Court Opinion

ID: 9839970
Source: CourtListenerOpinion
Date Created: 2023-09-14 19:04:34.614221+00
Date Added: 2024-06-11T09:42:45.983773
License: Public Domain

Filed 9/14/23 Owosen Motorsports Group v. TBE Tour Consultant Corp. CA2/3

 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

 California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on
 opinions not certified for publication or ordered published, except as specified by rule 8.1115(a). This
 opinion has not been certified for publication or ordered published for purposes of rule 8.1115(a).

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION THREE

 OWOSEN MOTORSPORTS                                             B314076
 GROUP, INC.,
                                                                Los Angeles County
      Plaintiff and Appellant,                                  Super. Ct. No. BC544747

      v.

 TBE TOUR CONSULTANT
 CORPORATION et al.,

      Defendants and Respondents.

      APPEAL from a judgment and an order of the Superior
Court of Los Angeles County, Stuart Rice, Judge. Judgment
reversed in part with directions, affirmed in part. Appeal from
order dismissed in part, affirmed in part.
      Ferguson Case Orr Paterson, Wendy C. Lascher, and John
A. Hribar for Plaintiff and Appellant.
      Meylan Davitt Jain Arevian & Kim, Raymond B. Kim, and
Grace C. Lee for Defendants and Respondents.
            _______________________________________
                         INTRODUCTION

       Plaintiff and appellant Owosen Motorsports Group, Inc.
(Owosen) appeals a judgment entered following a trial before a
judicial referee under Code of Civil Procedure1 638, as well as the
referee’s post-judgment order denying Owosen’s motions for new
trial and to set aside the judgment. Owosen entered into two
contracts with TBE Tour Consultant Corporation (TBE) and
Hong Liu, respectively, pursuant to which Owosen provided tour
buses to TBE and Liu, who operated a tour bus business. Liu’s
ex-wife, Betty Qi, also assisted in the management of TBE.
Owosen filed suit against TBE, Liu, and Qi (together, the
defendants) after the contractual relationship between Owosen,
TBE, and Liu fell apart. At trial, the parties presented vastly
different interpretations of the contracts between them and the
allocation of expenses and profits. The referee did not entirely
adopt either side’s interpretation. However, he awarded damages
of $64,438.83 in TBE’s favor and against Owosen under the
parties’ first contract and awarded no damages to Owosen with
respect to the second contract.
       On appeal, Owosen does not challenge the referee’s
interpretation of the contracts but contends that the referee made
several fundamental errors in the calculation of damages that
resulted in a decision unsupported by the evidence. Owosen
argues that the referee’s primary error was his exclusion of entire
categories of operating expenses from his analysis. We agree with
Owosen that the referee’s exclusion of payroll, payroll tax,
workers’ compensation, and insurance expenses from the

1 All undesignated statutory references are to the Code of Civil

Procedure.

                                   2
calculation of damages for the parties’ first contract was
inconsistent with the measure of damages the referee adopted,
unsupported by substantial evidence, and did not reasonably
approximate damages. We therefore reverse the judgment in part
with instructions to award damages against TBE and in favor of
Owosen in the amount of $44,537.83. We otherwise affirm the
judgment.
      The appeal of the motions for a new trial and to set aside
the judgment is dismissed as moot with respect to Owosen’s
challenge of the referee’s exclusion of payroll, payroll tax,
workers’ compensation, and insurance expenses from the
calculation of damages. We affirm the referee’s order denying the
motions in all other respects.

        FACTS AND PROCEDURAL BACKGROUND

1.    Factual Background
      Feng Jun (Frank) Zhang was born in China and lived there
most of his life, though he now primarily resides in the United
States. He came to the United States to be closer to his son, Jian
(John) Zhang2, and because his wife needed medical treatment.
At the time of the hearing, Frank was in the process of obtaining
permanent residency status through the EB-5 Immigrant
Investor program, which requires a significant investment in the
United States economy. He decided to make a direct investment

2 We follow Owosen’s convention in its briefing below and on appeal

and refer to Feng Jun Zhang and Jian Zhang as Frank and John in
this opinion. Because Frank and John share the same last name, we
refer to them by their first names for clarity. No disrespect is intended.

                                    3
by starting Owosen, which began its operations as a vehicle
importer/exporter and expanded to include bus leasing.
      While living in China, Frank met Yong Zhou through
Zhou’s sister, who was a client manager at a bank with which
Frank did business. When Frank came to visit his son in January
2011, he spent a week with Zhou in Los Angeles. During this
time, they discussed Zhou’s businesses and whether there were
investment opportunities for Frank. Zhou suggested a vehicle
import and export business. Frank agreed to do business with
Zhou and they established Owosen.3 Several months later, Frank
visited the United States again and Zhou introduced him to Liu.
They discussed Liu’s tour bus business, TBE, and how the
number of buses TBE had was insufficient to meet demand. Liu
suggested that Frank purchase additional buses which Liu could
then lease from Frank. In the course of discussing Liu’s business,
Frank also met Liu’s ex-wife, Betty Qi, who worked with Liu in
the tour bus business and ran a travel agency. After four
meetings, Frank decided to do business with Liu.
      Owosen purchased five buses in 2011. The parties
discussed and agreed that TBE would manage the five vehicles,
and the net profits, after expenses, would be split 60 percent to

3 Zhou worked at Owosen and managed the bus side of the business

when Frank returned to China in 2011 and 2012. Sometime in the first
half of 2012, Frank discovered that Zhou, who had authority to sign
checks from Owosen, was using Owosen’s checking account to pay for
personal expenses and terminated his employment. John and another
Owosen employee took over the management of Owosen.

                                 4
Owosen and 40 percent to TBE (Contract One).4 The parties also
agreed that expenses for the operation of the buses would be paid
from the income, including salaries, benefits, and insurance for
employees of TBE, and that the agreement could be amended
from time to time as agreed by the parties, and that it could be
terminated if there was a material breach of the contract by
either side. Although the parties subsequently executed a written
lease agreement on April 28, 2011, this contract was written in
English, in which neither Liu nor Frank is fluent, was prepared
by Owosen and Frank’s counsel without input from Liu as to the
terms and did not reflect the parties’ earlier meeting of the
minds, except with the portion of the lease agreement that was
consistent with the prior agreement.
      The parties subsequently executed an undated attachment
written in Mandarin, but this was not a new, binding agreement
between the parties but intended as a document to support
Frank’s immigration application.
      In the spring of 2012, Owosen purchased five additional
buses. On April 4, 2012, Owosen and Liu, in an individual
capacity, signed a contract written in Mandarin relating to the
five new buses only (Contract Two). Contract Two was a new
binding contract between Liu and Owosen, and its basic terms
were that Liu was to be responsible for essentially all operating
expenses, as to the five buses identified in it, in exchange for
which Liu was required to pay Owosen the monthly sum of either
$17,000 or $20,000, depending on the season. Thereafter, all

4 Because Owosen does not challenge the referee’s findings with

respect to the substance of the parties’ agreements, we rely on those
findings in setting forth the terms of those agreements.

                                   5
remaining income, or losses, was to be for the benefit or
detriment of Liu. Under Contract Two, it was contemplated that
Liu would use TBE and its personnel for logistical, management,
and accounting services to assist in his performance of Contract
Two. There was no agreed upon provision between Liu and
Owosen or TBE and Owosen for a management or accounting fee
payable to TBE for services rendered in connection with Contract
Two. At some point around the time Contract Two went into
effect, Liu became an employee of Owosen and received a salary.
       In early 2013, Owosen notified Liu that he was $32,000
short on his monthly payments under Contract Two. Owosen
subsequently sent letters to Liu requesting payment of the
amount owed, which it now claimed was $83,000. In August 2013,
Frank reached out to Qi for assistance in resolving the situation.
Qi made additional payments to Frank. However, Frank stated
that money was still owed under the contracts. Qi sent Frank the
account details for May 2012 through August 2013, which Qi and
Frank discussed at a meeting at the Owosen office. The reports
did not match reports that Liu had provided Frank for the same
period. Around this time, Liu quit his job with Owosen. Frank
and Qi discussed the possibility of continuing Owosen and TBE’s
business relationship, with Qi managing the relationship for
TBE, but they were unable to reach an agreement and Frank
ultimately requested the return of the 10 buses. Several of the
buses were still completing previously contracted tours at the
time Frank demanded their return. All buses other than a Volvo
bus, Owosen’s most valuable bus, were subsequently returned.
Liu asserted that the Volvo belonged to TBE.

                                6
2.    Procedural Background
       In May 2014, Owosen commenced a lawsuit, alleging
causes of action against TBE, Liu, Qi, Eric Investment, LLC,
Queen Estates Holdings, LLC, Old Brooks Estates, LLC, and
Eastland Estate, LLC.5 It subsequently filed an amended
complaint, which is the operative pleading. As is relevant to this
appeal, Owosen asserted the following causes of action against
defendants: (1) breach of Contract One; (2) in the alternative, for
monies due on account stated as to Contract One; (3) breach of
Contract Two; (4) in the alternative, for monies due on account
stated as to Contract Two; (5) conversion as to the nine buses
other than the Volvo. As to Liu and Qi, the operative complaint
also asserted causes of action for fraud with respect to the Volvo
bus and various documents, but Owosen chose not to pursue
damages under the fraud causes of action at trial. TBE filed a
cross-complaint against Owosen and Frank asserting five causes
of action, but only the cause of action for breach of contract
remained pending at the time of trial.
       In 2017, the parties stipulated that the matter would be
heard by a judicial referee, the Honorable R. Bruce Minto
(Retired), pursuant to section 638. The parties also stipulated
that the referee would hear and determine all matters, issues,
and controversies among the parties, including all pretrial and
post-trial matters.

5 Owosen also alleged causes of action against Moxu Qi, Prevost Car

(US) Inc., and TCF Equipment Finance, Inc, but later dismissed its
causes of action against these parties. Judgment was entered in favor
of Eric Investment, LLC, Queen Estates, LLC, Old Brooks Estates,
LLC, and Eastland Estate, LLC as to Owosen’s claims against these
defendants. Owosen does not challenge this aspect of the judgment.

                                  7
       The trial was held in front of the referee in March 2019.
The referee heard testimony from Frank, John, Liu, Qi, and the
defendants’ damages expert, Claudia Berglund. The parties also
submitted six binders of exhibits, almost all of which were
received into evidence by stipulation. The parties also stipulated
that closing argument would be conducted through opening and
reply briefs filed by both parties, and the parties also filed
proposed statements of the case and findings of fact, after which
the matter was submitted for decision.
       The referee issued a 100-page statement of decision and
recommended judgment (the Statement of Decision) in April
2020. The referee took over 300 pages of notes to aid in arriving
at a decision. He noted that, “far more than in most cases, almost
every fact was hotly disputed. It was almost as if the two camps
lived in alternate universes on almost every issue, and sometimes
the beliefs held in those universes even differed greatly from the
written documents used to memorialize their own interpretations
of the transactions between them.” The referee did not accept any
party’s interpretation of the agreements and thus could not rely
on the views of damages put forth by any party. He noted that
the credibility of witnesses, particularly Frank, Liu, and Qi, was
“of paramount importance in [his] decision.” Considering all
evidence, the referee found Liu “to be more believable regarding
the terms of the agreements and the evolution of the business
relationship between the parties” than Frank. The referee
acknowledged that there were inconsistencies in Qi’s testimony,
but found that, in general, she had a higher level of credibility
than most witnesses, including Frank and Liu, and that “[s]he
had superior knowledge to any of the other witnesses . . . of the
business and accounting side of the bus and tour industry in

                                8
general, and specifically regarding TBE’s operations and
finances.” The referee found that the testimony of Berglund was
“important” and “the most reliable evidence of the financial
picture and damages between the parties.” However, because
relatively little time was allotted to her testimony and she was
unable to provide a detailed explanation of her analysis, utilizing
her data and exhibits to calculate damages consistent with the
referee’s interpretation of the contracts “was difficult and time
consuming.”
       With respect to Owosen’s claim that the defendants were
liable to Owosen for the breach of Contract One, and for
conversion and fraud based on the failure to return the buses
after demand, the referee found that Owosen’s cancellation of
Contract One based on Liu’s breach of Contract Two in his
individual capacity was not justified and therefore his demand of
the first five buses was not justified. The referee noted that the
demand for the return of the buses within two days was not
dictated by any contract between the parties. However, he found
that Frank’s demand to Qi and TBE was sufficient notice of
termination of Contract One and Contract Two. The referee
further found that the return of the nine buses within either
approximately a week or eleven days was not unreasonable.
However, the Volvo was never returned voluntarily and was
eventually repossessed. The referee concluded that this delay was
unreasonable, as was TBE’s failure to return it to Owosen or the
lender or to negotiate a compromise.
       Owosen did not submit evidence concerning the diminution
in value of the Volvo after the demand for its return was made,
nor was there evidence concerning the number of miles put on the
vehicle after the demand. The referee found that there was some

                                9
evidence that the Volvo continued to be used by TBE. In the
absence of better evidence, the referee set the economic benefit to
TBE for its unreasonable delay in returning the Volvo at $500.00
per day, or $15,000 per month. The referee concluded that
10 days would be a reasonable time in which to return the Volvo
and thus measured damages beginning on October 3, 2013. The
only information the referee had as to when the bus was
repossessed is that it took place after the action was filed on May
6, 2014. The referee thus awarded seven months of damage
against TBE and in favor of Owosen, for a total of $105,000. The
referee also concluded that there was a breach of Contract One
with respect to TBE’s practice of deducting Lexus payments from
Owosen’s revenue and awarded Owosen three months’ worth of
payments on the Lexus, or $4,464.
      With respect to the first period of the parties’ relationship,
defined as “May 2011 through May/June 2012,” or approximately
the period after Contract One was entered into and the execution
of Contract Two, the referee noted that whatever complaints
Owosen had about the funds it received and whether they were
consistent with the parties’ agreement were not reduced to
writing. Further, Zhou, who managed the relationship at the
time, was not brought in to testify. There was also no evidence to
support that, after John took over management of Owosen, he
had sent any written objection to the absence of accounting
reports from TBE or shortage with respect to payments that were
due. The referee concluded that John’s and Berglund’s analysis
both generally corroborated the accountings propounded by the
defendants. With respect to Contract One, under which 60
percent of net profits were owed to Owosen, “the parties’ course of
conduct demonstrated that, broadly and generally, but with some

                                10
exceptions, during the first year, TBE collected the revenues
derived from the tour bus operations, paid all expenses (except
for driver salaries), deducted those expenses from the revenues,
and then gave 60% of the net profits to Owosen each month.”
       The referee found that Owosen’s damages analysis,
presented through John, was less persuasive than Berglund’s
analysis. Specifically, John’s analysis, which was set forth in
Exhibits 77 and 78, failed to differentiate between revenue and
expenses under Contract One and Contract Two. The referee
concluded that, “[i]n totality . . . such exhibits make it almost
impossible to determine the extent of income and expenses
through the period [Contract One] was in effect, up to the time
Contract Two took effect, and between [Contract One] and
Contract Two during the second period of time when both were in
effect.” John unilaterally decided what revenues and expenses
were related to the bus business, put those items in Exhibits 77
and 78, and redacted all other financial information. According to
Berglund, Owosen redacted approximately 75 percent of the
dollar amounts of financial data in its production to the
defendants, making it difficult to verify the validity of his work.
The referee concluded that this made it “impossible” for him to
determine an accounting for Contract One and Contract Two
from Owosen’s exhibits alone or to determine which party, if any,
breached the agreement or what the damages would be for such a
breach.
       The referee concluded that the accounting and testimony of
Berglund preponderated and, accordingly, TBE underpaid
Owosen during the first period of Contract One in the amount of
$27,321.82 but declined to award interest on this amount.

                                11
       Berglund’s analysis did not reconstruct the gross income,
gross expenses, and net income for the first five buses in the
second period of May 2012 through August 2013. The referee
attempted to use the protocol testified to by Berglund, although
the primary document relied upon by Berglund was an exhibit
written in Mandarin, for which Berglund had an English
translation but the referee did not. The referee considered many
different options, including finding that neither side had met
their respective burden of proof, but ultimately attempted “to use
the existing exhibits and testimony to determine to a reasonable
degree of accuracy the issues surrounding the amounts owed
under [Contract One] for the first five buses during the second
period of the parties’ business relationship.” In light of these
various limitations, the referee’s analysis concerning the
damages under Contract One in the second period “required
applying some broad assumptions.” Although these assumptions
resulted in “imprecise conclusions,” the referee concluded that his
analysis met the standard of “to a reasonable probability.”
       The referee “assumed that income was earned
approximately equally between the first set of five buses and
second set” as the number of seats in both sets of buses were
similar (153 seats for the first five buses and 132 to 140 seats for
the five other buses). He further assumed that operating
expenses were approximately equal for both sets of buses and
assumed that the cumulative overpayment by TBE that Berglund
calculated was attributable 50 percent to the first and second set
of buses. It was also assumed that the expense identified as
“Commission” in Exhibit 599 (which reflected Berglund’s analysis
of expenses, revenues, and net overpayment by TBE during the
second period) was attributable 50 percent to the first set of buses

                                12
and 50 percent to the second set of buses. However, because TBE
could not properly charge a “commission” under the terms of
Contract One, this expense was “disallowed from the calculation
of allowed expenses for the first set of five buses.” The referee
thus subtracted 50 percent of the expenses, less 50 percent of the
“commission” charges, from 50 percent of the gross income, which
yielded $298,370.79 in expenses attributable to the first set of
buses in the second period. The referee then deducted that
amount from 50 percent of gross revenues for the second period
($686,986.18), leaving a net revenue of $388,615.39, of which 60
percent, or $233,169.23, was Owosen’s share.
       The referee then turned to the amounts received by Owosen
to determine whether TBE had paid all amounts owed or had
overpaid. The referee took 50 percent of Owosen’s gross receipts
for the period ($617,250.85) and deducted 50 percent of the
payments Owosen made for fuel, parking, and maintenance
($158,423.54), which were TBE’s responsibility under Contract
One. The referee determined that the amount received by
Owosen with respect to the first set of buses in the second period
was $458,827.31. Since Owosen’s share was only $233,169.23, the
referee concluded that TBE had overpaid by $225,658.08 with
respect to the first five buses in the second period. The net award
to TBE under Contract One was thus $88,872.26. The referee also
concluded that TBE was the prevailing party with respect to
Owosen’s claims concerning Contract One.
       With respect to Contract Two, the referee declined to adopt
either side’s arguments as to damages in light of his finding that
the terms of Contract Two “governed the business and financial
relationship between Owosen and . . . Liu as to the second five
buses during the second period of time.” However, the referee did

                                13
find that the analysis and opinions of Berglund preponderated in
general. Although not prepared for this purpose, the referee
relied on Exhibits 601, which Berglund based on Owosen’s
Exhibit 78, and Berglund’s testimony pertaining to that exhibit.
Adopting Berglund’s analysis in Exhibit 601 with respect to the
second set of buses, the court concluded that, TBE owed $305,000
in fixed monthly fee payments to Owosen as well as operating
expenses (i.e., payroll, payroll taxes, workers’ compensation, and
insurance and repairs), which were shown to be $287,740.21, for
a total of $592,740.21. Exhibit 601 showed that Owosen received
$617,250.86 from TBE with respect to Contract Two during the
second period, meaning that the overpayment to Owosen was
$24,510.65. However, it was stipulated that only the cross-
complaint of TBE remained in play and only with respect to
Contract One, and thus no affirmative relief was awarded to Liu
in connection with Contract Two.
       With respect to future damages, the referee concluded that
Contract Two was for a five-year term. However, he noted that
Owosen had the burden of producing evidence as to what the
damages would be to a reasonable probability, which was
“substantially more complicated than $17,000 or $20,000 times
the number of months remaining on the contract.” He noted that,
“[w]hile Owosen’s income was fixed under Contract Two, its
expenses could vary wildly, as past history has repeatedly shown,
and current history corroborates.” The referee further noted that
every aggrieved party has a duty to mitigate damages and there
was no evidence presented that Owosen had done so. The referee
concluded: “On the totality of evidence presented, sufficient
evidence was just not presented from which the Referee could
calculate to any reasonable degree of confidence the net damages

                               14
[Owosen] suffered from September 2013, out approximately 3.5
years into the future. Without such evidence of future damages
and mitigation, the Referee declines to award same.” The referee
further concluded that the term of Contract One was 36 months
or three years and that Owosen terminated it without legal
justification but declined to award future damages for the same
reasons as Contract Two.
       Owosen subsequently filed objections to the Statement of
Decision as to both liability issues and damages. The referee
found that most of the objections were inappropriate for the
pending motions and “more in the nature of a motion for new
trial, a JNOV, or renewed argument on issues that were before
the Referee at the original trial and, in most cases, thoroughly
briefed post-trial.” He concluded that, with certain limited
exceptions,6 the findings in the Statement of Decision were
“supported by the preponderance of the totality of the evidence
presented by all sides.” However, with respect to damages, the
referee agreed with the parties that the total expenses used with
respect to the second period of Contract One was inconsistent
with Exhibit 599 and that an adjustment of $18,481.43 in
Owosen’s favor was appropriate. The referee also concluded that
an additional award of $5,952 in favor of Owosen was appropriate
with respect to the Lexus payments under Contract One.

6 For example, the referee sustained in part the objection that there

was ambiguity in the Statement of Decision insofar as he referred to
both the written lease agreement in April 2011 and the oral contract
that governed the parties’ relationship (which we refer to as Contract
One) as “The Lease.” However, as the term was used numerous times
in the Statement of Decision, the referee stated that context would be
sufficient to determine which reference was intended.

                                   15
      Judgment was entered in April 2021 in favor of TBE in the
amount of $64,438.83. Shortly thereafter, Owosen moved for a
new trial pursuant to sections 659 and 657 and to set aside the
judgment pursuant to section 663. Among other things, Owosen
contended that there was no evidentiary basis to exclude
insurance, driver’s salaries, workers’ compensation, and payroll
taxes from the bus operating expenses for the second period for
Contract One. These expenses were not included in Exhibit 599,
on which the referee relied in calculating damages for Contract
One in the period but were included in the referee’s calculation of
damages under Contract Two for the second set of buses. Owosen
also argued that there was no evidentiary basis to exclude
expenses that it paid for fuel, parking, and maintenance from the
Contract Two calculations.
      The referee denied Owosen’s motions. He concluded that
“[n]one of the issues raised by [Owosen] are clearly contrary to
the preponderance of the evidence, such that a different result is
compelled.” He acknowledged that, “many, if not most, of the
issues on which there were findings may be contrary to some of
the evidence, but not the preponderance of the evidence as this
referee determined that to be.” The referee further concluded
that, with respect to the request for a new trial, “no adequate
showing was made as to what additional evidence would be
presented, and why such evidence was not and could not have
been presented in the original trial.” The referee concluded that
this was not an appropriate case to exercise his discretion to
enter a different judgment or grant a new trial.
      Owosen timely appealed the judgment and the referee’s
order denying the motions for new trial and to set aside the
judgment.

                                16
                          DISCUSSION

1.    Substantial Evidence Review of the Referee’s Award of
      Damages
       Owosen does not contest the referee’s conclusions with
respect to the terms of the contracts. Rather, Owosen limits its
challenges to the referee’s determination of damages, specifically:
(1) his exclusion or omission of certain categories of expenses in
determining whether TBE had paid Owosen an adequate amount
under the contracts; (2) his calculation of the amount that Liu
overpaid to Owosen under Contract Two; and (3) his exclusion of
bus fees for April 2012 and September 2013 from the calculation
of damages under Contract Two. We agree with Owosen’s first
challenge and conclude that the judgment must be reversed in
part with directions that judgment be entered against TBE and
in favor of Owosen in the amount of $44,537.83. We otherwise
conclude that the referee’s damages analysis was consistent with
the measure of damages and supported by substantial evidence.
      1.1.   Standard of Review
      “The applicable legal standard [for an award of damages]
requires that the court use some reasonable basis of computation.
[Citation.] An award of damages computed on a reasonable basis
will be upheld even if it is only an approximation. [Citation.]”
(Scheenstra v. California Dairies, Inc. (2013) 213 Cal.App.4th
370, 402.) “Whether a plaintiff ‘ “ ‘ “is entitled to a particular
measure of damages is a question of law subject to de novo
review.” ’ ” ’ [Citation.] The amount of damages, however, is a
question of fact. The award will not be disturbed if it is supported
by substantial evidence.” (Pebley v. Santa Clara Organics, LLC
(2018) 22 Cal.App.5th 1266, 1273.) The parties agree that the

                                17
substantial evidence standard applies to the damages issues
raised by Owosen on appeal.
       “In resolving challenges to a verdict based on sufficiency of
the evidence, we review the record as a whole, resolving all
conflicts and indulging all legitimate and reasonable inferences
in favor of the prevailing part, to determine whether substantial
evidence supports the verdict. [Citation.] ‘Substantial evidence’ in
this regard does not mean ‘any evidence.’ Rather, to be
‘substantial,’ the evidence must be ‘ “of ponderable legal
significance, . . . reasonable in nature, credible, and of solid
value.” ’ [Citation.] If there is substantial evidence, contradicted
or uncontradicted, that will support the finding, it must be
upheld regardless of whether the evidence is subject to more than
one interpretation. [Citations.]” (Mardirossian & Associates, Inc.
v. Ersoff (2007) 153 Cal.App.4th 257, 273, fn. 7.)
      1.2.   The Omission of Four Categories of Damages
             from the Calculation of Damages for the Second
             Period of Contract One
       Owosen argues the referee’s damages analysis was not
supported by substantial evidence because it excluded insurance,
driver salaries, workers’ compensation, and payroll taxes for
Contract One in the second period, even though these same
expenses were included for the first period. Owosen contends that
this error should be corrected by adding $287,740.21 to the
expenses paid by Owosen, and which TBE was required to
reimburse. This includes $55,116.74 for insurance, $158,674.90
for payroll, $23,106.76 for workers’ compensation, and $50,841.82
for payroll taxes. These amounts are derived from Exhibit 601,
which was prepared by the defendants’ expert and based on
Owosen’s Exhibit 78. The defendants argue that Exhibit 601 was

                                18
meant only “to illustrate that even if the Referee relied on
Owosen’s suspect financial records, TBE still overpaid Owosen
under the terms of their agreements.” They assert that Exhibit
601 “did not, and was never meant to, suggest that the data set
forth in Exhibit 78 were in any way trustworthy or accurate.”
       As a preliminary matter, it is unclear that Owosen’s
argument with respect to the exclusion of these four categories of
expenses is a substantial evidence challenge. In Scheenstra v.
California Dairies, Inc., supra, 213 Cal.App.4th at page 404, the
court observed that the defendant’s contention “that the trial
court excluded an item from the damage calculation, which
caused the calculation to be wrong or incomplete under the
measure of damages imposed by law” was a “legal argument” and
“not really a substantial evidence argument.”
       To the extent this is a legal argument, there is no dispute
that the referee interpreted Contract One as providing that TBE
was responsible for all expenses and net profits were divided 60
percent to Owosen and 40 percent to TBE. Indeed, as Owosen
points out, the referee expressly identified “salaries, benefits, and
insurance for employees” as expenses that would be paid from the
revenue TBE received before the parties split the profits. Exhibit
598, which the referee adopted as the damages owed by TBE to
Owosen under Contract One in the first period, includes
insurance, driver salaries, workers’ compensation, and payroll
tax expenses as TBE’s responsibility. The Statement of Decision
makes clear that Contract One remained in effect with respect to
the first five buses in the second period. Nevertheless, these
expenses are absent from Exhibit 599, which the referee used to

                                 19
calculate damages with respect to Contract One in the second
period.7
      To the extent it is a question of fact, we conclude that
substantial evidence did not support the omission of payroll,
payroll tax, workers’ compensation, and insurance expenses from
the referee’s calculation of damages under Contract One in the
second period. There is no evidence that these expenses were not
incurred in the second period. Rather, there is substantial
evidence both of their existence and amounts.
      Although the referee concluded that Berglund’s analysis
preponderated and that John’s unilateral redactions of Owosen’s
financial records made it “impossible” for the referee to determine
an accounting for Contract One and Contract Two from Owosen’s
exhibits alone, the record does not support that the referee
entirely discredited Exhibit 78. Berglund testified that she
reviewed the bank records underlying Exhibit 78 and concluded
that approximately $895,000 of the expenses listed in it were
reimbursable to Owosen, while approximately $620,000 were not.
Exhibit 601 includes a total of $885,159.72 of expenses (not
including the $305,000 in monthly fees due to Owosen under
Contract Two). Thus, Exhibit 601 only included expenses from
Exhibit 78 that Berglund confirmed were reimbursable. The

7 Exhibit 599 was prepared to reflect the defendants’ position that a

new course of conduct applied to all 10 buses in the second period.
Under that purported course of conduct, which the referee rejected,
Owosen began paying bus-related expenses and TBE retained a fee of
approximately $10,000 per month and remitted the balance (after
deducting for its expenses) to Owosen. Thus, the exhibit was not
intended to and did not reflect the terms of Contract One as
understood by the referee.

                                   20
referee expressly adopted Berglund’s testimony regarding the
reimbursable expenses included in Exhibit 78.
       The referee opted not to attempt to calculate damages for
the second period of Contract One using Exhibits 601 and 602
because they did not reflect the gross income of the first set of
buses over both periods, but he relied on Berglund’s testimony
concerning Exhibits 601 and 602 and Exhibit 601 in calculating
damages under Contract Two. With respect to Exhibit 601,
Berglund testified that the payroll, payroll tax, workers’
compensation, and insurance expenses for the second period
(which totaled approximately $575,000) could be allocated
between Contract One and Contract Two by dividing them in
half. The record shows that the referee found the allocation and
the amounts to be credible, as he used them to calculate damages
for Contract Two. The defendants’ contention that the figures in
Exhibit 601 were “unverified” or unreliable is therefore
inconsistent with the record. Incorporating the remaining 50
percent of these expenses attributable to Contract One for the
second period does not implicate a reweighing of the evidence,
but rather incorporates amounts approved by the referee in a
manner consistent with the analysis he adopted for the first
period.
       The referee acknowledged that his approach to calculating
damages for Contract One in the second period “clearly results in
imprecise conclusions,” but concluded that the damages
calculated nevertheless met the standard of “to a reasonable
probability.” However, the omitted expenses were relevant to
multiple steps of Berglund’s analysis, which the referee adopted.
First, they were relevant to determining the overall profit
(determined by subtracting expenses from revenues) and the

                               21
parties’ respective shares of the profit.8 Additionally, because
Owosen was also entitled to reimbursement of any expenses it
paid, these expenses were subtracted from the payments Owosen
received before determining whether it had received the profits to
which it was entitled.
       Nor were these minor expenses in the context of Berglund’s
analysis. Exhibit 598 shows that, taken together, payroll, payroll
tax, workers’ compensation, and insurance expenses constituted
the majority (52 percent) of expenses for the first period.9 There
is no evidence in the record suggesting that these expenses did
not constitute a similar proportion of total expenses in the second
period. Indeed, when the figures for the four omitted categories of
expenses in Exhibit 601 are added to the expenses in Exhibit 599
for the second period, they similarly comprise 51 percent of the
total expenses. Thus, substantial evidence does not support these
expenses could be omitted without calling into question the
reasonableness of the referee’s basis of computation.
       In sum, we recognize the difficulties the referee faced in
calculating damages in this case and commend his efforts and
detailed analysis in the Statement of Decision, which greatly
assisted our review. Nevertheless, considering the entire record,
we cannot conclude that the referee’s calculation of damages with
respect to the second period of Contract One was consistent with

8 As an illustration, if these four categories of expenses were omitted

from Exhibit 598, the overall profit for the first period would jump
from $218,848.68 to approximately $459,000, and Owosen’s contractual
share would increase from $131,309.21 to approximately $275,000.
9 Together, insurance, driver salaries, workers’ compensation, and

payroll tax were $240,115.72 of the total expenses of $458,022.32 for
Contract One in the first period.

                                   22
the measure of damages he adopted, supported by substantial
evidence, or that it reasonably approximated actual damages. We
therefore agree with Owosen that the driver salary, payroll tax,
workers’ compensation, and insurance expenses in Exhibit 601
should have been included in the calculation of damages under
Contract One in the second period.
      As illustrated in Table 1 below, we conclude that
$281,620.78 should be added to Owosen’s reimbursable expenses,
which reduces TBE’s overpayment to Owosen in the second
period of Contract One from $207,177 to $98,199.99.10 The referee
concluded that TBE underpaid by $27,321.82 with respect to
Contract One in the first period and that TBE owed $105,000 in
damages with respect to the Volvo bus and $10,416 in damages
with respect to the Lexus bus, resulting in a total of $142,737.82
in damages owed by TBE to Owosen with respect to Contract
One. When the $98,199.99 overpayment to Owosen is credited
against this amount, damages under the first contract are
$44,537.83 in Owosen’s favor. We therefore reverse the judgment
in part with directions that judgment be entered against TBE
and in favor of Owosen in this amount.

10 Owosen requests that we add $287,740.21 to the expenses for

Contract One in the second period, including $55,116.74 for insurance.
However, Exhibit 601 states that the figure of $55,116.74 comprises
“Insurance and repairs.” (Italics added.) To obtain that figure,
Berglund added the totals for the columns “Repair/Tire/Parking” and
“Bus Insurance” in Exhibit 78 for the second period and divided that
amount in half. “Bus Insurance” expenses represented $48,997.31 of
this amount, while the remaining $6,119.43 represented
“Repair/Tire/Parking” expenses. Because maintenance and parking
expenses are already reflected in Exhibit 599, we conclude that only
$48,997.31 should be included for insurance expenses.

                                  23
  Table 1: Corrected Damages for Contract One in the
                    Second Period
                                       Source Exhibit    Amount
Gross Bus Revenues                          599         $686,986.18
Expenses
      Fuel                                  599         $154,850.49
      Parking                               599         $15,750.00
      Maintenance                           599         $70,726.74
      Part Time Accountant                  599         $8,000.00
      Miscellaneous                         599         $18,241.18
      Payroll/Drivers Salaries              601         $158,674.90
      Payroll Taxes                         601         $50,841.82
      Workers’ Compensation                 601         $23,106.76
      Insurance                             601         $48,997.31
      Total                                             $549,189.20

Profit (Revenues Less Expenses)                         $131,677.55
Profits Due to Owosen (60 percent)                      $79,006.53

Owosen’s Gross Receipts                     599         $617,250.85
Owosen’s Expenses Paid
(Reimbursable)
      Fuel, Parking, and Maintenance        599         $158,423.54
      Payroll/Drivers Salaries              601         $158,674.90
      Workers’ Compensation                 601         $23,106.76
      Payroll Tax                           601         $50,841.82
      Insurance                             601         $48,997.31
      Total                                             $440,044.33
Gross Receipts Less Expenses Paid                       $177,206.52
Overpayment by TBE                                      $98,199.99

                                 24
      1.3.   The Exclusion of Fuel, Parking, and Maintenance
             Expenses from the Calculation of Damages Under
             Contract Two
        Owosen observes that “[t]he Referee concluded that ‘Mr.
Liu was to be responsible for essentially all operating expenses,
as to the five buses identified in [Contract Two], in exchange for
which Mr. Liu was required to pay Owosen the monthly sum of
either $17,000 or $20,000,’ ” and therefore contends that “[t]here
is no question that fuel, parking, and maintenance (very large
categories of bus operating expenses) are included in ‘essentially
all operating expenses’ ” and should have been included in the
referee’s analysis. Owosen states that this error can be remedied
by adding $158,423.54 to the expenses for Contract Two. This
amount is derived from Exhibit 599 and is 50 percent of the
payments Owosen made for fuel, parking, and maintenance,
which total $316,847.09.
        The defendants argue that Owosen misrepresents the
referee’s findings with respect to Contract Two. They point out
that the Statement of Decision states that “[t]he basic terms of
Contract Two were that Mr. Liu was to be responsible for
essentially all operating expenses, as to the five buses identified
in it . . . .” (Italics added.) They argue that this was a shorthand
for the terms of Contract Two but does not mean that Liu was
responsible for virtually all expenses. By its own terms, Contract
Two provides that Liu was responsible for: salaries and payroll
tax; workers’ insurance and benefits; “the bus, insurance,
maintenance, upkeep, and accidents etc. and related fees in the
course of normal operation”; and monthly contract fees of $17,000
or $20,000. Thus, while Contract Two expressly includes

                                25
maintenance costs, it does not state that Liu was responsible for
fuel and parking costs.
      We agree with the defendants that the referee’s damages
calculation included maintenance expenses. Although Owosen
contends that Exhibit 601 “only includes expenses for insurance,
driver salaries (payroll), workers comp, and payroll taxes,” one of
the categories of expenses listed in Exhibit 601 is “Insurance and
repairs” (italics added). Exhibit 78 includes a column titled
“Repair/Tire/Parking,” which, together with the column entitled
“Bus Insurance,” formed the basis for the “Insurance and repairs”
figure in Exhibit 601. Thus, Exhibit 601 does in fact include
repair or maintenance expenses.11
      With respect to fuel and parking expenses, this court has
not been asked to determine de novo what the appropriate
measure of damages is under Contract Two. We are concerned
only with determining which party was responsible for fuel and
parking expenses under the Statement of Decision and whether
the calculation of damages awarded was consistent with that
determination and supported by substantial evidence. Based on
our review of the record, we conclude that the referee did not
consider fuel and parking expenses TBE’s responsibility under
Contract Two.
      In recounting the parties’ position, the referee noted that
the defendants opposed Owosen’s position that “TBE was

11 Berglund does not reference parking when including these totals in

Exhibit 601 and testified that it was her understanding that another
column of the chart represented parking and fuel expenses based on
the translations provided to her. It is therefore unclear what
proportion of the expenses in the “Repair/Tire/Parking” column are
attributable to parking.

                                  26
responsible for 100% of expenses, including fuel and parking”
under Contract Two. As the defendants point out, when
summarizing his holding with respect to the provisions of the
contract, the referee stated that Liu was responsible for
“essentially all operating expenses.” (Italics added.) Had the
referee agreed with Owosen and concluded that Liu was
responsible for 100 percent of expenses, including expenses not
specifically set forth in the terms of the contract, he presumably
would have said so, rather than using language indicating that
there was at least one category of expenses that was not TBE’s
responsibility.
       Further, the referee found Liu “to be more believable
regarding the terms of the agreements and the evolution of the
business relationship between the parties” than Frank. Liu
testified that when TBE advanced payments for fuel and parking,
it sought and received reimbursement from Owosen. Owosen
argues that Liu’s testimony that it would not be appropriate for
TBE to seek reimbursement for fuel costs if TBE had already
taken out those costs before remitting revenue to Owosen
supports its position that Liu was responsible for fuel costs in the
second period. However, this testimony seems to reflect Liu’s
agreement that it would be inappropriate to seek double payment
for fuel expenses from Owosen, not that he was responsible for
those payments. The referee also found that Qi generally had a
higher level of credibility than both Frank and Liu and that
“[s]he had superior knowledge to any of the other witnesses . . . of
the business and accounting side of the bus and tour industry in
general, and specifically regarding TBE’s operations and
finances.” Like Liu, Qi testified that TBE received
reimbursement from Owosen for fuel charges.

                                27
      Additionally, Berglund testified that she disagreed with the
inclusion of expenses for parking and fuel in Exhibit 78 because
she did not believe them to be reimbursable expenses. The referee
concluded that the defendants “demonstrated through the
testimony of Ms. Berglund that [John] and Exhibit 78 overstated
expenses by $620,000” and that the overstatement largely
consisted of fuel and parking expenses. The referee’s adoption of
Berglund’s analysis also indicates that fuel and parking expenses
were not reimbursable expenses under his interpretation of
Contract Two.
      We therefore conclude that there is substantial evidence to
support the exclusion of fuel and parking expenses from the
referee’s calculation of damages.
      1.4.   The Exclusion of Bus Fees for April 2012 and
             September 2013 from the Calculation of Damages
             under Contract Two
       Finally, Owosen argues that the referee erred by
determining that Liu overpaid it under Contract Two.
Specifically, Owosen contends that the referee erred in relying on
the monthly fee total set forth in Exhibit 601, which states that
the total fees due were $305,000, because this excludes the
months of April 2012 and September 2013.
       The Statement of Decision notes that the handwritten date
of April 4, 2012, was consistent with Liu’s testimony as to when
Contract Two was executed, but also states that Frank’s
testimony varied with respect to when Contract Two was
executed and referred variously to April, May, or June 2012. The
referee observed that “[e]ntering into the contract in anticipation
of the designated buses being acquired or put in service is
consistent with The Lease, which bears a date of April 4, 2011,

                                28
with the evidence being that, at least as to the Volvo coach, the
bus was not actually acquired for a month or two.” Thus, while
the referee concluded that it was “more likely than not” that
Contract Two was formally executed around April 4, 2012, he did
not find that all buses were available for TBE’s use at that time.
Under the terms of Contract Two, Owosen was responsible for
“[t]he timely purchase and payment for the models of buses
selected by Party B, guaranteeing the normal operation of
business.” To the extent that Owosen failed to “guarantee[] the
normal operation of business” by providing Liu the full second set
of buses in April 2012, the referee could have reasonably
concluded that no fee should be awarded for that month.
       Owosen argues that the fact that revenues were higher in
April 2012 than in March 2012 or any prior month demonstrates
that the second set of five buses were already in use. Revenues
for April 2012 ($85,400) were substantially higher than the
revenues for March 2012 ($35,955). However, revenues varied
significantly from month to month and March 2012 had the
lowest revenues of any month of operation. Revenues in August
through October of 2011 ranged from $67,510 to $70,085. The
revenues in May 2012—after Owosen contends the full set of
second buses were delivered to TBE—were $67,835 and thus in
the same range of revenues that TBE had earned with the first
set of buses alone. Thus, although Owosen has identified
evidence indicating that the second set of buses was in operation
in April 2012, “[w]e may not reweigh a judgment ‘supported by
substantial evidence even if substantial evidence to the contrary
also exists.’ [Citation.]” (City of San Buenaventura v. United
Water Conservation District (2022) 79 Cal.App.5th 110, 120.)

                               29
       With respect to the omission of the September 2013 fee
from the expenses under Contract Two, the defendants argue
that there was evidence that Liu had terminated the parties’
relationship before September 2013, as well as evidence that the
bus business only continued through September 2013 to fulfill
existing contracts. However, in his discussion of damages under
Contract Two, the referee states: “From April 2013 until
cancellation of Contact Two on September 23, 2013, additional
payments were due to Owosen of $117,000, consisting of the April
2013 payment at $17,000, and five months (May through
September 2013) at $20,000 per month.” (Italics added.) If this
language left any doubt, the referee also included September in
his calculation of the monthly payments due to Owosen between
April and September 2013. Thus, the referee expressly concluded
that a monthly fee was due to Owosen for September 2013.
       Nevertheless, even accepting that the omission of the
September fee from the damages calculation was not supported
by substantial evidence, the referee calculated TBE’s
overpayment to Owosen under Contract Two at $24,510.65.
Reducing this amount by $20,000 still results in a net
overpayment by TBE, and thus does not alter the judgment
against Owosen under Contract Two. Accordingly, with the
exception of the partial reversal discussed above, the judgment is
affirmed.
2.    Motions to Set Aside Judgment and For a New Trial
      Owosen moved to set aside the judgment pursuant to
section 663 and moved for a new trial pursuant to sections 659
and 657. We review a trial court’s denial of motions to set aside
the judgment and for new trial under the deferential abuse of
discretion standard. (Philippine Export & Foreign Loan

                                30
Guarantee Corp. v. Chuidian (1990) 218 Cal.App.3d 1058, 1076–
1077; Crouch v. Trinity Christian Center of Santa Ana,
Inc. (2019) 39 Cal.App.5th 995, 1018.) “In reviewing an order
denying a motion for a new trial, we review the entire record,
including the evidence, and independently determine whether
any error was prejudicial.” (Crouch, at p. 1018.)
       Owosen’s arguments in support of its motions are primarily
the same as set forth above with respect to the calculation of
damages. In light of our conclusion above that the judgment must
be reversed in part and entered in Owosen’s favor and against
TBE in the amount of $44,537.83, Owosen’s appeal is partially
moot. With respect to Owosen’s remaining arguments concerning
the calculation of damages, we conclude that the referee did not
abuse his discretion in denying the motions for the reasons set
forth above and therefore affirm.
       Owosen further contends that the referee erred in failing to
award future damages with respect to Liu’s breach of Contract
Two and that a new trial is therefore appropriate. We conclude
that the referee did not abuse his discretion in declining to award
future damages or denying a new trial on this ground. The
referee determined that, on the totality of the evidence presented,
there was insufficient evidence from which he could calculate to
any reasonable degree of confidence the net damages Owosen
suffered from September 2013 to approximately 3.5 years in the
future, and thus declined to award damages. For the same
reason, the referee declined to award any future damages to TBE
for Owosen’s termination of Contract One without legal
justification. The referee also found that there was no evidence
that Owosen had mitigated its damages by exploring other
options by which the buses could have made Owosen money.

                                31
      Owosen contends that this was erroneous because Owosen’s
expenses in the leasing of its buses were minimal and fixed.
However, as discussed above, the referee’s discussion of Contract
Two and calculation of damages demonstrate that he understood
fuel and parking expenses to be Owosen’s responsibility under
Contract Two. His statement that Owosen had costs to bear
under that contract which could “vary wildly” further supports
that the referee did not consider Owosen’s expenses under
Contract Two to be limited to fixed personnel and office expenses.
Owosen also represented that it did not intend to present new
evidence on damages even if a new trial were granted. In the
absence of additional evidence, we cannot see how the referee
could have possibly determined Owosen’s future damages under
Contract Two. Thus, even if Owosen had mitigated damages (a
question we need not reach), the referee’s determination that
Owosen failed to prove future damages to a reasonable
probability and his denial of the motion for a new trial on this
ground was not an abuse of discretion.

                               32
                        DISPOSITION

      The judgment is reversed in part with directions to enter
judgment against TBE and in favor of Owosen in the amount of
$44,537.83. In all other respects, the judgment is affirmed. The
appeal of the order denying the motions for new trial and to set
aside the judgment is affirmed in part and dismissed as moot in
part. The parties shall bear their own costs.

 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                                    LAVIN, J.
WE CONCUR:

      EDMON, P. J.

      EGERTON, J.

                               33