Lerdahl v. Milber CA1/5

Filed 6/22/21 Lerdahl v. Milber CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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 FIVE

ANNETTE LERDAHL, as A159167
Conservator, etc.,
Plaintiff and Appellant, (Sonoma County
Super. Ct. No. SCV 260207)
v.
DIANE R. MILBER et al.,
Defendants and Respondents.

ANNETTE LERDAHL, as
Conservator, etc., A160788

Plaintiff and Respondent, (Sonoma County
v. Super. Ct. No. SCV 260207)
DIANE R. MILBER et al.,
Defendants and Appellants.

In these consolidated appeals, we consider challenges to postjudgment
rulings regarding attorney’s fees and expert witness fees.
Plaintiff Louis J. Watts, Jr. (Watts), through the conservator of his
estate, Annette Lerdahl, sued Diane Milber and members of her family for

1
causes of action including financial elder abuse.1 Based on the jury’s special
verdict findings, the trial court entered a judgment against Watts.
The trial court subsequently denied Watts’s postjudgment motions,
which sought, among other things, an award of attorney’s fees. But the court
also granted in part Watts’s motion to strike and tax costs, determining the
Milbers were not entitled to recover costs for expert witness fees. Watts
appeals the denial of his request for attorney fees, and the Milbers appeal the
denial of their request for expert witness fees.
Based on the jury’s findings, and our interpretation of Welfare and
Institutions Code, section 15657.5, subdivision (a), we conclude Watts is not
entitled to attorney fees because he did not prove the Milbers were “liable for
financial abuse.”2 (Ibid.) Moreover, we find no abuse of discretion in the trial
court’s denial of the Milbers’s request for expert witness fees. Accordingly,
we affirm.
BACKGROUND
In February 2017, Watts filed a complaint against Diane and members
of her family asserting causes of action for conversion, fraud, civil theft,
breaches of fiduciary duty, and elder abuse. Watts alleged Diane, a certified
public accountant and insurance agent, sold him annuities worth
approximately $400,000. Around 2014, Diane became Watts’s attorney-in-
fact. Using her power of attorney, she created a trust called the “Gold Lake
Trust,” and she transferred the annuities into it. The Gold Lake Trust

For the sake of convenience, we sometimes refer to the defendants
1

individually by their first names. In doing so, we intend no disrespect. We
refer to Diane and her husband, Edward, collectively as “the Milbers.” Even
though plaintiff has a conservator, we follow the practice of the parties and
refer to him as “Watts.”
2 Undesignated statutory references are to the Welfare and Institutions
Code.

2
named Diane’s husband, Edward, as the trustee, their son, Jeffrey, as the
successor trustee, and their other son, James, as the sole beneficiary.
In October 2017, about eight months after they were sued by Watts,
Diane and members of her family filed a probate petition seeking to modify
and terminate the Gold Lake Trust. In February 2018, the probate court
issued an order voiding the trust. It explained: “Diane Milber admits to
being in a fiduciary relationship with settlor Louis J. Watts, Jr., when she
helped Mr. Watts draft the trust. The beneficiary is Ms. Milber’s son. Thus,
pursuant to [Probate] Code section 21380, the gift is presumed to be a
product of fraud or undue influence. As the donative transfers to prohibited
transferees are void, the trust fails for lack of a beneficiary.” The court
directed the petitioners to “turn over all assets held in the trust to the
settlor’s conservator Annette Lerdahl.” It further explained that its ruling
was “not intended to have any effect on liability or damages for the currently
pending civil action.” The annuities formerly held in the Gold Lake Trust
were thereafter returned to Watts.
In December 2018—almost two years after the original complaint was
filed—the Milbers served Watts with a Code of Civil Procedure section 998
offer to settle for $75,000 (998 offer or offer). Watts did not accept the offer.
In the civil action, Watts filed the operative second amended complaint
in January 2019. The complaint contained causes of action for fraud,
receiving stolen property, breach of fiduciary duty, common law undue
influence, statutory fraud or undue influence, and elder abuse. Watts alleged
that, after Diane became his attorney-in-fact, she changed the beneficiary
designations on the annuities—referred to as the “Allianz” annuity and the
“Athene” annuity—making her sons, James and Jeffrey, the beneficiaries of
the annuities.

3
 The jury trial commenced in early May 2019.3 The jury was instructed
that Watts was seeking economic damages measured by “[t]he value of the
Allianz and Athene Annuities.” The jury returned a verdict in June 2019. It
is not a model of clarity.
Regarding the financial elder abuse cause of action, the special verdict
form indicates the jury found that Diane obtained or retained, or assisted in
obtaining or retaining, Watts’s property; she did so for a wrongful use, or
with the intent to defraud, or by undue influence; and Watts was 65 years of
age or older at the time of the conduct. But the jury also found that Watts
was not thereby harmed, and that Diane’s conduct was not a substantial
factor in causing harm to Watts. The jury also found that Edward obtained
or retained, or assisted in obtaining or retaining, Watts’s property. But the
jury made no finding regarding whether he did so for a wrongful use, or with
the intent to defraud, or by undue influence, whether Watts was harmed, or
whether Edward’s conduct caused harm to Watts.
Under “Damages” on the special verdict form, when asked whether
Diane or Edward were “liable under any of the preceding legal theories,” the
jury answered “Yes.”4 The next question asked, “What are Louis Watts’s
damages?” and the form stated: “Damages for the value of the Allianz
and Athene Annuities. [¶] Enter the amount below if you find that Diane
Milber or Edward Milber is liable to Louis Watts under the theories of fraud,

3Before trial, Diane’s son, Jeffrey, was dismissed from the action; her
son, James, was dismissed on the first day of trial.
4The special verdict form indicates the jury found Diane “liable” for
fraud and undue influence. The special verdict form reflects no findings
regarding the receiving stolen property causes of action against the Milbers.
Finally, the jury found that Diane intentionally breached her fiduciary duty
to Watts, but it made no finding regarding whether that breach caused harm
to Watts.

4
undue influence, breach of fiduciary duty, financial elder abuse, or receiving
stolen property.” The jury entered “$0.00.” Under “Punitive Damages,” the
jury was asked whether Diane was “liable under any of the preceding
theories?” The jury answered “Yes.” But the jury made no finding as to
whether Edward was liable under any of the preceding theories or whether
he or Diane acted with fraud, oppression, or malice.
After the verdict, the parties filed briefs regarding the legal effect of the
jury’s answers on the special verdict form. In August 2019, the court entered
an order directing the clerk to record the verdict. In its order, the court
indicated the jury found that Watts suffered no damages and that “[t]he jury
therefore did make a finding of fact necessary to dispose of liability.” The
court continued: “Damage is an element of each cause of action. Plaintiff has
waived any argument to the contrary by requesting the given jury
instructions and preparing the proposed verdict form, both of which
instructed on damages as a necessary element of the causes of action. Even if
plaintiff had not waived this claim, the court finds it is without merit,
particularly as to the Elder Abuse cause of action. The jury’s finding that the
plaintiff suffered no damages under any of the five theories of liability as to
either defendant is therefore dispositive as to all causes of action.”
The trial court rejected Watts’s “claim that the factual finding of zero
damages is unsupported by the evidence. The finding reflects the jury’s
determination that since the annuities had been returned, and no other item
of damages was requested, the plaintiff suffered no monetary loss. This
finding by the jury is logical and consistent with the evidence. This
conclusion is further bolstered by the jury’s findings on the cause of action for
financial elder abuse by Diane Milber. The jury found Mr. Watts was not
harmed. This finding of fact is internally consistent with the jury’s finding of

5
$0.00 damages in light of the fact the evidence showed that the annuities had
been returned prior to the trial, were valued at as much or more as when
they were taken, and no other item of damages was requested.”
In September 2019, the trial court entered the judgment. The
judgment provides that the jury found Watts “suffered no damages under any
of the causes of action alleged against the defendants. Thereafter, the Court
determined the jury’s verdict was dispositive of all plaintiff’s counts and
causes of action against the defendants and directed the court clerk to record
a verdict in favor of the defendants.” In the judgment, the court ordered that
Watts “shall recover nothing from defendants,” and that the defendants may
recover costs, including attorney’s fees, in an amount to be determined.
Watts moved for a new trial and to vacate the judgment and enter a
different partial judgment. Watts also filed a motion to set an award of
attorney and conservator fees. The Milbers opposed the motions. In
November 2019, the trial court denied Watts’s motions. Watts appeals.
For their part, the Milbers filed a costs memorandum seeking
$68,994.89 in costs and $125,257.90 in expert witness fees. The parties
agreed to extend the deadline for Watts to move to strike or tax costs. (See
Cal. Rules of Court, rule 3.1700(b)(3).) Two days before the stipulated
deadline, Watts filed a one-paragraph “placeholder” motion stating he
intended to move to strike the Milbers’s costs.
Several weeks later, Watts filed a second or so-called “amended”
motion. This motion, supported by a lengthy memorandum of points and
authorities, challenged specific costs and the request for expert witness fees.
Watts argued the 998 offer was not reasonable or made in good faith. In
opposition, the Milbers argued the second motion was untimely and, as a
result, Watts waived his right to object to the costs or expert witness fees.

6
They also argued the 998 offer was reasonable, and that Watts failed to
demonstrate otherwise. The Milbers claimed their return of the annuities
nullified the prospect of Watts recovering damages at trial.
Following a hearing, the trial court determined Watts’s “placeholder”
motion—which lacked any supporting arguments, legal authority, or
evidence—did not preserve his specific objections to the claimed costs. The
court denied the motion to strike costs “to the extent it is based on challenges
to individual line items raised for the first time” in the motion and supporting
documentation filed after the stipulated deadline. But the court reached a
different result regarding the expert witness fees. It determined Watts’s
“timely filed motion . . . sufficiently preserved the ability to ask the court to
exercise its discretion [on Code of Civil Procedure section 998 expert witness
costs], even if the court disregards the late filed papers.” The court granted
the motion to strike the Milbers’s expert witness fees, concluding the “offer of
$75,000 was not reasonable, and not reasonably likely to be accepted, given
the circumstances of the case.” The Milbers appeal.
DISCUSSION
In the first appeal, Watts argues the trial court erred by denying his
request for attorney fees. In the second appeal, the Milbers argue the court
abused its discretion by denying their request for expert witness fees. We
address each argument in turn.
I. Watts’s Failure to Establish Liability for Financial Elder Abuse
Precludes an Award of Attorney Fees
Watts contends he is entitled to attorney fees for financial elder abuse
pursuant to the Elder Abuse and Dependent Adult Civil Protection Act
(Elder Abuse Act), section 15600 et seq. We review de novo the trial court’s
order denying attorney fees. (Arace v. Medico Investments, LLC (2020)
48 Cal.App.5th 977, 983 (Arace).)

7
 Section 15657.5, subdivision (a) provides, “Where it is proven by a
preponderance of the evidence that a defendant is liable for financial abuse,
as defined in Section 15610.30, . . . the court shall award to the plaintiff
reasonable attorney’s fees and costs.”5 (Italics added.) This language is
clear and unambiguous. (Perlin v. Fountain View Management, Inc. (2008)
163 Cal.App.4th 657, 664 [concluding a parallel provision of the Elder Abuse
Act is “clear and unambiguous”].) Watts acknowledged—both during oral
argument and in the proceedings below—that we are presented with a
“legislatively-designed tort.” Thus, as with torts generally, Watts had to
allege and prove not only the existence of a duty and its breach, but also
injury and causation in order to establish the Milbers were liable. (Ibid.
[concluding causation is an element of liability under the Elder Abuse Act];
Berkley v. Dowds (2007) 152 Cal.App.4th 518, 529 [concluding injury required
for liability under the Elder Abuse Act].)
That injury and causation are necessary to establish liability and
thereby recover attorney fees is supported by Judicial Council of California
Civil Jury Instructions (ed. 2014) CACI No. 3100, entitled “Financial Abuse—
Essential Factual Elements (Welf. & Inst. Code, § 15610.30).” CACI No. 3100
provides that to establish a claim of financial abuse under the Elder Abuse
Act, the plaintiff “must prove that all of the following are more likely to be
true than not true: [¶] . . . [¶] . . . That [the plaintiff] was harmed; and
[¶] . . . That [the defendant’s] conduct was a substantial factor in causing [the

5 Section 15610.30, in turn, provides that “ ‘[f]inancial abuse’ of an
elder or dependent adult occurs when a person or entity” “[t]akes, secretes,
appropriates, obtains, or retains real or personal property of an elder or
dependent adult for a wrongful use or with intent to defraud, or both”; assists
in the foregoing wrongful conduct; or commits, or assists in the committing of,
the wrongful conduct by undue influence. (Id. at subd. (a)(1)–(3).)

8
plaintiff] harm.”6 That instruction is consistent with a basic principle of tort
law: liability for wrongful conduct requires proof of harm or injury and
causation. (Whiteley v. Philip Morris Inc. (2004) 117 Cal.App.4th 635, 696
[“ ‘Defendants are not liable unless their conduct . . . was a “legal cause” of
plaintiff’s injury.’ ”]; Brookhouser v. State of California (1992) 10 Cal.App.4th
1665, 1677 [“It is axiomatic that a defendant cannot be held liable in tort for
an injury he or she did not cause.”].)
Other courts have reached similar conclusions when construing section
15657.5 and related provisions of the Elder Abuse Act. In Perlin v. Fountain
View Management, Inc., supra, 163 Cal.App.4th at pages 660 and 662, for
example, the court considered whether the plaintiffs were entitled to attorney
fees under section 15657, which mandates an award of fees “[w]here it is
proven . . . that a defendant is liable for physical abuse . . . [or] neglect . . . .”
The court concluded the plaintiffs were not entitled to fees because they had
failed to establish causation, and “causation is an element of liability.”
(Perlin, at p. 660.) In Berkley v. Dowds, supra, 152 Cal.App.4th at pages 529
to 530, the court reviewed the grant of a demurrer to the plaintiffs’ elder
abuse cause of action. The court sustained the demurrer, concluding that the
plaintiffs had failed to allege harm or causation, and such failure was fatal to
the cause of action. (Ibid.)
Watts relies on Arace, supra, 48 Cal.App.5th 977, but that decision is
consistent with our interpretation. The special verdict form in that case

6We cannot determine whether the jury received an instruction based
on CACI No. 3100 because Watts’s appendix does not contain a copy of the
complete set of jury instructions. But the instructions that are in the record
are based on the Judicial Council of California Civil Jury Instructions, and
the special verdict form indicates the jury was asked to make findings that
correspond to the five elements of a claim for financial abuse as outlined in
CACI No. 3100.

9
indicated the jury found in favor of the plaintiff on her claims for financial
elder abuse and neglect. (Id. at p. 981.) The jury awarded economic damages
on the neglect cause of action, but no damages for the financial abuse. (Ibid.)
The trial court awarded attorney fees to the plaintiff under section 15657.5.
(Arace, at pp. 981–982.) Citing the jury’s decision not to award damages for
financial abuse, the defendant appealed the award of attorney fees. (Id. at
p. 981.) The Court of Appeal affirmed, noting that the jury found the
defendant had committed financial abuse and that the plaintiff suffered harm
as a result of the defendant’s conduct. (Id. at pp. 982–983.) As the court
explained, the jury’s decision not to award damages on the financial abuse
cause of action was likely a consequence of it being instructed that it could
award damages “ ‘only once, regardless of the number of legal theories
alleged.’ ” (Id. at p. 983, fn. 4.) In any event, Arace supports the proposition
that an award of damages is not necessary to establish liability, but proving
harm and causation are.
As the trial court concluded below, the jury’s finding that Watts did not
suffer harm is not surprising given his tactical decisions. The only harm
alleged in the operative complaint concerned the taking, secreting,
appropriating, obtaining, or retaining of Watts’s property, and Watts only
sought economic damages as measured by the value of the annuities.
Because the annuities were returned more than a year before trial, and no
other injury was alleged nor other form of damages sought, the jury found
Watts did not prove any harm and it awarded no damages. The trial court
correctly concluded that, having failed to prove harm or causation, Watts did
not establish that the Milbers were liable for financial abuse and he therefore
was not entitled to attorney fees under section 15657.5.

10
 Of course, Watts theoretically could have alleged and potentially
proven harm based on something other than the value of the annuities. Had
he, for example, alleged and proven that the Milbers’s conduct caused him
pain and suffering or some other harm, the outcome of his request for
attorney fees likely would have been different, as counsel for the Milbers
acknowledged at oral argument. But, to paraphrase the Milbers’s counsel,
that is not the case we have before us. Having failed to prove that Watts was
harmed by the Milbers’s conduct, Watts failed to establish liability for
financial abuse, and he is not entitled to attorney fees pursuant to section
15657.5, subdivision (a).
II. No Abuse of Discretion in Denying Expert Witness Fees
In the second appeal, the Milbers challenge the denial of their request
for expert witness fees. We affirm.
Under Code of Civil Procedure section 998, a party in a civil suit may
serve a settlement offer before commencement of trial. If a defendant’s offer
is not accepted and the plaintiff does not obtain a more favorable judgment or
award, the plaintiff must pay the defendant’s costs from the time of the offer.
(Code Civ. Proc., § 998, subd. (c)(1).) In addition, the trial court has
discretion to award “costs of the services of expert witnesses.” (Ibid.)
To be entitled to these costs, the 998 offer must be reasonable and
made in good faith. (Adams v. Ford Motor Co. (2011) 199 Cal.App.4th 1475,
1483 (Adams).) “ ‘ “Where . . . the offeror obtains a judgment more favorable
than its offer, the judgment constitutes prima facie evidence showing the
offer was reasonable.” ’ ” (Id. at p. 1484.) Good faith means the settlement
offer must “ ‘carry with it some reasonable prospect of acceptance.’ ” (Id. at
p. 1483.) “Whether a [Code of Civil Procedure] section 998 offer was
reasonable and made in good faith is left to ‘the sound discretion of the trial

11
court.’ ” (Id. at p. 1484.) Similarly, the decision to award expert witness fees
is “left to the discretion of the trial court.” (Ibid.) The trial court, “ ‘having
heard the entire case and [having] observed the demeanor of witnesses,’ ” is
generally in the best position to make such decisions. (Ibid.)
“An appellate court may reverse the trial court’s determination only
if the court finds that in light of all the evidence viewed most favorably in
support of the trial court, no judge could have reasonably reached a similar
result.” (Adams, supra, 199 Cal.App.4th at p. 1484.) “Such a discretionary
ruling will not be disturbed on appeal absent a showing that discretion was
exercised in an arbitrary, capricious or patently absurd manner that
resulted in a manifest miscarriage of justice.” (Najera v. Huerta (2011)
191 Cal.App.4th 872, 877.) “ ‘ “ ‘ “[U]nless a clear case of abuse is shown and
unless there has been a miscarriage of justice a reviewing court will not
substitute its opinion and thereby divest the trial court of its discretionary
power.” ’ ” ’ ” (Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513, 1529.)
First, we consider the Milbers’s argument that Watts waived his right
to object to the request for expert witness fees by failing to file a timely
motion to strike or tax costs. “As a general rule, doubtful cases will be
decided against the existence of a waiver.” (Ringler Associates Inc. v.
Maryland Casualty Co. (2000) 80 Cal.App.4th 1165, 1188.) Moreover, the
Milbers’s request for expert witness fees is based on Code of Civil Procedure
section 998, subdivision (c)(1), which provides the court has discretion to
award the defendant such costs. As a result of Watts’s “placeholder” motion,
the trial court and the Milbers were aware he intended to challenge costs. An
award of expert witness fees required a decision by the trial court, exercising
its discretion. (Anthony v. City of Los Angeles (2008) 166 Cal.App.4th 1011,
1016.) While we do not condone Watts’s lack of diligence, we conclude his

12
failure to file a complete motion before the stipulated deadline did not waive
the issue or otherwise preclude the trial court from addressing the Milbers’s
claimed “right to recover expert witness fees.”
Second, on the merits, we find no abuse of discretion in the trial court’s
denial of the Milbers’s request. The jury’s verdict, which resulted in a
judgment against Watts, is prima facie evidence that the 998 offer, made in
December 2018, was reasonable. (Adams, supra, 199 Cal.App.4th at p. 1484.)
Nevertheless, in February 2018, the probate court voided the Gold Lake
Trust and ruled that Diane’s designation of her son as the beneficiary of the
trust was “presumed to be a product of fraud or undue influence.” And about
two months later, in April 2018, when ruling on the Milbers’s motion for
summary judgment, the trial court elected to treat the motion as one for
judgment on the pleadings, and it granted the motion with leave to amend
the complaint, finding Watts “may be able to amend the complaint to allege
facts stating legally sufficient claims.” When the 998 offer was made in
December 2018, the case had been pending for almost two years, giving rise
to a reasonable inference that the plaintiff had incurred “substantial costs.”
Based on the prospect of recovering enhanced remedies under the Elder
Abuse Act, including attorney fees and punitive damages, there was no abuse
of discretion in the trial court’s finding that the offer was not reasonable or
reasonably likely to be accepted by Watts. (Pineda v. Los Angeles Turf Club,
Inc. (1980) 112 Cal.App.3d 53, 63–64 [no abuse of discretion in denial of
request for expert witness fees given finding that offer was not reasonable].)
In arguing otherwise, the Milbers claim, based on the jury’s verdict,
that the burden shifted to Watts “to prove the offer was made in ‘bad faith.’ ”
The cases cited by the Milbers do not support this claim. Watts was required
to overcome the prima facie evidence that the offer was reasonable, which

13
does not necessarily entail showing the offer was made in bad faith. And, of
course, on appeal, “the burden is on the party complaining to establish an
abuse of discretion.” (Najera v. Huerta, supra, 191 Cal.App.4th at p. 877.)
The Milbers next argue the trial court erred by relying on the probate court
order that voided the Gold Lake Trust because the jury was instructed that it
had no effect on liability or damages. In support of this argument, the
Milbers rely on what appears to be a draft of a trial exhibit. Based on this
document alone, we cannot determine how it was used at trial, nor does it
shed any light on how the parties may have viewed their trial prospects in
December 2018, about five months before trial.7 Furthermore, we cannot
conclude the probate court order had no relationship to the issues decided at
trial given the jury’s finding that Diane was liable for fraud and undue
influence as a result of the trust’s donative transfer to Diane’s son.
Finally, the Milbers’s claim, again without citing to the record, that
when they made their 998 offer, they “predicted and understood” that Watts’s
theory of damages based on the value of the annuities would be unsuccessful.
It is true that the annuities were returned to Watts in February 2018, about
ten months before the 998 offer. But the Milbers point to nothing in the
record to support their suggestion that they or anyone else understood, at the
time of the offer, that Watts’s only theory of damages at trial would be based
on the value of the annuities. Here, the trial court found that, at the time the

7 A similar problem applies regarding the Milbers’s challenge to the
trial court’s reliance on its denial of the Milbers’s motions for nonsuit and a
directed verdict. We cannot evaluate this argument because the Milbers
provide no citation to where we can locate the relevant documents or orders
in the record. Indeed, the record does not even appear to contain the first
amended complaint, which would have been the operative one at the time of
the 998 offer. (Jones v. Dumrichob (1998) 63 Cal.App.4th 1258, 1264 [failure
to provide an adequate record on appeal “leaves this court with no evidence
upon which to base a finding that the trial court abused its discretion”].)

14
offer was made, it was reasonable for Watts “to believe he would likely
recover a much greater amount than the 998 offer represented, or for [Watts]
to view the offer as a disproportionately low amount in comparison to [the
Milbers’s] potential exposure, which included the possibility of punitive
damages.” Based on the record before us, and considering the many
legitimate factors taken into account by the trial judge in rendering her
decision, we cannot say that “no judge could have reasonably reached a
similar result.” (Adams, supra, 199 Cal.App.4th at p. 1484.) The Milbers fail
to show an abuse of discretion.
DISPOSITION
We affirm. Each side shall bear its own costs on appeal. (Cal. Rules of
Court, rule 8.278(a)(5).)

15
 _________________________
Rodriguez, J.*

WE CONCUR:

_________________________
Simons, Acting P. J.

_________________________
Needham, J.

A159167 & A160788

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

16