STATE RUBBISH COLLECTORS ASSN v. SILIZNOFF

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District Court of Appeal, Second District, Division 3, California.

STATE RUBBISH COLLECTORS ASSN. v. SILIZNOFF.

Civ. 18230.

Decided: August 31, 1951

John C. Stevenson and Lionel Richman, Los Angeles, for appellants. Borah & Borah and Peter T. Rice, all of Los Angeles, for respondent.

State Rubbish Collectors Association, a corporation, sued John W. Siliznoff upon 19 promissory notes aggregating $1,875. In his answer the defendant admitted execution of the notes and pleaded want of consideration. Defendant also filed a cross complaint seeking cancellation of the notes for want of consideration and duress and seeking compensatory and punitive damages for ‘severe mental shock, distress, grief, worry, impairment and injury to his physicial well being,’ alleged to have been occasioned by plaintiff's ‘misconduct, threats, terrorism and assault.’ The action was tried to a jury. The verdict was, (1) in favor of defendant and against plaintiff, (2) favor of the cross complaint and against cross defendant for general and special damages of $1,250, and for exemplary damages, $7,500. The court made findings which incorporated the verdict, found that the notes were given without consideration and were executed as a result of acts of ‘oppression and duress committed upon defendant by the plaintiff, State Rubbish Collectors Association, its agents and board of directors;’ also, that plaintiff ‘did commit acts of assault against cross complainant, John W. Siliznoff, as a result of which said cross complainant suffered nervous disorders and physical injuries,’ and that ‘plaintiff has been guilty of oppression, fraud, malice and duress in the commission of the acts aforementioned.’ The notes were ordered cancelled, and the judgment awarded Siliznoff damages in accordance with the verdict. Upon motion for a new trial the exemplary damages were reduced from $7,500 to $4,000 by conditional order. Plaintiff appeals.

No claim is made that the judgment should be reversed with respect to the cancellation of the notes. The award of damages is challenged upon several grounds: (1) Insufficiency of the evidence to justify any compensatory damages; (2) insufficiency of the evidence to establish liability of plaintiff corporation; (3) prejudicial error in the admission of evidence and the exclusion of evidence; (4) incorrect instructions; (5) misconduct of counsel.

Before passing to the questions of law we shall give in some detail the background of the litigation. This is necessary for a clear understanding of the conditions which are alleged to have caused Siliznoff to become emotionally upset, and which, it is alleged, caused him physicial distress. Plaintiff, as its name implies, is a mutual protective association of rubbish collectors, operating in Los Angeles and vicinity. Defendant Siliznoff is the son-in-law of Kobzeff, the elder, who was a member of the association. Mike Abramoff, also a member of the association, had for a customer the Acme Brewing Company. Shortly prior to January of 1948, Kobzeff contacted the Brewing Company a number of times with the result that the account which was said to be worth $375 per month was taken from Abramoff and given to him. Although he signed the contract with the Brewery, Kobzeff turned the job over to Siliznoff, who undertook to perform it. In taking an account from another member of the association without his consent, Kobzeff ran afoul of the by-laws, principles and practices of the associated members. The controversy was reported to the corporation's board of directors and was thereafter acted upon in a manner that was customary in such matters. Kobzeff and Abramoff appeared before the board and stated their views with respect to the Acme account. The directors reviewed the circumstances of the case and recommended to Kobzeff and Abramoff, who were long time friends, that they settle their differences between themselves. It was determined by the board that Abramoff should be compensated for the loss of the account; its value was placed at $3,000, or eight times the monthly rate paid by Acme. Siliznoff accompanied Kobzeff to later meetings, and the two took the position that although Kobzeff had entered into the Acme contract, it in reality belonged to Siliznoff, and they contended that the latter should be required to pay nothing to Abramoff. Kobzeff offered Abramoff $1,000 in settlement, which was declined, and eventually Siliznoff offered to pay the association for the benefit of Abramoff, $500, which was refused. A settlement was reached for $1,875, for which Siliznoff gave notes payable to the association. These are the notes in suit.

There was a great deal of evidence as to the purposes of plaintiff association and the manner in which the affairs of its members are conducted. It has some 300 members, seven of whom constitute its board of directors. It is provided in the by-laws that the members ‘shall not in any manner whatever encroach upon the territory of any member, and in case they discover that any member is encroaching upon their territory, or is about to, they shall immediately notify the secretary in writing and the association shall take steps to prevent any interference with their route.’ Members are given the first chance to buy a route which a member desires to sell. If a member desires to raise the price of a job he must report to the board full details and reasons for the raise and the board determines whether the change is reasonable. A member violating an applicable city ordinance may be fined from $5 to $25; the board shall investigate and conduct hearings on all claims of lost jobs or routes and shall render its decision thereon; it is the duty of the directors to appraise the value of routes and accounts that come into controversy. All controversies and claims arising between members, ‘shall be settled by arbitration under the laws of the State of California, and judgment may be rendered on the award in any court having jurisdiction. The arbitration shall be held in the County of Los Angeles, State of California, and in accordance with the laws of the State of California.’ It was the established practice of the directors to pass judgment upon the controversies brought to the board for decision. The minutes of the association show proceedings involving arbitrations of more than 100 such controversies between December, 1947, and March, 1948. Many of them involved settlements between members where jobs belonging to one member were taken by another. Settlements were agreed to on the basis that the job taken was worth from five to ten times the monthly rate paid by the customer.

Accounts were freely bought and sold at these valuations. The minutes of numerous meetings show clearly that a major purpose of the association is to obviate differences among its members in all matters large or small that might otherwise cause trouble. The records show distinctly the deposition of the members to cooperate in accomplishing this purpose. The members of the Board sat in the capacity of arbitrators, listened to the disputing members, investigated their claims and passed judgment. The records kept furnished ample evidence that the hearings were conducted dispassionately, in good faith and with a purpose of accomplishing worthy aims of the association. Kobzeff, a member of the association for several years, was apparently well aware of the aims and practices of the association. He registered no objection to the proceedings other than to claim that the Acme account belonged to Siliznoff. He did not deny that he had taken it from Abramoff but claimed that the job was only worth five to one. Accordingly, the final settlement with Siliznoff was made on a valuation of five times the monthly rate. The foregoing is sufficient to give a general idea of the situation which Kobzeff brought about in procuring the Acme Brewing Company account and turning it over to his son-in-law. He was not ignorant of the fact that he would be called upon to justify his action or settle with Abramoff either by returning the account or paying what the account was determined to be worth.

We are thus brought to the only question which we need answer, namely, did Siliznoff make out a case for compensatory and punitive damages. He claimed that he had been frightened, had suffered from nervousness and occasional nausea and had been ‘practically’ confined at home for several days during a period of two months. According to his testimony he was present when John Andikian and Bob Stepanian, the former an inspector and the latter president of the association, called upon Kobzeff and told him that he and Siliznoff should make a settlement with Abramoff; that they should either give up the job or make a settlement for it. This was a friendly meeting and no threats were made. There was evidence that at the first board meeting Stepanian told Kobzeff he should settle; that some unnamed member of the board told Siliznoff that if a settlement was not made the job would be taken away from him even if they had to haul it for nothing; later, when a price of $3,000 was mentioned and Siliznoff refused to pay it, he was told he had better drop the job and someone said he had better ‘pay up, or else make up your mind to pay up or drop it,’ otherwise they would stop the sale of his salvage. Siliznoff testified he was frightened. Abramoff was present but apparently said nothing. Later, John Andikian, an inspector of the association, talked to him and according to Siliznoff said: ‘We will give you up till tonight to get down to the board meeting and make some kind of arrangements or agreements about the Acme Brewery, or otherwise we are going to beat you up * * * either would hire somebody or do it himself * * * cut up the truck tires or burn the truck, or otherwise put me out of business completely.’ At the meetings there were present directors Aaron Perumean, Suren J. Lalaian, Michael Ambarkumian, Bob Stepanian, Tim Agajanian, also John Andikian and Theodore Smith. Lalaian said ‘What rights have you getting a job like that * * * you stole something from us.’ Andikian said that Siliznoff had better settle up with the boys. Siliznoff was again scared and promised to sign the notes. After they were signed Andikian invited him to have a cup of coffee and he accepted. Over a period of two months Siliznoff was sick and vomited four or five times. He did not consult a physician or receive medical care and carried on his business with slight interruption. No one touched him or threatened any immediate violence.

In Emden v. Vitz, 88 Cal.App.2d 313, 198 P.2d 696, we upheld a judgment for damages for personal injuries which resulted from fright and emotional upset due to the threatening words and conduct of the defendants. The plaintiff in that case was a young woman; she had been locked out of her apartment by her landlord, her clothing had been taken from her, she had been made a virtual prisoner in a room while two of the defendants yelled and screamed at her; she suffered an acute upset of her glandular condition which was described by medical testimony as a serious condition resulting from ‘some sort of upset or emotional experience.’ The case was brought clearly within the rules recognized in our state by the following summary, 88 Cal.App.2d at page 319, 198 P.2d at page 700: ‘The evidence justified a conclusion that defendants intentionally and unreasonably subjected plaintiff to severe mental distress involving a risk of causing physical harm; and by clear and uncontradicted evidence, it was proven that substantial physical injuries were actually incurred by plaintiff as a proximate result of fright engendered by the said conduct of defendants. Liability under these circumstances is manifestly correct. (Rest., Torts, sec. 312.)’ Plaintiff endeavors to bring his case within the holding in the Emden case. We think he failed in several respects.

Section 312 of the Restatement, Torts, reads: ‘If the actor intentionally and unreasonably subjects another to emotional distress which he should recognize as likely to result in illness or other bodily harm, he is subject to liability to the other for an illness or other bodily harm of which the distress is a legal cause, (a) although the actor has no intention of inflicting such harm, and (b) irrespective of whether the act is directed against the other or a third person.’ Comment C: ‘Where, however, the distress is likely to be physically harmful only to a person who has a peculiar sensibility to emotional strain which is not characteristic of any substantial minority of women or men the actor is not subject to liability under the rule stated in this Section unless he knows or from facts known to him should realize that the other has or may have such a peculiarity.’ The threats uttered by Andikian were provisional and were so understood. If Siliznoff made a settlement with Abramoff he would have no trouble. That the threats were calculated to induce him to make a settlement cannot be denied. They were not made for any other purpose. Siliznoff was 23 years of age, in good health, and of sufficiently rugged physique and temperament to engage in the rubbish collection business. He was not shown to be a timid young man. His actions in resisting the demands made upon him for a period of two months indicated the contrary. Andikian, notwithstanding his strong language, was not shown to have been a man of violent disposition. The offiers and directors of the association on the whole were considerate of the position of Siliznoff, and the very fact that his countrymen who composed the association made a practice of adjusting their business difficulties amicably should have indicated to him that they were peaceable by nature and not ruffians. One deficiency of the evidence is that it furnished no reasonable basis for an inference that Andikian should have recognized that his threats were likely to result in illness or other bodily harm to Siliznoff. There was no threat and no fear of immediate harm. The absence in the circumstances of any logical basis for an inference that Andikian had reason to believe that his threats would cause Silizenoff to become ill, appears more clearly from a consideration of the evidence, which failed completely to connect the claimed illness of Siliznoff with the threats that were uttered.

There was in our opinion no tangible evidence of physicial injury resulting from any wrongful acts of the association or its representatives. In a view of the evidence most favorable to Siliznoff he was frightened and worried; he felt ill on several days during a period of two months while a settlement was under discussion, and in the same period he vomited four or five times. The nature of his alleged illness or illnesses was not disclosed. There was no evidence even as to any symptoms of illness. There was no evidence whatsoever to identify any illness with fright or other emotional disturbance. The same is true of the alleged attacks of nausea. The cause or causes were nto identified. No doubt the young man got to worrying at different times spread over a period of two months. He had cause to worry over the fact that his father-in-law had involved him in a large financial controversy with Abramoff and the association and he expected him to settle it. If so, the association was not responsible; under its by-laws its demand that settlement be made with Abramoff was not wrongful. Once Siliznoff vomited after he left an extended meeting with the directors, but whether this was because of fright or the legitimate arguments that had taken place or the atmosphere of the meeting room was a matter of pure speculation. Incidentally, there was no corroboration, even by the wife of Siliznoff, of his testimony on the subject of illness. And we feel assured that responsible medical experts, if they had been called, would not have been able to determine from the meager facts in evidence the cause or causes of Siliznoff's occasional nausea.

In the examination of a vast number of cases of claimed physical injury resulting from fright we have found none in which recovery was allowed upon such intangible evidence as we have related. In all those in which damages were recovered there was evidence of wrongful conduct that was reasonably calculated to produce injury, and also satisfactory evidence to establish such conduct as the proximate cause of injury. We may safely say that rarely, if ever, has there been recovery for claimed physical injuries of such trivial nature as to require no medical attention, or without medical testimony as to the cause of the injury. We are not disposed to inaugurate a type of litigation that has not heretofore plagued the courts. And we may add that the present case illustrates the inadvisability of entertaining such tenuous claims. One cannot read the record without becoming convinced that the verdict for $1,250 compensatory damages and $7,500 exemplary damages was the result of sympathy for young Siliznoff and prejudice against the association. Punishment, rather than compensation was meted out. The argument to the jury by counsel for Siliznoff consisted of a bitter denunciation of the methods and motives of the directors of the association. They were accused of holding a ‘Kangaroo Court’ with methods inconsistent with ‘good,’ decent, American business;' and with forcing their decision upon innocent people and who needed a ‘trouncing’; they were compared with people who poison horses, cut tires, smash windows, blackjack their victims and throw acid upon customers' clothes. It was suggested that something evil might happen to the ‘brave’ witnesses who came to testify for Siliznoff. The arbitration procedure of the by-laws was ridiculed as illegal, arbitrary and unauthorized. Incidentally, the jury was instructed that there had been no legal arbitration of the Kobzeff-Abramoff controversy, although this was not in issue under the pleadings. To affirm the judgment in this case would be to encourage a new and frivolous type of litigation. The law does not recognize demands that cannot be established with reasonable certainty. There must be a relationship between the wrong and the injury which is susceptible of proof. Mere possibility of causal connection is not sufficient. One can readily imagine the consequences if every man who is roundly abused or threatened during a business argument should be given damages for nervousness, worry, or the everyday physical disturbances which he might attribute to emotional upset. We would not undertake to enumerate the common experiences of modern living which tend to destory digestive tranquility.

There being no right to compensatory damages, punitive damages are not allowable. Civ.Code, § 3294; Haydel v. Morton, 8 Cal.App.2d 730, 736, 48 P.2d 709; Cf. Clark v. McClurg, 215 Cal. 279, 284, 9 P.2d 505, 81 A.L.R. 908; Wilkinson v. Singh, 93 Cal.App. 337, 345, 269 P. 705.

Evidence was introduced over the objection of appellant that its board of directors had used pressure upon other men engaged in rubbish collection to induce them to give up certain customers or to join the association. These incidents had occurred shortly prior to the trial and some two years after the Siliznoff transaction. The jury was instructed that evidence had been received that threats had been made against others ‘with the approval, ratification or acquiescence of the State Rubbish Collectors Association’ and that it was received to prove ‘a system of procedure, tactics and methods of violence to gain their ends in the same manner as claimed by the cross complainant Siliznoff,’ and that the burden of proof was upon cross complainant ‘to prove that such other acts are tactics of violence as were alleged to have been committed against Siliznoff and for the same or similar unlawful purpose or purposes.’ Other instructions used such terms as ‘illegality’ in the demands of the association, ‘unfounded claim’ upon the part of the association, ‘wrongful extortion’ as a condition to the exercise by Siliznoff of a ‘legal fight,’ and similar expressions which were calculated to incite prejudice against the association.

The principles of law first discussed were not given in any instructions. The jury was told that ‘a mental shock is deemed to be an assault.’

These additional matters do not require discussion. We motion them only as explanatory of the verdict, which as we have said, represents punishment of appellant based upon wrongful conduct for which no recoverable damage was shown. If we were not reversing the judgment, in part, for insufficiency of evidence, it would have to be reversed for error. That would be inadvisable in view of our holding that upon the same evidence Siliznoff would not be entitled to recover damages.

The judgment is reversed as to the award of damages, compensatory and exemplary, to Siliznoff; otherwise it is affirmed.

SHINN, Presiding Justice.

PARKER WOOD and VALLÉE, JJ., concur.