NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

OPINION

RYLAARSDAM, Acting P. J.

Defendants Michael Younessi and Alea Investments, LLC (Alea) appeal from a judgment that included an award of over $3.9 million in damages to plaintiff Diamond Enterprises, Ltd., L.P. (Diamond) for its losses in two commercial real estate transactions. Younessi and Alea contend the trial court erred in (1) denying a motion for relief from their waiver of a jury trial, (2) signing a statement of decision prepared by Diamond without expressly ruling on their objections to the proposed statement or making any substantive changes to it, and (3) entering a judgment they claim awarded Diamond excessive damages on one of the investments. We reject these claims and affirm the judgment.

FACTS

Since defendants do not challenge the sufficiency of the evidence supporting their liability for Diamond's investment losses and liabilities, a detailed recounting of the evidence presented at trial is unnecessary.

Diamond is a limited partnership with the Houman Family Trust as its managing partner. Dr. Bruce Houman, a retired physician, is one of the trustees of the family trust and in charge of managing Diamond's assets. Alea is a limited liability company used by Younessi for investment purposes.

Houman and Younessi are members of the same synagogue and over the years became close friends. Diamond introduced evidence Younessi made false representations to Houman about the extent of Younessi's personal wealth and his experience in commercial real estate investments. Houman testified that prior to the investments at issue in this case he did not have any experience in commercial real estate transactions.

In 2008, Younessi convinced Houman to invest Diamond's funds in two commercial real estate deals. The first, Pacific View Plaza (PVP), concerned a vacant lot along Pacific Coast Highway in Huntington Beach. Younessi had purchased the property in 2007 and created PVP to develop it. Diamond introduced evidence that PVP was in dire financial condition when Younessi induced Houman to invest in it. Diamond sunk over $700,000 in PVP. The property was eventually lost in foreclosure.

The second investment was Ocean Plaza Investments (OPI). In June 2008, Diamond contributed over $1.5 million towards the acquisition of a commercial building in Oceanside. In return, Diamond received an 80 percent interest in OPI, a limited liability company Younessi created to manage the property. During the purchase transaction, Younessi received documents indicating the building had geotechnical problems. It had recently suffered damage from a mudslide and displayed signs of unevenness and had cracks in its floors. Houman testified Younessi did not share this information with him.

Shortly after buying the building, Houman and Younessi used the commercial building to obtain a $1.12 million line of credit for OPI. Diamond presented evidence that, subsequently Younessi withdrew nearly the entire amount of the line of credit, which he transferred to either Alea or to himself for his personal use.

Diamond sued Alea and Younessi, alleging numerous causes of action arising from the two investments. After a trial, the court issued a four-page notice of intended decision. The court awarded Diamond over $980,000 for its losses on its PVP investment and nearly $2.8 million for its losses relating to OPI on causes of action for breach of fiduciary duty (counts 1 and 16), fraud (counts 2 and 15), and violations of state securities laws (counts 3, 4, 18, and 19). In addition, the court ruled for Diamond on its causes of action to remove Alea as OPI's manager (count 20), rescission of OPI's operating agreement (count 25), and breach of that agreement (count 26).

The court directed Diamond "to prepare . . . and serve a proposed Statement of Decision" if one was requested. After both parties did so, Diamond prepared a 31-page proposed statement. The proposed statement's calculation of damages included prejudgment interest, thereby increasing the amounts awarded to over $1 million on PVP and over $2.97 million on OPI. It also contained a finding Alea was Younessi's alter ego and he was personally liable for the sums awarded to Diamond.

Defendants filed objections to the proposed statement on several grounds, including its calculation of Diamond's losses. The trial court signed the statement of decision without making any substantive changes to it and executed a judgment that awarded Diamond the foregoing sums as "damages against" both defendants.

Defendants timely moved for a new trial. The motion alleged three grounds: 1) Denial of the right to a jury trial; 2) insufficiency of the evidence to support the statement of decision's findings that defendants concealed the geotechnical condition of OPI's building and misappropriated funds from OPI's line of credit; and 3) excessive damages for awarding Diamond recovery of all monies it invested in OPI while allowing Diamond to retain its interest in OPI.

The court denied the new trial motion, but granted defendants' alternative request to issue an order that modified the judgment.

DISCUSSION

1. Denial of Defendant's Motion for Relief from their Jury Trial Waiver

Defendants' first claim is that the trial court abused its discretion in denying their motion for relief from their waiver of a jury trial.

1.1 Background

After the case was initially set for trial, Diamond timely posted jury fees. Defendants did not do so.

The case was called for trial on Thursday, March 1, 2012. Both parties were present with counsel.

When the hearing began, Diamond announced its intent to waive a jury trial. Asked for his position "regarding a jury trial," defendants' attorney responded he had not "thought about it," but felt prejudiced by the fact he had not prepared a trial brief. Noting he was still in trial on another matter and the trial of this case would not start until Wednesday, March 7, the trial judge stated he "will give [counsel] time to prepare" one. Diamond's attorney argued that defendants failed to post fees, but the court responded "if the defense waives jury, there's not an issue. If the defense says, `We want our jury trial . . .,' then there's an issue." Defense counsel acknowledged a court trial "will be much shorter and much more economical."

After the lunch recess, the jury trial issue arose again. Defense counsel stated "if it does end up being a bench trial, which I'm trying to confer and should have an answer for you by the end of today, I may have better availability. . . ." At the end of the hearing, Diamond's attorney again inquired "have we decided on jury or nonjury?" The court responded, "The substantial probability is we're looking at a court trial since there have been no fees posted and there has been no demand for a jury trial by defendants."

On Tuesday, March 6, defendants filed an ex parte application for relief from the jury trial waiver. The court denied the request. It explained "the demand for jury trial has to be made timely," cited the fact Younessi was present when Diamond waived a jury trial, and thus "available for consultation" on whether to request a jury. In addition, the court informed the parties that on March 2, it had "accepted other assignments on the understanding this was going to be a court trial since there was no [jury trial] demand made" the prior day.

1.2 Analysis

Defendants initially argue they were entitled to a jury trial "[a]bsent an ultimate knowingwaiver to the right to a jury trial. . . ." But here they did waive the right to a jury trial. A jury trial may be waived "in the manner designated by the provisions of section 631, Code of Civil Procedure." (City of Redondo Beach v. Kumnick (1963) 216 Cal.App.2d 830, 835.) Defendants waived their jury trial right by failing to timely deposit the necessary fees. (Code Civ. Proc., § 631, subd. (f)(5); Taylor v. Union Pac. R.R. Corp. (1976) 16 Cal.3d 893, 897-898.) Further, when informed Diamond was waiving a jury trial, defendants failed to timely make a demand for a jury, even when the hearing continued after the lunch recess.

Of course, "[t]he court may, in its discretion upon just terms, allow a trial by jury although there may have been a waiver of a trial by jury." (Code Civ. Proc., § 631, subd. (g).) "The court abuses its discretion in denying relief where there has been no prejudice to the other party or to the court from an inadvertent waiver. [Citations.] The prejudice which must be shown from granting relief from the waiver is prejudice from the granting of relief and not prejudice from the jury trial. [Citation.] In exercising its discretion, the trial court may consider delay in rescheduling jury trial, lack of funds, timeliness of the request and prejudice to the litigants. [Citation.] A court does not abuse its discretion where any reasonable factors supporting denial of relief can be found even if a reviewing court, as a question of first impression, might take a different view." (Gann v. Williams Brothers Realty, Inc. (1991) 231 Cal.App.3d 1698, 1704.)

There was no abuse of discretion in this case. As noted, defendants' jury trial request was untimely. (Day v. Rosenthal (1985) 170 Cal.App.3d 1125, 1176 ["In exercising its discretion, a trial court may consider" the "`timeliness of the request'"].) Both Younessi and his attorney were present when Diamond waived a jury. Defense counsel even informed the court he would confer with Younessi and likely have an answer that day. The only prejudice he hinted at was his failure to have prepared a trial brief and the court expressed its willingness to allow him time to file one the following week. Further, defendants waited until the day before trial was to begin to seek relief from their jury trial waiver.

In addition, by that time the court's schedule had changed. "`[P]rejudice to . . . the court, or its calendar'" is a relevant factor. (Day v. Rosenthal, supra, 170 Cal.App.3d at p. 1176.) The trial court cited the change in its schedule resulting from defendants' failure to immediately request a jury trial as a ground to deny their motion for relief from the waiver. Defendants argue this scheduling change amounted to only a "law and motion assignment," which they assert "could have been handled in a way that would allow [them] to keep their constitutional right to a jury trial." First, as discussed above, defendants had already waived their right to a jury trial. The sole issue is whether the trial court properly exercised its discretion in denying the request to be relieved from that waiver. Second, while the judge mentioned he had been assigned to a law and motion calendar for the following Friday, it is not clear that was his only assignment. The judge stated that when "[t]here was no demand on Friday [March 2]," he "accepted other assignments" and "they've loaded me up."

We conclude the trial court did not abuse its discretion in denying defendants' belated request for relief from their waiver of the right to a jury trial in this case.

2. The Statement of Decision

Next, defendants present a wide ranging attack on the trial court's statement of decision. We conclude defendants have failed to show any prejudicial error on this ground.

One claim is that the judge signed the proposed statement of decision without reading it. Since defendants failed to raise this objection in their new trial motion, they are barred from asserting it on appeal. Code of Civil Procedure section 656, subdivision 1 authorizes a new trial for "Irregularity in the proceedings of the court." In Wagner v. Meinzer (1920) 182 Cal. 608, the Supreme Court denied a request to allow the appellant to raise on appeal a claim that the trial judge failed to read findings of fact and conclusions of law before signing it. "[W]e are satisfied that, upon the matters alleged, the claim of the applicant in this behalf could be urged only on motion for new trial on this ground, and only on affidavits setting forth the alleged facts. (Id. at p. 609.) The same is true here. Defendants did not assert this claim in their new trial motion and there is nothing in the appellate record supporting the contention.

Defendants also complain that Diamond prepared the statement of decision. That is usually the case (DeArmond v. Southern Pacific Co. (1967) 253 Cal.App.2d 648, 657-658), and it is also expressly authorized by court rule. (Cal. Rules of Court, rule 3.1590(c)(3), (f).)

A third contention is that Diamond's proposed statement of decision is "27 pages longer than the trial court's Notice of Intended Decision and addresse[s] issues far beyond those addressed, even remotely, by the trial court[]." But "`only when [a statement of decision] fails to make findings on a material issue which would fairly disclose the trial court's determination would reversible error result.'" (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1531.) Defendants do not contend the statement fails to explain the lower court's "factual and legal basis for its decision as to each of the principal controverted issues at trial. . . ." (Code Civ. Proc., § 632.) To the contrary, their objection is that the statement of decision Diamond prepared is too detailed.

In part, defendants complain the statement of decision contains a finding that Alea is Younessi's alter ego, a point not mentioned in the trial judge's notice of intended decision. But a finding on this issue was not necessary. Defendants' verified answer admitted the allegations in paragraph 7 of Diamond's verified second amended complaint, which declared, "Younessi and Alea constitute a single business enterprise . . . owned, dominated and controlled by . . . Younessi in such a manner so that [Alea is] simply a conduit or instrumentality through which . . . Younessi operates," and thus there is "such [a] unity of interest . . . that the individuality or separateness of . . . Younessi and Alea should be disregarded." This admission was binding on defendants and its inclusion in the statement of decision amounted to mere surplusage. (Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271.)

Nor does the discrepancy in length and detail between the notice of intended decision and statement of decision advance defendants' cause. A "tentative decision . . . does not constitute findings of fact and it may not be used to impugn subsequent findings or the judgment." (United Pacific Ins. Co. v. Hanover Ins. Co. (1990) 217 Cal.App.3d 925, 934; Taormino v. Denny (1970) 1 Cal.3d 679, 684 ["`"No antecedent expression of the judge, whether casual or cast in the form of an opinion, can in any way restrict his absolute power to declare his final conclusion . . . by filing the `decision' . . . provided for by . . . the Code of Civil Procedure"'"].)

Next, defendants argue the trial court signed Diamond's proposed statement without conducting a hearing on their objections or making any changes to the statement. But the court was not required to conduct a hearing on defendants' objections. (Cal. Rules of Court, rule 3.1590(k).) Nor do defendants cite any authority for the proposition the court was required to expressly rule on the objections.

Further, the assertion that the trial court did not conduct a substantive review of the proposed statement or consider their objections simply ignores the scope of appellate review. In this circumstance as is in our appellate review generally, "`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 (1970) 2 Cal.3d 557, 564) The appellant also "has the burden, to show . . . prejudice arising from the error." (Gould v. Corinthian Colleges, Inc. (2011) 192 Cal.App.4th 1176, 1181.)

We conclude defendants have failed to establish any reversible error in the preparation of the statement of decision in this case.

3. Duplicative Recovery

3.1 Background

During trial, a financial expert called by Diamond testified on his calculations of damages for Diamond's investments in PVP and OPI. For OPI the expert calculated Diamond's "total damages" were "$2,788,774.47." He further concluded "there is no value" in OPI.

Diamond's counsel noted "with respect to OPI, that office building still exists, there's tenants in there. Why didn't you back out any value for the existing building?" The expert gave two reasons for his conclusion. First, he noted a valuation report on the office building estimated it was currently worth $1.1 million. Taking into account the existing credit line of $1,112,500, the expert concluded the building had negative equity.

Second, the expert explained "we're valuing the [limited liability company's] interest . . . [b]ecause at the most Diamond would have a membership interest in . . . OPI. . . . [¶] And the value of [that] interest is based upon what a willing buyer would pay a willing seller, with each adequately apprised of all relevant facts relating to the investment. And it would be my conclusion and my opinion in this case, that had any reasonable investor know[ing] all the facts relating to Mr. Younessi and Alea, especially the financial condition of Alea and the suspect financial condition of Mr. Younessi, and the fact that Mr. Younessi does not have the experience that he claims to have had with respect to commercial real estate development, that a reasonable investor would not have invested. [¶] Therefore, there would be no value in those membership interests."

The judgment awarded Diamond over $2.9 million in damages and prejudgment interest on the OPI transaction. This consisted of over $1.85 million for Diamond's investment in OPI and over $1.12 million for the liability it incurred on the line of credit.

In their new trial motion, defendants argued this ruling was erroneous. Citing their own expert's opinion, defendants claimed OPI's commercial building was worth $1.5 million. Further, while acknowledging Diamond was entitled to restitution of the sums it invested and liabilities it incurred for OPI, defendants claimed that allowing Diamond to also keep an interest in OPI constituted excessive damages. Nonetheless, defendants acknowledged that, as a result of the current litigation, any attempt by Diamond to foreclose on Alea's interest in OPI would "likely be worth zero dollars."

In its opposition, Diamond noted that it had elected the remedy of damages, not rescission. Citing Civil Code section 3343, Diamond argued it was entitled to recover its out-of-pocket loss. Further, noting its expert's trial testimony, Diamond argued its interest in OPI was worthless and, due to the outstanding unpaid line of credit, OPI's sole asset had negative equity.

The trial court denied defendants' new trial motion, but granted their alternative request to modify its decision. The court issued a written order quoting Civil Code section 1692 and declaring: "The Court grants Defendant's Motion to modify in part the Court's present decision in that `the Court awarded excessive damages by allowing to Diamond full restitution of all monies it provided to Alea and Younessi in the OPI project, while at the same time allowing [D]iamond to retain a security interest in OPI.' Both sides were in agreement that the Judgment awarded Plaintiff a complete recovery of all sums paid by Plaintiff to Defendants Younessi, Alea and OPI. [¶] . . . [¶] Since the damages . . . awarded in the Judgment fully compensate Plaintiff for its investments with Younessi, Alea and OPI, the Court concludes that any future recovery for Plaintiff based upon OPI's future increase in value would constitute a potential duplicate or inconsistent item of recovery, and orders that no such damages be awarded in the future since both sides agree that OPI's present value is worthless."

3.2. Analysis

Defendants contend the trial court's attempt to avoid giving Diamond a double recovery on OPI by modifying the judgment fails for two reasons. First, they argue Diamond's recovery on the line of credit was actually "double the amount of" that obligation because it "awarded [Diamond] $1,121,000 for the value of the line of credit on the OPI property . . . while at the same time allowing [Diamond] to reduce the value of the OPI property by the amount of the line of credit." (Underscoring omitted.) Second, defendants assert Diamond obtained a double recovery on its interest in OPI because "the trial court . . . returned to [Diamond] all amounts it invested in OPI" while "allowing [Diamond] to keep its OPI shares." (Underscoring omitted.) We conclude defendants' arguments lack merit.

The trial court awarded damages to Diamond based on its causes of action for breach of fiduciary duty, fraud, and violation of California's security laws. Generally, the measure of damages for fraud and violation of the security laws is the out-of-pocket rule. (Civ. Code, § 3343, subd. (a); Corp. Code, § 25500; Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1240-1241; OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 881.) "The out-of-pocket measure restores a plaintiff to the financial position he enjoyed prior to the fraudulent transaction, awarding the difference in actual value between what the plaintiff gave and what he received." (Fragale v. Faulkner (2003) 110 Cal.App.4th 229, 236.) Cases have recognized that on a breach of fiduciary duty claim the appropriate measure of damages is the broader benefit of the bargain rule. (Alliance Mortgage Co. v. Rothwell, supra, 10 Cal.4th at p. 1241.)

Here, Diamond elected to recover damages under the out-of-pocket rule contained in Civil Code section 3343, subdivision (a). Thus, Diamond received the net amount of its investment in OPI and the amount of the liability it incurred on the line of credit.

Contrary to defendants' first argument, the latter sum was not doubled. Rather, Diamond's expert cited the negative equity resulting from the line of credit secured by the commercial building, OPI's primary asset, to support his opinion that Diamond's interest in OPI had no value. Defendants presented conflicting expert testimony on the property's value. But under the substantial evidence doctrine we view the evidence, including the question of witness credibility, "most favorably to the prevailing party," resolving "[a]ll conflicts . . . in favor of the respondent." (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925-926.) "When two or more inferences can reasonably be deduced from the facts, the reviewing court is without power to substitute its deduction for those of the trial court." (Buist v. C. Dudley DeVelbiss Corp. (1960) 182 Cal.App.2d 325, 329-330.)

Defendants' second argument fares no better. As Diamond argues in its brief, it sought recovery of damages, not the remedy of rescission. "It is hornbook law that one who has been defrauded may elect to rescind the contract or to affirm it, retain what he has received and sue for damages for fraud. [Citations.] The right of election belongs to the defrauded party alone." (Buist v. C. Dudley DeVelbiss Corp., supra, 182 Cal.App.2d at p. 333.)

In Buist, the defendant sold the plaintiffs a residence concealing the fact the house was built on a lot in a slide area with underground water and inadequately compacted fill. The plaintiffs sued for fraud and presented evidence that "the market value of the property was zero." (Buist v. C. Dudley DeVelbiss Corp., supra, 182 Cal.App.2d at p. 334.) The plaintiffs recovered as damages the purchase price and the value of landscaping expenses they incurred that were damaged by subsidence on the lot. In affirming the judgment, the appellate court rejected the defendant's contention "the respondents should not have been permitted to both recover damages and retain the property." (Id. at p. 333.) "The actual value of property may be determined by the trial court from evidence of the reasonable market value or of actual or intrinsic value. . . . `The unqualified language of section 3343 indicates that the plaintiff should receive as damages the difference in value between everything with which he parted and everything he received, and the statute contains nothing to show that the difference must be calculated solely on the basis of the facts existing at the time the contract was made or performed. The section must be applied realistically so as to give the defrauded person his actual out-of-pocket loss, and, where necessary, to reach that result, the court must consider subsequent circumstances . . . [.]' [Citation.] When these rules are applied to the facts of the instant case, there can be no question that the trial court properly assessed the measure of damages as the difference between the amount paid for the realty and the actual value of the property received." (Id. at pp. 334-335.)

Here, the property in question was Diamond's investment in OPI. Diamond presented expert testimony that this interest had no value because a reasonable person aware of Younessi's lack of commercial real estate experience, the precarious financial condition of both Younessi and Alea, plus the commercial building's structural problems, would not have purchased an interest in OPI. He also noted the subsequent line of credit secured by the building effectively eliminated any equity in the property itself. Given this evidence, we conclude the judgment awarding Diamond the full amount of its investment in OPI, plus and the amount of the outstanding line of credit without requiring it to give up its interest is supported by the record.

Apparently, the trial judge did change his mind on this point when he ordered the judgment modified to bar Diamond from recovering "damages" that are "based upon OPI's future increase in value." We question the correctness of this modification. The trial court relied on Civil Code section 1692, which declares that "[w]hen a contract has been rescinded," an "aggrieved party shall be awarded complete relief, including restitution of benefits, if any, conferred by him as a result of the transaction and any consequential damages to which he is entitled; but such relief shall not include duplicate or inconsistent items of recovery." (Civ. Code, § 1692, italics added.) As discussed above, Diamond elected the remedy of affirming its acquisition of an interest in OPI and sought damages for defendants' fraudulent conduct related to that interest. In any event, since Diamond requests we affirm the judgment and the modification of the judgment is favorable to defendants, they cannot assert it as a ground for reversal. (Tomlinson v. Wander Seed & Bulb Co. (1960) 177 Cal.App.2d 462, 476 [where "evidence with respect to loss of profits would have supported a larger award than was actually given, defendants cannot, on review, complain of the award"]; Rauer v. Fernando Nelson & Sons (1921) 53 Cal.App. 695, 700 ["the defendant has no ground for complaint" where "[t]he trial court . . . has reduced the judgment" and the prevailing "plaintiff has acquiesced in the judgment by not appealing"].)

DISPOSITION

The judgment is affirmed. Respondent shall recover its costs on appeal.

MOORE, J. and ARONSON, J., concurs.