Court Opinion

ID: 8482426
Source: CourtListenerOpinion
Date Created: 2022-11-09 00:01:36.652061+00
Date Added: 2024-06-11T16:49:38.784612
License: Public Domain

Filed 11/8/22 Honetschlager v. Kozeychuk

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE

 MICHAEL HONETSCHLAGER,
 individually and as Trustee, etc., et al.,
                                                                       G060530
      Cross-defendants and Respondents,
                                                                       (Super. Ct. No. 30-2018-00999614)
           v.
                                                                       OPI NION
 ULIANA KOZEYCHUK,

      Cross-complainant and Appellant.

                   Appeal from a judgment of the Superior Court of Orange County, Charles
Margines, Judge. Affirmed.
                   Uliana Kozeychuk, in pro. per., for Cross-complainant and Appellant.
                   Klein & Wilson, Michael S. LeBoff and Brian M. Kelly for Cross-
defendants and Respondents.
                                           INTRODUCTION
                 We have heard it said on more than one occasion: business and friendship
don’t mix. A fortiori, business and love are problematic. This case is a paradigm of that
proposition.
                 The parties in this appeal were formerly involved in a long-term
relationship. Honetschlager started a company early in the couple’s relationship which
later became quite successful. Kozeychuk, his ex-girlfriend, says he told her from the
beginning she would own a one-third share of the business if she put in time and effort
contributing various services to the company. She never insisted he put this in writing
and never invoiced him for the services she performed. Apparently, she did without such
formalities because they were in a relationship and she trusted him.
                 This turned out to be a costly abjuration. Because once the couple parted
ways, Honetschlager denied she had any interest in the company and refused to pay her
anything for her contributions. The dispute ended up in Orange County Superior Court
and went to a jury trial, where a verdict was handed down in favor of Honetschlager.
Kozeychuk now appeals, and we conclude we must affirm.
                                                   FACTS
                 Appellant Uliana Kozeychuk and respondent Michael Honetschlager were
in a somewhat fitful romantic relationship for eight years, beginning in 2010 and ending
                    1
in May of 2018. Kozeychuk is a practicing attorney, and Honetschlager is in the
commercial painting industry.
                 Sometime around 2008, before he and Kozeychuk got together,
Honetschlager decided to start his own painting business as a sole proprietorship. Shortly

        1
                 The couple broke up and got back together some four times before their final break up in May
2018. All break ups were at Kozeychuk’s behest. The couple never married, although they were engaged at one
point.

                                                       2
after he began dating Kozeychuk, in 2010, he incorporated the business as respondent
MGH Painting, Inc. (MGH). Honetschlager held 100 percent of the company’s shares.
                 Throughout their relationship, Kozeychuk assisted and advised
Honetschlager and MGH on various aspects of the business. The assistance she provided
ranged in complexity. For example, she performed ministerial tasks, such as printing
employee paychecks. She assisted Honetschlager with bids for a few jobs. She ran
interference on issues that arose with MGH’s 401(k) plan and with its bank. She also
provided legal services from time to time, such as reviewing contracts and preparing a
severance agreement.
                 The problem was Kozeychuk did not keep records of the work she
performed, nor did she bill the company or Honetschlager contemporaneously for her
time. According to Kozeychuk, she did not expect to be paid in the traditional sense, but
rather in what is commonly known as “sweat equity” – labor in exchange for an
ownership stake in the business. She testified she and Honetschlager had discussed the
prospect of her becoming a stakeholder, even going so far as to discuss what percentage
                     2
each would hold. She had asked for 50 percent ownership, but he had insisted she could
only have a one-third ownership stake because he had two children to whom he intended
to bequeath the business upon his demise. Based on this conversation, Kozeychuk
testified, she invested time and energy assisting with various tasks that came up.
                 Despite her perceived understanding, however, Kozeychuk had no signed
agreement regarding the terms of her relationship with MGH. She never obtained share
certificates and never memorialized her understanding in writing. She claimed she did
not force the issue because she did not want to upset Honetschlager or indicate she did
not trust him.

        2
                  According to her, this conversation took place shortly after Honetschlager’s original business
partner, Kevin Francois, was arrested and imprisoned. In the wake of the arrest, Honetschlager asked Kozeychuk if
she would like to become his business partner. A corporate document entered into evidence shows Kozeychuk was
made a director of MGH along with Honetschlager on July 2, 2010.

                                                        3
                  In November 2011, Kozeychuk filed for personal bankruptcy. However,
she failed to schedule either her purported interest in MGH or any alternative claim for
                                                                                    3
services rendered to the company in the bankruptcy paperwork.                           The bankruptcy was
discharged in February 2012.
                  In May of 2018, Kozeychuk and Honetschlager broke up for the fifth and
final time. Just prior to their break up, Kozeychuk said, Honetschlager had indicated he
intended to sell MGH and keep all sale proceeds without sharing them with Kozeychuk.
This conversation apparently took place at a Costa Mesa steakhouse. Kozeychuk
abruptly left the restaurant and terminated the relationship.
                  On May 7, 2018, Kozeychuk sent an e-mail to the brokerage firm
Honetschlager was using to find a buyer and informed the staff she was a part owner of
the business and expected to have approval authority on the transaction, as well as a cut
of the proceeds. This scuttled any possibility Honetschlager might have had to line up a
buyer for MGH. So in June 2018, he filed a complaint against Kozeychuk, seeking a
declaratory judgment that he, and he alone, was the rightful owner of MGH.
                  Kozeychuk saw this as a shot across the bow. She decided to file a cross-
complaint against both Honetschlager and MGH alleging breach of oral partnership
agreement, promissory fraud, quantum meruit, promissory estoppel, and declaratory
relief in August of 2018.
                  The following year, Kozeychuk informed the United States Bankruptcy
Trustee about the litigation and her claims against Honetschlager and MGH. The
bankruptcy court reopened the bankruptcy estate and appointed a trustee. In or around
February 2020, an auction was scheduled to sell off Kozeychuk’s interest and claims, and
MGH was the highest bidder. It paid $57,000.

         3
                 At trial, she testified she failed to schedule it because she had no writing confirming her interest,
and she had forgotten about it because of how distraught she was at the time.

                                                           4
              As a result, Kozeychuk divided her quantum meruit claim into two separate
claims – one for services rendered prior to bankruptcy and one for services rendered
after. Honetschlager received judgment on his claim for declaratory relief. And he and
MGH filed a motion for summary adjudication as to all of Kozeychuk’s claims, save her
quantum meruit claim for services rendered after bankruptcy. They argued Kozeychuk
lacked standing to assert claims belonging to her bankruptcy estate or now, to MGH.
This motion was granted, and Kozeychuk was left to go to trial with just the postpetition
quantum meruit claim. The jury hearing the claim found for Honetschlager and MGH.
                                       DISCUSSION
              Kozeychuk makes several arguments on appeal. First, she contends there
was insufficient evidence to support the verdict in favor of the respondents. Second, she
believes the trial court abused its discretion in denying several of her motions in limine,
which permitted prejudicial evidence to come in. Third, she claims the trial court
erroneously used respondents’ proposed verdict form. And finally, she argues it was
error for the trial court to summarily adjudicate the bulk of her claims. None of these
arguments have merit.
I.            Verdict Not Supported By the Evidence
              Kozeychuk argues the jury’s verdict in her former boyfriend’s favor was
not supported by substantial evidence, but this is a misstatement of the applicable legal
standard.
              “‘We generally apply the familiar substantial evidence test when the
sufficiency of the evidence is at issue on appeal. Under this test, “‘we are bound by the
established rules of appellate review that all factual matters will be viewed most
favorably to the prevailing party [citations] and in support of the judgment . . . . “In brief,
the appellate court ordinarily looks only at the evidence supporting the successful party,
and disregards the contrary showing.” [Citation.] All conflicts, therefore, must be
resolved in favor of the respondent.’” [Citation.] [¶] ‘But this test is typically implicated

                                               5
when a defendant contends that the plaintiff succeeded at trial in spite of insufficient
evidence. In the case where the trier of fact has expressly or implicitly concluded that the
party with the burden of proof did not carry the burden and that party appeals, it is
misleading to characterize the failure-of-proof issue as whether substantial evidence
supports the judgment. This follows because such a characterization is conceptually one
that allows an attack on (1) the evidence supporting the party who had no burden of
proof, and (2) the trier of fact’s unassailable conclusion that the party with the burden did
not prove one or more elements of the case [citations]. [¶] ‘Thus, where the issue on
appeal turns on a failure of proof at trial, the question for a reviewing court becomes
whether the evidence compels a finding in favor of the appellant as a matter of law.
[Citations.] Specifically, the question becomes whether the appellant’s evidence was (1)
“uncontradicted and unimpeached” and (2) “of such a character and weight as to leave no
room for a judicial determination that it was insufficient to support a finding.”’
[Citation].” (Sonic Manufacturing Technologies, Inc. v. AAE Systems, Inc. (2011) 196
Cal.App.4th 456, 465-466.)
                 The above standard applies to this case because the jury’s verdict rested on
a failure of proof. The jury explicitly determined Kozeychuk had failed to prove every
                                                4
element of her quantum meruit claim.
                 “‘Quantum meruit refers to the well-established principle that “the law
implies a promise to pay for services performed under circumstances disclosing that they
were not gratuitously rendered.” [Citation.] To recover in quantum meruit, a party need
not prove the existence of a contract [citations], but it must show the circumstances were
such that “the services were rendered under some understanding or expectation of both
parties that compensation therefor was to be made” [citations].’ (Huskinson & Brown v.

        4
                 Even if we were examining whether substantial evidence supported the jury’s verdict, we would
find Kozeychuk waived the issue by failing to summarize and analyze in her brief all of the evidence, both favorable
and unfavorable to her position. (See Doe v. Roman Catholic Archbishop of Cashel & Emly (2009) 177 Cal.App.4th
209, 218.) Kozeychuk’s statement of facts was barebones and one-sided.

                                                         6
Wolf (2004) 32 Cal.4th 453, 458.) The requisite elements of quantum meruit are (1) the
plaintiff acted pursuant to ‘an explicit or implicit request for the services’ by the
defendant, and (2) the services conferred a benefit on the defendant. (Day v. Alta Bates
Medical Center (2002) 98 Cal.App.4th 243, 249.)” (Port Medical Wellness, Inc. v.
Connecticut General Life Ins. Co. (2018) 24 Cal.App.5th 153, 180.)
                 The evidence does not compel a finding in Kozeychuk’s favor as a matter
of law on her quantum meruit claim. Indeed, the evidence – even when viewed from
                               5
Kozeychuk’s perspective – lays out a very simple picture. Kozeychuk expected to
obtain a stake in MGH if she helped Honetschlager with the business. She did not have
an expectation of being paid in wages or salary for her services, but rather in equity. It is
undisputed that MGH purchased said equity in the business in 2020. It was reasonable
for the jury to conclude Kozeychuk’s work for MGH had been compensated through the
purchase of her purported equity.
                 Kozeychuk’s case at trial, and before us, places great weight on responses
given by MGH to several requests for admission (RFA’s) during the discovery process.
In these responses, MGH admitted Kozeychuk had performed services for its benefit and
it had not paid her. But whatever these RFA responses prove, they do not overshadow or
                                                                                                       6
eviscerate the impact of the $57,000 paid by MGH for her interest in the business.
                 Kozeychuk believes the $57,000 represented payment only for her stake in
the company as well as any wages due as of the date she filed bankruptcy. But again, her
own testimony shows she expected to be compensated in equity and not in wages. The
only real question for the jury to resolve, then, was whether the $57,000 paid to her

        5
                 We say this because Honetschlager steadfastly denied he promised Kozeychuk a stake in the
business.
        6
                   We note the discovery responses were dated about a year prior to the purchase, at a time when
respondents had given Kozeychuk nothing at all in exchange for her labor. We imagine they might have answered
differently after the purchase.

                                                       7
bankruptcy estate was adequate to make Kozeychuk whole. We cannot say it was
unreasonable for the jury to conclude it was.
                At oral argument, Kozeychuk stressed that her quantum meruit claim was
an alternative theory of recovery such that she was still due the reasonable value of her
services even if she conceded she no longer had a claim to an equity stake. But we are
leery of giving Kozeychuk a double recovery here. As we’ve stated, Kozeychuk’s
bankruptcy estate was compensated for her claimed equity stake. So the jury could
reasonably have concluded this eliminated the need for any alternative theory of
recovery. Even if we were to accept Kozeychuk’s framing of the issue, we still do not
see a basis to reverse the verdict. Kozeychuk was given an opportunity to present
evidence of her damages, and the evidence she presented was largely speculative. At
best, Kozeychuk could merely opine about the amount of time she spent on tasks and
what tasks she performed. She had little documentation of her work. Because she gave
the jury so little proof of damages, it was not unreasonable for the jury to find she had not
proven damages.
II.             Evidentiary Rulings
                Kozeychuk’s second line of attack is the trial court’s rulings on two
motions in limine, both of which we review for abuse of discretion. (See Condon-
Johnson & Associates, Inc. v. Sacramento Municipal Utility Dist. (2007) 149 Cal.App.4th
1384, 1392.) Even if we find such error, we may not reverse the judgment unless we
conclude it “resulted in a miscarriage of justice.” (Evid. Code, § 353, subd. (b).) There
was no error.
                A.            Motion in Limine No. 4 - Conclusiveness of RFA’s
                Kozeychuk asked the trial court to bar Honetschlager and MGH from
presenting any evidence on the matter in the admitted RFA’s discussed previously. The
admitted RFA’s asked (1) whether respondents asked Kozeychuk to perform services, (2)
whether she performed services, (3) whether the services conferred a benefit on MGH,

                                                8
and (4) whether MGH paid her for the services. The RFA’s tracked the language of
                                                                               7
CACI No. 371, which lists four elements of quantum meruit . During pre-trial motions,
Kozeychuk argued MGH had admitted the first three elements of the claim through its
RFA responses, and should be barred from introducing evidence refuting or negating the
elements it admitted.
                  The trial court denied the motion, finding the RFA’s themselves were very
broad in their language. It did not feel the admissions could be reasonably read to
preclude the defendants from being able to dispute specific services Kozeychuk provided .
Kozeychuk contends the trial court, in effect, impermissibly rewrote her RFA’s.
                  We disagree. “Although admissions are dispositive in most cases, a trial
court retains discretion to determine their scope and effect. An admission of a fact may
be misleading. In those cases in which the court determines that an admission may be
susceptible of different meanings, the court must use its discretion to determine the scope
and effect of the admission so that it accurately reflects what facts are admitted in the
light of other evidence.” (Fredericks v. Kontos Industries, Inc. (1987) 189 Cal.App.3d
272, 277, italics added.) This is exactly what the trial court did. The RFA’s were very
broadly worded, and, in our estimation, quite unhelpfully so. Because Kozeychuk was
trying to prove she had rendered services over a years-long period, Honetschlager’s

         7
                 CACI No. 371 states:
        “371 Common Count: Goods and Services Rendered
        “[Name of plaintiff] claims that [name of defendant] owes [him/her/nonbinary pronoun/it] money for
[goods delivered/services rendered]. To establish this claim, [name of plaintiff] must prove all of the following:

         “1. That [name of defendant] requested, by words or conduct, that [name of plaintiff] [perform
services/deliver goods] for the benefit of [name of defendant];

         “2. That [name of plaintiff] [performed the services/delivered the goods] as requested;

         “3. That [name of defendant] has not paid [name of plaintiff] for the [services/goods]; and

         “4. The reasonable value of the [goods/services] that were provided.”

                                                          9
admission that she had indeed performed services did not necessarily mean he thought
she had performed all services she was claiming at trial.
               B.             Motion in Limine No. 2 - Kozeychuk’s Bankruptcy
               Next, Kozeychuk appeals the trial court’s decision to deny her motion in
limine seeking exclusion of any reference to her bankruptcy case. She argued it was
more prejudicial than probative because the only claim being tried was the quantum
meruit claim for services rendered after her bankruptcy was filed. Honetschlager and
MGH’s counsel argued her statements before the bankruptcy court in 2011 were directly
relevant. Kozeychuk’s failure to schedule her interest in MGH in 2011, they argued, was
relevant for the jury to be able to assess the credibility of her claims. The trial court
agreed, and so do we. It was highly relevant. The jury was entitled to know this
information in order to decide whether Kozeychuk’s testimony should be believed.
               Kozeychuk argues such evidence was being used to attack her character on
grounds outside honesty or veracity. Her concern was the jury was essentially being told
she was a bad person because she filed bankruptcy. This is simply not the case.
Evidence of her bankruptcy was not introduced to impugn her character as such. It was
being introduced to show her claim at trial was inconsistent with a previous statement she
made in front of the bankruptcy court. The jury was surely entitled to know this.
III.           Verdict Form
               Next, Kozeychuk argues she was prejudiced by the trial court’s choice of
Honetschlager’s verdict form over hers. Kozeychuk proposed a verdict form which
would have required the jury to answer “yes” or “no” to questions targeting each specific
element of her claim. Honetschlager and MGH proposed a verdict form which lumped
the elements together and simply asked the jury to answer “yes” or “no” as to whether
Kozeychuk had proven “all of the elements of her claim for services rendered [.]” The
trial court preferred the latter form.

                                              10
                Kozeychuk believes the respondents’ verdict form was designed to confuse
the jurors because it did not mention what “all of the elements” of the claim were. In our
view – and apparently in the trial court’s – she underestimates the jury. The trial court
said it would instruct the jury on CACI No. 371 and provide the instructions to the jury
when they went to deliberate. It did so. If they didn’t understand them when read, the
jury was more than capable of finding the instruction providing the elements of the claim
and determining whether those elements had been proven.
                In any event, Kozeychuk herself ensured the jurors would not be confused
on the elements of her claim because she took time in her closing to guide the jury to
CACI No. 371 and discuss the elements. We are satisfied the jury was properly
instructed and well aware of the elements required.
IV.             Summary Adjudication of Other Claims
                Finally, Kozeychuk claims the trial court erred when it granted
Honetschlager and MGH’s motion for summary adjudication of four of her six claims –
breach of oral partnership agreement, promissory fraud, promissory estoppel, and
                          8
declaratory judgment.         Honetschlager and MGH’s motion contended Kozeychuk lacked
standing to bring the bulk of her claims because they all belonged to her bankruptcy
estate, and later passed to MGH. We agree.
                Kozeychuk’s bankruptcy estate included all of her “legal and equitable
interests” at the time of the Chapter 11 filing in November 2011. (See 11 U.S.C. § 541,
subd. (a).) Neither side disputes this would have included any current or expected future
interest she might have had in MGH, which disposes of her declaratory relief claim. The
bankruptcy estate also would have included Kozeychuk’s prepetition causes of action.
(See Smith v. Arthur Andersen LLP (9th Cir. 2005) 421 F.3d 989, 1002.)

        8
                Kozeychuk apparently does not challenge the summary adjudication of her prepetition quantum
meruit claim.

                                                    11
              Kozeychuk’s first cause of action for breach of oral partnership agreement
alleged she and Honetschlager agreed she would own one-third of MGH and perform
services in exchange. She further alleged Honetschlager breached the agreement in May
2018 when he refused to buy her out of her share. Kozeychuk correctly argues that a
breach of contract claim does not come into existence until the breach occurs. And her
cross-complaint alleged the breach did not occur until May 2018. Nevertheless, at the
time of the alleged breach, Kozeychuk owned no interest in MGH. By that time, any
contractual benefit related to her interest in MGH had passed to the bankruptcy estate.
She could not have sustained an injury.
              Summary adjudication was similarly proper as to Kozeychuk’s promissory
estoppel claim, which hews closely to her breach of contract claim. The promissory
estoppel cause of action, too, would have accrued in May 2018, based on the statute of
limitations analysis applicable to breach of an oral contract. (See Newport Harbor
Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207, 1224, fn.
5 (Newport Harbor).) “The elements of promissory estoppel are (1) a promise, (2) the
promisor should reasonably expect the promise to induce action or forbearance on the
part of the promisee or a third person, (3) the promise induces action or forbearance by
the promisee or a third person, and (4) injustice can be avoided only by enforcement of
the promise.” (Id. at p. 1225.) By the time Kozeychuk was arguably entitled to
enforcement of Honetschlager’s promise, she no longer had standing to assert an
ownership interest in MGH because the interest belonged to the bankruptcy estate.
Again, she had suffered no injury.
              Kozeychuk’s promissory fraud claim also belonged to her bankruptcy
estate. A claim for promissory fraud requires a promise made without intention of
performing it. (See Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060.) The breach
occurred prepetition; the moment Honetschlager allegedly promised Kozeychuk an
ownership stake in MGH in 2010.

                                            12
              Kozeychuk argues she still maintained standing as to claims arising after
her bankruptcy petition was filed, because she believes her lawsuit encompasses
continuing wrongs, each of which represents a separate claim. This argument misses the
mark. It is irrelevant whether Honetschlager engaged in multiple breaches of the same
agreement, as Kozeychuk claims in her briefing. Kozeychuk’s interest in MGH passed to
her bankruptcy estate in 2011 and any claims associated with it no longer belonged to her
– even if the breaches took place after her petition. In sum, we find no error in the trial
court’s grant of summary adjudication as to the above claims.
                                      DISPOSITION
              The judgment is affirmed. Respondents to recover their costs on appeal.

                                                  BEDSWORTH, ACTING P. J.

WE CONCUR:

MOORE, J.

MARKS, J.*

*Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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