O'LEARY, J.
William H. Takahashi appeals from a judgment in favor of Snell & Wilmer LLP (Snell & Wilmer) on his complaint for legal malpractice against Snell & Wilmer and awarding Snell & Wilmer $838,837 in unpaid legal fees on its cross-complaint. Takahashi contends the trial court erroneously instructed the jury in accordance with CACI No. 203, that if a party provided weaker evidence when it could have provided stronger evidence, the jury could distrust the weaker evidence. He argues the instruction permitted Snell & Wilmer to impermissibly comment in closing argument upon Takahashi's failure to testify at trial. We find no prejudicial error and affirm the judgment.
For context, we begin with a brief summary of the facts as set forth in this court's prior nonpublished opinion concerning the underlying litigation Yamanuha v. Takahashi (Nov. 26, 2003, G029257), adding dates where relevant to our subsequent discussions.
Sometime before 1993, Takahashi and Harold Yamanuha became friends and agreed Yamanuha would become involved with Takahashi in real estate investments. Yamanuha understood he would be a "`silent partner'" and Takahashi would run things. Takahashi would later claim Yamanuha was merely a lender and the agreement was Yamanuha would get double his investment after sale of the properties.
In 1993, Takahashi approached Yamanuha about investing in a 55-unit apartment building on Ross Street in Santa Ana (the Ross Street Property). Yamanuha agreed. Takahashi purchased the building for $1,125,000, with a $700,000 mortgage, and held title in his name alone. Yamanuha put in $250,000 towards the purchase, plus $110,911 for renovations, for a total investment of $360,911. Takahashi's total investment in the Ross Street Property was $216,562.89, not counting the mortgage. After renovations, the Ross Street Property sold for $2.6 million, netting $1,431,513 in cash, plus a promissory note for $290,000.
In the winter of 1994 (after the Ross Street Property sold), Takahashi proposed rolling the Ross Street Property profits into the purchase of the Pacific Point Apartments in Oceanside (the Pacific Point Property). Yamanuha agreed. They purchased the Pacific Point Property for $5.8 million.
On February 18, 1994, during a meeting with Takahashi and his real estate broker, Alan Reay, about the purchase of the Pacific Point Property, Yamanuha handwrote two documents memorializing his agreement with Takahashi, both of which were signed by Takahashi and witnessed by Reay. The first document stated, "This note acknowledges receipt of $250,000.00 and $200,000.00 and miscellaneous loans of $110,911.00 given to . . . Takahashi from . . . Yamanuha." The second (hereafter called the Partnership Agreement) stated, "Partnership Agreement [¶] It is hereby understood that the monies loaned by . . . Yamanuha to . . . Takahashi will be used to enter into a real estate partnership with percentage to be determined by monies invested. The monies invested is [sic] $560,911.00[,]" the latter figure being comprised of Yamanuha's original $360,911 invested in the Ross Street Property and $200,000 he borrowed from his sister. Yamanuha subsequently put in another $40,780 toward the purchase, bringing his out-of-pocket contributions to approximately $601,000.
Five years later, the Pacific Point Property sold for $13.5 million. After costs and distribution of another investor's share, the net proceeds amounted to about $7 million. Yamanuha requested his partnership share; Takahashi told Yamanuha he was just a lender and was only entitled to double his $601,000 outlay, i.e., $1.2 million.
Yamanuha sued Takahashi. At trial, Takahashi was represented by attorney Patrick O'Keefe. Yamanuha's expert testified that based on the proportion of their original investments, Yamanuha was entitled to $4,683,821, from the proceeds of the Pacific Point Property. Following a jury trial, the court entered judgment against Takahashi for a total of $4.5 million, which included $500,000 in punitive damages. Takahashi appealed the judgment. We concluded the trial court gave erroneous jury instructions that had the effect of shifting the burden to Takahashi to disprove the existence of a partnership agreement. We reversed the judgment and remanded for a new trial. (Yamanuha v. Takahashi, supra, G029257.)
Takahashi retained Snell & Wilmer attorney Richard A. Derevan to represent him on the appeal from the original judgment. In August 2001, Takahashi's assistant Tom Murray faxed Derevan copies of some documents Takahashi found after the first trial that had not been produced by him during discovery. Takahashi maintained the new documents demonstrated his relationship with Yamanuha was that of lender/borrower, not partners. The documents included: (1) a deed of trust dated July 8, 1993, indicating it secured a $216,000 loan from Yamanuha to Takahashi, at the bottom of which Takahashi had written "Paid in full" on September 2, 1993; and (2) a series of handwritten IOUs totaling $70,000 loaned by Yamanuha to Takahashi, on the bottom of which Takahashi had written "Paid in full" on September 2, 1993. Derevan told Murray that because the documents were not part of the trial record, they could not be used in the appeal. Derevan placed the faxed documents in his out box, and it was added to his file's correspondence clip.
After this court reversed the judgment against Takahashi, Takahashi retained Snell & Wilmer attorney Bill O'Hare to handle the retrial. O'Hare obtained files from Takahashi's prior attorney (O'Keefe), which apparently contained copies of the documents Murray had faxed to Derevan three years earlier (deed of trust and IOUs), but the new trial team did not know about them or find them in the files. Derevan did not recall receiving the faxed documents from Murray. Takahashi had also apparently forgotten about the documents. His assistant, Murray, testified he had completely forgotten about the documents, and although the originals were in Takahashi's possession, Murray never produced them or sent them to Snell & Wilmer when retrieving documents responsive to Yamanuha's numerous discovery requests.
The retrial of Yamanuha v. Takahashi took place in February 2005. As with the first trial, the testimony and evidence centered around whether the February 1994 Partnership Agreement created a partnership relationship and whether the $560,911 capital contribution by Yamanuha referenced in both the Partnership Agreement and the receipt was accurate.
About six days into the retrial, after Yamanuha testified, Takahashi remembered he had the August 1993 deed of trust and IOUs stored in an old briefcase he kept in a trailer at one of his properties. Murray retrieved the documents and gave them to O'Hare, who sought to have them admitted into evidence. In court, O'Hare argued the documents were highly significant as they corroborated Takahashi's testimony he and Yamanuha were lender and borrower and showed Yamanuha had been repaid for his original investment in the Ross Street Property. The trial court refused to admit the documents into evidence because they had not been produced during discovery in either the first or second trial. However, the court permitted Takahashi to testify he had repaid Yamanuha $286,000 of his original Ross Street Property investment. Takahashi testified that around the time he purchased the Ross Street Property, he sold another property located on Odessa Street in Foothill Ranch (the Odessa Property). Takahashi's trial counsel (O'Hare) was allowed to introduce into evidence closing documents from the August 1993 sale of the Odessa Property showing Takahashi received $300,000 from the sale. The closing statement showed four checks totaling $286,000 were paid out of the Odessa escrow, and Takahashi testified those funds were paid to Yamanuha as repayment of a $216,000 loan and $70,000 worth of IOUs. Takahashi asserted the Partnership Agreement overstated Yamanuha's $560,911 capital contribution by $216,000. Additionally, the $216,000 deed of trust was provided to Takahashi's expert who factored the $216,000 debt satisfaction in preparing his charts setting forth the "matrix" of Yamanuha's possible damages.
The second trial jury found no breach of contract or fraud by Takahashi but awarded Yamanuha $3,145,042 in compensatory damages on a conversion theory, a number which apparently did not factor in the claimed $216,000 repayment. Takahashi eventually settled with Yamanuha for $3,480,000.
Even before the second trial began in early 2005, Takahashi was behind on his legal bills, and Snell & Wilmer was trying to work with him on a payment plan. By the end of the second trial, Takahashi owed Snell & Wilmer almost $605,000. Throughout 2005, Snell & Wilmer continued to negotiate payment of its bills by Takahashi, who alternately promised to pay the outstanding legal bills with proceeds that were to be released from his bankruptcy estate, then from a refinance of his Las Vegas home, then from a pending sale of one of his commercial properties. Eventually, Takahashi sold most of his California holdings, moved to Texas, and bought several properties there. He never paid the fees he owed Snell & Wilmer.
Takahashi filed the instant legal malpractice action against Snell & Wilmer in April 2006, alleging the law firm had been negligent in failing to find and produce the deed of trust and IOUs during discovery, failing to get the documents admitted at trial, and failing to seek a mistrial when it became clear the trial court would not admit the documents. Snell & Wilmer filed a cross-complaint for its unpaid legal fees.
Yamanuha testified in the current action the February 1994 Partnership Agreement accurately stated his capital contribution to the partnership was $560,911. At the time they signed the Partnership Agreement, Yamanuha and Takahashi had not forgotten about the $216,000 in payments to Yamanuha. Yamanuha explained that upon receiving the $216,000 payment in the form of four checks from the Odessa Property closing in August 1993, he immediately put that money back into the partnership by either signing the checks back over to Takahashi or depositing the money into his accounts and then later giving the funds back to Takahashi for the partnership-related escrow.
Takahashi's counsel cross-examined Yamanuha extensively about his lack of documentary evidence (e.g., cancelled checks, complete ledgers, and bank records) demonstrating he had put the $216,000 back into the partnership. Although Yamanuha admitted he no longer had bank records from that period, his handwritten ledger was incomplete, and he could not remember the specifics of how the $216,000 was put back into the partnership, but he clearly recalled $560,911 was his total capital contribution as of the date of the Partnership Agreement (February 1994).
Takahashi did not testify at trial in the current action. He had testified at the first and second trial in the underlying litigation and apparently had serious credibility problems. During his testimony in the underlying trials, Takahashi repeatedly gave inconsistent and contradictory answers, made long pauses, stared into space, and was frequently combative and prone to outbursts on the stand. Takahashi was repeatedly impeached with inconsistent deposition testimony and 82 substantive changes he had made to his deposition answers. In his opening statement, and throughout the current trial, Takahashi's counsel conceded Takahashi lacked credibility, repeatedly impeached himself, and was a terrible witness. His counsel explained Takahashi suffered from personality disorders, was bipolar, suffered from attention deficit disorder, could be abusive, and had almost been thrown out of the courtroom during the second trial because of his behavior. O'Hare testified about what a poor witness Takahashi had been at the first and second trial. O'Hare had gone so far as to consult with a psychiatrist about Takahashi's aberrant behavior and how to make Takahashi a better witness for his second trial.
Although Takahashi was not called as a live witness by either side, Snell & Wilmer presented Takahashi's videotaped deposition testimony taken during the current litigation. Takahashi's deposition testimony covered the signing of the Partnership Agreement, whether Yamanuha was his partner or a lender, what sort of return Yamanuha was entitled to (Takahashi testified Yamanuha agreed he would get no interest on the loans), whether Takahashi believed the result at the second trial was better than the result at the first trial, whether Yamanuha's discovery requests during the second trial covered the missing documents, and what efforts Takahashi made to locate documents responsive to Yamanuha's discovery requests.
Takahashi presented expert testimony that Snell & Wilmer breached the standard of care by failing to find the new documents (deed of trust and IOUs) that were located in his prior counsel's (O'Keefe's) files and in Snell & Wilmer's appellate file. His experts testified that if the jury had credited Takahashi with the $216,000 for the deed of trust, the damages at the second trial would have been reduced by about $1 million.
Snell & Wilmer presented expert testimony that failure to get the $216,000 deed of trust admitted into evidence had no impact on the jury verdict at the second trial. The jury had been presented with other evidence of the repayment of the $216,000.
O'Hare testified that in deciding whether to settle or seek a new trial after the second trial, he and Takahashi discussed the inherent weaknesses in Takahashi's trial position, i.e., the challenge in convincing a jury Yamanuha's contribution to the Pacific Point Property was not the $560,911 referenced in the Partnership Agreement but was really $216,000 less based on a payment supposedly made five months earlier that Takahashi and Yamanuha both had forgotten about, but that Takahashi suddenly remembered 11 years later. O'Hare had learned from jurors the $3.1 million verdict was a compromise verdict. Furthermore, between the first and second trials, the properties had appreciated tremendously in value. Takahashi and O'Hare discussed the possibility a retrial could result in a much larger verdict, as high as $8 to 10 million. The verdict had been significantly less than Yamanuha's best pretrial settlement offer of $4.5 million. O'Hare recommended and Takahashi agreed that "we were better off settling than even if we had another trial, even if we got all this evidence in, it was more likely than not we would not be able to do better and there was actually a very real risk that we could do a lot worse."
After the Snell & Wilmer defense rested, Takahashi's counsel indicated he might want to present some deposition testimony in rebuttal, but later declined to and rested. The next day, Thursday, counsel and the court discussed final jury instructions and verdict forms. When court reconvened the following Monday, Snell & Wilmer requested the jury also be instructed with CACI No. 203 (which had not been among the instructions previously requested), which states: "You may consider the ability of each party to provide evidence. If a party provided weaker evidence when it could have provided stronger evidence, you may distrust the weaker evidence."
Takahashi's counsel objected to giving the instruction. He argued the basis on which Snell & Wilmer wanted the instruction was Takahashi's failure to testify. Counsel argued it would be improper to allow the defense to comment upon Takahashi's failure to testify, or to invite the jury to draw an adverse inference from his failure to testify, because Takahashi had been available to be called as a witness by Snell & Wilmer. Furthermore, Takahashi's counsel argued if CACI No. 203 was to be given, then he should be allowed to call Takahashi to testify, a request the court denied. Snell & Wilmer's counsel argued Takahashi had the opportunity to call Takahashi and did not. "Yamanuha testified and [counsel] chose not to call his client as a witness, and I'm allowed to argue that he should have because that would have been the better evidence."
In closing argument, Snell & Wilmer's counsel specifically referred to CACI No. 203 once, and argued the "best evidence" of the significance of the deed of trust—i.e., why Takahashi believed it negated or altered the partnership relationship memorialized in the Partnership Agreement—would have been testimony by Takahashi. Counsel made several other references to Takahashi's having not testified at trial.
The court submitted the action and cross-action to the jury on two verdict forms. On the malpractice claim, the jury found (10 to 2) that Snell & Wilmer was negligent but its negligence was not a substantial factor in causing harm to Takahashi. The jury awarded Snell & Wilmer $604,794 on its cross-complaint for unpaid legal fees,
Takahashi contends the trial court erred by instructing the jury in accordance with CACI No. 203. He argues there was no evidence supporting the instruction and giving the instruction permitted Snell & Wilmer to comment in closing argument upon his failure to take the stand and to invite the jury to draw negative inferences from his failure to testify—both of which, Takahashi urges, were improper because he could have been called to testify by Snell & Wilmer. We find no error.
"`A party is entitled upon request to correct, nonargumentative instructions on every theory of the case advanced by him which is supported by substantial evidence.' [Citation.] The judgment may not be reversed on the basis of instructional error unless the error caused a miscarriage of justice. [Citation.] `When the error is one of state law only, it generally does not warrant reversal unless there is a reasonable probability that in the absence of the error, a result more favorable to the appealing party would have been reached. [Citation.]' [Citation.] `"`A reviewing court must review the evidence most favorable to the contention that the requested instruction is applicable since the parties are entitled to an instruction thereon if the evidence so viewed could establish the elements of the theory presented. [Citation.]' [Citation.]"' [Citation.]" (Baumgardner v. Yusuf (2006) 144 Cal.App.4th 1381, 1388.)
Preliminarily, we note Takahashi mischaracterizes the instruction. He repeatedly states in his brief the court instructed the jury "it could disregard Takahashi's evidence because he did not take the stand." That was not the instruction. The court gave CACI No. 203, a routinely given general instruction (As You Sow v. Conbraco Industries (2005) 135 Cal.App.4th 431, 453, fn. 11), concerning inferences a jury may draw if a party provided weaker evidence, when it could have provided stronger evidence: "You may consider the ability of each party to provide evidence. If a party provided weaker evidence when it could have provided stronger evidence, you may distrust the weaker evidence." The instruction is based on Evidence Code section 412, which provides: "If weaker and less satisfactory evidence is offered when it was within the power of the party to produce stronger and more satisfactory evidence, the evidence offered should be viewed with distrust."
Takahashi argues there was no circumstance or evidence that justified giving CACI No. 203 other than his failure to take the stand on his own behalf. Indeed, Snell & Wilmer urged the instruction be given because Takahashi had asserted the deed of trust (which Snell & Wilmer had failed to locate and produce so it could be admitted at the second trial) demonstrated that in September 1993 Takahashi repaid Yamanuha $216,000. Accordingly, Takahashi argued the Partnership Agreement signed when Yamanuha provided funds for purchase of the Pacific Pointe Property in February 1994 reciting that Yamanuha's total contribution to the partnership was $560,911, overstated Yamanuha's contribution by $216,000. Yamanuha testified he had received a $216,000 repayment from Takahashi in August 1993, but he immediately gave it back to Takahashi to roll back into their partnership. Takahashi was relying on the deed of trust to assert Yamanuha's partnership contribution was less than the Partnership Agreement (and the signed receipt) recited. Snell & Wilmer argued the omitted "stronger evidence" would have been Takahashi's own testimony refuting Yamanuha's explanation.
But Takahashi argues Snell & Wilmer was precluded from commenting on his failure to testify because it is improper to permit the jury to draw an adverse inference from one party's failure to call a particular witness if the witness was equally available to both sides, and it is improper for opposing counsel to comment on any such absent but available witness in argument. In other words, as applicable here, Takahashi asserts a jury may not draw any adverse inference from, and a defendant may not comment in argument upon, a plaintiff's failure to testify on his own behalf if the defendant could have called the plaintiff to testify as a hostile witness. (Evid. Code, § 776.)
Takahashi relies primarily on cases involving absent nonparty witnesses. (See Smith v. Covell (1980) 100 Cal.App.3d 947, 956-957 [improper for defendant to comment upon plaintiff's failure to call her doctors as witnesses where they were known and equally available to defendant by subpoena]; Neumann v. Bishop (1976) 59 Cal.App.3d 451, 478-482 [error for counsel to comment on opponent's failure to call three expert witnesses earlier designated]; Provencio v. Merrick (1970) 5 Cal.App.3d 39, 42 [officer who investigated accident]; Patton v. Royal Industries, Inc. (1968) 263 Cal.App.2d 760, 769 [nonparty witness]; Hansen v. Warco Steel Corp. (1965) 237 Cal.App.2d 870, 877 [treating physician]; Davis v. Franson (1956) 141 Cal.App.2d 263, 270 [passenger who witnessed accident].)
The only case Takahashi cites involving a party who does not testify is Winkie v. Turlock Irr. Dist. (1937) 24 Cal.App.2d 1 (Winkie)). In Winkie, a coplaintiff in a wrongful death action, the decedent's widow, did not appear or testify at trial and defendant was unsuccessful in attempts to locate her. (Id. at p. 6.) The trial court instructed the jury a litigant's unexplained nonappearance "created an inference that she refuses to testify because the truth, if made to appear, would have been adverse to her," and defense counsel argued the jury could "assume that upon any facts within her knowledge the testimony of [coplaintiff] would have been adverse to [the other plaintiffs], and for that reason she was not called by [them] as a witness, nor her testimony given." (Id. at p. 7.) The court held the jury instruction and the argument were appropriate because the widow "was not equally available to both parties . . . ." (Ibid.) Winkie is inapposite. There, the court told the jury to infer from the plaintiff's absence her testimony would be negative. Here, the instruction concerned failure to present available stronger evidence on a specific issue. The only other case we have found involving a party who does not testify is Mendoza v. Gomes (1959) 143 Cal.App.2d 172, which observed comment on the party's failure to testify was improper because she was statutorily precluded from testifying. In short, we are unpersuaded by Takahashi's assertion that CACI No. 203 is improper when the omitted "stronger evidence" is a party's own testimony.
In any event, even if Takahashi's failure to take the stand was not a sufficient basis for the instruction, other facts championed by Takahashi supported giving it as well. Fleming v. Safeco Ins. Co. (1984) 160 Cal.App.3d 31 (Fleming), is instructive. In Fleming, the trial court instructed with the BAJI instruction that corresponds to CACI No. 203, BAJI No. 2.02, which read: "`If weaker and less satisfactory evidence is offered by a party, when it was within his power to produce stronger and more satisfactory evidence, the evidence offered should be viewed with distrust.'" (Id. at p. 41.) In closing argument, plaintiff referred to defendant's failure to call an ex-employee as a witness. (Id. at pp. 41-42.) On appeal, defendant argued giving the instruction constituted error. The court rejected the argument because it was waived and "there was ample reason to give [the instruction] other than because of the failure of [defendant] to produce [its ex-employee] at the trial." (Id. at p. 42.) The court noted that in closing argument "both sides argued that the other did not produce stronger evidence available to it as to various items of evidence[,]"defendant in particular had argued about plaintiff's failure to put the insurance policy or claim file into evidence and had not called her husband or sister on the issue of emotional distress. (Id. at p. 41.)
Here, Takahashi's counsel cross-examined Yamanuha about a handwritten ledger he kept showing monies he gave Takahashi, which did not include the $216,000, and about Yamanuha's lack of affirmative documentation (e.g., bank records or copies of checks) demonstrating he put the $216,000 back into the partnership. Counsel referred in closing argument to the absence of the latter records. In Largey v. Intrastate Radiotelephone, Inc. (1982) 136 Cal.App.3d 660, 672, the court held predecessor of CACI No. 203 was properly given because "[a] jury could well find corporate records concerning the date of a board meeting to be much stronger and more satisfactory than the recollection several years later of persons who attended such meeting." Takahashi certainly took advantage of the instruction suggesting in argument such documents would have been stronger evidence of what had transpired than Yamanuha's testimony.
Finally, we observe as did the court in Fleming, supra, 160 Cal.App.3d 31, because other facts supported giving the pattern jury instruction, the error alleged by Takahashi is not the giving of the instruction, but the use Snell & Wilmer made of it in its closing argument, i.e., commenting on Takahashi's failure to testify. (Id. at p. 42.) But Takahashi raised no objections to Snell & Wilmer's argument. (See Ibid. [waiver].) Indeed we note it was Takahashi's counsel who first drew attention to Takahashi's failure to testify, arguing extensively in his closing argument about why Takahashi did not take the stand (i.e., he was a terrible, completely unreliable witness) and that he could not have provided stronger evidence on any point.
The judgment is affirmed. Respondent is awarded its costs on appeal.
WE CONCUR.
BEDSWORTH, ACTING P. J.
MOORE, J.
