WEINER v. FLEISCHMAN (1990)

I.

INTRODUCTION

Beryl Weiner, appellant and cross-respondent, hereafter Weiner, appeals from a “Judgment On Special Verdict” in which the jury found no fiduciary relationship or oral joint venture between Weiner and William O. Fleischman, respondent and cross-appellant, hereafter Fleischman, giving rise to a duty to disclose information by Fleischman to Weiner pertaining to an investment opportunity.

The issues on appeal concern the standard of proof required to establish the existence of an oral joint venture in a civil fraud case, whether the trial court erred in refusing certain readback requests of the jury and the nature of the alleged relationship between Weiner and Fleischman as a matter of law.   Additionally, Fleischman cross-appeals seeking an award for attorney fees and cost of expert witnesses.

II.

FACTS AND PROCEEDINGS BELOW

Weiner, an attorney, represented 67 percent of the shareholders selling their Pioneer Theatres (“Pioneer”) stock.   Weiner also had 100 shares of Pioneer stock, a gift which enabled him to attend shareholder meetings.

In December 1979, Weiner informed Fleischman, also an attorney, of the interest of Pioneer shareholders' in selling their stock.   Weiner and Fleischman entered into an oral agreement whereby they would find a third party buyer of the stock and equally share the finder's fee.   There was conflicting testimony concerning the extent of that oral agreement.   Contrary to Fleischman, Weiner claimed that they had further agreed to purchase the stock together if unable to find a third party buyer.

Weiner claimed that the December 1979 oral agreement was identical to the prior agreement between them involving their sole business venture, the Sinclair Project.   The Sinclair Project concerned a Glendale apartment building investment in 1978.   Weiner represented Sinclair and his partners, the sellers of the building.   Weiner informed Fleischman about the investment opportunity.   Since all prospective third party buyers withdrew from the transaction, Weiner and Fleischman consummated their agreement.   Weiner disclosed to his client-sellers that he and Fleischman were acquiring the Sinclair property.   Written documents specifically stated that Weiner and Fleischman would be “co-general partners.”

There was conflicting testimony as to the relationship between Weiner and Fleischman.   Weiner and Fleischman first met in 1973.   They shared office space for about one and one-half years during 1976 and 1977.   Weiner then moved his office to a Century City location.   Soon after, Fleischman leased an adjacent office.   Weiner testified that over the years, he had cultivated a close friendship as well as a long standing business and professional relationship with Fleischman.   Fleischman, however, testified that they were acquaintances who referred clients to one another once or twice a year.

In January 1980, Fleischman told Weiner that Thorne Donnelley, Jr. was interested in being the sole buyer of the Pioneer stock.   Donnelley had been one of Fleischman's prospective buyers in the Sinclair Project.   Donnelley agreed to let Fleischman join in the Pioneer investment.

Weiner's shareholder-clients accepted Donnelley's written offer to purchase the Pioneer stock.   Fleischman proceeded to form T.D.J. Pioneer Corporation (“T.D.J. Pioneer”), the initials symbolic of the prospective purchaser.

In late January 1980, Dale Gasteiger, Sr., a dissenting shareholder represented by another law firm, tried to block the sale.   A previously entered temporary restraining order was dissolved when the court denied a preliminary injunction in March of 1980.

Donnelley had not anticipated becoming involved in any litigation and withdrew from the purchase.   The exact date of Donnelley's withdrawal is not contained in the record.   Fleischman did not mention Donnelley's withdrawal at the June 2, 1980, Pioneer shareholder's meeting.   However, Fleischman claims to have sent out a letter in late May, informing Pioneer shareholders and Weiner of Donnelley's withdrawal.

There was also contrary testimony surrounding what occurred moments before the closing of the Pioneer stock sale.   Weiner testified that Fleischman introduced his business partner, William Warnick, as Donnelley's employee who would operate Pioneer after acquisition.   In contrast, Fleischman claims to have introduced Warnick as his business partner.   Fleischman further testified that Weiner saw the cashier's check (to tender the purchase), pass hands from Warnick to Fleischman.

The Pioneer stock sale closed on July 14, 1980.   Fleischman, as president of T.D.J. Pioneer, had a special power of attorney from Donnelley, dated July 3, 1980, enabling him to proceed with the closing.   A mutual general release and a California Civil Code section 1542¹ waiver were signed by all sellers, including Weiner.   Soon after, T.D.J. Pioneer changed its name to Pioneer Theatres, Inc. (“Pioneer Theatres”), and the shares were re-issued in the names of Fleischman and Warnick.   Pursuant to the 1979 oral agreement, Weiner and Fleischman received their shares of the finder's fee.

In October of 1982, Weiner read a newspaper article in Daily Variety, revealing Fleischman as one of the owners of Pioneer Theatres.   Weiner then filed this action in July of 1983, alleging that Fleischman's fraudulent concealment prevented Weiner from participating in the Pioneer stock purchase.

Trial on the issue of liability began in May of 1988.   Bifurcation was further ordered on the issue of damages and on the issues pertaining to the release, a purported conflict of interest and breach of ethics.   The court also heard and denied motions for a plea in abatement, judgment on the pleadings and nonsuit (because of Weiner's alleged violation of standards for ethical and professional conduct).

During deliberations on jury instructions, Weiner's counsel argued that a fiduciary relationship existed which imposed upon Fleischman a duty to refrain from the alleged intentional concealment.   However, in the opinion of the trial court, Weiner had proceeded to trial only on the theory that he and Fleischman had entered into an oral agreement or joint venture.   It was also urged by Fleischman that the statute of limitations for a contract claim had expired.

The first special verdict of the jury in response to the court's directions to return a verdict on special issues was as follows:  “Did Plaintiff Beryl Weiner and Defendant William O. Fleischman have a relationship, contractual, fiduciary or other, to participate equally in the acquisition of share [sic ] of stock of Pioneer Theaters, Inc., if the opportunity of such acquisition arose, aside and apart from any agreement only to share of [sic ] split the attorney's or finder's fee relative to the stock sale?”

“Yes    

“No  X ”

At Fleischman's request, the jury was given a modified jury instruction from BAJI No. 12.35 and a jury instruction No. 2.60 ² over Weiner's objections.   Modified BAJI No. 12.35 (Fraud and Deceit—Concealment) presents the five elements necessary for a fraudulent concealment cause of action.   The second element reads:  “2.   The defendant must have been under a duty to disclose the fact to the plaintiff.”   Instruction number 2.60 repeated the second element of BAJI No. 12.35, with the following addition:  “2.  ․ As was previously noted, the existence of the oral joint venture and its scope must be proved by clear and convincing evidence.”   (Emphasis added.)

During deliberations, the jury requested three readbacks regarding:  Fleischman's testimony of Weiner's possible participation in Donnelley's Pioneer offer, Weiner and Fleischman's testimony of the alleged Pioneer oral agreement, and Weiner and Fleischman's testimony of the Sinclair Project oral agreement prior to the written disclosure.   The court denied the requests because the portions of testimony might have fostered a different meaning when taken out of context.   However, the court offered the option to read back the entire testimony of Weiner and Fleischman.   Weiner's counsel declined that option.   A fourth readback request concerning Fleischman's testimony as to his desire or intention to buy Pioneer stock was granted.

The jury returned a 9–3 special verdict against Weiner finding, inter alia, no oral joint venture or other relationship between Weiner and Fleischman.

A motion for new trial was denied on August 16, 1988.   Weiner filed a timely notice of appeal.   Fleischman filed a timely notice of cross-appeal.

III.

DISCUSSIONA. The Trial Court Erred by Instructing The Jury to Find The Existence of A Relationship Between Appellant And Respondent by “Clear And Convincing” Evidence1. Before the issue of fraud by concealment could be raised, appellant had to establish the existence of a relationship giving rise to a duty to disclose

 The trial court instructed the jury to first determine by “clear and convincing” evidence whether a relationship existed between Weiner and Fleischman.   Weiner contends the instruction was in error because all the elements of civil fraud need only be established by a “preponderance of the evidence.”  (Liodas v. Sahadi (1977) 19 Cal.3d 278, 291, 137 Cal.Rptr. 635, 562 P.2d 316.)   However, “[a]lthough material facts are known to one party and not the other, failure to disclose them is ordinarily not actionable fraud unless there is some fiduciary relationship giving rise to a duty to disclose.”  (5 Witkin, Summary of Cal.Law (9th ed. 1988) Torts, § 697, p. 799;  cf. Swanson v. Siem (1932) 124 Cal.App. 519, 523, 12 P.2d 1053 [Before a partner may be charged, a prima facie showing of the copartnership should first be established.].)

While assessing the proper jury instructions, the trial court was indecisive as to the existence and nature of the relationship between Weiner and Fleischman.   The trial court decided to leave that fact finding to the jury by way of response to request for special verdict.   Weiner's counsel argued that a fiduciary relationship existed between Weiner and Fleischman, but was otherwise hesitant to label it.   Yet, the court opined that Weiner had proceeded to trial solely on an oral agreement or oral joint venture theory.   Counsel in argument made references to the nature of the testimonial language and the “co-general partnership” involved in the Sinclair Project.   Since there was properly admitted evidence from which a joint venture might be inferred, it was not error to instruct on the theory of joint venture.   (Hazelett v. Miller (1953) 115 Cal.App.2d 801, 804, 252 P.2d 997.)

2. A joint venture is synonymous with a partnership, and its members are fiduciaries

A joint venture is “an undertaking by two or more persons jointly to carry out a single business enterprise for profit.”  (Nelson v. Abraham (1947) 29 Cal.2d 745, 749, 177 P.2d 931.)  “Like partners, joint venturers are fiduciaries with a duty of disclosure and liability to account for profits.”  (9 Witkin, Summary of Cal.Law, (9th ed. 1989) Partnership, § 19, p. 418.)

 The distinction between joint ventures and partnerships is not sharply drawn.   A joint venture usually involves a single business transaction, whereas a partnership may involve “a continuing business for an indefinite or fixed period of time.”  (Emphasis deleted.)  (9 Witkin, Summary of Cal.Law, supra, Partnership, § 17, p. 416.)   Yet, a joint venture may be of longer duration and greater complexity than a partnership.   From a legal standpoint, both relationships are virtually the same.   Accordingly, the courts freely apply Uniform Partnership Act provisions to joint ventures when appropriate.  (Orlopp v. Willardson Co. (1965) 232 Cal.App.2d 750, 754, 43 Cal.Rptr. 125.)   In Nelson v. Abraham, supra, 29 Cal.2d 745, 750, 177 P.2d 931, the court found it “unnecessary to place a precise legal designation on the relationship betewen [sic ] the parties.”   Furthermore, a joint venture or partnership may be formed orally (Sly v. Abbott (1928) 89 Cal.App. 209, 216, 264 P. 507), or “assumed to have been organized from a reasonable deduction from the acts and declarations of the parties.”  (Swanson v. Siem, supra, 124 Cal.App. 519, 524, 12 P.2d 1053.)

3. California Supreme Court cases do not require the existence of joint ventures to be established by clear and convincing evidence when not in writing

 In Welch v. Alcott (1921) 185 Cal. 731, 742, 198 P. 626, the Court, in dicta, stated:  “Appellant cites a number of authorities to support the proposition that in the absence of a written agreement of partnership he who alleges its existence must assume the burden of establishing it with clear proof, which indisputably is the law.”

In Gustafson v. Stockton etc. R.R. Co. (1901) 132 Cal. 619, 620, 64 P. 995, the Court concluded that “in the case of a suit brought on an oral assignment [of claims for labor], if the fact be denied, the proof should be clear, positive, and in every way satisfactory, to justify a court in rendering judgment.”  (Emphasis added.)

Some appellate court decisions have stated that the existence of partnerships need be proved by “competent evidence” (Swanson v. Siem, supra, 124 Cal.App. at p. 523, 12 P.2d 1053) or “clear and convincing evidence.”   (Smalley v. Baker (1968) 262 Cal.App.2d 824, 839, 69 Cal.Rptr. 521;  Sullivan v. Schellinger (1959) 170 Cal.App.2d 111, 113, 338 P.2d 462;  see also 59A Am.Jur.2d Partnerships, § 206, pp. 348–349.)

The Smalley court cited Sullivan as authority regarding the requisite burden of proof to establish the existence of a partnership.   The Sullivan court cited to Lyon v. MacQuarrie (1941) 46 Cal.App.2d 119, 124, 115 P.2d 594, which in turn, cited to Welch, Swanson and Blinn v. Ritchie (1929) 101 Cal.App. 691, 282 P. 390.

In Blinn v. Ritchie, supra, 101 Cal.App. 691, 692, 282 P. 390 the court stated:  “The judgment must be sustained, ․ upon the basis of the existence of a copartnership between the defendants Ritchie and Knopf.   There is no finding that such a copartnership existed, nor is there competent evidence in the record to sustain such a finding.”   The Blinn court reasoned that “a contract of copartnership must be proved in the same manner that any other contract must be established.”  (Id. at p. 693, 282 P. 390.)

In Mission Valley East, Inc. v. County of Kern (1981) 120 Cal.App.3d 89, 96, 174 Cal.Rptr. 300, the court reasoned that:  “Although the general rule in California is that choses in action or other personal rights to claim money are freely assignable, nonetheless, proof of intent to assign must be ‘clear and positive’ to protect the obligor (here the County) from any further claim by the primary obligee.”  (Emphasis added.)

In Cochran v. Board of Supervisors (1978) 85 Cal.App.3d 75, 81, 149 Cal.Rptr. 304, the court stated, “The burden upon one seeking to prove a parol partnership is proof by clear and convincing evidence—a standard which, however, applies only in the trial forum.”   The court cited to Smalley and Crail v. Blakely (1973) 8 Cal.3d 744, 750, 106 Cal.Rptr. 187, 505 P.2d 1027.  Crail, however, concerned an oral agreement to make mutual wills.   The policy for requiring a higher burden of proof to establish an oral agreement to make mutual wills arises because those “cases typically arise after both parties to the agreement have died, and those who claim as intended beneficiaries thereunder must necessarily often rely upon indirect evidence, including the testimony of persons, ․ who have overheard references to the oral agreement.”  (Ibid.)

Respondent, in his brief, cites to Tannehill v. Finch (1986) 188 Cal.App.3d 224, 232 Cal.Rptr. 749, as authority to require the burden of proof be by “clear and convicing” evidence when disputed property ownership arises from a fiduciary relationship.   However, Tannehill is not on point.   In that case, the plaintiff had to rebut by clear and convincing evidence, the presumption that the record title holder owned full beneficial interest of real and personal property.  (Id. at p. 227, 232 Cal.Rptr. 749.)

In conclusion, there are no California Supreme Court cases holding that the existence of a partnership or joint venture must be established by clear and convincing evidence.   Furthermore, California Court of Appeal cases either cite to dicta in Supreme Court cases, or are grounded in facts inapplicable to the situation at hand.

4. Judicial expressions purporting to require clear and convincing evidence in civil cases should be read in conjunction with statutory provisions for proof by a preponderance of the evidence

 The conflict between distinct lines of authority requiring fraud to be proved by either a preponderance of the evidence or by clear and convincing evidence was settled in Edmonds v. H.W. Wilcox (1918) 178 Cal. 222, 172 P. 1101.  “[A]ll judicial expressions concerning the necessity of clear and satisfactory proof of fraud must be construed in light of the fundamental rule that a preponderance of the evidence controls in a civil case.  ( [former] Code Civ.Proc., sec. 2061, subd. 5.)”  (Id., at pp. 224–225, 172 P. 1101.)

“The same reasoning—i.e., that judicial expressions purporting to require clear and convincing evidence must be read in light of the statutory provision for proof by a preponderance of the evidence—has been invoked in nonfraud cases as well.  [Citations.]”  (Liodas v. Sahadi, supra, 19 Cal.3d 278, 289, fn. 6, 137 Cal.Rptr. 635, 562 P.2d 316.) ³  “The foregoing decisions of this court should have laid to rest the early belief that civil fraud must be proved by more than a preponderance of the evidence.   Any lingering doubt on the point, moreover, should have been removed by the enactment of the Evidence Code.”  (Id., at p. 289, 137 Cal.Rptr. 635, 562 P.2d 316.)

“[T]he matter is now governed by Evidence Code section 115, successor to Code of Civil Procedure section 2061, subdivision 5, which declares in relevant part that ‘Except as otherwise provided by law, the burden of proof requires proof by a preponderance of the evidence.’ ”  (Id., at p. 290, 137 Cal.Rptr. 635, 562 P.2d 316.)   The Court further noted “it has long been settled that in civil cases even a criminal act may be proved by a preponderance of the evidence.  [Citations.]  Surely the proof of an act of civil fraud should require no higher standard.”  (Id., at p. 290, fn. 8, 137 Cal.Rptr. 635, 562 P.2d 316.)

Although “appellate court[s are] empowered to ‘otherwise provide by law’ in [the context of Evid.Code, § 115],” (id., at p. 290, fn. 8, 137 Cal.Rptr. 635, 562 P.2d 316) this court is not bound by factually disparate cases requiring the existence of oral joint ventures to be proved by clear and convincing evidence.   Accordingly, within the language of Evidence Code section 115 and Liodas, the existence of a joint venture or partnership in a civil fraud case need only be established by a preponderance of the evidence.

5. The trial court erred in instructing the jury that appellant had the burden to prove the existence of an oral joint venture between himself and respondent by clear and convincing evidence instead of by a preponderance of the evidence

 What constitutes the undertaking of a partnership or a joint venture presents primarily questions of fact.  (Nelson v. Abraham, supra, 29 Cal.2d 745, 750, 177 P.2d 931.)   Moreover, “[t]he burden is on the one asserting the existence of a copartnership.”  (Swanson v. Siem, supra, 124 Cal.App. 519, 523, 12 P.2d 1053.)

 In this case, Weiner alleges that a fiduciary relationship existed between himself and Fleischman.   The trial court, based upon evidence properly admitted at trial, gave a jury instruction pertaining to an oral joint venture.   Indeed, joint venturers owe a fiduciary duty of disclosure.   The jury instructions properly raised the threshold issue as to the existence of a relationship, fiduciary or otherwise.   Weiner had the burden to prove the existence of an oral joint venture between himself and Fleischman.   However, the existence of that oral joint venture or other relationship was to be proved by a preponderance of the evidence.

The language of Fleischman's jury instruction no. 2.60 necessarily modified the second element of fraud by digressing into the threshold question of the existence or nonexistence of a relationship between Weiner and Fleischman and the necessity to prove the existence of the relationship by “clear and convincing” evidence.   Accordingly, the trial court erred by instructing the jury to require Weiner to establish the existence of an oral joint venture between himself and Fleischman by “clear and convincing” evidence.

B. The Trial Court Did Not Abuse Its Discretion in Refusing to Comply with The Jury's First Three Readback Requests

 The jury submitted four readback requests.   The jury's first request was for a reading of the testimony of Weiner and Fleischman “concerning actual conversation which contained alleged oral agreement as to Pioneer.”   The jury's second request was for a reading of their testimony “concerning oral agreement preceding written documentation in Sinclair.”

During a discussion out of the jury's presence, counsel selected portions of the testimony to satisfy the jury's requests.   The court noted that to read portions of the testimony out of context would “have a different impact than the impact they're supposed to have which is the impact created from the witness stand when that witness was testifying, be it direct or cross-examination, and in the context of all of the other testimony.”   The court notified counsel that it was willing to offer the jury another option, to “read back the entire testimony of both witnesses.”   However, counsel for Weiner, objected and refused this option.

The jury's third request was for a reading of Fleischman's testimony concerning Weiner “asking about his possible participation in Donnelley offer for Pioneer, and Fleischman's or Donnelley's response.”   Counsel for Weiner stated that this request could not be satisfied because Fleischman did not testify on this issue.

The court, addressing the jury, stated the reason for denying their requests was that:  “The lawyers and I have every desire to help you in your deliberations, but we're in a technical area where there is very little we can give you by way of help because we can't interfere or participate in your thought processes in your deliberations․  So a question you send out can—and I'm not saying these questions do, but a question can ask us to communicate with you by way of giving you an answer, and that answer and that effort on our part maybe an interference or an influence on your deliberations that's not allowed by law․  [¶] I cannot comply with your two written requests.”   The court then explained the reason stated above and went on to state that:  “So I'll ask you to return to the jury room, continue your deliberations and if we can help you, we'll try.   If we can't, it's because in my judgment the request will involve us, i.e., the lawyers and the trial judge, too much in your deliberating function at this time.”

The jury's fourth readback request was granted.

1. The language of the Code of Civil Procedure does not mandate a court to readback any portions of a transcript that a jury might request

Section 614 of the Code of Civil Procedure provides that:  “After the jury have retired for deliberation, if there be a disagreement between them as to any part of the testimony, ․ they may require the officer to conduct them into Court.   Upon their being brought into Court, the information required must be given in the presence of, or after notice to, the parties or counsel.”

In Cook v. Los Angeles Ry. Corp. (1939) 13 Cal.2d 591, 595, 91 P.2d 118, the Court, referring to section 614 of the Code of Civil Procedure, stated that:  “While this provision does not compel the court to give any information which the jury may request, any reasonable request relating to the rereading of instructions upon a topic which is doubtful in the minds of the jurors should not be wilfully disregarded.”  (See also Davis v. Erickson (1960) 53 Cal.2d 860, 863, 3 Cal.Rptr. 567, 350 P.2d 535.)

In this case, the testimony of Weiner and Fleischman comprised the bulk of the transcript.   As an alternative, the trial court offered a reading of their complete testimony.   The testimony is not segmented;  rather, it is interwoven and convoluted in nature.   The testimony covers agreements and relationships involved in both the Sinclair Project and the Pioneer stock sale.   The testimony, as to some issues, is in conflict.   The trial court reasonably assumed that reading portions of the testimony out-of-context might be highly prejudicial.   The trial court found the jury's first two readback requests to be too broad and unfocused.   As such, the information that the jury requested was not reasonable within the meaning of Cook.

In conclusion, the circumstances dictated that the jury's first two requests were unreasonable.   The trial court did not abuse its discretion, for compliance with the jury's requests had great potential for prejudice.

2. Counsel for appellant, by refusing the trial court's offer to read the entire testimony, invited the trial court into the error of not offering that option to the jury

 Counsel for Weiner and Fleischman selected testimony that they thought was relevant to the first two jury requests.  “It is not the party to whom the law gives the right to select testimony to be read.   And the law does not make the party or his attorney the arbiter to determine the jury's wishes.”   (Original emphasis.)  (Asplund v. Driskell (1964) 225 Cal.App.2d 705, 714, 37 Cal.Rptr. 652.)   Thus, it is in the court's discretion to select portions of the testimony to be read to the jury.

 Counsel for Weiner selected its testimony in a less “expansive” manner than Fleischman.   Counsel for Weiner selected 25 pages of testimony in response to the jury's requests.   Fleischman's selection was considerably more voluminous.   During discussion on the readback requests, the court ultimately decided to allow the entire testimony requested to be read.

Counsel did not have the right to select portions of the requested testimony.   The trial court had the opportunity to choose between counsel's selections or provide an alternative it felt was most proper in light of the circumstances.   Accordingly, the trial court felt it could best meet the jury's requests and prevent partialities by offering the entire testimony of Weiner and Fleischman.   Weiner refused the offer and objected.

Weiner refused to acknowledge that the trial court “ultimately decided that it would not allow a reading of the complete testimony, and thus counsel for [appellant] did not have that option.”  (Original emphasis.)   However, a more accurate interpretation of the record would be that the trial court retracted the offer when counsel for Weiner objected.

Weiner urges that the testimony was critical in that the requested testimony went to the essence of this case, the existence of an oral joint venture between Weiner and Fleischman.   We agree that the evidence went to the essence of the case.   In People v. Butler (1975) 47 Cal.App.3d 273, 285, 120 Cal.Rptr. 647, it was deemed prejudicial error for the trial judge to deny the jury a reading of requested testimony which went to the very essence of the case.   The trial judge told the jury to continue deliberating and to do their best to reach a verdict based on the information they had available.⁴  (Id., at p. 279, 120 Cal.Rptr. 647.)

Although the trial court erred by not offering the jury a complete reading of the testimony of Weiner and Fleischman, as indicated below the error was invited by Weiner's counsel.

In accordance with the doctrine of invited error Weiner is estopped to raise the error, “[w]here a party by his conduct induces the commission of error, he is estopped from asserting it as a ground for reversal.”  (Emphasis deleted.)  (9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 301, p. 313;  see also Abbott v. Cavalli (1931) 114 Cal.App. 379, 383, 300 P. 67.)   Here, Weiner could not select testimony in response to the jury's request nor could Weiner impose on the court's discretion to read portions of the requested testimony to the jury.   The court had good reason to offer a complete reading of the testimony.   Weiner's counsel, rejected the offer, stating that:  “Then I would say—my position I made clear to the court—if this court is going to tell the jury that it's not going to provide them with the limited information they requested, the court simply do so, tell them why the court's not doing it and end the matter then.”   That said, the court was induced to not offer the complete testimony to the jury.   Counsel for Weiner expressed dissatisfaction with the court's solution to the jury requests.   The court's offer was rejected.   As Weiner invited the error he is estopped from asserting it on appeal.

3. Since testimony concerning the jury's third readback request was lacking, appellant took the position that it was best not to elaborate on the reasons for noncompliance with the request, thereby again inviting error

 The jury's third readback request concerned Fleischman's testimony regarding Weiner's inquiry about participating in the Pioneer stock sale and the ensuing response by either Fleischman or Donnelley.   Weiner's counsel stated that Fleischman did not testify pertaining to that matter and that no testimony existed to satisfy the jury's request.   However, the trial court did not notify the jury that this request could not be complied with for the reason that testimony was unavailable.

After retracting the offer to read the entire testimony, the court explained the impressions it had received from reading the transcripts.  “THE COURT:  ․ ‘Wow.   That's it.   Weiner wins.’   And then ‘Wow,’ you read something else, ‘Fleischman wins.’   And I can literally see some scorecard of how many times Weiner wins and how many times Fleischman wins when [the jury is] given this regurgitation of this evidence.”   Counsel for Weiner agreed.

“MR. CLIFFORD [Counsel for Weiner]:  Then I think its best just to proceed as you were going to and give [the jury] the out-of-context statement without elaborating beyond that.

“THE COURT:  Okay.   And not suggest to them they can have the readback.   If they ask for that later, then that's a different issue.”  (Emphasis added.)

The trial court gave a single explanation to the jury, for its inability to comply with each of the jury's three readback requests.   Mr. Clifford, counsel for Mr. Weiner, therefore invited error and is estopped from asserting this error as grounds for reversal.  (See Abbott v. Cavalli, supra, 114 Cal.App. 379, 383, 300 P. 67.)   Moreover, even if Weiner's counsel had not triggered the doctrine of invited error, such noncompliance would be “so slight or so ephemeral in character as to be harmless under the circumstances.”  (9 Witkin, Cal.Procedure, supra, Appeal, § 340, p. 346;  see also Walling v. Kimball (1941) 17 Cal.2d 364, 370, 110 P.2d 58.)

IV.

CROSS–APPEALA. The Trial Court Did Not Err in Denying Respondent Attorney Fees And Augmented Costs1. Appellant brought an action against respondent in fraud based on a purported oral joint venture, not on the Pioneer purchase agreement

 Fleischman contends that Weiner indirectly challenged the purchase agreement and release involved in the Pioneer stock sale.   The purchase agreement contains an attorney's fees provision:

“18. Attorneys' Fees.   In the event that any of the parties resorts to legal action in order to enforce the provisions of this Agreement and retains counsel in connection therewith, or to defend such suit, the prevailing party shall be entitled to receive reimbursement from the nonprevailing party for reasonable attorneys' fees and all other costs incurred in commencing or defending such suit.”

Fleischman further contends that Weiner has “implicated” this contract provision, entitling them to a recovery of attorney's fees and costs.

A party is generally precluded from recovery of attorney's fees, except where attorney's fees are specifically authorized by agreement or statute.   (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 127, 158 Cal.Rptr. 1, 599 P.2d 83.)  Civil Code section 1717 provides in pertinent part:  “(a) In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs.”

The issue is whether Fleischman can recover attorney's fees on the theory that this action was commenced to enforce provisions of the purchase agreement.   We see no relation between enforcing the purchase agreement provisions and this action for fraud.  “[A] tort action for fraud arising out of a contract is not an ‘action on a contract’ within the meaning of section 1717 so as to permit an award of attorney fees.”  (Star Pacific Investments, Inc. v. Oro Hills Ranch, Inc. (1981) 121 Cal.App.3d 447, 460, 176 Cal.Rptr. 546;  see also Stout v. Turney (1978) 22 Cal.3d 718, 730, 150 Cal.Rptr. 637, 586 P.2d 1228.)   Clearly, Fleischman is trying to merge two different factual settings in this case.   First, there is the Purchase Agreement to which Weiner was a party when he sold his 100 shares of Pioneer stock.   A matter related to the 100 shares of the Pioneer stock would invoke the attorney's fees provision.   Second, is the situation in this case, which revolves around an alleged oral joint venture or other relationship whereby respondent Fleischman would have had a duty to disclose information to Weiner, permitting Weiner to participate in the Pioneer stock sale.   Accordingly, Fleischman's contention is without merit and the trial court was correct in not awarding attorney's fees.

2. Expert witness costs should not augment costs because cross-appellant's token offer was not in good faith nor realistic under the circumstances

 Code of Civil Procedure section 998, subdivision (c), in pertinent part, states:  “If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment, the plaintiff shall not recover his or her costs and shall pay the defendant's costs from the time of the offer.   In addition, ․ the court, in its discretion, may require the plaintiff to pay the defendant's ․ costs of the services of expert witnesses, ․”

In this case, Fleischman made a $1 pretrial written offer of settlement to Weiner, which was refused.   Weiner failed to obtain a more favorable judgment since the verdict was for Fleischman.   The trial court denied expert witness fees to augment Fleischman's costs.

The issue is whether the $1 compromise offer pursuant to section 998, subdivision (c) qualifies “for such extra costs [because it is] reasonable and responsive to the legislative purpose of encouraging the settlement of litigation without trial.”  (Wear v. Calderon (1981) 121 Cal.App.3d 818, 820, 175 Cal.Rptr. 566.)   To encourage settlement of litigation without trial, “a good faith requirement must be read into section 998.   In other words, [it] must be realistically reasonable under the circumstances of the particular case.   Normally, therefore, a token or nominal offer will not satisfy this good faith requirement, ․  [¶] ․  A plaintiff cannot reasonably be expected to accept a token or nominal offer from any defendant exposed to this magnitude of liability unless it is absolutely clear that no reasonable possibility exists that the defendant will be held liable.”  (Id., at p. 821, 175 Cal.Rptr. 566.)

Fleischman contends that “Wear is distinguishable because [Weiner's] case was totally devoid of merit.”   However, it is Fleischman's contention that is without merit.   In this case, it was not absolutely clear that Fleischman would not have suffered judgment.   The special verdict at trial was not unanimous, but 9–3.   A large sum of money was at stake, literally, millions of dollars.   A $1 token offer would not encourage a reasonable person who felt wronged to settle this case.   Accordingly, Fleischman did not satisfy the good faith requirement in section 998, subdivision (c).   The trial court did not abuse its discretion in denying expert witness fees.

The issue regarding the existence of the relationship between Weiner and Fleischman need not be addressed by us on appeal and the resolution of this question should be addressed by the trial court on retrial.

DISPOSITION

The judgment is reversed by reason of erroneous instructions given to the jury.   The matter is remanded for trial in accordance with the views expressed herein.   Each side to bear their own costs on appeal.

FOOTNOTES

1.   Civil Code section 1542 provides:  “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”

2.   The full text of BAJI No. 12.35 and instruction number 2.60 given by the court are as follows:Instruction 12.35:“1. The defendant must have concealed or suppressed a material fact;“2. The defendant must have been under a duty to disclose the fact to the plaintiff;“3. The defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff;“4. The plaintiff must have been unaware of the fact and would not have acted as he did if he had not known of the concealed or suppressed fact;“5. And, finally, as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.   You must find damage.   Not the amount.   In the next phase of this trial, if any, evidence on which to compute damage will be introduced.”Instruction 2.60:“In this case, the plaintiff claims that he had an oral joint venture with the defendant to accomplish certain purposes.   As a threshold matter, you must find by clear and convincing evidence, first, that the plaintiff and the defendant did enter into an oral joint venture and, second, the essential terms of that joint venture.“If the existence and scope of any oral joint venture is proved by clear and convincing evidence, then, thereafter, the plaintiff has the burden of proving, by a preponderance of the evidence, all of the facts necessary to establish the existence of fraud by intentional concealment.   To do so, the plaintiff must prove all of the following elements by a preponderance of the evidence, except on those certain issues that I instruct you require a higher burden of proof:“1. That the defendant must have concealed or suppressed a material fact;“2. The defendant must have been under a duty to disclose the fact to the plaintiff.   As noted previously, the existence of the oral joint venture and its scope must be proved by clear and convincing evidence;“3. The defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff;“4. The plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact;“5. And, finally, as a result of the concealment or suppression of the fact, the plaintiff must have sustained damages.”

3.   A joint venture is founded on contract.  (Campagna v. Market St. Ry. Co. (1944) 24 Cal.2d 304, 308, 149 P.2d 281;  see also Sadugor v. Holstein (1962) 199 Cal.App.2d 477, 483, 18 Cal.Rptr. 859.)  “Whether the parties to a particular contract have thereby created, as between themselves, the strict relation of joint adventurers or some other relation involving cooperative effort, depends upon their actual intention, which is determined in accordance with the ordinary rules governing the interpretation and construction of contracts.”  (Universal Sales Corp. v. California Press Mfg. Co. (1942) 20 Cal.2d 751, 764–765, 128 P.2d 665.)

4.   Butler was decided pursuant to Penal Code section 1138, which is an almost verbatim criminal version of section 614 of the Code of Civil Procedure.

FRED WOODS, Associate Justice.

LILLIE, P.J., and JOHNSON, J., concur.