The Twelve Tribes of Israel v. Barnum CA2/4

Filed 3/17/22 The Twelve Tribes of Israel v. Barnum CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

SECOND APPELLATE DISTRICT

DIVISION FOUR

THE TWELVE TRIBES OF B299838
ISRAEL, U.S.A., INC.,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No. BC574481)

v.

KATRINA BARNUM,

Defendant and Appellant.

APPEAL from a judgment of the Superior Court of Los Angeles
County, Holly E. Kendig, Judge. Affirmed in part and Reversed in part.
Kerendian & Associates, Inc., Shab Kerendian and Edrin Shamtob
for Defendant and Appellant.
Westwood Lawyers and Lottie Cohen for Plaintiff and
Respondent.

____________________________
 Defendant and appellant Katrina Barnum appeals a judgment in
favor of plaintiff and respondent, The Twelve Tribes of Israel, U.S.A.,
Inc. (the Tribe) for promissory fraud and breach of an oral settlement
agreement.1 The instant action arose out of promises Barnum made to
the Tribe, while selling a property owned by her husband, Wilhelm
Grafrath, and used by the Tribe as its headquarters. Grafrath, the
leader of the Tribe, purchased the property in 1997, taking title in his
own name, and Barnum quitclaimed any interest in the property. The
Tribe subsequently paid the mortgage payments and used the property
as its headquarters, believing that once the mortgage was paid off
Grafrath would transfer title to the Twelve Tribes organization.
In 2006, Grafrath was deported to Germany, following a felony
conviction, where he remains to this day. After Grafrath’s departure,
the Tribe continued to use the property as its headquarters and pay the
monthly mortgage payments.
In 2014, Barnum quietly put up the property up for sale, pursuant
to a power of attorney executed by Grafrath. When the Tribe found out
about the sale, the Tribe filed suit against both Barnum and Grafrath
seeking to halt the sale on the grounds that the Tribe had equitable
rights to the property and/or the right to recoup their payments.
Barnum subsequently accepted an offer on the property, but the
pending lawsuit threatened to derail the closing. Barnum met with a

1 No disrespect is intended by not repeating the full name of a party or
individuals each time they are addressed. (See ENA North Beach, Inc. v. 524
Union Street (2019) 43 Cal.App.5th 195, 198, fn. 1.)

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group of Tribe members, and promised that she would transfer the net
proceeds of the sale to the Tribe, in exchange for their dismissal of the
pending lawsuit. The Tribe dismissed the pending lawsuit and escrow
successfully closed on the property. Barnum, however, paid none of the
proceeds to the Tribe and instead pocketed the proceeds for her own
use, including the payment of delinquent taxes on separate properties
facing imminent foreclosure.
After unsuccessfully seeking to reopen their lawsuit, the Tribe
filed the instant action, which eventually proceeded to a bench trial
with only Barnum as defendant. The trial court found in favor of the
Tribe on its actions for promissory fraud and breach of
contract/settlement agreement; the court awarded the Tribe $375,000 in
compensatory damages and $180,000 in punitive damages.
On appeal, Barnum challenges the trial court’s judgment on four
grounds, contending that: (1) the promissory fraud claim is barred by
the litigation privilege (Civ. Code, § 47, subd. (b)(2)), which prohibits
derivative tort actions based on statements made in connection with
litigation; (2) the breach of oral settlement/contract claim is barred by
the statute of frauds (Civ. Code, § 1624, subd. (c)) which requires that
an agreement for the sale or transfer of property, be in writing;
(3) Barnum, in her capacity as Grafrath’s agent, cannot be held liable
for actions taken on Grafrath’s behalf; and (4) the trial court erred in
refusing to dismiss the action on the grounds that Grafrath was an
indispensable party.
We agree that the promissory fraud claim is barred by the
litigation privilege, but find no reversible error in Barnum’s remaining

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contentions. We therefore reverse the trial court’s judgment with
respect to the promissory fraud cause of action (and the associated
punitive damages award), but otherwise affirm.

FACTUAL AND PROCEDURAL BACKGROUND
A. Factual History2
1. The Tribe’s Move to California
In 1985, a group of members of the Twelve Tribes of Israel, U.S.A.,
Inc. of New York, moved to California and formed the Twelve Tribes of
Israel in Los Angeles. Wilhelm Grafrath was the church leader or
“Overseer” of the group and Katrina Barnum was then, and currently
is, his wife. Initially, the Tribe was an unincorporated religious
organization, guided by the rules set up by the headquarters in New
York. The Tribe formally incorporated in California in 1998.

2. Acquisition of the Furness Avenue Property in 1997, and
Use of Property as the Tribe’s Headquarters

In 1997, a year before the tribe formally incorporated, Grafrath
purchased a property located at 238 Furness Avenue in Highland Park,
California (“Furness property” or “the Property”). Grafrath obtained a
loan from Delta Credit Corporation in the amount of $52,850 to finance

2 Our factual summary is based on the parties’ stipulated statements,
exhibits, and the trial court’s statement of decision. (See Western Bagel Co.,
Inc. v. Superior Court (2021) 66 Cal. App. 5th 649, 655, fn. 2; Baxter v. State
Teachers’ Retirement System (2017) 18 Cal.App.5th 340, 349, fn. 2; see also
fn. 9, post.)

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the purchase of the property, which was secured by a deed of trust
recorded against the property in February 5, 1997. Barnum
quitclaimed any interest she may have had in the property to Grafrath,
and Grafrath took title via grant deed, as “a married man as his sole &
separate property.”
The Tribe, however, paid the subsequent mortgage payments, and
used the property as its headquarters and place of worship.

3. Conviction and Deportation of Overseer Grafrath in 2006
In 2003, Grafrath was arrested for molesting one of the children in
the congregation of the Tribe and subsequently suffered a felony
conviction. In 2006, he was deported to Germany, his country of origin,
where he continues to live to this day.
At some point around the time of Grafrath’s arrest, he executed a
general power of attorney, authorizing Barnum to handle his matters in
Los Angeles.
After Grafrath was deported, the Tribe continued to use the
property for its congregational functions and continued to pay the
mortgage.

4. Sale of Property, and Prior Lawsuit filed in 2014
In January 2014, Barnum secretly placed the property up for sale.
Barnum brought a real estate agent to organizational events, but did
not introduce the agent as a real estate agent, and there was no “for
sale” sign on the property.

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 On March 3, 2014, after learning that Barnum was selling the
property, the Tribe filed an action against both Barnum and Grafrath,
seeking to halt the sale. The complaint pled actions for breach of oral
contract, negligence per se, and unfair business practices, and alleged
that in 1998, the parties verbally agreed that Grafrath would sign the
Deed of Trust on behalf of the Tribe, that the Tribe would make the
monthly mortgage payments on the property, and that the property
would not be sold out from under the Tribe. The complaint further
alleged that Barnum had refused the Tribe’s demands to stop the sale of
the property. The Tribe requested cancellation of the sale and/or
damages for harm suffered, including their contributions to the
mortgage on the property.

5. Dismissal of 2014 Lawsuit After Barnum Promises Tribe
Proceeds from Pending Sale

In mid-March 2014, Barnum entered into escrow to sell the
property for $215,000.3 However, the title company would not issue
title insurance as long as the lawsuit involving the Property continued.
Faced with this obstacle, Barnum met with the Tribe and promised that
once she sold the property, she would give the net monetary proceeds to
the Twelve Tribes Corporation. Barnum made these promises to the

3 In April 2014, Grafrath executed another general power of attorney,
authorizing Barnum to act as Grafrath’s agent with respect to several
categories, including real estate, as well as a specific power of attorney,
authorizing Barnum to act as his agent with regard to the Furness property.
An updated power of attorney was required by the title company to close the
sale of the Property.

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Board members as a group, and individually, stating she would transfer
the proceeds after paying any taxes due. In exchange for her promise,
the Tribe agreed to dismiss the lawsuit.
On July 21, 2014, the Tribe filed a request for dismissal of the
action without prejudice, which was entered the same day.4 Escrow
closed on the property on July 24, 2014, and Barnes received a wire
transfer of the funds into her account on the following day. Barnum
never sent any part of the proceeds from the sale of the Furness
Property to Grafrath. Instead, she diverted and converted all of the
funds for her own use.
After escrow had closed, Barnum continued to promise the Tribe
that she would provide the net sale proceeds to them. The Tribe moved
out of the property, opened a bank account, and sought new
headquarters for the Tribe.
On January 21, 2015, the Tribe filed a motion to re-open the prior
lawsuit on the grounds that Barnum breached an oral agreement by
failing to deliver half of the proceeds of the sale of the Property. The
court denied the motion on the grounds that a non-profit organization
was attempting to appear in pro per.

B. Procedural History
1. Initial Complaints Filed by Tribe and Court Rulings
On March 9, 2015, a member of the Tribe filed the first complaint
in this action, pleading a single claim against Barnum for breach of

4 Prior to the lawsuit, Barnum had received all-cash offers as high as
$350,000.

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contract. The complaint alleged that Barnum orally agreed to provide
the Tribe “half of the proceeds” from the sale of the property, in
exchange for the dismissal of the prior lawsuit by the Tribe.
On October 23, 2015, the Tribe filed a first amended complaint,
replacing the named plaintiff in the case. The complaint alleged that
Barnum had verbally promised to pay the Tribe the net sale proceeds,
and alleged four causes of action: (1) breach of oral contract; (2) money
had and received; (3) breach of fiduciary duty; and (4) fraud.
Barnum filed a motion for judgment on the pleadings, alleging,
inter alia, that the statute of frauds barred the first two claims, and
that her capacity as an agent precluded liability on the remaining
claims. The trial court granted Barnum’s motion for judgment on the
pleadings on the first three causes of action, but denied the motion as
the Tribe’s fraud claim.
The Tribe filed a second amended complaint (SAC), and then a
third amended complaint (TAC), attempting to correct the infirmities of
the complaint, but both complaints resulted in the trial court again
sustaining the demurrer to the first three causes of action. In
sustaining the demurrer to the TAC, the trial court did so without leave
to amend, thereby leaving only the fraud claim as the sole surviving
claim set for trial.5

5 Although the Tribe added Grafrath to the SAC, resulting in a default
judgment against him, the default judgment was subsequently set aside due
to noncompliant service. The Tribe subsequently dismissed Grafrath as a
defendant from the TAC.
The trial judge who issued the ruling on the TAC, Judge Robert Hess,
recused himself following a motion for peremptory challenge under Civil Code

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 2. Bench Trial and Final Amendment to Complaint
In April 2018, prior to trial, Barnum filed a motion to dismiss the
action for the Tribe’s failure to join Grafrath as an indispensable party,
contending that complete relief could not be accorded among the then
parties because Grafrath was the sole record title holder of the Property
and Barnum was merely functioning as Grafrath’s agent with respect to
the sale of the Property. The trial court denied the motion.
The trial court subsequently bifurcated the case into a two-phase
bench trial, with phase one for liability, and phase two for punitive
damages. Phase One began on August 6, 2018, upon the Tribe’s only
remaining cause of action for Fraud in the TAC. In lieu of utilizing a
court reporter to transcribe testimony provided by various witnesses,
the parties elected to utilize settled statements. Testimony was given
during an eleven day trial by various witnesses between August 6, 2018
and October 24, 2018.

a. Motion to Amend TAC, and Subsequent Filing of FAC
On August 14, 2018, the Tribe moved to amend the TAC to add a
second cause of action for “Enforcement of Settlement Agreement.” On
November 6, 2018, the court granted the Tribe’s motion and allowed the
Tribe to file its fourth amended complaint (FAC)—the operative
complaint in this case. The court found the amendment was “based on
the same facts as the first cause of action for promissory fraud.” The

of Procedure 170.6; the matter was then transferred to Judge Kendig, who
presided over the instant bench trial.

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court further noted that “the breach of contract claim which [the Tribe]
seeks to add by amendment now is a different breach of contract claim
from that in the original complaint, which was dismissed on demurrer
by a different court” and “relates to a slightly different legal theory.”6

b. Trial Court’s Statement of Decision
On December 11, 2018, the trial court issued a tentative
statement of decision on phase one of the trial, finding in favor of the
Tribe and against Barnum on each cause of action. and awarded the
Tribe $375,000 in compensatory damages.
Barnum objected to the proposed statement of decision,
contending it did not sufficiently address the controverted issues at
trial, and failed to provide the appellate court with sufficient
information regarding the factual or legal bases for the trial court’s
ruling. Barnum requested the trial court explain its reasoning on the
principal issues in the following four categories: (1) the court’s denial of
Barnum’s litigation privilege defense to the promissory fraud claim; (2)
the court’s denial of Barnum’s statute of frauds defense to the breach of
oral settlement claim; (3) the court’s determination of ownership of the

6 The breach of contract claim in the TAC did include allegations that
Barnum, while the 2014 lawsuit was pending, verbally promised to the Tribe
that she would sell the property and give the net proceeds to the Tribe, in
exchange for dismissal of the lawsuit. However, the TAC was against both
Barnum and Grafrath, at the time of the prior court’s ruling, and also
included a series of allegations regarding the Tribe’s “100% equitable
interest” in the property and Grafrath’s designation as “nominee straw
person” who controlled “the bare legal title to the religious corporation’s real
property.”

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property without Grafrath’s inclusion or participation as an
indispensable party; and (4) the court’s failure to explain its finding of
liability against Barnum on each claim, while she was acting as
Grafrath’s attorney-in fact under the specific and general powers of
attorney.
On January 4, 2019, the trial court filed its final statement of
decision, with minor changes to its tentative statement of decision. The
court awarded the Tribe a constructive trust over Barnum’s bank
account and four real properties, into which she diverted the net
proceeds of the sale. Lastly, the court found Barnum had acted with
malice, oppression, and fraud—a precursory finding for a future
punitive damages award in phase two of the trial. On April 22, 2019,
after a three day bench trial, the court issued its final statement of
decision on phase two of the trial, and awarded the Tribe $180,000 in
punitive damages.
On May 23, 2019, the trial court entered its final judgment in this
action, and Barnum timely appealed.

DISCUSSION
“In reviewing a judgment based upon a statement of decision
following a bench trial, we review questions of law de novo. [Citation.]
We apply a substantial evidence standard of review to the trial court’s
findings of fact. [Citation.] Under this deferential standard of review,
findings of fact are liberally construed to support the judgment and we
consider the evidence in the light most favorable to the prevailing party,

11
drawing all reasonable inferences in support of the findings.
[Citation.]” (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.)7
Barnum contends that (1) the promissory fraud claim is barred by
the litigation privilege; (2) the breach of oral settlement
agreement/contract claim is barred by the statute of frauds; (3) Barnum
cannot be held liable for any promises made while acting as Grafrath’s
agent; and (4) Grafrath is an indispensable party to this action. For the
reasons we discuss, we agree that the promissory fraud claim is barred
by the litigation privilege, but find no error in Barnum’s remaining
claims. We address the promissory fraud and breach of contract claims
first, as some our discussion regarding these claims forms the basis for
our disposition of the latter two contentions.

I. The Promissory Fraud Claim
Promissory fraud is a subspecies of fraud, and an action may lie
where a defendant fraudulently induces the plaintiff to enter into a
contract, by making promises she does not intend to keep. (Lazar v.
Superior Court (1996) 12 Cal.4th 631, 638.) The elements of fraud are
misrepresentation, knowledge of falsity, intent to induce reliance on the
misrepresentation, justifiable reliance on the misrepresentation, and
resulting damages. (Ibid.) Here, the trial court found the Tribe had
established its action for fraud by false promises by clear and
convincing evidence. Specifically, and as relevant to our discussion

7 Barnum states that the facts decisive to this appeal are undisputed. As
indicated by our opinion, we largely agree, but note where it is otherwise.

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below, the court found that Barnum promised Tribe members on several
occasions that when she sold the property, she would give the proceeds
to the Tribe. Barnum made this promise to a group of Tribe Board
members during the pendency of the lawsuit, and continued to reaffirm
this promise to individual Tribe members Michael Whyte and Arlene
Andrade in August, after the lawsuit had been dismissed by the Tribe.
The court further found that Barnum clearly intended for the
Tribe to rely on her promise and dismiss the lawsuit, which they did, as
Barnum was “in a big hurry” to close escrow on the property and
“pocket the proceeds.” The court found additional reliance on the part
of the Tribe in their willingness to cooperatively move out of the
property, foregoing the filing of a lis pendens, and willingness to wait
for the funds to be paid out by Barnum after taxes were calculated.
The trial court rejected Barnum’s assertion that the claim was
barred by the litigation privilege. This was error.

A. Relevant Law
Civil Code, section 47, subdivision (b)(2), makes privileged any
publication or broadcast made in a judicial proceeding. Originally
designed to provide a privilege in defamation situations, the section
now applies to any communication, not just a publication, and bars all
state tort suits premised on such communications, save malicious
prosecution actions. (Silberg v. Anderson (1990) 50 Cal.3d 205, 211,
213–216 (Silberg) [noting litigation privilege operates as a defense to
tort liability and serves as an absolute bar].)

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 “The usual formulation is that the privilege applies to any
communication (1) made in judicial or quasi-judicial proceedings; (2) by
litigants or other participants authorized by law; (3) to achieve the
objects of the litigation; and (4) that have some connection or logical
relation to the action. [Citations.]” (Silberg, supra, 50 Cal.3d at p. 212.)
The privilege has been given broad application to further the public
policies it is designed to serve—i.e., affording litigants freedom of access
to courts and open channels of communication. (Id. at pp. 213–216.) As
such, it applies to any communication made “‘to achieve the objects of
the litigation, even though the publication is made outside the
courtroom and no function of the court or its officers is involved’”
(Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057 (Rusheen)), and “is not
limited to statements made during a trial or other proceedings, but may
extend to steps taken prior thereto, or afterwards.” (Rusheen, supra, 37
Cal.4th at p. 1057.) “Any doubt as to whether the privilege applies is
resolved in favor of applying it. [Citations.]” (Adams v. Superior Court
(1992) 2 Cal.App.4th 521, 529 (Adams).)

B. The Promissory Fraud Claim is Barred By the Litigation
Privilege

Barnum’s promises to the Tribe fall squarely within the the scope
of the litigation privilege. (Civ. Code, § 47, subd. (b); Silberg, supra, 50
Cal.3d at p. 212.)
First, numerous courts have held that statements relating to
settlements also fall within the privilege, including those made during

14
settlement negotiations. (See, e.g., Navarro v. IHOP Properties, Inc.
(2005) 134 Cal.App.4th 834, 843–844 (Navarro); Home Ins. Co. v. Zurich
Ins. Co. (2002) 96 Cal.App.4th 17, 23–24 (Home); Joseph A. Saunders,
P.C. v. Weissburg & Aronson (1999) 74 Cal.App.4th 869, 875
[“absolutely privileged”]; Rosenthal v. Irell & Manella (1982) 135
Cal.App.3d 121, 126–128 (Rosenthal).)
For example, in Rosenthal, supra, 135 Cal.App.3d 121, attorneys
for a judgment creditor allegedly induced the debtor’s insurance carrier
to settle in breach of a provision in the insurance contract requiring the
insured’s consent to settlement. The appellate court concluded that the
statements by the attorneys urging settlement were privileged
publications and hence a cause of action for inducing a breach of
contract (along with tort actions for intentional interference with
prospective economic advantage and intentional infliction of emotional
distress, premised on these same communications) was entirely barred:
“Rosenthal’s complaint alleges that defendants published certain
undescribed statements to the Insurer Group, which induced that group
to breach its contract with Rosenthal by settling without his consent.
Patently those publications were closely related to judicial proceedings
and the insurer group were persons with a direct interest in the action.
Further, these publications clearly were in the interest of achieving the
objects of the underlying litigation.” (Rosenthal, supra, 135 Cal.App.3d
at p. 126.)
The same result was reached in Navarro, supra, 34 Cal.App.4th at
pages 837–838, wherein the plaintiff, a franchisee, sued IHOP

15
Properties, alleging a single cause of action for promissory fraud.
Plaintiff alleged that to induce her to settle an unlawful detainer action,
IHOP agreed to stay execution of judgment and (falsely) promised to
consider offers to buy her franchise rights “without undue delay.” IHOP
then intentionally delayed consideration of purchase offers until the
deadline to sell her rights had passed. (Id. at pp. 837–838.)
On appeal, the court found the claim entirely barred by the
litigation privilege, stating that “[t]he case law supports IHOP’s
contention that statements made during settlement negotiations, such
as those at issue here, are protected by the litigation privilege” and
rejected attempts by the plaintiff to “dismiss[] these cases by stating
that they did not relate to claims for fraud.” (Navarro, supra, 134
Cal.App.4th at p. 844.)
The reasoning in Navarro and Rosenthal is equally applicable
here. During the pendency of the 2014 lawsuit Barnum promised the
Tribe that when she sold the property she would tender the proceeds to
the Tribe. Barnum made these promises to induce the Tribe into
dismissing the suit. Barnum’s statements “clearly were in the interest
of achieving the objects of the underlying litigation” and thus protected
under the privilege. (Rosenthal, supra, 135 Cal.App.3d at p. 126; see
also Rusheen, supra, 37 Cal.4th at p. 1057.)
To the extent Barnum affirmed her promises after the dismissal of
the lawsuit, this does not change the result. First, the lawsuit was
dismissed without prejudice, meaning that Barnum remained under
threat of litigation. (See Rosenthal, supra, 135 Cal.App.3d at p. 126
[stating that “the privilege has been applied to publications which were

16
private communications between parties and which communications
were related not only to actual but potential court actions”], italics
added; Rusheen, supra, 37 Cal.4th at p. 1057 [privilege not limited to
statements made during legal proceedings, but may extend to steps
taken before or after litigation].)
Second, the Tribe dismissed the lawsuit shortly before escrow
closed at the end of July 2014. In its statement of decision, the trial
court noted that Barnum affirmed her promise to pay the proceeds to
Tribe members Michael Whyte and Arlene Andrade after dismissal of
the suit, and prior to August 17, 2014. Although the court did not
explain the significance of the August 17, 2014 date, the testimony
given by Whyte indicates that the Tribe formulated a letter to send to
Barnum on August 17, 2014, documenting statements she made to the
Tribe, and sent it via email the following day. Whyte further testified
that in his personal meetings with Barnum in August and September,
they discussed the 2014 lawsuit, and that the Tribe was trying to collect
the money owed in August.
Given that the lawsuit was dismissed without prejudice, that the
Tribe made efforts to collect the money owed, and that the Tribe did in
fact seek to reopen the litigation after Barnum failed to abide by her
promises, any communications made by Barnum shortly after dismissal
of the suit were akin to communications relating to potential court
actions or made in anticipation of litigation—which are protected by the
litigation privilege. (Rosenthal, supra, 135 Cal.App.3d at p. 126; see
also Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th
1532, 1541 [litigation privilege applies to prelitigation demand letters];

17
Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106,
1115 [“‘communications preparatory to or in anticipation of the bringing
of an action or other official proceeding are within the protection of the
litigation privilege’”].)
To the extent the court sought to separate out the three-week
period between the dismissal of the 2014 lawsuit, and the Tribe’s letter
to Barnum on August 17, we find no basis for such a narrow and
artificial extraction. Instead, we remain guided by the principle that
“[a]ny doubt as to whether the privilege applies is resolved in favor of
applying it. [Citations.]” (Adams, supra, 2 Cal.App.4th at p. 529.)8

8 In its final statement of decision—and after Barnum objected to the
court’s tentative statement of decision by arguing the court had failed to
explain its reasons for rejection of application of the privilege—the trial court
added a footnote stating that the false promises were made “on multiple
occasions before the litigation, during settlement discussions while the
litigation was pending, and also after the litigation was dismissed.”
In its respondent’s brief, the Tribe repeatedly asserts that Barnum told
the Tribe’s Executive Board in 2012 she was going to sell the property and
give the Tribe the proceeds. The Tribe, however, cites to no specific portion of
the trial record to support this assertion. Barnum points out that the only
actionable conduct found by the trial court on the promissory estoppel
claim—i.e., that which induced the reliance and caused the injury—was
based on promises she made after the Tribe filed the 2014 lawsuit. Therefore,
the 2012 allegation makes no difference.
While we agree with defendant, we also note the following: When the
Tribe filed its 2014 lawsuit to halt Barnum’s sale of the property, the
complaint expressly alleged that neither Grafrath nor Barnum ever met with
the Tribe to discuss their plan to sell the property, and that Barnum was now
refusing the Tribe’s demands to stop the sale of the property. With regard to
the instant lawsuit, the first four complaints solely alleged that Barnum
made promises to turn over the proceeds of the sale during the pendency of
the 2014 litigation.
After the parties started the instant trial in 2018, and defendant raised
the litigation privilege, the Tribe moved to amend its complaint to allege an

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 On appeal, the Tribe also argues that the privilege does not apply
because Barnum’s conduct of selling the Furness property and keeping
the sale proceeds was a tortious “course of conduct.” While it is true
that the litigation privilege encompasses only communicative acts and
does not privilege tortious courses of conduct (Kimmel v. Goland (1990)
51 Cal.3d 202, 211), “the key in determining whether the privilege
applies is whether the injury allegedly resulted from an act that was
communicative in its essential nature” (Rusheen, supra, 37 Cal.4th at p.
1058).
Here, the only actionable fraud committed by Barnum was her
false promise to the Tribe that she would transfer the net proceeds to

action for breach of oral settlement agreement. In that same motion, the
Tribe also stated its intent to add the following factual allegations—which it
subsequently added to the promissory fraud claim: (1) “Starting in 2012,
which was prior to the March 3, 2014 date Lawsuit #1 was filed, Defendant
started promising that she would give [the Tribe] the net proceeds of the sale of
the Furness real property she wanted to sell because her husband wanted the
title and mortgage out of his name” and (2) “After Lawsuit #1 was dismissed
without prejudice on July 21, 2014, by the Plaintiff, Defendant Katrina
Barnum promised that now that she had closed escrow, the net proceeds from
the sale of the Furness real property would soon thereafter be given to [the
Tribe].”
The trial court granted the Tribe’s motion to amend the complaint in its
entirety, stating it merely sought to add a new legal theory based on the
same facts alleged for the promissory fraud claim. While defendant objected
to the amendment several times asserting, inter alia, that the amendment
amounted to a sham complaint in that it was seeking to plead around the
litigation privilege defendant does not renew that issue here on appeal.
While we agree that the only actionable promises found by the trial court
were based on promises made after filing of the Tribe’s lawsuit (thereby
supporting application of the litigation privilege as outlined above (see
Navellier v. Sletten (2003) 106 Cal.App.4th 763, 771–772 (Navellier)), we
would be remiss if we did not at least acknowledge this state of the record.

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Tribe after the sale had closed, in order to induce the Tribe’s dismissal
of the lawsuit and compliance with the sale. As such, the court’s
findings on the promissory fraud claim exclusively hinged on the
communicative statements made by Barnum.9 (Navellier, supra, 106
Cal.App.4th at pp. 771–772 [harm arose from communicative act, and
thus litigation privilege barred fraud action]; see also Rusheen, supra,
37 Cal.4th at at p. 1065 [“[U]nless it is demonstrated that an
independent, noncommunicative, wrongful act was the gravamen of the
action, the litigation privilege applies”].)
Finally, the Tribe argues that the litigation privilege does not
apply because Barnum’s promises constitute unprotected “extrinsic
fraud.” The same argument was made by the plaintiff in Navarro,
supra, 134 Cal.App.4th 834 and well-addressed by the court as follows:
“Extrinsic fraud does not occur, as [plaintiff] suggests, when one party
lies to another, leading to litigation. ‘Extrinsic fraud occurs when a
party is deprived of the opportunity to present his claim or defense to
the court; where he was kept ignorant or, other than from his own
negligence, fraudulently prevented from fully participating in the
proceeding. [Citation.] Examples of extrinsic fraud are: concealment of
the existence of a community property asset, failure to give notice of the
action to the other party, and convincing the other party not to obtain

9 Indeed, in its motion to amend the complaint and add a claim for
breach of settlement, the Tribe expressly acknowledged that the first cause of
action was one for promissory fraud, a subspecies of fraud and deceit—and
based on Barnum’s verbal promise that she would give the Tribe the net
proceeds from the sale of the property.

20
counsel because the matter will not proceed (and then it does proceed).
[Citation.] The essence of extrinsic fraud is one party’s preventing the
other from having his day in court.’ (City and County of San Francisco
v. Cartagena (1995) 35 Cal.App.4th 1061, 1067.) ‘By contrast, fraud is
intrinsic and not a valid ground for setting aside a judgment when the
party has been given notice of the action and has had an opportunity to
present his case and to protect himself from any mistake or fraud of his
adversary but has unreasonably neglected to do so. [Citation.]’ (Ibid.)
The type of fraud [plaintiff] alleges is intrinsic. She claims she was lied
to about IHOP’s intentions with regard to the settlement terms, and
had the opportunity to negotiate terms that would have been more
favorable (e.g., not dependent on IHOP’s intent) or to reject the
settlement altogether. She was not prevented from participating in the
proceedings.” (Navarro, supra, 134 Cal.App.4th at p. 844.)
The same holds true here. The Tribe was not deprived of
participating in any proceedings or having its day in court. Instead, it
accepted a verbal offer of settlement and reserved its right to refile the
lawsuit. (Silberg, supra, 50 Cal.3d at p. 214 [“For our justice system to
function, it is necessary that litigants assume responsibility for the
complete litigation of their cause during the proceedings”].) Moreover,
even where extrinsic fraud occurs, the remedy is to set aside the
affected judgment. (Navarro, supra, 134 Cal.App.4th at p. 845; cf.
Home, supra, 96 Cal.App.4th at p. 26 [explaining that where civil
judgment is procured by extrinsic fraud, the normal remedy is to seek
equitable relief from the judgment, not to sue in tort].) Here, as noted

21
in our factual background, the Tribe sought to reopen the prior
litigation, but did so in a procedurally defective manner. Regardless,
the Tribe’s perception of “extrinsic fraud” is contrary to the caselaw
which holds statements made during settlement negotiations cannot
form the basis for tort actions—including fraud—due to the litigation
privilege. (See Navarro, supra, 134 Cal.App.4th at p. 845 [so noting].)
Accordingly, we conclude the Tribe’s cause of action for fraud is
barred by the litigation privilege, and reverse the trial court’s judgment
in favor of the Tribe on this cause of action.10

II. The Breach of Oral Settlement Agreement/Contract Claim
The Trial court found the Tribe “established that there was a
settlement agreement between [the Tribe] and Defendant Barnum,
whereby [the Tribe] agreed to dismiss its lawsuit against Barnum in
exchange for Barnum’s agreement to pay [the Tribe] the proceeds of the
sale of the Furness Property after calculating and paying any related
taxes.”
On appeal, defendant does not argue that the elements of the
breach of contract/settlement agreement claim were not met. Instead,

10 Defendant Barnum does not argue that the litigation privilege also bars
the Tribe’s non-tort claim for breach of settlement agreement. (See Navellier,
supra, 106 Cal.App.4th at p. 773 [noting that the litigation privilege “is
generally described as one that precludes liability in tort, not liability for
breach of contract” and concluding, in action arising from defendant’s breach
of a release agreement reached in a prior lawsuit, that the litigation privilege
did not bar separate claim for breach of contract, and we discern no reason to
so conclude].)

22
she argues that the statute of frauds bars the claim because the
contract involved the sale of property.11 We disagree.

A. The Statute of Frauds Does Not Bar the Claim
First, although defendant states that the trial court did not make
any findings or rulings on her statute of frauds defense, the trial court
stated the following at the outset of its statement of decision: “[The
Tribe] in this case is seeking the funds from the Defendant’s sale of the
property. [The Tribe] is not seeking legal title. Defendant Barnum
already sold the property to a third party. This case concerns false
promises made by Defendant Barnum and her failure to turn over the
proceeds of any property sale to the religious organization, the Twelve
Tribes, as she had promised.”12
Unless a writing is required by the statute of frauds, oral
settlement agreements are enforceable in the same manner as oral
agreements in general. (Gorman v. Holte (1985) 164 Cal.App.3d 984,

11 Barnum also argues that the claim is barred because she was acting on
behalf of a disclosed principal (Grafrath) and the statute of frauds requires
that a promise to answer for the debt of another must be in writing. (Civ.
Code, § 1624, subd. (a)(2).) We address defendant’s agency argument in the
next section. (See, post, Discussion, Section III.)

12 We note that notwithstanding the trial court’s prefatory statement, the
court’s statement of decision contains several statements and/or findings that
the Tribe was the “100 % equitable owner” of the property, while Wilhelm
Grafrath was merely the “strawman” or “bare” title holder of the property.
Whether the Tribe had a viable equitable interest in the property, however,
was not squarely before the court in the instant action and we express no
opinion on that issue.

23
988–989.) Civil Code section 1624, subdivision (a), states: “The
following contracts are invalid, unless they, or some note or
memorandum thereof, are in writing and subscribed by the party to be
charged or by the party’s agent: [¶] . . . [¶] (3) An agreement . . . for
the sale of real property, or of an interest therein.” As our Supreme
Court has observed, “We must, of course, apply the California statute of
frauds to a situation which is precisely covered by the language of the
statute. If the extent of coverage is unclear, however, we know of no
policy reasons which compel a resolution of the ambiguity in favor of its
wide application.” (Sunset-Sternau Food Co. v. Bonzi (1964) 60 Cal.2d
834, 838 (Sunset-Sternau).)
Here, the agreement between defendant and the Tribe was not for
the “sale” of the property, or for an interest therein. Indeed, the 2014
lawsuit filed by the Tribe expressly alleged that Barnum had refused
their demands to halt the sale of the property. Nor did Barnum agree
to transfer any interest in the property to the Tribe. Instead, the
agreement here was that Barnum would give the Tribe the net cash
proceeds she obtained from the sale, in exchange for their dismissal of
the lawsuit. Thus, in the strictest sense, the agreement here is not
covered by the language of the statute. (Sunset-Sternau, supra, 60
Cal.2d at p. 838.)
The only cases cited by defendant Barnum in her terse argument
on the issue are Texaco, Inc. v. Ponsoldt (9th Cir. 1991) 939 F.2d 794
(Texaco, Inc.) and Nicholson v. Barab (1991) 233 Cal.App.3d 1671
(Nicholson). Texaco, Inc., however, involved a settlement agreement
between a buyer and seller of real property, wherein the buyer agreed

24
to close escrow on the property. (Texaco Inc., supra, 939 F.2d at pp.
800–801.) Nicholson also involved an agreement between a potential
buyer and seller—albeit a more complex one—wherein the parties
agreed to cancel the existing escrow, to have the buyer purchase the
property from defendants for a specified amount, and then resell it for
no less than a specified amount in order to share in the proceeds with a
second buyer involved in the litigation. (Id. at pp. 1676–1682.) In
finding the settlement agreement barred by the statute of frauds, the
Nicholson court stated: “[I]t is clear that the settlement agreement is an
agreement for the sale of real property and not merely an agreement to
pay damages to settle a lawsuit involving real property.” (Id. at p. 1683,
italics added.) Here, the agreement was closer to the latter in that it
did not call for the transfer of property between the two settling parties,
but solely provided for the payment of cash proceeds to settle the
lawsuit.

B. The Doctrine of Estoppel Provides an Alternate Basis
Upon Which to Affirm the Judgment

The doctrine of estoppel, to preclude reliance on the statute of
frauds, has been consistently applied by the courts of this state to
prevent fraud that would result from refusal to enforce oral contracts in
certain circumstances. (Monarco v. Lo Greco (1950) 35 Cal.2d 621, 623.)
Thus, estoppel may be applied where necessary to prevent either
unconscionable injury or unjust enrichment (ibid.) and justify the
imposition of a constructive trust. (Mazzera v. Wolf (1947) 30 Cal.2d

25
531, 535.) In light of the trial court’s findings on the issue of fraud, and
imposition of a constructive trust to avoid unjust enrichment, we find
this doctrine to be an additional ground justifying affirmance of the
trial court’s finding in favor of the Tribe on its contract cause of action.13

III. Agency and Indispensable Party
Barnum contends the trial court erred in holding Barnum liable
for breach of the oral settlement agreement because Barnum was
functioning solely as Grafrath’s agent, and an agent cannot be held
liable for a contract executed on behalf of his or her principal. Barnum
further contends the trial court committed reversible error by failing to
dismiss the action for want of joinder of Grafrath, an indispensable
party to the action. We find no merit in either contention.14
First, “[t]he existence of an agency relationship and the extent of
the authority of an agent are questions of fact[,]” (California Viking

13 In her reply brief, defendant Barnum states in passing that the prior
court’s dismissal of the oral contract claim in the TAC “constitutes res
judicata, which should have barred the ressurection [sic] of the [breach of oral
settlement] cause of action.” (Cf. fn. 8, ante.) Defendant did not argue this
issue in her opening brief, and we do not consider matters raised for the first
time in the reply brief. (Neighbours v. Buzz Oates Enterprises (1990) 217
Cal.App.3d 325, 335.)

14 In her opening brief, Barnum also argues that the statute of frauds
prevents her from answering for the debt of another, absent a written
agreement, and that the question of whether there was an intention to keep
the promises made to the Tribe, was solely within Grafrath’s control. Our
resolution of the agency/indispensable party issues raised above is equally
dispositive of these arguments.

26
Sprinkler Co. v. Pacific Indem. Co. (1963) 213 Cal.App.2d 844, 850),
reviewed for substantial evidence on appeal (Inglewood Teachers Assn.
v. Public Employment Relations Bd. (1991) 227 Cal.App.3d 767, 780–
781). Second, “[w]hether a party is necessary and/or indispensable is a
matter of trial court discretion in which the court weighs ‘factors of
practical realities and other considerations.’” (Hayes v. State Dept. of
Developmental Services (2006) 138 Cal.App.4th 1523, 1529; Bianka M.
v. Superior Court (2018) 5 Cal.5th 1004, 1022–1023.)
Here, Barnum’s agency argument is solely premised on the fact
that Grafrath executed powers of attorney granting Barnum authority
to conduct transactions involving his property. Similarly, Barnum’s
contention that Grafrath was an indispensable party to this action, is
premised on the assertion that Grafrath was the legal title holder, and
thus sole principal, in any transactions related to the property.
However, the powers of attorney and Grafrath’s status as legal title
holder are not dispositive of the issues.
In concluding that Grafrath was not an indispensable party, the
trial court pointed out that the “sole[]” question before it “involve[d] . . .
Barnum’s promise to pay the proceeds to [the Tribe].”15 (Italics added.)
To the extent Barnum argues that there was no additional
determination that she exceeded her authority under any of the powers
of attorney, we disagree.

15 To the extent Barnum criticizes additional reasons put forth in the trial
court’s order, we review the correctness of the court’s decision, not its
rationale. (See Gilbert v. State of California (1990) 218 Cal.App.3d 234, 240,
fn. 4.)

27
 First, the trial court here found Barnum personally liable on both
causes of action, and imposed a constructive trust on the property into
which she funneled proceeds of the property sale. Second, the trial
court made explicit findings that: (1) Barnum converted all of the
proceeds of the sale “for herself only and her own use,” despite the fact
that she had quitclaimed any legal interest in the property in 1997;
(2) that she rejected a check made out to Grafrath by escrow and
directed them to instead wire the funds into her bank account;16 (3) that
she made the promises to the Tribe so that they would dismiss the
lawsuit and she could quickly close escrow to pay delinquent taxes on
two properties she owned that were facing imminent foreclosure;
(4) that the same day she received the funds from escrow she wrote
checks to pay the property taxes on her two properties set for tax
collector auctions and (5) that she rapidly sold the property for less than
market value, so that she could “pocket the proceeds.”
In making these findings, the trial court essentially found that
Barnum’s actions vis-à-vis the oral promises/settlement agreement were
undertaken for her own personal benefit. In the absence of any specific
and controlling evidence to the contrary, this ultimate finding is
supported by substantial evidence. (Cf. Lee v. Helmco, Inc. (1962) 199
Cal.App.2d 820, 833 [“‘[T]he testimony of an agent at the trial is

16 Although the bank account was in in the name of both Barnum and
Grafrath, the trial court pointed out that Barnum admitted she never
transferred any of the funds to Grafrath. The court also noted that Barnum
could not point to a single instance in which she had either sent Grafrath
money from this “joint account” or in which Grafrath had himself withdrawn
any money from that account.

28
admissible to prove either the fact of agency or the extent of the
authority’”]; Dandini v. Dandini (1947) 82 Cal.App.2d 263, 269 [“If a
finding made is supported by competent and substantial evidence it
must stand. It is not enough to say that equally competent and
substantial evidence in the record would just as adequately, or from a
consideration of mere lifeless words even more adequately, support a
contrary finding”].)
Similarly, the trial court’s finding that Barnum was personally
liable to the Tribe for the promises made, along with an imposition of a
constructive trust upon properties into which she funneled the proceeds
of the sale, leads us to conclude that the trial court’s non-
joinder/indispensable party finding was an appropriate exercise of its
discretion. (Countrywide Home Loans, Inc. v. Superior Court (1999) 69
Cal.App.4th 785, 794 [in determining whether a party is necessary, and
whether “complete relief” can be granted in the absence of joinder, key
question is whether relief can be granted between the extant parties,
not as between a party and the absent person whose joinder is sought];
see also County of San Joaquin v. State Water Resources Control Bd.
(1997) 54 Cal.App.4th 1144, 1149 [in determining whether the action
should proceed among the parties before it “no factor is determinative
or necessarily more important than another”].)17

17 Towards the end of her opening brief, in a two-paragraph argument,
Barnum also asserts that the trial court committed “legal error” in its
decision because California Evidence Code section 1152, subdivision (a)
precludes the use of offers to settle or compromise as evidence of a party’s
liability. We deem any argument on this point waived.

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IV. Punitive Damages
Because the litigation privilege bars the Tribe’s promissory fraud
claim, the Tribe was not entitled to damages on that cause of action.
However, the promissory fraud and breach of contract awards were
duplicative and since we uphold the latter claim on appeal, the award of
$375,000 cannot be disturbed. We must, however, reverse the $180,000
in punitive damages awarded to the Tribe.
Punitive damages are permissible only in connection with “an
action for the breach of an obligation not arising from [a] contract.” (Civ.
Code, § 3294, subd. (a); Tomaselli v. Transamerica Ins. Co. (1994) 25
Cal.App.4th 1269, 1286.) In this case, the only viable theory of liability
was premised on a contract. As such, punitive damages are not
available. (Cf. Vivian v. Labrucherie (2013) 214 Cal.App.4th 267, 272

First, evidentiary rulings are reviewed for abuse of discretion (Evans v.
Gordon (2019) 41 Cal.App.5th 1094, 1102), and second, Evidence Code section
353 bars relief for the admission of evidence unless “[t]here appears of record
an objection to or a motion to exclude or to strike the evidence that was
timely made and so stated as to make clear the specific ground of the
objection or motion.” (Evid. Code, § 353, subd. (a); Casella v. SouthWest
Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1146, fn. 5.)
Here, Barnum has failed to point to any part of the record showing that
she raised this evidentiary objection in the trial court. (See Guthrey v. State
of California (1998) 63 Cal.App.4th 1108, 1115 [“It is the duty of counsel to
refer the reviewing court to the portion of the record which supports
appellant’s contentions on appeal” and “[i]f no citation ‘is furnished on a
particular point, the court may treat it as waived’”].)

30
[equating breach of contract claim with breach of settlement
agreement].)18

DISPOSITION
The judgment is reversed with respect to the promissory fraud
claim and the award of punitive damages. The judgment is affirmed in
all other respects.
The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WILLHITE, Acting P. J.

We concur:

COLLINS, J.

CURREY, J.

18 In its motion to amend their complaint to add the breach of settlement
claim, the Tribe expressly stated that the proof of such an action “is the same
as proving a breach of oral contract” and cited to CACI No. 303 (Breach of
Contract) to set out the elements.

31