Court Opinion

ID: 6329299
Source: CourtListenerOpinion
Date Created: 2022-04-01 22:02:01.230824+00
Date Added: 2024-06-11T09:22:49.904685
License: Public Domain

Filed 4/1/22 Roesler v. Nella Terra Cellars CA1/3

                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

                                                                          A160574
 VEENA ROESLER et al.,                                                    (Alameda County
            Plaintiffs and Respondents,                                    Super. Ct. No. RG 17846053)

 v.                                                                       ORDER MODIFYING
                                                                          OPINION AND DENYING
 NELLA TERRA CELLARS, INC. et                                             REQUEST FOR
 al.,                                                                     JUDICIAL NOTICE AND
           Defendants and Appellants.                                     PETITION FOR
                                                                          REHEARING
                                                                          [NO CHANGE IN
                                                                          JUDGMENT]

THE COURT:
         It is ordered that the unpublished opinion filed on March 11, 2022, be
modified as follows:
         On page 4, delete the last sentence in the first full paragraph that
states: “Until that time, plaintiffs did not have either a catering permit or a
license to serve distilled spirits.”

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     There is no change in the judgment.
     Respondents’ petition for rehearing is denied.

Dated: _______________                   ___Tucher    , P. J.

A160574

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Filed 3/11/22 Roesler v. Nella Terra Cellars CA1/3 (unmodified opinion)
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

 VEENA ROESLER et al.,                                                    A160574
            Plaintiffs and Respondents,
 v.                                                                       (Alameda County Super. Ct.
 NELLA TERRA CELLARS, INC. et                                             No. RG 17846053)
 al.,
           Defendants and Appellants.

         Veena Roesler, individually and doing business as Palmdale Estates
Inc. (collectively, plaintiffs), filed a complaint against defendants Nella Terra
Cellars, Inc. (Nella Terra) and Gerald and Paulette Beemiller arising out of
their business relationship. They alleged defendants reneged on their
promise to execute a long-term contract leasing plaintiffs their vineyard to
operate an event venue. The trial court ultimately determined plaintiffs
invested in that venture and awarded them two years of anticipated lost
profits and depreciable assets as a matter of equity. Defendants appeal,
arguing the statement of decision omits the specific equitable basis for
awarding damages and fails to explain whether the award is limited to
plaintiffs’ anticipated lost profits for events that comply with Department of

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Alcoholic Beverage Control (ABC) regulations.1 We affirm in part, reverse in
part, and remand for the trial court to issue a new statement of decision and
enter a new judgment.
                               BACKGROUND
      Plaintiffs operate a wedding and events business. In 2013, Roesler and
the Beemillers discussed creating and operating an events venue at Nella
Terra, the Beemillers’ vineyard, which was largely undeveloped at the time.
The parties drafted a contract providing plaintiffs with an exclusive lease to
Nella Terra from January 1, 2014 to December 31, 2025, for $15,000 per
month for the first two years. After that time, all future payments would be
dependent on event bookings, but plaintiffs guaranteed defendants $360,000,
representing the first two years of facility fees. Nella Terra would be the
exclusive wine supplier for plaintiffs’ events. Nella Terra and the Beemillers
would receive all of the events’ facility fees and proceeds from wine sales.
Plaintiffs were entitled to all catering, service, decorations, and other
miscellaneous rental item fees. At the end of the lease in 2025, plaintiffs had

      1 We reject plaintiffs’ request for judicial notice of an amended
judgment entered against Nella Terra and the Beemillers, not simply the
Beemillers as noted in the original judgment. The amended judgment is of no
substantial consequence to the issue before us — challenges to the statement
of decision. (Evid. Code, § 459, subd. (c); People ex rel. Lockyer v. Shamrock
Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [“any matter to be judicially
noticed must be relevant to a material issue”].) Moreover, both Nella Terra
and the Beemillers appealed from the original judgment. We have no
indication defendants have filed a notice of appeal of the amended judgment.
       We also reject defendants’ request to dismiss Nella Terra as a party,
a request made in a footnote in their opening brief rather than a served and
filed written motion. (Cal. Rules of Court, rule 8.54 [“a party wanting to
make a motion in a reviewing court must serve and file a written motion”];
ReadyLink Healthcare, Inc. v. Jones (2012) 210 Cal.App.4th 1166, 1174
[declining to treat request for a stay presented in middle of reply brief as
a formal motion].)
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the option to extend the lease for five years or to be bought out by one of the
Beemillers’ children.
      Plaintiffs started to develop an event venue at Nella Terra and paid
defendants $15,000 for January 2014 rent even though the parties had not
signed the contract. Roesler also loaned the Beemillers, who had limited
monetary funds, nearly $100,000 to pay for, among other things,
improvements to Nella Terra’s roads. In addition, plaintiffs purchased items
for hosting events, such as a mobile kitchen, bathroom, dance floor, garden
furniture, trucks for transporting dishes for washing, and catering and dining
items, totaling over $450,000. Plaintiffs advertised Nella Terra to their
clients. Meanwhile, using plaintiffs’ monthly $15,000 payments, defendants
worked on improving Nella Terra and its vineyard. By May 2014, plaintiffs
hosted their first of 22 events at Nella Terra that year. In 2015, Roesler
purchased a vacant property and building adjacent to Nella Terra, in part to
serve as a dishwashing site since Nella Terra did not have any plumbing.
Plaintiffs continued to pay defendants $15,000 in monthly rent for two years,
for a sum of $360,000. During this time, Nella Terra became more profitable
— its 2015 profits were approximately $300,000, and in 2016, $459,000.
      The parties continued to negotiate contract details but were unable to
finalize an agreement. In June 2014, the Beemillers revised the draft
contract to give themselves an option to buy plaintiffs out within five years of
operating — a proposal Roesler rejected. In August 2015, Gerald Beemiller
proclaimed he was unconcerned the parties had not signed the ten-year
agreement. Wanting to improve Nella Terra’s cash flow, he offered plaintiffs
a catering contract if they wanted to remain on the property. Under that
arrangement, plaintiffs, who were not caterers, would only receive profits
from catering food at events, while the Beemillers would retain the revenue

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from the more lucrative event planning items, such as decorations and
coordination fees. This would result in plaintiffs losing $6,500 per event.
      The parties continued to work on negotiating a workable relationship
but, in March 2016, Roesler terminated their partnership effective December
31, 2017, so the parties could complete the already-booked 2017 events.
Shortly after this announcement, the Beemillers began to question plaintiffs’
compliance with ABC regulations, which capped at 24 the number of events
per year at which distilled spirits could be served.2 A few months later, the
Beemillers notified plaintiffs that the parties’ exclusive relationship might
violate ABC’s tied-house restrictions3 — regulations preventing a wholesaler
from being “tied” to an exclusive arrangement to sell its wine through an
events retailer. In 2017, plaintiffs began offering other wines to clients to
comply with those restrictions. In March 2017, they also obtained a license
authorizing the sale of distilled spirits. Until that time, plaintiffs did not
have either a catering permit or a license to serve distilled spirits.
      In January 2017, plaintiffs sued defendants for, among other things,
breach of oral contract and promissory estoppel. Plaintiffs alleged they
conferred defendants with a benefit — developing Nella Terra as a wedding

      2 Catering permits authorize the sale of alcoholic beverages at one
specific premise for at most 24 events in one calendar year “except when
[ABC] determines additional events may be catered to satisfy substantial
public demand.” (Cal. Code Regs., tit. 4, § 60.5, subd. (4); see also Bus. &
Prof. Code, § 23399 [describing caterer’s permit to sell beer, wine, and
distilled spirits], undesignated statutory references are to the Business and
Professions Code.)
      3Winegrowers are prohibited from “[f]urnish[ing], giv[ing], or lend[ing]
any money or other thing of value, directly or indirectly, to, or guarantee[ing]
the repayment of any loan or the fulfillment of any financial obligation of,
any person engaged in operating, owning, or maintaining any on-sale
premises where alcoholic beverages are sold for consumption on the
premises.” (§ 25500, subd. (a)(2).)
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venue — but without a long-term contract, they lost opportunities to recoup
their initial investments. At a bench trial, plaintiffs’ expert derived their
projected gross income for 2017, estimating plaintiffs would hold 70 events
per year, each securing $20,900 in revenue. Using that metric, he testified
plaintiffs’ net loss from the severed relationship over 12.3 years, the
remaining 7.3 years on the proposed lease and the five-year option period,
was $1,417,534 after mitigating damages. After the trial, plaintiffs amended
their complaint to conform to proof, adding an unjust enrichment claim. In
a posttrial brief, defendants conceded plaintiffs were entitled to $55,917 in
depreciable assets but disputed the lost profits, arguing plaintiffs violated
various ABC regulations throughout the parties’ working relationship.
      The trial court’s tentative decision concluded plaintiffs were entitled to
damages based on promissory estoppel and unjust enrichment. It awarded
plaintiffs $555,917 — plaintiffs’ posttrial request for two years of lost profits
estimated at $500,000 and $55,917, the defendants’ estimate of plaintiffs’
start-up costs. It also concluded the ABC violations was not “a deterrent to
a substantial damages award.” The court noted both parties benefitted from
this noncompliance.
      Defendants requested a statement of decision that provided the legal
and factual basis for the court’s damages calculation and explained whether
the ABC violations affected the damages award. It reiterated these issues in
their objections to plaintiffs’ proposed statement of decision. Instead of
addressing these requests, the statement of decision reiterated plaintiffs were
entitled to equitable relief, rejected the ABC compliance defenses, and
“acceded to Plaintiff’s request to limit the lost profits to $250,000 per year
and then adopted Defendants’ depreciable asset analysis from page 1 of their
post-trial brief.”

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                                 DISCUSSION
                                        I.
      Defendants contend the statement of decision is insufficient as a matter
of law because it does not identify the specific equitable bases for granting
plaintiffs relief, and it fails to clearly articulate the amount of damages
awarded. These deficiencies, they argue, require reversal and remand for the
issuance of a new statement of decision. We disagree.
      Questions of law regarding a judgment based on a statement of decision
following a bench trial are reviewed de novo, while the trial court’s factual
findings are reviewed for substantial evidence. (Thompson v. Asimos (2016)
6 Cal.App.5th 970, 981.) If requested, a trial court must issue a statement of
decision explaining the legal and factual bases for its decision on each
principal controverted issue at trial. (Code Civ. Proc., § 632; In re Marriage
of Hoffmeister (1987) 191 Cal.App.3d 351, 358–359.) If there is a timely
objection to a proposed statement of decision, a court’s failure to make
necessary factual findings to resolve disputed material issues renders the
statement of decision inadequate as a matter of law. (In re Marriage of
Hardin (1995) 38 Cal.App.4th 448, 453.) And “[e]ven though a court fails to
make a finding on a particular matter, if the judgment is otherwise
supported, the omission is harmless error unless the evidence is sufficient to
sustain a finding in favor of the complaining party.” (Nunes Turfgrass, Inc. v.
Vaughan-Jacklin Seed Co. (1988) 200 Cal.App.3d 1518, 1525 (Nunes).)
      We acknowledge the statement of decision simply notes there are
“equitable bases for [the] decision” rather than identifying a particular
theory for awarding equitable relief. But that omission does not warrant
reversal — on this point, the judgment is otherwise supported. (Nunes,
supra, 200 Cal.App.3d at p. 1525.) We can reasonably infer the statement of

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decision’s “equitable bases for [the] decision” refers to unjust enrichment and
promissory estoppel — the equitable remedies identified in plaintiffs’
amended complaint and upon which the tentative decision expressly relies for
granting relief. (Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229,
269 [appellate courts may examine tentative decisions to interpret the trial
court’s findings or conclusions].) Indeed, defendants concede the statement of
decision awarded relief based on unjust enrichment.
      The evidence supports granting plaintiffs relief under either theory.
Under promissory estoppel, “a promisor is bound when he should reasonably
expect a substantial change of position, either by act or forbearance, in
reliance on his promise, if injustice can be avoided only by its enforcement.”
(Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 249.) Here,
plaintiffs relied on defendants’ promise of providing them with an exclusive
right to host events at Nella Terra for at least twelve years. The grounds at
Nella Terra were largely undeveloped — mostly dirt with a long ravine —
when the parties began creating an event venue in 2013. Despite the lack of
a contract, plaintiffs worked with defendants, loaned the Beemillers
approximately $100,000, purchased event equipment totaling over $450,000,
and funded defendants’ improvements to Nella Terra’s grounds with their
monthly $15,000 payments. Plaintiffs advertised Nella Terra to potential
clients even when it initially lacked any infrastructure to host events,
resulting in the hosting of 22 events in 2014. Gerald Beemiller ultimately
refused to sign the draft agreement under which the parties were operating
— after the parties had established a profitable events venue — and instead
he offered plaintiffs a catering contract that reduced their revenue to remain
on the property. As a matter of equity, promissory estoppel authorizes

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relief for plaintiffs. (See, e.g., Signal Hill Aviation Co. v. Stroppe (1979)
96 Cal.App.3d 627, 632–633 [awarding plaintiff lost profits under doctrine
of promissory estoppel].)
      Similarly, unjust enrichment describes circumstances where there is no
enforceable contract, but plaintiffs nonetheless conferred a benefit on
defendants that they “knowingly accepted under circumstances that make it
inequitable for the defendant to retain the benefit without paying for its
value.”4 (Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 938.) Plaintiffs
immediately made monetary investments and purchases, including property
adjacent to Nella Terra to support its events. Within the next year, Nella
Terra became more profitable. Defendants thus knowingly benefitted from
plaintiffs’ monetary investments and professional experience in developing
a successful events venue at Nella Terra. Under these circumstances, it
would be inequitable for defendants to retain their benefit — plaintiffs are
entitled to relief. (Ibid.)
      Finally, calculating plaintiffs’ damages based on profits they would
have received had the contract been made was appropriate under either
theory. (Hernandez v. Lopez, supra, 180 Cal.App.4th at pp. 938–939 [unjust
enrichment authorizes paying amounts necessary to place plaintiffs in as
good a position as they would have been if the contract had been made];

      4 There is some debate about whether unjust enrichment is a
cause of action in California. (Levine v. Blue Shield of California (2010)
189 Cal.App.4th 1117, 1138 [finding no cause of action for unjust
enrichment]; Prakashpalan v. Engstrom, Lipscomb & Lack (2014)
223 Cal.App.4th 1105, 1132 [stating elements of an unjust enrichment
claim].) Neither party raised this issue and we need not resolve the debate
here. We simply note that unjust enrichment is synonymous with restitution.
(Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231
[construing unjust enrichment claim as a quasi-contract claim seeking
restitution].)
                                         8
Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 692 [damages under
promissory estoppel are “ ‘measured by the extent of the obligation assumed
and not performed’ ”].) To the extent the statement of decision fails to fully
identify the amount of damages awarded, that omission similarly does not
warrant reversal. (Nunes, supra, 200 Cal.App.3d at p. 1525.) The decision
states “the Court acceded to Plaintiff’s request to limit the lost profits to
$250,000 per year and then adopted Defendants’ depreciable asset analysis
from page 1 of their post-trial brief.” There is evidence in the record that
plaintiffs ultimately requested $500,000, representing two years of lost
profits, and that defendants proposed $55,917 for plaintiffs’ depreciable
assets. (Shaw v. County of Santa Cruz, supra, 170 Cal.App.4th at p. 269
[appellate courts do not ignore the record when interpreting the lower court’s
findings and conclusions].)
      In sum, the statement of decision’s failure to clearly identify the
equitable basis and amount of relief does not constitute reversible error.
                                        II.
      Defendants next contend the statement of decision should be reversed
and remanded because it fails to fully explain how the parties’ violations of
the ABC regulations — requiring a license to serve distilled spirits,
prohibiting a tied-house arrangement, and limiting caterers to serving
distilled spirits at 24 events per year — impact the calculation of plaintiffs’
lost profit award. (§§ 23300, 23399 [requiring a caterer permit for sale of
distilled spirits “for consumption on the premises where sold”], 25500, subd.
(a)(2); Cal. Code Regs., tit. 4, § 60.5, subd. (4).) We conclude the decision
adequately addresses the distilled spirts license and tied-house violations.
But we agree the decision fails to adequately address the impact of the 24-

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event limit in ABC regulations on its calculation of plaintiffs’ anticipated lost
profits.5
      At the outset, the decision appears to broadly reject the ABC
compliance issues. It explains defendants raised those issues after plaintiffs
had already invested funds to create an event venue. On the issue of
plaintiffs’ serving distilled spirits without a license, the decision states
plaintiffs obtained the appropriate license in 2017. The record supports this
conclusion. As defendants acknowledge, plaintiffs had a license in 2017 —
the year upon which the lost profits are calculated.
      The decision further discusses the impact of the tied-house restrictions
— requiring separation between wine manufacturers, wholesalers, and
retailers like plaintiffs — on plaintiffs’ lost profits. (§ 25500, subd. (a)(2);
California Beer Wholesalers Assn., Inc. v. Alcoholic Bev. etc. Appeals Bd.
(1971) 5 Cal.3d 402, 407.) It acknowledges plaintiffs’ expert calculated their
total anticipated lost profits through the remaining proposed lease and option
period, approximately 12 years, at $1,417,534. The decision continues, noting
the expert considered “the ABC noncompliance argument,” and reduced
plaintiffs’ lost profits by $299 per event, or $20,930 based on plaintiffs
hosting 70 events.6 The decision considered and addressed the tied-house
restrictions.

      5After oral argument, plaintiffs submitted a request to file a
supplemental brief. The issues identified in the court’s focus letter were
addressed in the parties’ briefs, and both counsel had the further opportunity
to address the identified issues at oral argument. The request to file
a supplemental brief is denied.
      6 The expert used plaintiffs’ income and profits from 2017 to calculate
plaintiffs’ future lost profits. In 2017, plaintiffs began complying with tied-
house rules offering clients non-Nella Terra wines at their events, which the
expert testified reduced plaintiffs’ revenue by $299 per event, or a 1.5 percent
reduction in their overall total revenue.
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      But the statement of decision does not explain whether these projected
lost profits comply with title 4 of the California Code of Regulations, section
60.5. Under that section, an entity with a catering permit is authorized to
sell alcohol at one specific premise for at most 24 events in one calendar year
“except when [ABC] determines additional events may be catered to satisfy
substantial public demand.” (Cal. Code Regs., tit. 4, § 60.5, subd. (4); see also
§ 23399 [describing caterer’s permit to sell beer, wine, and distilled spirits].)
Determining whether plaintiffs’ lost profit projections were based on 24
events was a principal controverted issue at trial. Moreover, defendants
identified this issue in both their request for and objections to the proposed
statement of decision. (In re Marriage of Hoffmeister, supra, 191 Cal.App.3d
at p. 359.) The statement of decision nonetheless appears to award plaintiffs
lost profits based on 70 events per year — the number of events plaintiffs’
expert assumed would be held at Nella Terra each year. While the decision
states “the undisputed evidence presented showed that defendants crafted an
arrangement with another vendor which allowed them to host 45 events in
2018 and 59 in 2019,” the relevance of those third party events to calculating
plaintiffs’ lost profits is unclear, especially because the other vendor did not
supply alcohol to the events at all.
      On this record, we cannot determine whether substantial evidence
supports awarding plaintiffs their requested amount of lost profits. (Nunes,
supra, 200 Cal.App.3d at p. 1525.) Plaintiffs’ expert testified there were
discussions regarding whether plaintiffs were limited to hosting 24 events
but he assumed plaintiffs were allowed to host 70 events and calculated the
estimated lost profits accordingly. Although plaintiffs assert they did not
serve distilled spirits at all Nella Terra events — to which the 24-event limit
does not apply — they do not identify, and we cannot determine, the number

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of those events. Plaintiffs further argue they had two licenses at two
locations, and believed they could host 48 events per year at which distilled
spirits could be served. Even assuming this is accurate, plaintiffs’
nonetheless lacked any authorization to host 70 events. That plaintiffs hired
a vendor with the appropriate license to serve distilled spirits at events that
exceeded 48 also does not assist plaintiffs, contrary to their assertions. The
testimony plaintiffs cite in support of this argument simply details their
service of distilled spirits through an alcohol distributor when they first
operated at Nella Terra in 2014 and did not have a license. The record does
not indicate whether this practice continued through 2017, the year upon
which plaintiffs’ lost profits are calculated.
      At minimum, the trial court should have explained why it based
plaintiffs’ lost profit award on a number of events that are unauthorized
under ABC regulations. (Guan v. Hu (2017) 12 Cal.App.5th 406, 420
[“ ‘ “court of equity will never lend its aid to accomplish by indirect means
what the law or its clearly defined policy forbids to be done directly” ’ ”].)
Because the court’s explanation concerning the amount of plaintiffs’ lost
profit award is inadequate, we remand with directions for the trial court to
issue a complete statement of decision addressing how the 24-event limit for
caterers set forth in California Code of Regulations, title 4, section 60.5
impacts the damages award. (Dart Industries, Inc. v. Commercial Union Ins.
Co. (2002) 28 Cal.4th 1059, 1067 [noting reversal of judgment and remand to
the trial court to address certain additional issues in a new statement of
decision and to enter a new judgment based thereon].)
                                 DISPOSITION
      The judgment is affirmed in part and reversed in part. The matter is
remanded with directions to the trial court to issue a new statement of

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decision addressing California Code of Regulations, title 4, section 60.5’s
impact on plaintiffs’ lost profit award, and entering a new judgment based on
that statement of decision. The parties shall bear their own costs on appeal.

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                                 _________________________
                                 Rodríguez, J.

WE CONCUR:

_________________________
Tucher, P. J.

_________________________
Fujisaki, J.

A160574

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