Court Opinion

ID: 4695813
Source: CourtListenerOpinion
Date Created: 2021-06-15 20:02:43.739262+00
Date Added: 2024-06-11T08:05:37.410255
License: Public Domain

Filed 6/15/21 Voit v. Malliet CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

 ROBERT D. VOIT et al.,

    Plaintiffs, Cross-defendants and                                   G058435, G058478 & G058567
 Respondents,
                                                                       (Super. Ct. No. 30-2013-00652567-
           v.                                                           CU-CO-CJC)

 BRIAN K. MALLIET,                                                     OPINION

    Defendant, Cross-complainant and
 Appellant.

 ROBERT D. VOIT,
                                                                       G058798 & G059171
       Plaintiff and Respondent,

           v.

 BRIAN K. MALLIET,

       Defendant and Appellant.
              Appeals from judgments and orders of the Superior Court of Orange
County, James Di Cesare, Judge. Affirmed.
              Rutan & Tucker, Steven J. Goon and Gerard M. Mooney for Defendant,
Cross-complainant and Appellant.
              Grant, Genovese & Baratta, David C. Grant and Marcus G. Larson for
Plaintiffs, Cross-Defendants and Respondents.
                                  *           *           *
                                      INTRODUCTION
              This is the second consolidated appeal arising from a dispute between
appellant Brian Malliet and respondent Robert Voit. In our first opinion, which
encompassed five separate appeals by Malliet, we held that a comprehensive judgment in
Voit’s favor on Malliet’s second amended cross-complaint had erred in only one aspect:
contrary to the trial court’s holding, Malliet was entitled to 20 percent of any repayment
on a $5 million note Voit held from the debtor Voit Real Estate Service, LLC (the
Company). Otherwise Voit would be unjustly enriched. The rest of the judgment was
affirmed, as were the orders that were the subjects of remaining appeals, which included
orders awarding Voit his attorney fees as the prevailing party.
              We returned the matter to the trial court with very specific instructions.
The court was to determine the amount, if any, that had been repaid on the Company note
as of October 1, 2015, and to modify the judgment only as necessary to award 20 percent
of that amount to Malliet. Because the Company had dissolved as of October 1 and was
winding up, however, any repayments on the note made after the dissolution date were to
be administered, not in the current lawsuit, but in accordance with the Corporations Code
procedure for winding up a limited liability company.
              After a series of hearings, the trial court followed our instructions to the
letter. It determined that no repayments on the Company note had been made before
October 1. Therefore any payments to Malliet had to be dealt with as part of the winding

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up process. The court modified the judgment in favor of Malliet on one subpart of his
declaratory relief cause of action, based on unjust enrichment, but awarded no damages
because there were no pre-dissolution repayments on the note. The rest of the judgment,
as we had instructed, remained in Voit’s favor.
              Malliet has appealed again, asserting that the trial court should have entered
a judgment in his favor on a separate cause of action for unjust enrichment and that he is
entitled to prejudgment interest. Moreover, in light of the modification of the judgment,
he is now the prevailing party and therefore entitled to attorney fees.
              These assertions, however, reflect a reading of our prior opinion afflicted
with a serious case of tunnel vision. We did not reverse the entire judgment. Only a very
small portion of the resolution of a wide-ranging set of issues was reversed. The case
was therefore not “at large,” to be completely relitigated. Only Malliet’s share of pre-
October-1 repayments of the Company note remained to be determined. The rest of the
judgment – in Voit’s favor – was undisturbed. Voit remained, as he had at the end of
trial, “the party who recovered a greater relief in the action on the contract.” (Civ. Code,
§ 1717, subd. (b)(1.))
              Because the Company had made no pre-dissolution repayments on its note,
Malliet was not entitled to any monetary damages on remand. There was therefore no
basis for any calculation of prejudgment interest, even assuming that an amount of
damages was “certain, or capable of being made certain by calculation” and “vested in
the person upon a particular day” before trial. (Civ. Code, § 3287, subd. (a).)
               We therefore affirm the modified judgment, the revised modified
judgment, the attorney fee orders, and the order denying Malliet’s motion for new trial or
to vacate the modified judgment.

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                                                    FACTS
                 The details of the facts underlying the initial appeal may be ascertained
from our previous opinion.1 Briefly, Voit and Malliet were in the real estate business
together in the mid-2000’s. They were both members of the Company, in which Voit
held a substantial majority interest.2
                 In 2011, Voit made $5 million available to the Company as a loan,
memorialized in a promissory note.3 At the same time, Voit made $1 million available to
Malliet, earmarked as his contribution to the Company note, which loan was
memorialized in a separate promissory note. The $1 million note provided,
“Concurrently herewith, a note of even date with this Note from [the Company]
(“VRES”) in favor of [Voit], as Payee, in the amount of $5,000,000 has been executed
. . . . As advances are made under the VRES Note from [Voit] to [the Company],
[Malliet] hereby agrees that 20% of any and all such advances shall be deemed advances
under this Note by [Voit] to [Malliet]. It is also agreed that 20% of any repayments by
VRES to [Voit] under the VRES note shall be applied as repayments under this Note.”
As it turned out, the Company borrowed $4.5 million of the available funds.
                 The $1 million promissory note provided that Malliet had to repay any
advances from Voit as of a date certain. If he did not, then the note allowed Voit to
cancel as “satisfy[ing] the Balance in full” the 10 percent increase in Malliet’s share of
the Company he was due to receive at the end of 2011. Malliet defaulted, and Voit chose
to take the 10 percent increase. He thereupon canceled the $1 million note. Malliet was
fired in 2012.

          1      Malliet v. Voit (Jan. 25, 2019, G053757, G053767, G053912, G054279 & G054385 [nonpub.
opn.].
          2      More specifically, Voit and Malliet were members of the Company as trustees of their respective
trusts.
         3         The parties to the $5 million note were the Company and the Robert D. Voit Living Trust. For
simplicity’s sake, we will refer to the Trust as “Voit.”

                                                        4
                 The lawsuit, filed by Voit in 2013, was prompted by Malliet’s refusal to
continue participating in a buyout process mandated by the Company’s operating
agreement after Malliet failed to respond to a capital call. Malliet cross-complained
against Voit.4 The second amended cross-complaint, filed in April 2014, included a
cause of action for declaratory relief with 15 subparts, including subpart (m), “whether, if
and to the extent that Mr. Voit, the Voit Trust, and V[oit] C[orporation] have received
any repayment of principal or interest owed under the $5M [Company] Note, they have
been unjustly enriched in regard to Malliet’s 20% share of same.” The second amended
cross-complaint included 16 other causes of action, some of them derivative on behalf of
the Company. The seventh cause of action was one for equitable subrogation based on
breach of contract, breach of the covenant of good faith, breach of fiduciary duty, and
unjust enrichment.
                 The Company’s main asset was sold in September 2015, triggering the
dissolution and winding up process required by the Company’s operating agreement and
by the Corporations Code. Voit then dismissed his complaint because, with the main
asset sold and the Company dissolved, the buyout process no longer mattered.
                 A bench trial in December 2015 resulted in total victory for cross-
defendants. The trial court issued a 32-page statement of decision that addressed each
allegation of the cross-complaint – 15 requests for declaratory relief and 15 other counts
for breach of fiduciary duty, interference with economic advantage, and breach of
contract – and meticulously explained why Malliet lost on every one of them that
remained for trial.5 The court also awarded attorney fees to Voit as the prevailing party.

           4        The cross-defendants were Voit individually and as trustee of his trust, the Company, Voit
Corporation, and a limited partnership, Voit Real Estate Services, L.P. Malliet sued as an individual, as trustee of
his trust, and derivatively on behalf of the Company.
           5        A 16th count for judicial dissolution of the Company was moot because the Company was already
dissolved. Some causes of action had been disposed of on demurrer.

                                                         5
              In the previous appeal, the two main issues Malliet identified – out of all
those as to which Voit had prevailed – were (1) whether the buyout process had to go
forward and (2) whether he was entitled to 20 percent of whatever the Company repaid
on the $5 million note. The trial court had ruled that the buyout process was dead, in part
because Malliet had, through his conduct, waived any right to it. The court had also ruled
that Malliet was not entitled to 20 percent of the repayments on the $5 million note.
              Malliet’s five appeals in the previous (consolidated) proceeding in this
court were from (1) the judgment and the corrected judgment (which added attorney fees
and costs), (2) two orders awarding attorney fees to Voit as the prevailing party, and (3) a
postjudgment order denying his petition to compel the buyout process to continue. We
affirmed everything except for the portion of the judgment and corrected judgment
completely denying Malliet’s 20 percent repayment on the $5 million note. We sent the
matter back with specific instructions to award him 20 percent of whatever the Company
had repaid before October 1, 2015, the date of dissolution. Any repayments made post-
dissolution, we said, had to be dealt with as part of the winding up of the Company’s
affairs, which was not part of the current lawsuit. In all other respects, the trial court’s
judgment was affirmed, including the attorney fee awards.
              Back in the trial court on remand, the litigation continued unabated. The
wording of the modified judgment was the subject of three hearings, all of which
involved briefing. The trial court entered a modified judgment on August 13, 2019. The
modified judgment awarded attorney fees to Voit as the prevailing party and did not
award Malliet any damages. It provided that Malliet’s share of the repayment on the $5
million note, $1.5 million, would be dealt with as part of the Company’s winding up.
              Malliet moved for a new trial and to vacate the modified judgment, arguing
that he was the prevailing party, entitled to attorney fees, and also that he was entitled to
prejudgment interest. The court denied the motions for new trial and to vacate the
judgment on October 18, 2019.

                                               6
                 Malliet made two motions for attorney fees, one for the fees incurred in the
appeal process and the other for all the fees from the beginning of the lawsuit, on the
ground that he was now the prevailing party. Voit opposed Malliet’s motions and filed
his own motion for attorney fees incurred on appeal and on remand. The court denied
Malliet’s two attorney fee motions and granted Voit’s motion for fees on appeal and on
remand on January 24, 2020. The modified judgment already awarded Voit fees through
the original judgment of December 2016, which awards had been affirmed on appeal.
                 In fact, no repayments had been made on the $5 million note before
October 1, 2015. Therefore, any repayments had to be dealt with as part of the
Company’s separate winding up process. The revised modified judgment of June 17,
2020, granted declaratory relief to Malliet only with respect to his entitlement to 20
percent of pre-October 1 payments (of which there were none) and denied all other
requests for declaratory relief.6 The revised modified judgment included an award of
attorney fees and costs to Voit as the prevailing party on Malliet’s cross-complaint for the
trial, the appeal, and post-appeal proceedings. Malliet has appealed from the revised
modified judgment.7
                                               DISCUSSION
                 Malliet has identified three issues on appeal. First, he asserts the trial court
erred when it did not vacate the attorney fee award from the first appeal, revisit the
question of the prevailing party, and declare him to be the prevailing party. Second, the
court should have entered judgment in his favor on a cause of action for unjust

         6         “Malliet is granted declaratory relief against Mr. Voit, individually and as Trustee of
the Voit Trust, the Voit Trust, and [the Company] only, as to one of the fifteen requests for declaratory relief
contained in his First cause of action – specifically item (m) thereof – as follows: [¶] a. No repayments by [the
Company] to the Trust (or any Cross-defendant) on the 2011 Promissory Note occurred before October 1, 2015
(‘Dissolution Date’): [¶] . . . [¶] All other requests for declaratory relief are denied.”
         7         Malliet has also appealed from the earlier modified judgment, entered on August 13, 2019 (case
No. G058435); from the order denying his motion for new trial or to vacate the modified judgment, entered on
October 18, 2019 (case No. G058478); from the August 13 judgment and the October 18 order (case No. G058567);
and from the order denying his two motions for attorney fees (case No. G058798). All the appeals have been
consolidated.

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enrichment. Finally, Malliet should have received prejudgment interest on the amount
determined to be his share of the note repayments.
I.            Prevailing Party and Attorney Fees
              The Company operating agreement included the following attorney fee
provision: “Attorneys’ Fees. In the event that any dispute between the Company and the
Members or among the Members should result in litigation or arbitration, the prevailing
party in such dispute shall be entitled to recover from the other party all reasonable fees,
costs and expenses of enforcing any right of the prevailing party, including without
limitation, reasonable attorneys’ fees, and expenses, all of which shall be deemed to have
accrued upon the commencement of such action and shall be paid whether or not such
action is prosecuted to judgment. Any judgment or order entered in such action shall
contain a specific provision providing for the recovery of attorneys’ fees and costs
incurred in enforcing such judgment and an award of prejudgment interest from the date
of the breach at the maximum rate allowed by law. For the purposes of this Section: (I).
attorneys’ fees shall include, without limitation, fees incurred in the following: (1) post
judgment motions; (2) contempt proceedings; (8) garnishment, levy, and debtor and third
party examinations; (4) discovery; and (5) bankruptcy litigation and (II) prevailing party
shall mean the party who, in light of all causes of action asserted, defenses raised and
relief sought, is afforded the greater relief or otherwise prevails by dismissal, default or
otherwise.”
              Malliet’s argument on this issue is binary. First, because he carried his
point about his entitlement to 20 percent of the repayment on the Company note on unjust
enrichment grounds, he is now the big winner. Second, the trial court erred in refusing to
revisit the prevailing party issue, holding instead that it had been decided upon appellate
review and was not open to further discussion.
              There is no question that a complete reversal of a judgment nullifies any
accompanying award of attorney fees. (See Beard v. Goodrich (2003) 110 Cal.App.4th

                                              8
1031, 1036; Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284.) The same is true of a
disposition that affirms only one part of a judgment and reverses the rest “in all other
respects.” (Ducoing Management, Inc. v. Superior Court (2015) 234 Cal.App.4th 306,
314-315; see also Ulkarim v. Westfield LLC (2014) 227 Cal.App.4th 1266, 1282-1285
[reversal of order granting anti-SLAPP motion requires reversal of prevailing defendant
attorney fee award].)
              It is also true that a partial reversal may compromise or call into question
the trial court’s prevailing-party determination. Malliet has cited several cases in which
this has occurred. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018,
1027 [demurrer improperly sustained as to non-preempted cause of action; attorney fee
award also reversed; existence of attorney fee provision questioned]; Gilman v. Dalby
(2009) 176 Cal.App.4th 606, 620 [reversal of defense summary judgment on sole
contested cause of action means defendants no longer prevailing parties]; Ventas Finance
I, LLC v. Franchise Tax Bd. (2008) 165 Cal.App.4th 1207, 1233-1234 [in light of partial
reversal, reviewing court “cannot say with certainty” that private attorney general fee
award would have been made]; Zagami, Inc. v. James A. Crone, Inc. (2008) 160
Cal.App.4th 1083, 1079 [reversal limited to damages award requires reconsideration of
prevailing party issue at conclusion of retrial].)
              What the cases Malliet cites have in common are explicit directions to the
trial courts either to reconsider attorney fee awards or to reverse them. “[W]here . . .
there is a limited reversal, we remand for the trial court to consider anew the propriety of
attorney fees unless we can say with certainty the court would have exercised its
discretion the same way had the successful party not prevailed on the issue on which we
reverse. [Citations.] Here, the substantive issue on which we reverse affects only a
minor part of the proposed development impact fees.” (Boatworks, LLC v. City of
Alameda (2019) 35 Cal.App.5th 290, 308.)

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              In this case, we can say “with certainty” the trial court would have
exercised its discretion to award Voit his fees in light of the overwhelming nature of his
success, even if Voit had lost on the declaratory relief/unjust enrichment subpart of the
cross-complaint. We can go even further and state it would have probably been an abuse
of discretion not to award Voit his fees, in light of the wording of the attorney fee
provision in the Company operating agreement, his extensive victory at trial, and the
minor adjustment made to the original judgment after appeal. There was no reason to ask
the trial court to “consider anew the propriety of attorney fees.”
              As to Malliet’s second argument, although our prior opinion affirmed the
trial court’s rulings on attorney fees, we did so because Malliet had abandoned the issue
by failing properly to provide argument and authority as required by the California Rules
of Court. Because the issue was abandoned, we did not review the merits of the attorney
fee awards or of the trial court’s determination of the prevailing party. So technically the
trial court should have exercised its discretion and ruled on the prevailing party issue,
rather than simply to say it had already been decided on appeal.
              But in addition to error, an appellant must also show prejudice, that is, a
reasonable probability of a better outcome. (Malibu Mts. Rec. v. County of L.A. (1998)
67 Cal.App.4th 359, 372.) As stated above, if the trial court had revisited the prevailing
party issue, the outcome would not have been in doubt. As the operating agreement
provides, Voit is unquestionably “the party who, in light of all causes of action asserted,
defenses raised and relief sought, is afforded the greater relief[.]” And to the extent the
action was “on [a] contract,” Voit “recovered a greater relief.” (Civ. Code, § 1717, subd.
(b)(1).) Voit won hands down at trial; he preserved all but one portion of his winnings on
appeal. The reversal resulted in a minor adjustment to the original judgment on equitable

                                             10
grounds and no money award for Malliet. One must squint very hard at this record to see
Malliet as the party who was “afforded the greater relief.” We see no reason to do so.8
II.                Unjust Enrichment
                   Malliet argues that in addition to entering judgment granting declaratory
relief on unjust enrichment grounds in his favor (per subpart (m) of the first cause of
action), the revised modified judgment should have included a separate judgment in his
favor for unjust enrichment. There are several problems with this argument.
                   First, there is no stand-alone cause of action for unjust enrichment in the
second amended cross-complaint. The only other cause of action even to mention unjust
enrichment is the seventh cause of action, for equitable subrogation.
                   Second, the trial court entered judgment in Voit’s favor on the equitable
subrogation cause of action, and we explicitly affirmed that portion of the judgment in
the first appeal. This is now the law of the case.9
                   Finally, and perhaps most importantly, most California courts hold that
there is no cause of action for unjust enrichment. “‘Unjust enrichment is not a cause of
action, . . . or even a remedy, but rather “‘“a general principle, underlying various legal
doctrines and remedies”’ . . . [Citation.] . . . [Citation.]” [Citation.]’ [Citation.]” (Bank of
New York Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 955; see also De Havilland
v. FX Networks, LLC (2018) 21 Cal.App.5th 845, 870; Daniel v. Wayans (2017) 8

          8        Having received no monetary award in the lawsuit, Malliet does not qualify for an automatic
award of costs under the definitions of “prevailing party” in Code of Civil Procedure section 1032, subdivision
(a)(4), with respect to Voit individually and as trustee of his trust and with respect to the Company. “If any party
recovers other than monetary relief . . . the ‘prevailing party’ shall be determined by the court. . . .” (Code Civ.
Proc., § 1032, subd. (a)(4).)
          9        “Upon a later appeal the appellate court will not inquire into the correctness of the principles of
law laid down upon the former appeal, but will only consider the record to determine if said principles have been
followed. Where a decision upon appeal has been rendered by a District Court of Appeal and the case is returned
upon a reversal, and a second appeal comes to this court directly or intermediately, for reasons of policy and
convenience, this court generally will not inquire into the merits of said first decision, but will regard it as the law of
the case.” (United Dredging Co. v. Industrial Acc. Com. (1930) 208 Cal. 705, 712.)

                                                            11
Cal.App.5th 367, 399; Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223
Cal.App.4th 221, 231.)
                  Malliet quotes from our prior opinion to argue that we authorized a separate
judgment on unjust enrichment. We did no such thing; we could not possibly introduce
an entirely new cause of action into a complaint after a trial and order the trial court to
enter judgment on it. What we said was “Malliet . . . asserted a cause of action for
declaratory relief regarding his entitlement to 20 percent of whatever the Company
repaid Voit on the $5 million note, and he asked for relief based on unjust enrichment.”
(Italics added.) There is no “authorization” in those words.
                  On remand, the trial court did exactly as instructed; it entered judgment in
Malliet’s favor on the portion (subpart (m)) of the declaratory relief cause of action based
on unjust enrichment. Since we had upheld the 2016 judgment on the seventh cause of
action for equitable subrogation, the trial court could not have entered judgment in
Malliet’s favor on that ground.10
III.              Prejudgment Interest
                  Civil Code section 3287 governs a party’s entitlement to prejudgment
interest in an action on a contract. Civil Code section 3287, subdivision (a), provides, in
pertinent part: “A person who is entitled to recover damages certain, or capable of being
made certain by calculation, and the right to recover which is vested in the person upon a
particular day, is entitled also to recover interest thereon from that day, except when the
debtor is prevented by law, or by the act of the creditor from paying the debt.”
Subdivision (b) provides: “Every person who is entitled under any judgment to receive
damages based upon a cause of action in contract where the claim was unliquidated, may

          10         Malliet alleged that he was entitled to equitable subrogation on several grounds: breach of
contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and unjust enrichment. The
court in the first trial entered judgment for Voit on this claim because Malliet did not meet the requirements of
equitable subrogation. We agreed.

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also recover interest thereon from a date prior to the entry of judgment as the court may,
in its discretion, fix, but in no event earlier than the date the action was filed.”
                 Civil Code section 3281 defines damages as compensation in money for
detriment suffered from the unlawful act or omission of another. The prerequisite for an
award of prejudgment interest in an action on a contract is an entitlement to recover
damages, whether certain, capable of being made certain, or pursuant to an unliquidated
claim. Malliet cannot meet this prerequisite.
                 Any monetary award under this subpart is limited to amounts repaid before
dissolution. We ordered the trial court to incorporate only Malliet’s share of any pre-
October 2015 repayments into the modified judgment. Subsequent proceedings
established there were no such amounts. Thus Malliet recovered no monetary
compensation in any action on a contract as a result of the trial.11 Our reversal of the
declaratory relief cause of action did not lead to a recovery of damages because Voit was
not unjustly enriched before October 1, 2015, the cutoff date for a declaratory relief cause
of action in the superior court. Malliet has no damages in this action and therefore
nothing upon which to base an award of prejudgment interest.
                 Malliet’s final entitlement to payments from the Company note had to be
determined not in this lawsuit but rather in the Company’s winding up process. We are
not involved in that process at this point. Nor is the trial court.

          11       The judgment included a provision specifying the repayments on the Company note after October
1, 2015, and specifying 20 percent of that amount, which would be Malliet’s share as part of the winding up. This
level of detail was unnecessary. Malliet needed a judgment from the trial court entitling him to 20 percent of
postdissolution note payments that he could take to the winding-up process, but he did not need a judgment for the
specific amount. The inclusion of the amount in the judgment did not turn it into damages.

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                                    DISPOSITION
             The judgments of August 13, 2019, and June 17, 2020, are affirmed. The
order denying appellant Malliet’s motions for attorney fees are affirmed. The order
denying Malliet’s motions for new trial and to vacate the judgment of August 13, 2019, is
affirmed. Respondents are to recover their costs on appeal.

                                                BEDSWORTH, J.

WE CONCUR:

O’LEARY, P. J.

MOORE, J.

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