Court Opinion

ID: 9892636
Source: CourtListenerOpinion
Date Created: 2023-10-24 17:08:08.267656+00
Date Added: 2024-06-11T08:24:37.824272
License: Public Domain

Filed 10/24/23 Casa Verde Landscaping Maintenance Corp. v. Lennar Communities CA4/1
                   NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

                 COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                       DIVISION ONE

                                              STATE OF CALIFORNIA

CASA VERDE LANDSCAPING                                                       D081550
MAINTENANCE CORP.,

     Plaintiff, Cross-defendant, and
Appellant,                                                                   (Super. Ct. No. CIVDS1907285)

          v.

LENNAR COMMUNITIES, INC., et al.,

     Defendants, Cross-complainants,
and Respondents.

          APPEAL from a judgment of the Superior Court of San Bernardino
County, Bryan F. Foster, Judge. Reversed and remanded with instructions.
          Law Offices of Robert F. Schauer, Noah K. McCall for the Plaintiff,
Cross-defendant, and Appellant.
          Watt, Tieder, Hoffar & Fitzgerald, LLP, Jane G. Kearl and Christopher
M. Bunge for the Defendants, Cross-complainants, and Respondents.
                            I. INTRODUCTION

      This appeal involves two contracts executed between Casa Verde
Landscaping Maintenance Corp. (Casa Verde) and Lennar Homes of
California, Inc. and Lennar Communities, Inc. (collectively, Lennar).
      As a part of its development agreement with the City of Redlands
(City), Lennar was obligated to construct, maintain, and turn over a park (the
Groves Project) to the City for public use. Lennar subcontracted these
responsibilities to Casa Verde. Concurrently, Casa Verde was contracted
with Lennar to work on a separate project in Moreno Valley (the Meadow
Creek Project).
      Casa Verde successfully completed the construction phase of the Groves
Project, however, during the maintenance phase grass and plant material
began to die – this delayed the Groves Project’s turn over to the City.
Consequently, Lennar withheld payments owed to Casa Verde, for both the
Groves Project and the Meadow Creek Project. Casa Verde subsequently
filed suit to recover the withheld payments from Lennar, alleging a breach of
contract of both the Groves Project and the Meadow Creek Project. Lennar
filed a cross-complaint for a breach of the Groves Project contract.
      After a three-day bench trial, the court outlined its concerns stating,
“I’m going to give you some initial impressions on this, so you can address
those in your [written] closing argument.” The court then outlined these
areas: (1) Whether Casa Verde breached its contract by failing to get the
park’s landscaping to an acceptable level or, alternatively, had Casa Verde
substantially complied with the contract by the time Lennar stopped paying
Casa Verde for its work; (2) Whether Lennar’s apparent delay in terminating
Casa Verde’s maintenance phase duties entitled Casa Verde to damages

                                       2
mitigation on the Groves Project; and (3) Whether the liquidated damages
provision in the parties’ contract applied in this dispute.

      On November 4, 2021, Casa Verde filed its closing brief.1 On
November 22, 2021, the court issued a tentative statement of decision (SOD).
The SOD failed to address the issues the court itself outlined to the parties.
The tentative SOD found for Lennar on its cross-complaint for breach of
contract, awarding it $91,553.94. Casa Verde timely objected to the proposed
SOD. The court later affirmed its tentative SOD without change. Casa

Verde next filed a motion under Code of Civil Procedure section 6632 to set
aside the judgment and enter a new judgment. The trial court summarily
denied the motion.
      On appeal, Casa Verde contends the trial court, in computing damages,
failed to make findings on several controverted issues including those the
court raised. Casa Verde therefore contends that the doctrine of implied
findings is inapplicable (see §§ 632, 634, discussed post); that the court’s
damage calculations are not supported by substantial evidence; and that the
judgment for Lennar should be reversed and a new judgment entered for
Casa Verde in the amount of $21,697.46.
      Lennar responds substantial evidence supports the court’s damage
computations and that Casa Verde seeks to relitigate issues decided against
it when it objected to the tentative SOD and moved to set aside the judgment.
Lennar argues further that Casa Verde “waived” certain objections presented
in its appeal by not raising them during trial and then not proffering
sufficient supporting evidence to sustain them.

1      The Register of Actions reflects Lennar lodged but did not file a closing
brief. However, Lennar’s closing argument is part of our augmented record.
2      All further statutory references are to the Code of Civil Procedure.
                                        3
      We conclude the trial court failed to make findings on controverted
issues as explained both in Casa Verde’s objections to the SOD and in its
motion to set aside the judgment. We further find that given this failure and
the SOD’s resulting lack of clarity, we are unable to apply the doctrine of
implied findings to the contested issues. Because the court’s SOD frustrates
the statutory statement of decision process, we cannot determine whether, as
a matter of law, the judgment is correct.
      However, we conclude a completely new trial is unnecessary because
Casa Verde on appeal does not dispute that it breached the maintenance
phase of the Groves Project contract. Instead, on remand we direct the trial
court to (1) vacate the judgment, its findings of fact, and its conclusions of law
as they pertain to the damage award for Casa Verde’s breach of contract; (2)
decide whether, if at all, to allow the parties to introduce any additional
evidence or argument regarding damages; (3) make new findings of fact and
conclusions of law based on evidence previously presented and additional
evidence, if any; and (4) enter a new judgment.

           II. FACTUAL AND PROCEDURAL BACKGROUND

      A. Groves Contract.

      Lennar and Casa Verde executed the Groves Contract in 2017.
Pursuant to the agreement Casa Verde would provide labor and materials
related to hardscape construction, landscaping services, and park
maintenance for the Groves Project. The park included a “playground,
walking trails and fields that [were] adjacent to a subdivision development
owned by [Lennar]. Casa Verde’s scope of work principally included the
construction of the park’s hardscape and softscape components including
grass turf, plants, trees, and irrigation.”

                                         4
        The initial contract provided that Lennar would pay Casa Verde
$617,579.65, which included four months of landscape maintenance once
Casa Verde completed the park. The parties subsequently executed change
orders to the Groves Contract. Relevant to this appeal are change order Nos.
1 and 2. Change order No. 1 increased the contract cost by $8,700 to add
grading and vegetation removal. Change order No. 2 added a second project
phase which would include 12 additional months of park landscape
maintenance beyond the initial four months. Lennar agreed to pay Casa
Verde $42,960 in 12 equal, monthly installments for this work.
        The Groves Contract allowed Lennar a 10 percent retention from each
payment to Casa Verde (including for work pursuant to change orders Nos. 1

and 2).3 Lennar would release the retained funds once Casa Verde
satisfactorily completed its obligations, signed lien releases and waivers, and
both Lennar and the City accepted the park.
        The park area consisted of “bare dirt” when Casa Verde began work in
2017. Casa Verde completed phase one in February 2018 to the satisfaction
of Lennar and the City. Phase two began shortly afterwards, on March 1,
2018.

        B. Park Maintenance.

              1. Both Sides Agree Lennar Made Only Two Monthly Payments.

        Casa Verde’s president, Frank Fontes, testified at trial that Lennar
made only two payments to Casa Verde under change order No. 2. Teresa
Bliven, the account manager of Casa Verde, testified she prepared a

3     Regarding change order No. 2, Casa Verde billed Lennar $3,580
monthly. Lennar retained 10% of that, or $358 per month. Casa Verde
received the $3,222 balance for each month Lennar paid on the contract.
                                        5
“customer open balance sheet” (Exhibit 12) showing Lennar paid Casa Verde
a total of $6,444 (two payments less the 10 percent retention). She further
testified Lennar owed Casa Verde $115,592.46 for its work on the Groves and
Meadow Creek Projects.
      During testimony, Lennar’s vice-president Geoffrey Smith agreed his
company made only two payments under change order No. 2. Lennar then
stopped paying Casa Verde due to Casa Verde’s nonperformance on the

Groves Contract.4 Smith testified he decided about “four or five months”
before Lennar terminated the Groves Contract on December 28, 2018 that
Casa Verde was in breach. In the interim, Lennar searched for a substitute
subcontractor to take over the park’s landscape maintenance.

            2. Lennar Contracts with Another Landscaping Firm at
      Additional Cost.

      In January 2019, Lennar entered into a contract with Park West
Landscape (Park West) agreeing to pay Park West $118,150 to complete the
park’s maintenance phase. Smith testified the new agreement included
replacement of “metal edging” that was outside Casa Verde’s scope of work.
Lennar subsequently agreed to a $20,328.82 change order with Park West for
additional trees and other plant material.
      At the time of trial, Lennar still held $61,757.97 in retained funds from
Casa Verde’s Groves Contract. Smith testified Lennar also withheld from
Casa Verde $18,548.50 in retained funds from the Meadow Creek Project
even though Smith confirmed Lennar had no claim against Casa Verde for its
Meadow Creek Project work.

4     Mr. Smith also speculated that Casa Verde could have stopped sending
invoices.
                                       6
            3. Park Turn Over to the City is Delayed.

      Casa Verde’s 12-month additional maintenance phase completion date
was targeted for March 1, 2019. However, the park turnover to the City did
not occur until late September 2019. Smith testified that Casa Verde’s
nonperformance on change order No. 2 delayed the park hand over to the
City by about six or seven months. He testified this delay resulted in Lennar
incurring $39,886.44 in additional water charges.
      Brian King, Lennar’s project manager, testified he took photographs of
the park’s condition in July 2018. King said he sent the pictures to Casa
Verde, requesting a meeting to “walk the park” to address what he considered
landscaping “deficiencies,” including the turf. King observed the
circumstances did not improve over the next two months, even after he met
with Ricardo Sierra, Casa Verde’s maintenance manager. Sierra agreed with
King’s assessment that some of the turf did not look good and appeared
overwatered in places.

           4. Even Though Lennar Decided to Terminate the Contract with
      Lennar in July or August 2018, Lennar Continues Working with Casa
      Verde on the Park Until Late December 2018.

      In late October 2018, King received an email from a Lennar consultant
stating the City expressed reservations about “bare areas” in the park’s turf
and other landscaping issues, determining it was not ready for turn over.
When asked whether he saw any improvements to turf conditions between
July 2018 and October 2018, King testified, “[n]one whatsoever.”
      However, King continued to engage Casa Verde and complain about the
landscaping problems until December 18, 2018, when he emailed Casa Verde
asking for a “plan to bring the park back up to turn[]over condition.” Casa
Verde responded the following day, stating it had been “fertilizing and

                                      7
adjusting the irrigation on a regular basis,” had “hydroseeded several times,”
and going forward would continue to fertilize the turf. King considered this
response inadequate and, “after this December 19 email,” concluded Casa
Verde had no “satisfactory plan to rehabilitate the park.” With Smith’s
approval, King notified Casa Verde by email on December 28 that Lennar
needed to “move on with someone else to complete this park to turn[]over
status.”

      C. The Tentative SOD and Damages Computation.

      In its tentative SOD, the trial court found Casa Verde breached the
Groves Contract by failing to adequately maintain the park’s landscaping.
Specifically, the court found “problems” developed in the park shortly after

the 12-month maintenance phase began in February 20185 when the turf,
plants, and trees started dying; when Lennar had discussions and
complained to Casa Verde about the “deteriorated conditions” in the park;
and that the condition of the park in August 2018 “showed the continued
existence of multiple weeds, vast bare spots and fields of dead grass.”
      The trial court found Lennar paid Casa Verde $17,184 for “work
performed between February to April, 2018” under change order No. 2, then
“withheld monthly payments starting in April 2018” as a result of “disputes
regarding quality of the work that Casa Verde was performing.” It also found
Casa Verde’s “failure” to “fulfill the obligations of the contract became evident
at the time that Lennar withheld payment”; that Lennar withheld $27,188.50
on the Meadow Creek Project “as a result of problems at the Grove[s]
[P]roject”; that on December 28, 2018, “pursuant to the term of the contract,
Lennar exercised its right to terminate[] Casa Verde’s services early”; and

5     But see footnote 8, post.
                                       8
that the turn over of the park to the City should have taken place no later
than March 2019, but the park instead “was turned over to the City of
Redlands on September 30, 2019, a delay of 7 months from the scheduled
turn over date.”
      The trial court found Lennar spent $113,176 to complete Casa Verde’s
scope of work, broken down as follows:
              Payment to Casa Verde              $17,184.00
              Payment to Park West               $95,992.00[6]
              Total                              $113,176.00[.]

The court also determined Lennar incurred “delay damages for additional
water costs in the amount of $39,886.44,” for a “total expenditure” of
$153,062.44.
      The trial court next found Lennar retained $18,548.50 from the
“unrelated” Meadow Creek Project, and credited Casa Verde $42,960 for
change order No. 2, for a total offset of $61,508.50. The court reduced
Lennar’s “total expenditure” by the amount of this offset, awarding Lennar
$91,553.94 in damages (i.e., $153,062.44 - $61,508.50).

      D. Casa Verde’s Objections.

      In response to the tentative SOD, Casa Verde filed a Request for
Further Factual and Legal Explanation of Material Issues (Request for
Explanation) seeking clarification on several issues including:
      “[W]hy the court allocated $17,184.00 as a cost [p]aid by Lennar” under
change order No. 2 when the “actual amount paid was shown to be
$6,444.00.”

6    In calculating this amount, the court excluded Lennar’s payments of
$22,158 for replacement of the metal edging in the park.
                                       9
      “[W]hy the court did not allocate to Plaintiff in its damages calculations
the retention amount under the Groves Contract of $61,757.96” when “[t]his
evidence was uncontested in favor of Plaintiff.”
      “[W]hy the court did not allocate in its damages calculations the $870
owed to Plaintiff” under change order No. 1 when “[t]his evidence was
uncontested in favor of Plaintiff.”
      “[W]hy the court recites a balance on the Meadow Creek Contract of
$27,188.50 [citation], but then allocates only $18,548.50 to Casa Verde in its
calculation of damages.”
      “[W]hy Lennar is not charged an offset of its damages that it failed to
mitigate. As the court finds in its Statement of Decision, ‘The failure on
[Casa Verde’s] part to properly fulfill the obligations of the contract became
eviden[t] at the time that Lennar withheld payment.’ [Citation.] If that is
true, then Lennar should not have kept Casa Verde working for free for the
next 7 months. Lennar should have terminated Casa Verde and gotten a
replacement or be held liable for failing to mitigate its damages for those 7
months. . . . Lennar claims delay damages of $39,886.44. Those delay
damages are caused by Lennar’s failure to mitigate. . . . As the court finds,
Park West could have finished in 8 months, meaning only one month of delay,
instead of nine months.”
      Lennar opposed Casa Verde’s Request for Explanation, claiming the
trial court resolved the above issues in Lennar’s favor and that Casa Verde
was attempting to “relitigate or reargue” them. Lennar then argued that
under the circumstances section 634, which governs the right to object to a
court’s statement of decision, did not apply. It also claimed substantial
evidence supported the court’s accounting of damages and Casa Verde failed
to proffer any support for its own damage calculations.

                                       10
      The trial court subsequently affirmed its tentative SOD without change
and entered judgment for Lennar in late December 2021.

      E. Set-Aside Motion.

      Casa Verde in its timely motion to set aside the judgment and enter a
new judgment under section 663 (Set-Aside Motion) argued the trial court
failed to properly calculate damages, repeating the same contentions it made
in its Request for Explanation. It also argued the court “failed to preclude
delay damages for the water bills because the Groves Contract only allows
Lennar Communities to recover liquidated damages in lieu of delay damages
in the amount of five percent (5%) of the daily contract price.”
      The unreported hearing on the Set-Aside Motion took place in mid-
March 2022. The trial court took the matter under submission, summarily
denying the motion later that day.

                               III. DISCUSSION

      A. Guiding Principles.

            1. Substantial Evidence and the Doctrine of Implied Findings.

      In reviewing a judgment based on a statement of decision following a
bench trial we review the trial courts findings of fact for substantial evidence.
(Niko v. Foreman (2006) 144 Cal.App.4th 344, 364 (Niko).) Under this
standard, findings of fact are construed to support the judgment and we
consider the evidence in the light most favorable to the prevailing party,
drawing all reasonable inferences in support of the findings. (Citizens
Business Bank v. Gevorgian (2013) 218 Cal.App.4th 602, 613 (Gevorgian).)
      The testimony of a single witness is sufficient to support a finding.
(Gevorgian, supra, 218 Cal.App.4th at p. 613.) As a reviewing court, it is not

                                       11
our role to reweigh the evidence or to assess witness credibility. (Niko, supra,
144 Cal.App.4th at p. 365.) “A judgment or order of a lower court is
presumed to be correct on appeal, and all intendments and presumptions are
indulged in favor of its correctness.” (In re Marriage of Arceneaux (1990) 51
Cal.3d 1130, 1133 (Arceneaux).) Specifically, “[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).)

               2. Statements of Decision and Preservation of Objections.

      California Rules of Court, rule 3.1590(d)-(g), outlines the procedure for
a statement of decision. This statutory process protects “[t]he right to
findings [as] a substantial right, as inviolate, under the statute, as that of
trial by jury under the constitution. [Citation.] The code provision requiring
written findings of fact is for the benefit of the court and the parties. To the
court it gives 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.” (Whittington v.
McKinney (1991) 234 Cal.App.3d 123, 126-127, italics omitted.)
      A trial 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.’ ” (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 500
(Ermoian).) An “ ‘ultimate fact’ generally refers to a core fact, such as an
essential element of a claim,” in contrast to “evidentiary facts” and “legal

                                         12
conclusions.” (Central Valley General Hospital v. Smith (2008) 162
Cal.App.4th 501, 513.) “[A] trial court is not required to respond point by
point to issues posed in a request for a statement of decision.” (Ermoian, at
pp. 499-500 [rejecting appellant’s contention that the trial court was required
to address 92 paragraphs of issues because the paragraphs were “general,
nonspecific objections” by appellant presented “in a scattershot fashion”].)
Nor is a trial court obligated to make findings regarding “detailed evidentiary
facts or to make minute findings as to individual items of evidence.” (Nunes
Turfgrass, Inc. v. Vaughan–Jacklin Seed Co. (1988) 200 Cal.App.3d 1518,
1525.)
      Sections 632 and 634 “establish a two-step procedure for requesting a
statement of decision and preserving objections for pursuit on appeal. First,
following the court’s announcement of its tentative decision, section 632
requires a party to specify, in timely fashion and in proper form, ‘those
controverted issues as to which the party is requesting a statement of
decision. After a party has requested the statement, any party may make
proposals as to the content of the statement of decision.’ This initial step
serves the function of advising the trial court of exactly what issues the
parties view as materially controverted at the close of the evidence, just as
the process of settling jury instructions serves to frame issues for decision by

the fact finder in the jury trial setting. Second, section 634[7] requires that
any omissions or ambiguities in the statement of decision must be ‘brought to

7      Section 634 provides: “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
either prior to entry of judgment or in conjunction with a motion under
Section 657 or 663, it shall not be inferred on appeal or upon a motion under
Section 657 or 663 that the trial court decided in favor of the prevailing party
as to those facts or on that issue.”
                                       13
the attention of the trial court either prior to entry of judgment or in
conjunction with’ a new trial motion (§ 657) or a motion to vacate the
judgment (§ 663), thus allowing the court to respond to objections before the
taking of an appeal. The second step is not a substitute for the first.
Objections are germane only as to issues framed as materially controverted
under section 632.” (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 982
(Thompson); accord, Arceneaux, supra, 51 Cal.3d at p. 1133 [same]; Fladeboe,
supra, 150 Cal.App.4th at p. 58 [same].)

            3. Nullification of the Doctrine of Implied Findings.

      “ ‘When findings on material subsidiary issues of fact are requested or
when the omission of such findings is brought to the trial court’s attention
prior to entry of judgment, the trial court is required to make such findings.’ ”
(Arceneaux, supra, 51 Cal.3d at p. 1137.) “ ‘If it does not do so, it cannot be
inferred on appeal that the trial court found in favor of the prevailing party
on the issues covered by the requested findings.’ ” (Ibid.; accord Culbertson v.
Cizek (1964) 225 Cal.App.2d 451, 465–466 (Culbertson) [recognizing that if
the statement of decision does not resolve a controverted issue, and the
omission was brought to the attention of the trial court, “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”].)
      To negate the doctrine of implied findings, the objections to a statement
of decision must be specific, meaning the alleged omission or ambiguity “must
be identified with sufficient particularly to allow the trial court to correct the
defect.” (People v. ConAgra Grocery Products Co. (2017) 17 Cal.App.5th 51,
81.) “ ‘ “By filing specific objections to the court’s statement of decision a
party pinpoints alleged deficiencies in the statement and allows the court to

                                        14
focus on the facts or issues the party contends were not resolved or whose
resolution is ambiguous.” ’ ” (Orange County Water Dist. v. Alcoa Global
Fasteners, Inc. (2017) 12 Cal.App.5th 252, 312.) “These requirements apply
to omissions or ambiguities in a court’s factual findings only. Since the
doctrine of implied findings does not apply to the court’s legal conclusions
(which are reviewed de novo on appeal), this procedure does not apply to
potential errors of law.” (Ibid.)
      As we explained, ante, in this matter Casa Verde identified specifically
those material and controverted issues requiring greater explanation to clear
up ambiguities and alleged calculation errors. However, the trial court did
not provide further guidance to the parties about how it reached its
conclusions.

      B. The SOD and Resulting Judgment Omitted Material Controverted
Issues.

      Casa Verde contends the judgment must be reversed because the trial
court prejudicially erred when it failed to make findings on, and resolve,
material controverted issues Casa Verde brought to the court’s attention in
its Request for Explanation and in its Set-Aside Motion. We agree. We turn
our attention to three areas that remained unexplained in the court’s SOD:
Retentions, Mitigation, and Liquidated Damages. We start with retentions.

            1. Retention Amount Damages.

      In its Request for Explanation and Set-Aside Motion, Casa Verde
argued the trial court made no findings regarding the retentions of
$61,757.96 and $870 withheld by Lennar under the initial Groves Contract
and change order No. 1, respectively. Casa Verde also argued that no
evidence supported the finding that Lennar paid Casa Verde $17,184 under

                                       15
change order No. 2. As Casa Verde explains, Lennar did not dispute that it
made to Casa Verde only two of 12 payments totaling $6,444. Further, Casa
Verde pointed out an inconsistency in the SOD regarding the balance owed
Casa Verde for the Meadow Creek Project. Specifically, at the beginning of
the SOD the court stated that balance as $27,188.50 but then credited Casa
Verde only $18,548.50. Despite raising these issues and asking the court to
address them, both before and after the entry of judgment, the court ignored
them. That places the case in a challenging position with respect to appellate
review.
      We conclude the trial court’s SOD is deficient because the court did not
make any findings regarding disposition of the retentions withheld by Lennar
under the Groves Contract (including change order No. 1). Indeed, the record
shows Lennar and the City accepted phase one of the Groves Contract
involving the construction of the park’s hardscape and softscape. Problems
between the parties only arose during phase two involving the 12-month park
maintenance extension. As a result of the court’s not making any findings
regarding the disposition of these retained amounts, we are unable to rely on
the doctrine of implied findings. And with the nullification of the doctrine of
implied findings, we cannot determine whether the court’s damages
calculations regarding retentions are correct or not as a matter of law. (See
Arceneaux, supra, 51 Cal.3d at p. 1137; Culbertson, supra, 225 Cal.App.2d at
pp. 465-466.)
      We conclude the SOD is similarly flawed regarding the trial court’s
finding that Lennar paid Casa Verde $17,184 under change order No. 2. As
summarized ante, the evidence strongly suggests that Lennar made only two
payments to Casa Verde under this change order, for a total of $6,444 (after

                                       16
withholding 10 percent).8 However, based on the court’s finding, Lennar
would have made more than five payments to Casa Verde (i.e.,
$17,184/$3,222 = 5.33 payments).
      Although Casa Verde twice raised this damage calculation issue, the
trial court did not address it, and we have no way of resolving this conflict on
appeal. (See DeArmond v. Southern Pacific Co. (1967) 253 Cal.App.2d 648,
658 [noting the “broad purpose of the amendment [to the statutory statement
of decision process] seems to have been to alleviate the frustration of losing
litigants and their attorneys confronted with non-communicative trial
judges,” and further noting “[if] findings are to serve any purpose they
should, as section 632 now requires[,] ‘fairly disclose the court’s
determination of all issues of fact’ ” (italics added)]; Niko, supra, 144
Cal.App.4th at p. 365 [as a court of review, our role is not to reweigh the
evidence and make new findings but instead determine whether a finding is
supported by substantial evidence].)
      Lennar, however, contends that substantial evidence supports the trial
court’s finding regarding the amount paid Casa Verde under change order
No. 2. Specifically, it contends the court could have taken the total amount
due under this change order (i.e., $42,960), and subtracted $25,776 from this
amount, which was the “Open Balance” in Exhibit 12, to reach the $17,184
figure. Lennar’s response underscores why the court’s SOD creates confusion

8     Also, the trial court found the 12-month maintenance contract began on
February 21, 2018, and concluded on February 21, 2019. However, it appears
the contract started March 1, 2018. Casa Verde’s first invoice for work under
change order No. 2 was dated April 30, 2018, in the amount of $3,580, with a
due date of May 30, 2018; and its second invoice was dated May 31, 2018, in
the same amount, with a due date of June 30, 2018. Exhibit 12 confirmed
both invoice dates and the amounts due. Based on this record the court on
remand may wish to clarify its finding here.
                                        17
requiring clarification. The arithmetical process described by Lennar may be
what the court did, but we do not know. Further, we are uncertain using
Lennar’s explanation above why three months of the 12-month contract
would not be included in the computation.
      In any event, what we see above is why the doctrine of implied findings
is limited and inapplicable here. The appellate court should not be left
guessing about how a trial court reached a conclusion. What the court could
have done is not the test. (See Arceneaux, supra, 51 Cal.3d at p. 1137;
Culbertson, supra, 225 Cal.App.2d at pp. 465-466; see also Parker v.
Contractors State License Bd. (1986) 187 Cal.App.3d 205, 211 [“Failure to
make a finding . . . is normally reversible error unless [an appellate court]
concludes that there is no substantial evidence to support the position of the
appealing party.”].)
      Also, in calculating Lennar’s damages for the Groves Contract breach
by Casa Verde, the trial court did not address the apparent discrepancy in
the SOD between what the court found as the balance due on the Meadow
Creek Project (i.e., $27,188.50), and the credit it gave Casa Verde (i.e.,
$18,548.50). “A proper statement of decision is 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 factual issues support the judgment as a matter of law.’
[Citation.]” (Thompson, supra, 6 Cal.App.5th at p. 982.) The instant case is a
prime example of why the rules regarding a proper statement of decision
exist, as we too have “no means of ascertaining” whether the trial court’s
computation of damages is correct as a matter of law. (See ibid.)

                                       18
            2. Mitigation Damages.

      We also conclude another flaw hobbled the trial court’s SOD: The
failure to address whether cross-complainant Lennar Communities was
required to mitigate its damages by terminating change order No. 2 sooner.
The omission of this issue is puzzling because the court specifically asked the
parties to address it in their closing briefs.
      “It is well established in California that a party injured by a breach of
contract is required to do everything reasonably possible to minimize [the
party’s] own loss and thus reduce the damages for which the other party has
become liable.” (Sackett v. Spindler (1967) 248 Cal.App.2d 220, 238
(Sackett).) The mitigation of damages doctrine provides that a “ ‘plaintiff who
suffers damage as a result of . . . a breach of contract . . . has a duty to take
reasonable steps to mitigate those damages and will not be able to recover for
any losses which could have been thus avoided.’ ” (Valle de Oro Bank v.
Gamboa (1994) 26 Cal.App.4th 1686, 1691 (Gamboa).) “The question of
whether the injured party has acted reasonably in mitigating damages is one
of fact. (Sackett, at p. 239; accord, Nielsen v. Farrington (1990) 223
Cal.App.3d 1582, 1589-1590 (Nielsen) [“Whether a party has exercised
diligence in attempting to mitigate damages is a question for the trial court
which will be upheld on appeal if there is substantial evidence.”].) “The
burden of proving a plaintiff [or cross-complainant] failed to mitigate
damages . . . is on the defendant [or cross-defendant].” (Powerhouse
Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A. (2013) 221
Cal.App.4th 867, 884.)
      Here, the trial court’s SOD omitted any discussion of whether Lennar
acted reasonably by waiting until late December 2018 to officially terminate
the contract with Casa Verde. Indeed, the record before us shows Lennar

                                        19
stopped payments to Casa Verde after May 2018. Lennar ostensibly made
only two of 12 payments under change order No. 2. Lennar expressed to
Casa Verde as early as July 2018 its dissatisfaction with the park’s
landscaping maintenance. Smith testified that about that time he decided to
terminate Casa Verde’s contract. Lennar began discussions with other
subcontractors to take over for Casa Verde because Lennar had already
decided Casa Verde was in breach of the maintenance contract. Nonetheless,
Lennar continued to encourage Casa Verde to fix the landscaping problems at
the park, including as late as December 18 when it emailed Casa Verde
asking for a “plan” to rehabilitate the landscape. Finally, Lennar hired Park
West, in January 2019, for more than twice the value of Casa Verde’s
landscape maintenance contract.
      Whether Lennar exercised diligence in attempting to mitigate its
damages is, as demonstrated by this record, a material question of fact the
court did not resolve. Again, we find ourselves unable to review for
substantial evidence whether Lennar acted reasonably in waiting until the
end of December 2018 to terminate change order No. 2. And, if Lennar acted
unreasonably, whether any damages are attributable to that failure. (See
Gamboa, supra, 26 Cal.App.4th at p. 1691; Nielsen, supra, 223 Cal.App.3d at
pp. 1589-1590; Sackett, supra, 248 Cal.App.2d at p. 238.) We are in no
position to evaluate this issue given the SOD’s silence on it.
      For the same reason, we are unable to determine whether the
$39,886.44 in “delay damages” awarded to Lennar for water charges should
stand. For instance, might Lennar have “avoided” some or all these charges
by terminating its contract with Casa Verde sooner? (See Gamboa, supra, 26
Cal.App.4th at p. 1691; Nielsen, supra, 223 Cal.App.3d at pp. 1589-1590;
Sackett, supra, 248 Cal.App.2d at p. 238.) Indeed, in its SOD the court found

                                       20
the “failure” of Casa Verde to “fulfill the obligations of the contract became
evident at the time that Lennar withheld payment.” However, the SOD is
silent on whether Lennar’s delay in terminating Casa Verde contributed to
the seven-month delay in the park’s turn over to the City. And is again silent
as to whether Lennar could have avoided these ensuing “delay damages” –
this was a question for the trial court to resolve as trier of fact.

             3. Liquidated Damages.

      In addition to the retention and mitigation damages, at the close of
evidence, the trial court also asked the parties to address whether the
liquidated damages clause in the Groves Contract applied. Section 1.8.3 of
the Groves Contract sets forth the liquidated damages clause:
         Subcontractor [Casa Verde] and Contractor [Lennar] . . .
         acknowledge and agree that if the Work[9] is not completed
         by Subcontractor within the Contract Completion Time,[10]
         subject to Permitted Delays, Contractor will suffer
         substantial damages which are, at the date of execution of
         this Agreement, extremely difficult and impracticable to
         ascertain. Therefore, Contractor and Subcontractor agree
         that if Subcontractor shall fail to complete the Work within
         the Contract Completion Time, Subcontractor shall pay
         Contractor as liquidated damages . . . the amount of

9      “Work” is defined to include “the furnishing of all labor, equipment,
tools, sewer, materials, and whatever may be deemed necessary and/or
required and incidental to finish and complete all of the work of construction
in each of such items as required by the Plans, Specifications, codes, and
ordinances. . . . The Work shall include whatever may be necessary to
complete all items described by the plans, specifications, codes, Governing
Bodies, Geotechnical Consultant and/or the Engineer.”

10    “Contract Completion Time” is defined as “the Work without delay
and/or interruption to its completion within the time allotted in the
Construction Schedule.”
                                        21
         damages Contractor will suffer due solely for delay[,] the
         daily amount determined by multiplying the Daily Contract
         Price (as defined herein) by five percent (5%), per day for
         each calendar day beyond the Contract Completion Date
         that the Work has not been completed, rounded up to the
         next $100 increment. For purposes of this Section 1.8.3, the
         ‘Daily Contract Price’ is the Contract Price divided by the
         number of days in which the Work is to be completed . . . .
         Notwithstanding anything in the foregoing to the contrary,
         Contractor and Subcontractor acknowledge and agree that
         this liquidated damages provision shall only apply to
         damages caused by Subcontractor’s failure to complete the
         Project within the Contract Completion Time.

(Italics added.)
      Casa Verde argued in its Set-Aside Motion that if Lennar was entitled
to any delay damages, section 1.8.3 addressed the damage amount. Casa
Verde noted that the delay began on March 2, 2019, the first day after Casa
Verde’s maintenance contract should have expired, and continued through
September 12, 2019, when Lennar stopped being billed for water usage, a
difference of 195 days; that the daily contract price was $117.75 per day (i.e.,
$42,980/365 days as a result of the one-year maintenance extension); that
under 1.8.3, the liquidated damages was $5.88 per day (i.e., $117.75 x 5
percent); and that because the court expressly found in the SOD the turn over
of the park was delayed by seven months, at most Lennar was entitled to a
credit of “$1,148.10” (i.e., $5.88/day x 195 days) and not $39,886.44 as

                                       22
awarded by the court.11 The court in its minute order dismissing the Set-
Aside Motion did not address this point.
      Lennar claims the trial court properly omitted discussion of liquidated

damages because: (1) Casa Verde “waived”12 all arguments regarding
section 1.8.3 by failing to raise it in the trial court; and, (2) the supporting
exhibit for liquidated damages that Casa Verde attached to the contract it
submitted to the trial court actually belonged to a separate, unrelated project
(“Pioneer Ave Improvement”), and, therefore, the trial court lacked necessary
information to calculate the liquidated damages formula.
      We think Casa Verde has the stronger position. As noted, the trial
court specifically asked the parties to explain in their filed closing arguments

the applicability of the liquidated damages contract clause.13 Casa Verde

11    Casa Verde argues similarly in their opening brief; however, Casa
Verde adjusts the end of the delay from September 12th to September 30th
(the date the park was accepted by the City). This change accounts for an
additional 18 days delayed, or 213 days in total. And in Casa Verde’s
argument, therefore, a credit, if any, of “$1,253.49” (i.e., $5.88/day x 213 days)
would be due to Lennar.

12     “[T]he correct legal term for the loss of a right based on failure to assert
it timely is ‘forfeiture,’ because a person who fails to preserve a claim forfeits
that claim. In contrast, a waiver is the ‘ “intentional relinquishment or
abandonment of a known right.” ’ ” (In re S.B. (2004) 32 Cal.4th 1287, 1293,
fn. 2.) We believe Lennar intended to say forfeiture and analyze their claim
accordingly.

13     Casa Verde failed to address the liquidated damages issue in its closing
brief. In this context we find that omission immaterial.

                                        23
raised the issue in its Set-Aside Motion made pursuant to section 663.14
(See Forman v. Knapp Press (1985) 173 Cal.App.3d 200, 203 [section 663
“empowers a trial court, on motion of ‘[a] party . . . entitl[ed] . . . to a different
judgment’ from that which has been entered, to vacate its judgment and
enter ‘another and different judgment’ ”].) Unfortunately, the minute order
summarily denying the Set-Aside Motion did not address whether section
1.8.3 of the Groves Contract applied in this case. Although the parties on
appeal make arguments to support their respective positions regarding how
to treat liquidated damages, we find it unnecessary to resolve the issue
because as we will explain, we conclude the failure to address the question at
all, along with the others we discussed, created prejudicial error.

             4. The Error Was Prejudicial.

      We conclude the trial court’s errors in this case are prejudicial,
requiring reversal of the judgment. (See Guardianship of Brown (1976) 16
Cal.3d 326, 335-336 [reversing under section 634 an order appointing a
guardian based on a contested petition, after the trial court had failed to
“ma[k]e an express finding” on the “material issue” of whether appointment
of an incompetent person’s wife or mother would be in his best interest,
“particularly after this omission was brought to the attention of the court and

14     Section 663 provides in relevant part: “A judgment or decree, when
based upon a decision by the court . . . may, upon motion of the party
aggrieved, be set aside and vacated by the same court, and another and
different judgment entered, for either of the following causes, materially
affecting the substantial rights of the party and entitling the party to a
different judgment: [¶] 1. Incorrect or erroneous legal basis for the decision,
not consistent with or not supported by the facts; and in such case when the
judgment is set aside, the statement of decision shall be amended and
corrected.”

                                          24
a request had been made for a further and specific finding”]; accord, Hine v.
Carmichael (1962) 205 Cal.App.2d 663, 666 [“Failure to make definite
findings on factual issues presented by pleadings, particularly where there is
substantial evidence which would have sustained a finding for the appealing
party, requires a reversal.”].)
      California Constitution, article VI, section 13, provides in pertinent
part: “No judgment shall be set aside, . . . in any cause, . . . for any error as to
any matter of procedure, unless, after an examination of the entire cause,
including the evidence, the court shall be of the opinion that the error
complained of has resulted in a miscarriage of justice.” The phrase
“miscarriage of justice” means that a judgment cannot be reversed unless the
reviewing court, “ ‘after an examination of the entire cause, including the
evidence,’ is of the ‘opinion’ that it is reasonably probable that a result more
favorable to the appealing party would have been reached in the absence of
the error.” (People v. Watson (1956) 46 Cal.2d 818, 836 (Watson).) This rule
of appellate review applies to civil cases, “precluding reversal unless the error
resulted in a miscarriage of justice.” (Cassim v. Allstate Inc. Co. (2004) 33
Cal.4th 780, 801 (Cassim).)
      Here, the trial court gave no explanation and made no findings
regarding disposition of the retentions under the Groves Contract; or why it
found Casa Verde received more than five payments under change order No.
2 when substantial (if not undisputed) evidence shows it only received two
such payments; or why Casa Verde was only entitled to a credit of $18,548.50
for Lennar’s retention from the Meadow Creek Project, despite the court’s
express finding in the SOD that Lennar withheld $27,188.50 from Casa
Verde for this project. Further, the trial court never explained why Lennar
was or was not required to mitigate its damages. Finally, the court did not

                                        25
explain why the Grove Contract liquidated damages provision was or was not
applicable. The court expressly found “delay damages” existed due to
additional water usage during what it found was a seven-month delay in
turning over the park to the City. But the court did not explain the role of
the liquidated damages clause in resolving that matter. Deciding these
questions requires resolving evidentiary conflicts. This we cannot do, and the
trial court’s failure to make these findings is not harmless error. (See
Cassim, supra, 33 Cal.4th at p. 801; Watson, supra, 46 Cal.2d at p. 836.)

      C. Directions on Remand.

      Casa Verde on appeal does not challenge the finding that it breached
change order No. 2 (as part of the Groves Contract). Instead, as we
discussed, Casa Verde challenges the court’s computation of damages arising
from Casa Verde’s work on both the Groves and Meadow Creek Projects. As
a result, we conclude a new trial is unnecessary on remand.
      Our conclusion is guided by the decision in Morris v. Thogmartin (1973)
29 Cal.App.3d 922 (Morris). The plaintiff in Morris was injured in a store
owned by the defendants during a fight between third parties and the
defendants’ employee. (Id. at pp. 924-925.) The trial court issued its
proposed findings of fact and conclusions of law under former section 632,
awarding the plaintiff general and special damages due to the negligence of
the defendants’ employee. (Id. at p. 925.) The defendants objected,
requesting the court make additional findings regarding the foreseeability of
harm to the plaintiff resulting from the defendants’ acts or omissions; the
nature and duty owed by a defendant shopkeeper to a plaintiff customer; and
the acts of the defendants that constituted breach of that duty. The trial

                                      26
court denied the defendants’ objections and their request for additional
findings. (Id. at pp. 926-927.)
      In reversing, the Morris court concluded the trial court erred by failing
under section 634 to make the additional findings requested by the
defendants. (Morris, supra, 29 Cal.App.3d at p. 924.) The Morris court
nonetheless found the evidence supported the judgment for the plaintiff
(ibid.); that a new trial was “not necessary” on remand (id. at p. 930); and
that the remand would be for the “limited purpose” of allowing the trial court
to make the omitted findings (id. at p. 924). It directed the trial court to
“vacate its findings of fact and conclusions of law and its judgment entered
thereon; to permit either side to introduce any additional evidence if so
requested; and thereafter, to make new findings of fact and conclusions of law
upon the basis of evidence previously presented and such additional evidence
as may be presented and . . . enter judgment thereon.” (Id. at pp. 930-931.)
      Here, the record shows the parties already participated in a multiday
bench trial. Because Casa Verde does not challenge the finding it breached
change order No. 2 to the Groves Contract, we see no reason to order a
retrial. Instead, as to damages only, we direct the trial court to vacate the
judgment, its findings of fact, and conclusions of law. We further order the
court to make new findings of fact and conclusions of law. At the court’s
discretion it may allow the parties to present any additional evidence or
argument on remand.

                                       27
                              IV. DISPOSITION

      The judgment for Lennar is reversed. On remand, the trial court is
directed to (1) vacate its findings of fact and conclusions of law, limited to the
issue of damages, arising from Casa Verde’s breach of the Groves Contract;
(2) make new findings of fact and conclusions of law based on evidence
previously presented and, in the court’s discretion, any additional evidence or
argument the parties may present; and (3) enter a new judgment.
      For purposes of this limited remand, we leave all questions regarding
the computation of damages for the trial court to decide anew. Casa Verde is
entitled to recover its costs of appeal. (See California Rules of Court, rule
8.278(a)(1).)

                                                                       RUBIN, J.

WE CONCUR:

BUCHANAN, Acting P.J.

CASTILLO, J.

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