Court Opinion

ID: 4566464
Source: CourtListenerOpinion
Date Created: 2020-09-17 19:02:44.264867+00
Date Added: 2024-06-11T09:23:00.322581
License: Public Domain

Filed 09/17/20 Multani v. DeCuollo 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                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

 AMARPREET S. MULTANI et al.,

    Plaintiffs, Cross-defendants and                                   G057642
 Appellants,
                                                                       (Super. Ct. No. 30-2017-00930514)
                     v.
                                                                       OPINION
 ERNEST ANTHONY DeCUOLLO,

    Defendant, Cross-complainant and
 Respondent;

 GLENN RICHARD BARRY,

      Defendant and Respondent.

                   Appeal from a judgment of the Superior Court of Orange County, Glenn R.
Salter, Judge. Affirmed. Request to take additional evidence. Denied.
                   Biggins Law Group and Chad Biggins for Plaintiffs, Cross-defendants and
Appellants.
                   Gladych Law, Inc. and John A. Gladych for Defendant, Cross-complainant
and Respondent and for Defendant and Respondent.
                                             *               *               *
                                   INTRODUCTION
              Two agreements are the subject of this appeal. The first is a promissory
note made on August 5, 2013 in the amount of $68,000 (the Promissory Note). The
payors are Amarpreet S. Multani and Seacliff Liquor & Market, Inc. (Seacliff), and the
payee is Anthony DeCuollo. The second is called the Put/Call Option Agreement, also
dated August 5, 2013, between Multani and DeCuollo.
              Multani and Seacliff sued DeCuollo and Glenn Richard Barry for a
declaration the Promissory Note and the Put/Call Option Agreement were void and
unenforceable. DeCuollo cross-complained against Multani and Seacliff to enforce the
Promissory Note. Following a bench trial, the trial court issued a comprehensive
statement of decision finding the Promissory Note and the Put/Call Option Agreement
were valid and enforceable, rejecting Multani and Seacliff’s claims they were
fraudulently procured (as well as other defenses to their enforcement), and awarding
DeCuollo $68,000 in damages on his claim to enforce the Promissory Note.
              Multani and Seacliff appealed from the judgment in favor of DeCuollo.
Multani and Seacliff’s appellate briefs are, however, more of an attempt to reargue the
evidence and inject new theories than they are temperate presentations of arguments
grounded in the principles of appellate review. Among those principles, the one that is
dispositive of this case is the substantial evidence standard governing—and limiting—
review of the trial court’s factual findings. We conclude substantial evidence supports
the trial court’s express and implied findings, and Multani and Seacliff have not met their
burden of showing legal error. We therefore affirm.
                                         FACTS
                                            I.
                                  The Promissory Note
              DeCuollo is a licensed real estate salesperson who worked under Barry’s
broker license. DeCuollo was the owner of a corporation called Business Finders, Inc.

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(Business Finders), and Barry was the broker for the corporation. Rather than split
commissions, DeCuollo had a written contract with Barry by which DeCuollo paid Barry
$6,000 per year in exchange for which Barry acted as broker and assigned commissions
to DeCuollo.
               Multani owned King Liquor store. He retained DeCuollo to sell King
Liquor and purchase another liquor store called Valley Liquor as a tax deferred
transaction (also called a section 1031 exchange). Multani and DeCuollo entered into a
written agreement by which Multani agreed to pay Business Finders a $40,000
commission for the sale of King Liquor and a $30,000 commission for the purchase of
Valley Liquor. The commission would be earned once DeCuollo found a “ready, willing,
and able buyer” for King Liquor.
               DeCuollo put King Liquor on the market and obtained an offer from a
prospective purchaser named Doug Pham, whom DeCuollo considered to be a qualified
buyer. Escrow was opened but ultimately was canceled by Multani, who told DeCuollo
he did so because “[m]y wife doesn’t want to sell the store.”
               Multani nevertheless went ahead with the purchase of Valley Liquor, and
that transaction closed in April or May of 2013. DeCuollo helped put the deal together
and obtained a new lease and the necessary licensing. The escrow instructions referred to
a $70,000 commission to be paid to Business Finders for both the King Liquor and the
Valley Liquor transactions.
               Multani claimed he did not have the money to pay the commission.
DeCuollo agreed to give Multani a $2,000 discount and accept a promissory for $68,000
from Multani and Seacliff as payment for the $70,000 in commissions owed. DeCuollo
testified: “[T]he $68,000 note was in satisfaction of the two commissions that Multani
. . . owed me. And they agreed to pay me, one, $40,000 for the sale of King Liquor; and
two, the $30,000 for the sale of Valley Liquor.” DeCuollo wanted the note to bear

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6 percent interest, but Multani did not want to pay interest, so DeCuollo agreed to make
the note interest free.
               Multani signed the Promissory Note individually and as president of
Seacliff, and a photocopy of the note was received into evidence as exhibit 12. Multani
has paid nothing on the Promissory Note.
               DeCuollo always spoke in English with Multani, who, though a native
Punjabi speaker, always spoke in English with DeCuollo. DeCuollo had no difficulty
understanding Multani, did not perceive that Multani had any difficulty understanding
him, and never understood Multani to be functionally illiterate in reading English.
                                            II.
                             The Put/Call Option Agreement
               The Put/Call Option Agreement, made between Multani and DeCuollo,
arose out of a two-step transaction by which Multani purchased a liquor store called the
Seacliff Liquor & Market that was owned by Seacliff. In the first step, DeCuollo acted as
the seller’s agent in selling a parcel of real property to a buyer named Mr. Schuelein. The
real property included, among several businesses, the Seacliff Liquor & Market.
Schuelein formed Seacliff to own that liquor store.
               Schuelein did not want to operate a liquor store and instructed DeCuollo to
“pick a price and sell it as quick[ly] as possible to a qualified buyer.” DeCuollo brought
in Multani as a buyer. In August 2013, Multani entered into an agreement to purchase
the stock of Seacliff from Schuelein. DeCuollo was not acting as Multani’s agent in this
transaction and explained so to Multani.
               DeCuollo was able to negotiate the price downward from $650,000 to
$350,000. Multani did not have the cash to pay the full amount, so DeCuollo brought in
one of his clients, named Scott Bertani, who agreed to put up $225,000 of the purchase
price of the Seacliff stock and, in exchange, receive 25 percent of the shares. As
compensation for “putting the whole deal together,” getting the pricing reduction,

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bringing in Bertani, and not charging fees, DeCuollo would be paid $200,000 or
37.5 percent of Seacliff stock, whichever was greater, in two years’ time. Attorney
Warren Wimer drafted the Put/Call Option Agreement to place in writing the terms of
this arrangement.
              The Put/Call Option Agreement, like the Promissory Note, was dated
August 5, 2013. The call option gave DeCuollo the right, at any time before August 5,
2015, to demand that Multani transfer to him either 50 percent or 37.5 percent
“whichever is more” of the capital stock of Seacliff.1 If DeCuollo did not make that
demand, then Multani would pay him $200,000 or 50 percent of the equity in Seacliff,
subject to Bertani’s $225,000 ownership interest. The put option gave Multani the right
to pay DeCuollo, at any time before August 15, 2015, $200,000 or 50 percent of the
equity in Seacliff, subject to Bertani’s $225,000 ownership interest. If Multani exercised
the put option after DeCuollo had exercised the call option, then DeCuollo would have
had to transfer back to Multani the shares obtained by exercising the call option and, in
exchange, would receive the payment due under the put option.
              Wimer explained the Put/Call Option Agreement to Multani and his wife.
Multani never said he did not understand that agreement. Multani signed the Put/Call
Option Agreement five times: twice as shareholder of Seacliff, once on behalf Seacliff,
and once each as its secretary and as its president.2 DeCuollo exercised the call option on
July 12, 2014. He sought 37.5 percent of the shares of Seacliff.

1
  It seems that 50 percent would always be greater than 37½ percent, but the call option
does state “whichever is more.”
2
  The Put/Call Option Agreement was marked as trial exhibit 29 but never offered or
received into evidence. Multani attached a copy of the agreement to the appellant’s
opening brief. DeCuollo and Barry have not objected.

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                               PROCEDURAL HISTORY
              In July 2017, Multani and Seacliff filed a complaint against DeCuollo,
Business Finders, and Barry. Although the complaint does not appear in the clerk’s
transcript, according to the respondent’s brief the complaint sought damages for fraud
and other causes of action and declarations that the Promissory Note and Put/Call Option
Agreement were void. At the close of trial, Multani’s counsel stated the only relief
sought by the complaint was a finding the Promissory Note and Put/Call Option
Agreement were void. DeCuollo filed a cross-complaint against Multani and Seacliff to
enforce the Promissory Note.
              Following a bench trial, the court issued a statement of decision in favor of
DeCuollo, Business Finders, and Barry, and against Multani and Seacliff on both the
complaint and the cross-complaint. The court found: “The evidence established that a
dispute existed between . . . DeCuollo and a business [that] Multani ow[n]ed over certain
commissions arising from the purchase of one liquor store and the attempted sale of
another liquor store. The evidence established that the commission dispute was lawfully
settled by the execution of the [P]romissory [N]ote in the negotiated amount of
$68,000.00. The evidence established that . . . DeCuollo, a licensed real estate agent, had
the legal right to negotiate the disputed commission due, and the evidence established
that his arrangement with . . . Barry allowed him to do so as well.”
              The trial court found that Multani and Seacliff had produced no evidence
against Business Finders or Barry that would support the causes of action alleged against
them. On appeal, Multani and Seacliff do not challenge that finding.
              The court found the Promissory Note was supported by adequate
consideration, had no legal defects, and was in all respects valid and enforceable. The
court found no evidence supported Multani’s claims that the Promissory Note was
procured by fraud, was a forgery, or was made in violation of DeCuollo’s fiduciary

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duties, and found Multani and Seacliff were in breach of the note for failing to pay it
when due.
              The court also found the Put/Call Option Agreement to be valid and
enforceable, Wimer to be credible, and Multani understood the nature, terms, and content
of the Put/Call Option Agreement, the terms and import of which had been explained to
him by Wimer. The court found the Put/Call Option Agreement was supported by legal
and adequate consideration, was not procured by fraud, and was not a gift of community
property.
              The court awarded judgment to DeCuollo in the amount of $68,000 plus
prejudgment interest. In April 2019, a judgment was entered, from which Multani and
Seacliff appealed.
                                      DISCUSSION
                                             I.
                                   Standard of Review
              Three fundamental principles of appellate review are: (1) a judgment is
presumed correct, (2) all intentions and presumptions are drawn in favor of correctness,
and (3) the appellant bears the burden of proving error. (In re Marriage of Arceneaux
(1990) 51 Cal.3d 1130, 1133; Fladeboe v. American Isuzu Motors, Inc. (2007) 150
Cal.App.4th 42, 58 (Fladeboe).) When, as in this case, we review a judgment based upon
a statement of decision following a bench trial, we review questions of law de novo and
apply a substantial evidence standard of review to the trial court’s express and implied
findings of fact. (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981; see Fladeboe,
supra, 150 Cal.App.4th at pp. 59-60.)
              In applying the substantial evidence standard, our task is to examine the
entire record in the light most favorable to the judgment and determine whether there is
evidence that is reasonable, credible, and of solid value to support the judgment.
(Ferguson v. Yaspan (2014) 233 Cal.App.4th 676, 682.) We resolve all conflicts in the

                                             7
evidence in favor of the judgment, we do not reweigh the evidence, and we are bound by
the fact finder’s credibility determinations. (Citizens Business Bank v. Gevorgian (2013)
218 Cal.App.4th 602, 613.) The testimony of a single witness may constitute substantial
evidence. (Ibid.) As a general rule, therefore, we will look only at the evidence and
reasonable inferences supporting the judgment and disregard contrary evidence and
inferences. (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631.) The test is
whether the record contains substantial evidence in favor of the respondent, and “[i]f this
‘substantial’ evidence is present, no matter how slight it may appear in comparison with
the contradictory evidence, the judgment must be upheld.” (Ibid.)
              Multani and Seacliff did not object to the statement of decision or bring any
ambiguities or omissions in it to the trial court’s attention. We therefore infer the trial
court made all implied factual findings favorable to DeCuollo on all issues necessary to
support the judgment. (Fladeboe, supra, 150 Cal.App.4th at pp. 59–60.)

                                              II.

                 The Promissory Note and Put/Call Option Agreement
                            Are Valid And Enforceable.
              In keeping with the first principle of appellate review, we presume the
judgment is correct; that is, the Promissory Note and Put/Call Option Agreement are
valid and enforceable, and DeCuollo is entitled to $68,000 in damages.3 Multani and

3
   A promissory note is an unconditional promise to pay money, signed by the person
undertaking to pay, and payable on demand or at a definite time. (Saks v. Charity
Mission Baptist Church (2001) 90 Cal.App.4th 1116, 1132.) A promissory note is
presumed to have been given for sufficient consideration and, in an action to recover on a
promissory note, the introduction of the note in evidence establishes a prima facie right to
recover according to its terms. (Id. at p. 1133.) The party seeking to avoid payment on
the note has the burden of proving a defense to its enforcement. (Ibid.) DeCuollo
established a prima facie right to recover under the Promissory Note by introducing it
into evidence, thereby placing the burden on Multani and Seacliff to prove a defense to
its enforcement.

                                              8
Seacliff have the burden of proving error. To meet that burden, they argue the
Promissory Note and Put/Call Option Agreement are unlawful and unenforceable because
they are both disguised real estate commissions. According to Multani and Seacliff, fatal
to both the Promissory Note and the Put/Call Option Agreement is the lack of a
commission agreement between Multani and Barry, the real estate broker under whose
license DeCuollo acted as salesperson.
              A real estate sales license does not permit its holder to represent another
unless the salesperson acts under a broker’s authority. (Venturi & Co. LLC v. Pacific
Malibu Development Corp. (2009) 172 Cal.App.4th 1417, 1423.) The broker under
whose authority a sales person acts must be a party to the real estate contract. (Id. at
p. 1424.) “No real estate salesperson shall accept compensation for activity requiring a
real estate license from any person other than the broker under whom he or she is at the
time licensed.” (Bus. & Prof. Code, § 10137.)
              Substantial evidence supports a finding there was an agreement between
Multani and Business Finders that would permit DeCuollo to accept compensation. The
trial court found that Barry was a licensed California real estate broker under whom
DeCuollo worked as an agent on a flat fee basis and that DeCuollo’s arrangement with
Barry allowed DeCuollo to negotiate the disputed commission. We infer the trial court
impliedly found there was a lawful contract between Multani and either Barry or
Business Finders that permitted recovery of commissions. (Fladeboe, supra, 150
Cal.App.4th at pp. 59-60.)
              Substantial evidence supports the trial court’s express and implied findings.
DeCuollo testified he owned Business Finders, for which Barry was the broker.
DeCuollo testified that Business Finders had a written agreement with Barry under which
Barry was paid $6,000 per year and, in exchange, Barry assigned commissions to
DeCuollo. Multani and Seacliff did not make a secondary evidence rule (best evidence
rule) objection to this testimony. (Evid. Code, §§ 1521, 1523, subd. (a).) DeCuollo

                                              9
testified that “he,” which we infer to mean Business Finders, had a written commission
agreement with Multani. Multani and Seacliff again did not make a secondary evidence
rule objection. DeCuollo testified the commission for the sale of King Liquor and the
purchase of Valley Liquor were to be paid to Business Finders, which was a practice
consistent with other transactions; for example, commission charges were paid to
Business Finders for the sale to Schuelein of the property on which the Seacliff Liquor &
Market was located.
              Multani and Seacliff, in their reply brief, ask us to consider, as additional
evidence, an unauthenticated report dated February 10, 2020 from the California
Department of Real Estate purporting to show the licensing status of Business Finders.
Multani and Seacliff concede this document was not presented at trial. We deny the
request. The Court of Appeal’s authority under Code of Civil Procedure section 909 to
take additional evidence must be exercised sparingly, only to affirm, and never when
substantial evidence supports the trial court’s findings. (Diaz v. Professional Community
Management, Inc. (2017) 16 Cal.App.5th 1190, 1213.) The request to take additional
evidence does not meet this standard.
              Multani and Seacliff argue the Promissory Note lacked adequate
consideration because there was no evidence any commissions would be earned if the
King Liquor sale did not close. The trial court found the Promissory Note was supported
by adequate consideration, and substantial evidence supports that finding. DeCuollo
testified he entered into a written commission agreement with Multani which provided
that (1) commission would be earned once DeCuollo found a “ready, willing, and able
buyer” and (2) “[if] the seller breaches the agreement and causes the sale to cancel, I am
owed a commission.” No secondary evidence rule objection was posed. DeCuollo
testified he found and obtained an offer from prospective buyer Pham, whom DeCuollo
considered to a qualified buyer, and escrow was canceled unilaterally by Multani because
his wife decided she did not want to sell the store. DeCuollo was owed a commission.

                                             10
              Multani and Seacliff argue the Promissory Note was “highly unusual and
suspect” because there had been no attempt to collect on it for years and the font style
was odd. They cite no authority or provide record citations for this argument, which
appears never to have been made at trial. This argument is forfeited. (Cal. Rules of
Court, rule 8.204(a)(1)(B) & (C); see Ryan v. Real Estate of the Pacific, Inc., supra, 32
Cal.App.5th at p. 644; Roe v. McDonald’s Corp. (2005) 129 Cal.App.4th 1107, 1114.) It
is also an inherently fact-based argument that neither can nor should be resolved for the
first time on appeal.
              Multani and Seacliff argue the Put/Call Option Agreement was
unenforceable because it was fraudulently procured and DeCuollo was acting as
Multani’s agent in the Seacliff Liquor & Market transaction. DeCuollo testified he did
not act as an agent for Multani in the Seacliff Liquor & Market transaction, Multani knew
DeCuollo was not his agent, and the entire transaction was explained to everyone by
Wimer. The trial court found the Put/Call Option Agreement was not fraudulently
procured, Wimer fully explained the terms and import of that agreement to Multani,
Wimer’s testimony was credible, and Multani fully understood the terms and import of
the Put/Call Option Agreement. Testimony by DeCuollo and Wimer supports those
findings.
              Multani and Seacliff argue the Put/Call Option Agreement lacks adequate
consideration. The trial court found the opposite to be true. DeCuollo’s testimony about
his effort in putting the transaction together supported that finding. Finally, Multani and
Seacliff argue the Put/Call Option Agreement is “unconscionable and clearly the result of
self-dealing and taking advantage of Appellant’s trust and fiduciary duty.” No legal
authorities or record citations are offered in support of this argument. It is forfeited.
              Multani and Seacliff assert, “where, as here the agent thinks he has a sucker
who can be tricked into signing documents which, the courts must protect people from
such actions, not condone or encourage agents to do this sort of thing!” We must respond

                                              11
by admonishing Multani’s appellate counsel on respect for the trial court, proper regard
for the principles of appellate review, and basic civility and courtesy toward others. The
trial court found that Multani had not been tricked into signing the Put/Call Option
Agreement. The issue facing Multani, as appellant, is whether that finding was supported
by substantial evidence, the relevant standard of review. Rather than try to meet that
appellate burden and convince us of error, counsel has attacked the trial court’s integrity
by insinuating the court condoned or even encouraged fraudulent behavior.

                                     DISPOSITION
              The judgment is affirmed. Respondent to recover costs on appeal.

                                                  FYBEL, ACTING P. J.

WE CONCUR:

THOMPSON, J.

GOETHALS, J.

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