Court Opinion

ID: 9911749
Source: CourtListenerOpinion
Date Created: 2023-12-20 19:02:25.538146+00
Date Added: 2024-06-11T12:54:02.606423
License: Public Domain

Filed 12/20/23 Garcia v. Bank of Stockton CA5

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                       FIFTH APPELLATE DISTRICT

 JOHN GARCIA et al.,
                                                                                             F084375
           Plaintiffs and Appellants,
                                                                             (Super. Ct. No. 18CECG00977)
                    v.

 BANK OF STOCKTON,                                                                        OPINION
           Defendant and Respondent.

         APPEAL from orders of the Superior Court of Fresno County. D. Tyler Tharpe,
Judge.
         Gilmore Magness Janisse and David M. Gilmore for Plaintiffs and Appellants.
         Lewis Brisbois Bisgaard & Smith, Sean M. Higgins and Greg L. Johnson for
Defendant and Respondent.
                                                        -ooOoo-
                                     INTRODUCTION
       Appellants John Garcia, Janie Garcia, and Vista Del Sol, LLC assert three claims
of error in this appeal. Appellants first argue the trial court erred when it granted
respondent Bank of Stockton’s summary adjudication motion and concluded
respondent’s duty to indemnify and defend appellants ended on a date certain, January 4,
2017. Second, appellants contend the court erred when it concluded it had insufficient
evidence from which to award damages. Third, appellants claim the court erred in
denying their motion for a new trial under Code of Civil Procedure section 6571 or to
modify the judgment under section 662 so that they could retry their damages case.
       For the following reasons, we affirm the judgment.
                                      BACKGROUND
       This case centers on an indemnification and defense agreement pursuant to which
respondent agreed to indemnify and defend appellants from certain third-party claims.
       The parties largely agree on the factual background of this dispute. Appellants
John Garcia and Janie Garcia were 50 percent owners of two limited liability companies,
Vista Del Sol Farms, LLC and Vista Del Sol Farms I, LLC (collectively referred to as
“Vista Del Sol”). Morris Garcia and Sharon Garcia were the other 50 percent owners of
Vista Del Sol.
       Morris2 and Sharon became indebted to respondent and defaulted on that debt.
Respondent obtained a judgment against Morris and Sharon on April 14, 2010, for
slightly less than $2.2 million. However, on April 12, 2010, two days prior to this
judgment, Morris and Sharon had stipulated with Douglas Maddox to the entry of a
judgment and charging order against their interests in Vista Del Sol in satisfaction of yet

1      Undesignated statutory references are to the Code of Civil Procedure.
2     Because the individuals involved in this case share the same last name, we will refer to
them by their first names for the sake of convenience only. No disrespect is intended.

                                               2.
another debt. Respondent ultimately obtained its own charging order against Morris and
Sharon’s interests in Vista Del Sol in July 2010. Respondent foreclosed on Morris and
Sharon’s economic interests in Vista Del Sol in August 2012, while John and Janie
continued to own the remaining half of the economic interests.
       In April 2012, respondent sued appellants, Morris, Sharon, and the executrix of the
estate of Douglas Maddox (collectively referred to with Douglas Maddox simply as
“Maddox”) in Bank of Stockton v. Garcia (Super. Ct. Fresno County, 2021,
No. 12CECG03902) (the “3902 Action”). In May 2013, Maddox filed a cross-complaint
against respondent and others in the same action challenging respondent’s foreclosure
and seeking damages in relation to the transfer of Morris and Sharon’s ownership
interests in Vista Del Sol to respondent.
       While the 3902 Action was pending, in November 2013, Vista Del Sol sold the
primary real estate asset associated with its business—almond orchards—and planned to
dissolve the business entities. Pursuant to settlement and dissolution agreements entered
in June 2014, Vista Del Sol distributed $5 million equally to John and Janie on the one
hand, and respondent on the other.
       Critically to this case, the settlement agreement contained an indemnification
provision, which states: “[Respondent] shall indemnify, defend and hold harmless
[appellants] for any claims for damages made or asserted by Morris [and Sharon] or …
Maddox based on distributions made to [respondent] pursuant to this Agreement prior to
a resolution of [respondent’s] claims regarding the validity of the Maddox Charging
Order; provided, however, that [respondent’s] agreement to indemnify, defend or hold
harmless [appellants] shall expire upon the earlier of (a) the expiration of any opportunity
to seek appellate review of any judgment, order, or decree issued in the [3902] Action
adjudging the [respondent’s] economic interest in [Vista Del Sol] to be free and clear of
the Maddox Charging Order; or, (b) [respondent’s] satisfaction or settlement of the
amounts secured by the Maddox Charging Order, if any.” Additionally, an addendum to

                                             3.
the dissolution agreement contained an indemnification clause requiring appellants to
indemnify and defend respondent from claims “arising from or connected to or related to
[John and Janie’s] ownership, management and operation of Vista Del Sol.”
       The indemnification provision requiring respondent to defend appellants proved to
be an issue of some dispute between the parties, as what followed next were a series of
lawsuits instituted by Morris and Sharon against appellants. In May 2015, Morris,
Sharon, and their son, Kevin Garcia, instituted a suit against John and Janie, naming
Vista Del Sol as nominal defendants in Garcia v. Garcia (Super. Ct. Fresno County,
2015, No. 15CECG01410) (the “1410 Action”). Morris and Sharon alleged, among other
things, that John and Janie had violated their fiduciary duties in the management of Vista
Del Sol. Appellants tendered the complaint to respondent for indemnification and
defense in May 2015. Respondent largely rejected the tender, claiming it fell outside of
the indemnification provision, but offered to pay 10 percent of the defense costs up to a
total of $20,000. Appellants rejected this offer.
       In August 2015, Maddox filed an amended cross-complaint in the 3902 Action,
adding claims against appellants for conversion, concealment, violations of the
Corporations Code, and purportedly fraudulent transfer, for paying proceeds from the real
estate sale to respondent. Appellants tendered this cross-complaint to respondent for
indemnification and defense on August 28, 2015. Respondent agreed to accept the
defense and indemnity of the cross-complaint on August 31, 2015, and advised it
intended to have its attorney litigate the defense of the case. Respondent indicated that it
would not pay for fees generated by appellants’ separate counsel after the date it agreed
to accept the defense and indemnity of the cross-complaint. Appellants responded on
September 8, 2015, advising they would accept the defense and indemnity so long as
there was no reservation and all fees were paid. Accordingly, it appears appellants
directed their counsel to continue defending the suit and not tender the defense to
respondent.

                                             4.
       On September 3, 2015, Morris and Sharon filed an elder abuse suit against John
and Janie in Garcia v. Garcia (Super. Ct. Fresno County, 2019, No. 15CECG02784) (the
“2784 Action”), alleging appellants failed to make payments on their behalf and deprived
Morris and Sharon of their economic interests in Vista Del Sol, among other allegations.
It is unclear whether this suit was ever tendered to respondent for indemnification and
defense. Appellants state it was tendered on September 8, 2015, but fail to include a
citation to the record showing this. They also state respondent rejected the tender;
however, the citation provided is to a letter in the record which concerns the 3902 and
1410 Actions, not the 2784 Action.
       On November 30, 2016, respondent secured a judgment against Maddox in the
3902 Action, which confirmed that Maddox’s judgment and charging order against
Morris and Sharon’s interests in Vista Del Sol was void for lack of jurisdiction. On
January 6, 2017, Maddox and respondent executed a stipulation to waive any award of
costs to respondent and Maddox’s right to appeal, thereby ending the dispute with
Maddox.
       The final suit was filed on November 22, 2017, when Morris and Sharon sued
Vista Del Sol and others to set aside John and Janie’s sale of Vista Del Sol real estate in
Garcia v. Samara Ranches, LLC (Super. Ct. Madera County, 2019, No. MCV076400)
(the “0764 Action”). Appellants tendered the defense of that claim to respondent on
December 18, 2017; respondent declined to provide indemnification or defense.
       This action was instituted by the filing of a complaint by appellants on March 21,
2018, which alleged two causes of action for breach of contract and declaratory relief.
On August 7, 2018, respondent filed a cross-complaint for declaratory relief. The parties
stipulated to submitting cross-motions for summary judgment and/or adjudication. The
trial court denied appellants’ motion for summary judgment, concluding triable issues of
fact remained on appellants’ claims. The court, however, granted respondent’s motion
for summary adjudication, finding that any obligation respondent had to defend and

                                             5.
indemnify appellants expired on January 4, 2017, when the judgment entered against
Maddox became final.
        Following the trial court’s ruling on those summary judgment and adjudication
motions, the parties stipulated to vacate the trial date and submit the matter to the court
for a bench trial based solely on written submissions. The court entered judgment in
favor of respondent on November 17, 2021. After the entry of judgment, appellants
moved for a new trial or to modify the judgment on March 17, 2022. The motion was
denied on April 21, 2022. A notice of appeal was timely filed on May 18, 2022.
                                        ANALYSIS
        I.    Standard of Review
        We review the trial court’s decision on the summary judgment motions de novo.
(Ryan v. Real Estate of Pacific, Inc. (2019) 32 Cal.App.5th 637, 642; Morris v. Paul
Revere Life Ins. Co. (2003) 109 Cal.App.4th 966, 973.) “A trial court’s order granting a
motion for summary adjudication is reviewed de novo.” (Smith v. Wells Fargo Bank,
N.A. (2005) 135 Cal.App.4th 1463, 1471.) The same standards that apply to a motion for
summary judgment apply to a motion for summary adjudication, the difference being that
a summary adjudication motion only seeks summary resolution of a portion of a lawsuit,
rather than the entirety of the complaint. (See § 437c, subd. (f)(1) [“[a] party may move
for summary adjudication as to one or more causes of action within an action … if the
party contends that the cause of action has no merit”], (2) [noting motions for summary
adjudication “proceed in all procedural respects as a motion for summary judgment”];
Certain Underwriters at Lloyd’s of London v. Superior Court (2001) 24 Cal.4th 945,
972.)
        Concerning the decision following the court trial on written submissions, we start
from the perspective that a “judgment or order of the lower court is presumed correct.
All intendments and presumptions are indulged to support it on matters as to which the
record is silent, and error must be affirmatively shown.” (Denham v. Superior Court

                                              6.
(1970) 2 Cal.3d 557, 564; see also In re Marriage of Arceneaux (1990) 51 Cal.3d 1130,
1133.) “ ‘[I]n reviewing a judgment based upon a statement of decision following a
bench trial, “any conflict in the evidence or reasonable inferences to be drawn from the
facts will be resolved in support of the determination of the trial court decision.
[Citations.]” [Citation.] In a substantial evidence challenge to a judgment, the appellate
court will “consider all of the evidence in the light most favorable to the prevailing party,
giving it the benefit of every reasonable inference, and resolving conflicts in support of
the [findings]. [Citations.]” [Citation.] We may not reweigh the evidence and are bound
by the trial court’s credibility determinations. [Citations.] Moreover, findings of fact are
liberally construed to support the judgment.” (Cuiellette v. City of Los Angeles (2011)
194 Cal.App.4th 757, 765, first bracketed insertion added.) However, questions of law
determined in the statement of decision are still reviewed de novo. (Ibid.)3

3        Appellants assert this court should review all aspects of the bench trial de novo, because
“it is based on the interpretation and application of the terms of a contract that are not in
dispute.” The trial court’s ruling after the bench trial includes both findings of law and findings
of fact. The ruling resolved both declaratory judgment causes of action and appellants’ causes of
action for breach of contract. In doing so, the court first made rulings about what duties were
owed under the contract. This type of contractual interpretation is a quintessential question of
law, not one of fact, and de novo review applies. (Cabral v. Ralphs Grocery Co. (2011)
51 Cal.4th 764, 770 [“Duty is a question of law for the court, to be reviewed de novo on
appeal.”]; Royal Globe Ins. Co. v. Whitaker (1986) 181 Cal.App.3d 532, 536.)
        However, both breach and the appropriate measure of damages are generally questions of
fact, unless reasonable minds could not differ based on the evidence presented. (See Moresco v.
Foppiano (1936) 7 Cal.2d 242, 245; Ash v. North American Title Co. (2014) 223 Cal.App.4th
1258, 1268; Brown v. Grimes (2011) 192 Cal.App.4th 265, 277; Beasley v. Wells Fargo Bank
(1991) 235 Cal.App.3d 1383, 1393; GHK Associates v. Mayer Group., Inc. (1990)
224 Cal.App.3d 856, 874; Sannes v. McEwan (1932) 122 Cal.App. 265, 270.) In denying
summary judgment on appellants’ breach of contract claims, the trial court specifically found
there were genuine disputes of material fact necessitating resolution at trial related to both breach
and damages. We conclude both breach and damages here are questions of fact appropriately
reviewed for substantial evidence. (See, e.g., People v. Waidla (2000) 22 Cal.4th 690, 730;
Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429; Ash v. North American Title Co.,
supra, at p. 1268; Brown v. Grimes, supra, at p. 279; Superior Motels, Inc. v. Rinn Motor Hotels,
Inc. (1987) 195 Cal.App.3d 1032, 1055; Sannes v. McEwan, supra, at p. 270.) “Our authority
begins and ends with a determination as to whether, on the entire record, there is any substantial
evidence, contradicted or uncontradicted, in support of the judgment.” (Howard v. Owens

                                                 7.
       Lastly, concerning the motion for a new trial under section 657 or to modify
judgment under section 662, these motions are typically reviewed for abuse of discretion.
(See Guzman v. NBA Automotive, Inc. (2021) 68 Cal.App.5th 1109, 1115.) However,
“any determination underlying any order is scrutinized under the test appropriate to such
determination.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 859.) In other
words, if the motion for a new trial is premised on a legal determination in a summary
judgment/adjudication motion, it is reviewed by the Court of Appeal de novo and is not
given deference. (Doe v. SoftwareONE Inc. (2022) 85 Cal.App.5th 98, 102.) If the issue
raised in the motion for a new trial or to modify the judgment is premised on a factual,
equitable, or qualitative decision, this is typically reviewed for abuse of discretion. (Id. at
pp. 102–104; see also Howard Entertainment, Inc. v. Kudrow (2012) 208 Cal.App.4th
1102, 1122–1124 (conc. opn. of Turner, P. J.); Border Business Park, Inc. v. City of San
Diego (2006) 142 Cal.App.4th 1538, 1561, fn. 18.)
       II.     The Trial Court’s Contractual Analysis in Resolving the Summary
               Adjudication Motion is Correct
       Appellants first argue the trial court erred in finding that the duty to defend ended
on January 4, 2017.4 They claim that, once the duty to defend arose, it could not end
until the underlying case was completely resolved. This argument is largely based on
case citations taken from the area of insurance law, which is a highly regulated and
specialized form of contract law. For the reasons that follow, we do not find this
argument convincing.

Corning (1999) 72 Cal.App.4th 621, 630–631.) “[E]ven if the judgment of the trial court is
against the weight of the evidence, we are bound to uphold it so long as the record is free from
prejudicial error and the judgment is supported by evidence which is ‘substantial,’ that is, of
‘ “ponderable legal significance,” ’ ‘ “reasonable in nature, credible, and of solid value .…” ’ ”
(Id. at p. 631.)
4        Because none of the cases for which a claim was tendered pursuant to the settlement
agreement ended with a judgment against appellants, the indemnification component was never
implicated.

                                                8.
       Both settlement agreements and indemnity agreements are contracts like any other
and are usually governed by the general rules applicable to contract interpretation.
(Coral Farms, L.P. v. Mahony (2021) 63 Cal.App.5th 719, 726 [“Generally, the
interpretation of a settlement agreement is governed by the same rules that apply to other
contracts.”]; United States Elevator Corp. v. Pacific Investment Co. (1994)
30 Cal.App.4th 122, 125 [“An indemnity provision of a contract is to be construed under
the same rules governing contracts in general, with a view to determining the intent of the
parties.”].) The court’s goal is to “give effect to the mutual intention of the parties as it
existed at the time of contracting.” (Civ. Code, § 1636.) Where a contract term is
unambiguous, the written language of the contract controls, and extrinsic parol evidence
is inadmissible to contradict it. (Code Civ. Proc., § 1856, subd. (a); Dore v. Arnold
Worldwide, Inc. (2006) 39 Cal.4th 384, 389 [acknowledging that “a clear and
unambiguous at-will provision in a written employment contract, signed by the
employee, cannot be overcome by evidence of a prior or contemporaneous implied-in-
fact contract requiring good cause for termination”]; Third Story Music, Inc. v. Waits
(1995) 41 Cal.App.4th 798, 808; Griswold v. Frame (1920) 48 Cal.App.178, 181–182.)
A contractual term is ambiguous if it is “reasonably susceptible” to more than one
interpretation. (Horath v. Hess (2014) 225 Cal.App.4th 456, 464.)
       By statute, additional rules of interpretation are imposed on indemnity contracts.
“In the interpretation of a contract of indemnity, the following rules are to be applied,
unless a contrary intention appears: [¶] … [¶] 3. An indemnity against claims, …
expressly, or in other equivalent terms, embraces the costs of defense against such claims
… incurred in good faith, and in the exercise of a reasonable discretion; [¶] 4. The
person indemnifying is bound, on request of the person indemnified, to defend actions or
proceedings brought against the latter in respect to the matters embraced by the
indemnity .…” (Civ. Code, § 2778, subds. (3), (4), italics added.) “A contractual
promise to ‘defend’ another against specified claims clearly connotes an obligation of

                                              9.
active responsibility, from the outset, for the promisee’s defense against such claims.”
(Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 553–554 (Crawford).)
“The duty promised is to render, or fund, the service of providing a defense on the
promisee’s behalf—a duty that necessarily arises as soon as such claims are made against
the promisee, and may continue until they have been resolved.” (Id. at p. 554, second
italics added.) Due to the statute, “the case law has long confirmed that, unless the
parties’ agreement expressly provides otherwise, a contractual indemnitor has the
obligation, upon proper tender by the indemnitee, to accept and assume the indemnitee’s
active defense against claims encompassed by the indemnity provision.” (Id. at p. 555,
italics added.)
       The general assumption of an indemnification provision via which the indemnitor
has agreed to cover the defense of a claim or case is that the defense will be provided
until the matter’s conclusion. (See Scottsdale Ins. Co. v. MV Transportation (2005)
36 Cal.4th 643, 655; Centex Homes v. R-Help Construction Co, Inc. (2019)
32 Cal.App.5th 1230, 1238.) However, “subject to public policy and established rules of
contract interpretation, the parties have great freedom to allocate [indemnification]
responsibilities as they see fit.” (Crawford, supra, 44 Cal.4th at p. 551.)
       This is particularly true outside of insurance contracts. Our Supreme Court has
noted that, while “indemnity agreements resemble liability insurance policies, rules for
interpreting the two classes of contracts do differ significantly.” (Crawford, supra,
44 Cal.4th at p. 552.)5 “Ambiguities in a policy of insurance are construed against the
insurer, who generally drafted the policy, and who has received premiums to provide the

5       Appellants’ assertion that our “Supreme Court in Crawford found no convincing
authority for a different treatment between insurance policies or indemnity agreements” is
somewhat baffling. Even on the page cited in appellants’ brief, the Supreme Court said exactly
the opposite. While, to our knowledge, the Supreme Court has never said insurance law is
completely inapplicable to other indemnity contracts, it did caution in Crawford that the public
policies underlying the two are often different and may impact interpretation. (Crawford, supra,
44 Cal.4th at p. 552.)

                                              10.
agreed protection. [Citations.] In noninsurance contexts, however, it is the indemnitee
who may often have the superior bargaining power, and who may use this power unfairly
to shift to another a disproportionate share of the financial consequences of its own legal
fault.” (Crawford, at p. 552.) Because of these public policy concerns, the trend in
insurance cases favoring a harsher interpretation against the indemnitor—i.e., the
insurance company—is not present in, and is in fact sometimes reversed in, noninsurance
indemnity agreements. (Ibid.)
       For instance, it is generally true the duty to defend imposed in an insurance
agreement is not limited to the policy period; only the event triggering potential coverage
must occur during the policy period, and then the defense duty extends until completion
of the suit. (See Aerojet-General Corp. v. Transport Indemnity Co. (1997) 17 Cal.4th 38,
75 [“although the trigger of the duty to defend is limited to the policy period, the extent
of the duty to defend is not”].) But appellant points us to no case outside of the insurance
context suggesting that contracting parties cannot limit the length of indemnification and
defense agreements by doing so expressly. This, coupled with the language of the
contract, controls the outcome on this question.
       In this case, respondent agreed to “indemnify, defend and hold harmless”
appellants “for any claims for damages made or asserted” by three specified parties—
“Morris,” “Sharon,” or “Maddox”—so long as they were related to one particular issue.
Specifically, those claims needed to be “based on distributions made to [respondent]
pursuant to this Agreement” and made “prior to a resolution of [respondent’s] claims
regarding the validity of the Maddox Charging Order.” However, the agreement then
went on to say that respondent’s “agreement to indemnify, defend or hold harmless
[appellants] shall expire upon the earlier of (a) the expiration of any opportunity to seek
appellate review of any judgment, order, or decree issued in the [3902] Action adjudging
the [respondent’s] economic interest in [Vista Del Sol] to be free and clear of the Maddox
Charging Order; or, (b) [respondent’s] satisfaction or settlement of the amounts secured

                                             11.
by the Maddox Charging Order, if any.” In other words, respondent agreed to
indemnification and defense, but did so only in relation to claims by certain parties,
related to a certain topic, and made during a certain period. Further, the parties
specifically provided those duties would expire when the judgment in the 3902 Action
was final, which occurred on January 4, 2017.
       To “expire” means “to come to an end.” (Merriam-Webster Dict. Online (2023)
<https://www.merriam-webster.com/dictionary/expire> [as of Dec. 20, 2023].)
Appellants suggest no alternative meaning of the term “expire” which would indicate
something other than all defense and indemnification duties coming to an end when the
judgment in the 3902 Action was final, which occurred on January 4, 2017. Absent such
an explanation, this expiration provision is unambiguous: Any duties owed under the
indemnification and defense clause came to an end when the 3902 Action became final.
While the normal presumption, absent such a clause, might have been that such duties
would continue until the conclusion of litigation, both statute and case law indicate the
parties to indemnification agreements may choose to vary their agreement. (See Civ.
Code, § 2778 [“the following rules are to be applied, unless a contrary intention appears”
(italics added)]; Crawford, supra, 44 Cal.4th at p. 555 [“unless the parties’ agreement
expressly provides otherwise, a contractual indemnitor has the obligation, upon proper
tender by the indemnitee, to accept and assume the indemnitee’s active defense against
claims encompassed by the indemnity provision” (italics added)].) Here, the parties
chose to include an expiration term to respondent’s obligation to indemnify or defend.
This court is not empowered to change the language of the parties’ agreement,
particularly where the parties are both sophisticated businesses represented by competent
counsel.
       The fact that the indemnification clause, and its expiration term, is unambiguous
also controls appellants’ argument that the trial court erred by concluding that the time
limitation also applied to claims from Morris and Sharon. Appellants argue that there

                                            12.
“was no agreement to any limitation on the time frame relating to the duty to defend and
indemnify claims that might be brought by Morris and Sharon.” But this is precisely
what the expiration clause states. According to the parties’ written contract, respondent’s
“agreement to indemnify, defend or hold harmless [appellants] shall expire upon” a
favorable final judgment in the 3902 Action. The language clearly says the “agreement”
would expire, thus indicating it applies to the totality of the indemnification and defense
agreement, not a component part. The expiration clause does not say indemnification and
defense would continue to apply as to Morris and Sharon, but not as to Maddox. While
such language could have been negotiated for and included, it was not. Again, we cannot
rewrite the contract for appellants’ benefit.
       We do not find persuasive appellants’ argument that the fact expiration could be
triggered by either of two alternatives made the contract illusory. Appellants argue that,
because the expiration was triggered by the earlier of final judgment or settlement, the
promise was illusory, since respondent could trigger expiration at any time merely by
settling the claims. “A contract is unenforceable as illusory when one of the parties has
the unfettered or arbitrary right to modify or terminate the agreement or assumes no
obligations thereunder.” (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373,
385.) However, what it is critical to creating an illusory contract is the right to modify or
terminate being truly unfettered. Courts have routinely held that even contracts which
contain a unilateral provision allowing modification or termination are not illusory,
because they remain subject to the overarching implied covenant of good faith and fair
dealing. (See Asmus v. Pacific Bell (2000) 23 Cal.4th 1, 15–16; Perdue v. Crocker
National Bank (1985) 38 Cal.3d 913, 923; Serpa v. California Surety Investigations, Inc.
(2013) 215 Cal.App.4th 695, 706.)
       Respondent did not have unfettered discretion here. The alternative expiration
clause was triggered by settlement of the claims by Maddox seeking to invalidate
respondent’s interest in Vista Del Sol. Settling a lawsuit is not an activity in which any

                                                13.
one party has unfettered discretion. It necessarily requires the agreement of the other
parties bringing claims in that lawsuit. Put simply, there is no way respondent could have
forced a settlement with Maddox at any moment, and thus caused the expiration clause to
trigger on demand. Without truly unfettered discretion, the contract is not illusory.
(Asmus v. Pacific Bell, supra, 23 Cal.4th at pp. 15–16 [“It has been thought, also, that
promissory words are illusory if they are conditional on some fact or event that is wholly
under the promisor’s control and bringing it about is left wholly to the promisor’s own
will and discretion. This is not true, however, if the words used do not leave an unlimited
option to the one using them. It is true only if the words used do not in fact purport to
limit future action in any way.”].)
       In sum, we find that the indemnification provision contained a clear and
unambiguous expiration clause, which triggered when a final favorable judgment was
entered in the 3902 Action. The expiration clause applied to the entire indemnification
agreement, not merely claims brought by Maddox, and therefore also cut off any
obligation to indemnify or defend against claims brought by Morris and Sharon as of
January 4, 2017. Accordingly, there is no basis to overturn the trial court’s decision on
the summary adjudication motion.
       III.   The Trial Court’s Decision to Award No Damages is Affirmed
       Appellants next contest the trial court’s decision on the merits of their claim. The
court found respondent owed a duty to indemnify and defend in the 3902 Action and a
duty to partially defend and indemnify in the 1410 Action. It found respondent had no
duty to indemnify or defend in the 2784 Action. It then concluded appellants had failed
to present evidence from which it could come to a reasonable approximation of the
damages to be awarded, because all of the attorney fees which were claimed as damages
were commingled and in no way separated by different cases. According to appellants,
the court erred in concluding there was no duty to indemnify or defend in the
2784 Action. Also, appellants argue the court’s conclusion that respondent owed defense

                                            14.
and indemnification to at least some of appellants’ tenders of the claims against them
means they should have been awarded at least some damages. Appellants reiterate this
argument by contending it was an abuse of discretion for the trial court not to grant their
motion for a new trial or to modify the judgment. We find no error and affirm.
               A.     Waiver.
       Respondent claims appellants waived these arguments on appeal by failing to cite
to necessary portions of the record and failing to support their argument with legal
authority. It is true appellants cite neither the record nor legal authority with any
specificity in this section of their brief.6 It is also true we have held, on many occasions,
the failure to cite to the record or legal authority may be deemed a waiver of an argument.
(See, e.g., Antelope Valley Groundwater Cases (2021) 63 Cal.App.5th 17, 50, fn. 9;
Conservatorship of Kevin A. (2015) 240 Cal.App.4th 1241, 1253; Sky River LLC v.
County of Kern (2013) 214 Cal.App.4th 720, 740–741.) However, this is a discretionary
rule, not a mandatory one. (See, e.g., Escobar v. Flores (2010) 183 Cal.App.4th 737,
747, fn. 5; Stockinger v. Feather River Community College (2003) 111 Cal.App.4th 1014,
1025, disapproved on other grounds in Regents of University of California v. Superior
Court (2018) 4 Cal.5th 607, 634, fn. 7.) The failure to adequately cite may hurt
appellants’ arguments to the extent they fail to direct us to specific portions of the record
that support their arguments. (See, e.g., Garcia v. Seacon Logix, Inc. (2015)

6       There is one record citation in this section which cites generally to approximately
140 pages of the record to establish the trial court had uncontradicted evidence of the amount of
fees incurred by appellants. First, this citation does not establish that this evidence is
uncontradicted. A further review of the record shows respondent disputed both whether it
breached the agreement and the amount of damages for any such breach, as shown in
respondent’s objections to appellants’ statement of undisputed material facts and its trial brief.
Second, a general citation to large blocks of pages does little to point us to any specific
information to support this point. (See, e.g., Ruiz Nunez v. FCA US LLC (2021) 61 Cal.App.4th
385, 392 [noting with disapproval citations to “large swathes of the reporter’s transcript rather
than to specific pages”]; Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 611
[“block citations do not comply with California Rules of Court, rule 8.204(a)(1)(C) and frustrate
the court’s ability to evaluate the party’s position”].)

                                               15.
238 Cal.App.4th 1476, 1489 [“ ‘It is not the function of this court to comb the record
looking for the evidence or absence of evidence to support [a party’s] argument.’ ”];
Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4th 498, 534.) But we
decline to wholly reject consideration of appellants’ merits arguments on this basis.
       Additionally, we requested supplemental briefing on the issue of nominal
damages. In response, respondent argued nominal damages were waived by appellants’
failure to request them in the trial court. We doubt whether this is possible simply as a
matter of logic. As explained further below, once the elements of a breach of contract
cause of action have been established, the award of some damages necessarily follows,
even if no actual damages have been proven. (Sweet v. Johnson (1959) 169 Cal.App.2d
630, 632 (Sweet) [finding nominal damages are “presumed as a matter of law to stem
merely from the breach of a contract”].) If nominal damages are an inherent part of
breach of contract—since the plaintiff must prove at least the existence of damages as
part of proving their claim—it is not apparent how a plaintiff could waive them without
dismissing the cause in its entirety. In any event, we do not find waiver here; we raised
the issue, and it was therefore appropriate for the parties to discuss it. (People v.
Williams (1998) 17 Cal.4th 148, 161, fn. 6 [“An appellate court is generally not
prohibited from reaching a question that has not been preserved for review by a party.”
“Whether or not it should do so is entrusted to its discretion.”]; Gov. Code, § 68081
[“Before … a court of appeal … renders a decision … based upon an issue which was not
proposed or briefed by any party to the proceeding, the court shall afford the parties an
opportunity to present their views on the matter through supplemental briefing.”].)
              B.     Applying de novo review to the legal question of duty, the ruling is
                     affirmed.
       Appellants briefly assert the trial court “erred in its ruling that only two of the
cases were encompassed in the defense/indemnity obligations.” The court found

                                             16.
respondent “had no duty to indemnify and defend” appellants in the 2784 Action. This is
a legal question of contract interpretation reviewed de novo.
       As discussed above, the 2784 Action was brought by Morris and Sharon alleging
financial elder abuse against appellants. The complaint in the 2784 Action alleged
appellants intentionally failed to make payments on the charging order owed to
respondent to deprive Morris and Sharon of their economic interests in Vista Del Sol.
This caused respondent to foreclose on Morris and Sharon’s economic interests in the
company. Morris and Sharon alleged that, even if they no longer held economic
interests, they still held membership interests in Vista Del Sol, and were unlawfully
prevented from participating in the business operations and having access to the records
of Vista Del Sol. They also alleged they were not paid a salary or paid a portion of the
sale proceeds from Vista Del Sol’s sale of property. Lastly, they claimed appellants filed
false statements with the Secretary of State. All of these things allegedly constituted
financial elder abuse within the meaning of Welfare and Institutions Code
section 15610.30.
       The contract at issue here provided for indemnification and defense of any claims
for damages made by Morris and Sharon “based on distributions made to [respondent]
pursuant to this Agreement.” In other words, indemnification and defense was to be
provided against any claims filed by Morris and Sharon predicated on the distribution of
assets from Vista Del Sol to respondent.
       Morris and Sharon’s complaints in the 2784 Action largely relate to what
happened before the foreclosure sale, insofar as they allege appellants failed to pay on the
charging order, which ultimately resulted in the foreclosure. Morris and Sharon also
complained they were not permitted to participate in the running of Vista Del Sol and
were not given access to its records. None of these are complaints based on the
distribution of assets to respondent. Even Morris and Sharon’s allegations that come
closest—that they were not paid a salary or a portion of the sale proceeds—fall short of

                                            17.
the indemnification agreement. Morris and Sharon’s complaint was that they were not
paid proceeds from the sale, not that respondent was paid. In other words, nothing about
Morris and Sharon’s complaint suggests they had any qualms about respondent receiving
a distribution of the assets; they merely objected that they also did not get a payout.
Under the plain language of the agreement, these financial elder abuse claims are not
“based on distributions made to [respondent] pursuant to this Agreement.” The
2784 Action was not covered by the indemnification agreement.
              C.     Applying the substantial evidence standard to the factual question of
                     damage, the finding is affirmed.
       Appellants also argue the court “had undisputed and uncontradicted evidence of
the amount of fees incurred by [appellants] from the date of the agreement through
January 4, 2017.” Appellants argue their time records were in evidence, and the trial
court erred by failing to award damages. Since appellants challenge the resolution of a
question of fact—i.e., the amount of damages—we review the trial court’s finding for
substantial evidence.
       Damages are a necessary element of any breach of contract action. (Monster, LLC
v. Superior Court (2017) 12 Cal.App.5th 1214, 1227, fn. 4; Behnke v. State Farm
General Ins. Co. (2011) 196 Cal.App.4th 1443, 1468.) It is axiomatic a plaintiff may not
recover damages that are not causally related to the breach of contract established. (Civ.
Code, § 3300; Patent Scaffolding Co. v. William Simpson Constr. Co. (1967)
256 Cal.App.2d 506, 511; Automatic Poultry Feeder Co. v. Wedel (1963) 213 Cal.App.2d
509, 515–516.) “The amount of damage sustained by a party need not be proved with the
same degree of certainty as the fact of damage, but may be left to reasonable
approximation or inference.” (Johnson v. Cayman Development Co. (1980)
108 Cal.App.3d 977, 983; see also Acree v. General Motors Acceptance Corp. (2001)
92 Cal.App.4th 385, 398.) However, admissible evidence must exist to provide such a
reasonable approximation of damages; such damages evidence cannot be speculative.

                                             18.
(See Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989; Carey v. Glenco Citrus
Products (1965) 235 Cal.App.2d 572, 581–582.) That said, where a breach of a duty has
occurred, a plaintiff is typically entitled to at least nominal damages. (See Civ. Code,
§ 3360; Elation Systems, Inc. v. Fenn Bridge LLC (2021) 71 Cal.App.5th 958, 966–968
[finding the failure to award nominal damages warranted reversal when it could impact
the parties’ rights in other regards]; Sweet, supra, 169 Cal.App.2d at p. 632.)
       The trial court first flagged appellants’ problems with its presentation of damages
in deciding the parties’ summary judgment and summary adjudication motions. In ruling
on appellants’ summary judgment motion, the trial court noted it appeared claims related
to some cases, such as the 1410 Action, were likely not covered by the indemnification
and defense clause, while claims related to other cases, such as the 3902 Action, likely
were covered. Part of denying appellants’ summary judgment motion was that even if
appellants had proved a breach, “[appellants] have failed to provide evidence showing
how they calculated the damages they incurred as to each of their claims. They only state
that they incurred $172,579.23 for the period between the settlement agreement and the
resolution of the dispute with Maddox, without explaining which defense costs were
incurred for defending each separate case.” Accordingly, per the court, “[s]ince it does
not appear that [appellants] are entitled to damages as to each separate claim that they
tendered to [respondent], they would need to provide evidence regarding the defense
costs incurred as to each claim in order for the court to be able to determine the amount
of damages they are entitled to recover.”
       Even after the parties agreed to move forward only on written submissions to the
court, appellants did not revise or supplement their damages case, despite this warning.
Perhaps unsurprisingly, following the bench trial, the court determined it had no way to
calculate damages, because there was no way to reasonably approximate the time spent
on the actions that were covered either in whole or in part. The sole evidence of damages
was a declaration from appellants’ attorney stating he had represented appellants in the

                                            19.
various disputes since July 2012. The attorney attached to his declaration a “complete
breakdown of the time entries and descriptions as well as the out of pocket costs
incurred.”
       The declaration purported to explain the breakdown of the fees but did not actually
make matters any clearer. The declaration stated, “Items under sub-file 1 are not related
to the litigation and are not included in the total amount sought. Sub file -0 is the main
file in which time was kept in this period. Sub file -2 was set up to keep track of the
work done when Morris and Sharon first filed their suit on May 5, 2015 and all work
under that file related to that claim.[7] Sub file -3 was set up in September of 2015 after
the elder abuse suit was filed.[8] In the end though the cases overlapped and were
intertwined and over time, I switched the billings to the sub file -0.” In other words,
subfile -1 represented fees that could not be part of any damages award, subfile -2
represented fees of which a portion might be part of a damages award, and subfile -3
represented fees related to the 2784 Action, which were not a part of any damages award.
However, all were ultimately switched into sub file -0.
       Subfile -0 presents a considerable problem here. The only description for
subfile -0 provided by appellants’ attorney is that it was the “main file in which time was
kept in this period.” No explanation was included which would permit the trial court to
determine whether subfile -0 included work related to the 3902 Action (which was
covered), the 1410 Action (which was partially covered), or the 2784 Action (which was
not covered).9 This is particularly true given the attorney’s statement that “[i]n the end

7       Although the declaration does not indicate the case number or court to which this refers,
it appears to be a reference to the 1410 Action, for which the court determined respondent had a
partial duty to defend appellants.
8      This appears to refer to the 2784 Action.
9       Since this declaration purported to include billing records between May 2015 and
January 2017, we presume it did not include any time related to the 0764 Action, which was not
filed until November 2017.

                                               20.
though the cases overlapped and were intertwined and over time, I switched the billings
to the sub file -0.” In other words, there simply is no telling whether the work in subfile -
0 is related to a covered matter or a noncovered matter.
       A review of the actual billing records does not help appellants. The time entries in
subfile -0 are almost invariably vague enough that they could apply to any case. For one
example, time was billed on May 20, 2015, for “Review and analysis of discovery
requests.” No case number is attached to this, or to virtually any other time entries in the
140-page file. On this record, we find there was substantial evidence for the trial court to
conclude the evidence of damages was speculative.
       However, notwithstanding actual damages, it appears the trial court did err in its
damages analysis. Assuming the trial court found a breach of contract,10 it should have
awarded at least nominal damages, even if it concluded the evidence on actual damages
was speculative. “A plaintiff is entitled to recover nominal damages for the breach of a
contract, despite inability to show that actual damage was inflicted upon him [citation],
since the defendant’s failure to perform a contractual duty is, in itself, a legal wrong that
is fully distinct from the actual damages.” (Sweet, supra, 169 Cal.App.2d at p. 632.)
Nominal damages are “presumed as a matter of law to stem merely from the breach of a
contract.” (Ibid.)
       As this court has previously explained, if “the judge determined defendant’s
conduct caused plaintiffs some damages,” and “if the trial judge merely believed the
evidence was speculative in the sense that he could not calculate the damages with

10     The trial court did not make a clear finding on whether a breach of contract occurred. It
noted respondent had a duty to indemnify as to certain cases, and none as to other cases. It also
noted appellants had tendered and respondent had responded in varying ways but did not say
whether these obligations were sufficient to discharge respondent’s duty under the contract. For
purposes of this part of our analysis, we assume the trial court found breach where it found duty.
Because we find the failure to award nominal damages here is not a basis for remand, it is
ultimately inconsequential. We analyze appellants’ brief argument that the court erred by not
making a finding on breach below.

                                               21.
certainty, he should have nevertheless resorted to the best evidence available and fixed
damages accordingly [citation].” (Hutcherson v. Alexander (1968) 264 Cal.App.2d 126,
135.) “On the other hand, if the trial judge believed the evidence was completely
speculative so that the amount of damages fixed would be entirely conjectural, he should
have at least allowed plaintiffs nominal damages [citation].” (Ibid.)
         While it is error not to award at least nominal damages, assuming breach, it is not
reversible error. Nominal damages are not a basis to reverse a lower court’s decision
unless the award of nominal damages impacts other rights of the parties. (Elation
Systems, Inc. v. Fenn Bridge LLC, supra, 71 Cal.App.5th at p. 967 [right to equitable
relief]; Sweet, supra, 169 Cal.App.2d at pp. 633–634 [right to costs].) However, these
awards must be mandatory; a discretionary award of costs is not sufficient to be
considered reversible error. (Staples v. Hoefke (1987) 189 Cal.App.3d 1397, 1406.) This
makes good sense: Since nominal damages are inherently damages in name only, there is
little reason to think such an award would affect a trial court’s discretionary analysis of
costs.
         Appellants contend the fee-shifting provision of the settlement agreement is the
type of mandatory award which flows from the award of nominal damages here and thus
warrants reversal. The record before us in this case indicates the contract creates a right
to attorney fees in the event of a dispute about the contract. The settlement agreement at
issue here states, “If any legal action or any motion or other proceeding is brought for the
enforcement of this Agreement or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement, the
successful or prevailing party or parties shall be entitled to recover reasonable attorney
fees and other costs and expenses incurred in any action or other proceeding, in addition
to any other relief to which it or they may be entitled.” (Italics added.)
         While the settlement creates a right for the prevailing party to be awarded attorney
fees, which party is the prevailing party—and indeed, whether any party is the prevailing

                                              22.
party—is consigned to the broad discretion of the trial court. Fee-shifting provisions are
governed by Civil Code section 1717, which states: “The court, upon notice and motion
by a party, shall determine who is the party prevailing on the contract for purposes of this
section .…” (Civ. Code, § 1717, subd. (b)(1).) “[T]he party prevailing on the contract
shall be the party who recovered a greater relief in the action on the contract. The court
may also determine that there is no party prevailing on the contract for purposes of this
section.” (Ibid.) Courts of this state have routinely found that, unless one party achieves
an “unqualified victory” on all of its claims, it is within the trial court’s discretion to
determine which party prevailed, or indeed whether either party prevailed.
(DisputeSuite.com, LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 973; Zintel Holdings, LLC
v. McLean (2012) 209 Cal.App.4th 431, 439; Silver Creek, LLC v. BlackRock Realty
Advisors, Inc. (2009) 173 Cal.App.4th 1533, 1541.)
       Here, were we to reverse and the trial court to determine a breach occurred and
thus award nominal damages, the result would in no sense be an unqualified victory for
appellants. Appellants sought damages in relation to respondent’s failure to defend in
relation to four suits—the 3902 Action, the 1410 Action, the 2784 Action, and the
0764 Action. Since we conclude no duty was owed to defend against the 2784 Action or
the 0764 Action, it is clear appellants would have failed to prove at least half of the case
they brought. Further, appellants sought hundreds of thousands of dollars in attorney
fees; being awarded nominal damages is hardly an unqualified victory. As such, it would
have been within the trial court’s discretion to determine a prevailing party. Since the
award of attorney fees here would be discretionary in any event, we may not reverse
merely because the court erred in not awarding nominal damages.
              D.      To the extent appellants contest the trial court’s failure to make a
                      clear ruling on breach, we find no error.
       Appellants briefly suggest the trial court erred by failing to make a clear finding
on breach, stating, “Having no direct ruling on breach or damages, the trial court’s Ruling

                                              23.
is against law and in error.” We do not understand appellants’ suggestion that the court
made no direct ruling on damages: The court’s finding was expressly based on the
failure of proof of damages in this case. It is unclear how the trial court could have been
more direct.
       We perceive no reversible error in the trial court’s failure to render a clear decision
on whether breach occurred. Appellants point us to no authority showing a similar case
where reversible error has been found merely because a court failed to opine on a specific
element of a cause of action. It is commonplace for courts to decline to reach additional
elements when it is clear a party cannot prevail on one necessary element of its argument,
because doing so is unnecessary to resolve the case. (See, e.g., Rodriguez v. Parivar, Inc.
(2022) 83 Cal.App.5th 739, 754, fn. 10; Connerly v. Schwarzenegger (2007)
146 Cal.App.4th 739, 746 [“Courts do not decide abstract questions of law.”].) We find
no error based on appellants’ argument here.
               E.    The trial court appropriately exercised its discretion in denying
                     appellants’ motion for a new trial or for a different judgment.
       Appellants also assert the trial court erred by failing to grant their motion for a
new trial pursuant to section 657. Although not entirely clear, appellants suggest the
motion should have been granted under section 657, subdivisions (6) and (7), namely that
there was “[i]nsufficiency of the evidence to justify the verdict or other decision, or the
verdict or other decision is against law” and there was an “[e]rror in law.” (§ 657,
subds. (6), (7).)
       Appellants fail to cite to anything in the record concerning their motion for a new
trial, which alone is grounds for rejecting their argument. (See Cal. Rules of Court,
rule 8.204(a)(1)(C); City of Lincoln v. Barringer (2002) 102 Cal.App.4th 1211, 1239;
Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979.) Moreover, appellants simply
rehash arguments discussed above, suggesting that because they presented an
amalgamated billings file, they introduced sufficient evidence to be awarded damages.

                                             24.
For the reasons given above, we continue to reject that argument here. The trial court did
not abuse its discretion in denying the motion for a new trial simply because appellants
submitted a billing file that was not meaningfully differentiated.
       Additionally, appellants assert the trial court erred in failing to grant a new trial
because it refused to exercise its discretion under section 662. Section 662 provides that,
following a court trial, the court “may vacate and set aside the statement of decision and
judgment and reopen the case for further proceedings and the introduction of additional
evidence.” Essentially, appellants claim the court should have reopened the case to allow
them to submit additional evidence further breaking down the attorney fees by suit so
they could recover damages for the suits the court determined were covered by the
indemnification agreement. They argue they did not know the court might require such a
further breakdown of damages, and they were therefore denied the opportunity to present
evidence of how the damages broke down by case.
       There are two problems with this argument. First, the trial court did signal the
need to break down the damages in its ruling on the summary judgment/adjudication
motions. As referenced above, the court noted it appeared claims related to some cases,
such as the 1410 Action, were likely not covered by the indemnification and defense
clause, while claims related to other cases, such as the 3902 Action, likely were covered.
Among the reasons the court denied appellants’ summary judgment motion was that even
if appellants proved a breach, “[appellants] have failed to provide evidence showing how
they calculated the damages they incurred as to each of their claims. They only state that
they incurred $172,579.23 for the period between the settlement agreement and the
resolution of the dispute with Maddox, without explaining which defense costs were
incurred for defending each separate case.” Thus, appellants knew from the summary
judgment decision that separate computations of damages for each different tendered
claim were probably necessary. This occurred before the parties agreed to submit the
matter to the trial court on the written submissions already lodged.

                                              25.
       Second, nothing in appellants’ motion for a new trial suggested they had made any
effort to disaggregate the attorney fees into separate matters. Appellants’ counsel
submitted a new declaration with the motion for a new trial, but in doing so, made
absolutely no effort to show which billings were associated with the 3902 Action, and
which were associated with the 1410 Action, and thus might arguably be covered. Based
on this, the trial court could have well concluded appellants could not provide such a
breakdown. We cannot find the court abused its discretion here: There simply was no
real indication in the motion for a new trial that appellants would or could present the
court with an accounting of the attorney bills separated by matter, especially since
appellants had had multiple opportunities to do so by that point. There was no reason to
believe reopening the evidence would have been anything but futile.
                                     DISPOSITION
       The trial court’s orders are affirmed. Respondent shall recover its costs on appeal.

                                                                                 HILL, P. J.
WE CONCUR:

PEÑA, J.

MEEHAN, J.

                                            26.