Filed 3/17/14 Yacoub v. Talia CA4/1
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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA



JOSEPH YACOUB,                                                      D063321

         Plaintiff and Appellant,

         v.                                                         (Super. Ct. No.
                                                                     37-2011-0098208-CU-PO-CTL)
WILLIAM J. TALIA,

         Defendant and Respondent.


         APPEAL from a judgment of the Superior Court of San Diego County, Kevin A.

Enright, Judge. Affirmed.

                   Zampi, Determan & Erickson, Joseph P. Zampi and Garrett A. Smee for

Plaintiff and Appellant.

         Murchison & Cumming, Robert M. Scherk and Scott J. Loeding for Defendant

and Respondent.

         Plaintiff Joseph Yacoub appeals a judgment entered after a jury found in his favor

on his personal injury claim, but assigned him 60 percent responsibility for his injury

caused by a fall from a ladder while trimming trees outside defendant's convenience
store. Yacoub contends the trial court erred by refusing his proposed special jury

instructions on the rebuttable and conclusive presumptions he was defendant's employee.

Yacoub also contends the court erred when it reduced his damages and allowed testimony

he had not received W-2 and 1099 forms. We affirm.

                  FACTUAL AND PROCEDURAL BACKGROUND

       Since 2006, defendant William Talia and his wife have operated the Bi-Rite

Market located in downtown San Diego through their corporation, Josiey, Inc. Yacoub is

married to Talia's cousin. Talia has employed family members at various times,

including his brothers and cousin. Although Yacoub did not work at Bi-Rite Market on a

regular basis, he occasionally performed odd jobs there, including washing and waxing

the floors on two occasions in 2010 and trimming shrubbery on another occasion. In

return, Talia paid Yacoub in cigarettes, lottery tickets, and between $50 and $100 in cash.

       At trial, the parties provided contradictory accounts of how Yacoub came to trim

the trees outside the Bi-Rite Market in July 2011. Yacoub testified he had a discussion

with Talia several months prior to his injury about waxing the market's floors again. At

the time, Talia did not want the floors waxed because customers were tracking fallen

flowers from two large trees into the store. During June and July 2011, Yacoub and Talia

discussed whether Yacoub should prune the trees to keep the flowers off the ground.

Yacoub testified that Talia eventually asked him to prune the trees, but they did not set a

price for the job. The lack of a predetermined price was not unusual because Yacoub

completed work for Talia in the past without a predetermined price, and was paid

whatever amount Talia desired on completion. At times this arrangement was not ideal

                                             2
for Yacoub; on one occasion Yacoub was disappointed by the $59 Talia paid him for

trimming weeds and bushes after he spent eight to 10 hours doing the job with the hope

of receiving between $100 and $120.

       On July 23, 2011, Yacoub arrived at the market to trim the two trees pursuant to

Talia's request. He successfully trimmed the first tree, but was injured when he fell from

the ladder while trimming the second tree.

       At trial, Talia and his family provided a different version of events. Talia testified

he never asked Yacoub to trim the trees and, in fact, Yacoub was not welcome at the

store. Several weeks prior to Yacoub's fall, he and Talia had an argument, and Talia told

him to leave the store and never return. However, although Talia's family testified that

Yacoub was not welcome at the store, Talia's brother watched Yacoub trim the trees and

helped him by picking up the trimmings from the sidewalk.

       On September 21, 2011, Yacoub sued Talia and Josiey Inc., alleging he was an

employee of Josiey, Inc., and stating causes of action for negligence, negligence per se -

violation of California Code of Regulations, title 8, section 3276, negligence per se -

violation of California Code of Regulations, title 8, section 1151, negligent infliction of

emotional distress, and breach of statutory obligation to provide workers' compensation

benefits.

       The case proceeded to jury trial in September 2012. The jury found Yacoub was

not an employee of Josiey, Inc., and was not acting within the scope of his employment

when he fell. The jury found Talia was not negligent; found Josiey, Inc., was negligent

and was a cause of harm to Yacoub; found Yacoub was also negligent; and found

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Yacoub's negligence was a substantial factor in causing his harm. The jury assigned 60

percent of the responsibility for the harm to Yacoub and 40 percent responsibility to

Josiey, Inc. The court also reduced the total damages Yacoub sought by the $16,878.60

"uninsured discount" the hospital applied to his medical bill.

       Yacoub appeals, arguing the trial court erred when it (1) refused a proposed

special jury instruction that a person in service to another is presumptively an employee,

(2) refused a proposed special jury instruction that unlicensed tree trimmers are

conclusively presumed to be employees, (3) reduced his damages award, and

(4) improperly allowed introduction of evidence of his income taxes.

                                        DISCUSSION

       A. Jury Instructions

       1. Standard of Review

       A party is entitled to have the jury instructed as to its theory of the case, provided

that (1) it requests and submits legally correct instructions, and (2) there is sufficient

evidence to support the theory. (Thompson Pacific Construction, Inc. v. City of

Sunnyvale (2007) 155 Cal.App.4th 525, 547.) When a party argues that a jury has been

erroneously instructed, we examine all the circumstances of the case. This includes a

review of all of the evidence, as well as the instructions as a whole. (Krouse v. Graham

(1977) 19 Cal.3d 59, 72.) We review the court's alleged error in instructing the jury de

novo. (Fariba v. Dealer Services Corp. (2009) 178 Cal.App.4th 156, 164.) Whether a

proposed jury instruction is legally correct is a question of law to which we apply our



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independent review. (See Isip v. Mercedes-Benz USA, LLC (2007) 155 Cal.App.4th 19,

24.)

       2. Rebuttable Presumption Instruction

       Yacoub first argues the court erred when it refused to instruct the jury that "a

person performing service for another is presumptively an employee." However, the

court did nor err because Yacoub's proposed special jury instruction was not legally

accurate.

       Labor Code1 section 3357 provides that "[a]ny person rendering service for

another, other than as an independent contractor, . . . is presumed to be an employee."

However, Yacoub submitted the following proposed instruction to the court: "In

California, any person in service to another is presumptively an 'employee.' " This

proposed instruction does not accurately reflect the law because "any person in service to

another" is not presumptively an employee--independent contractors are in service to

another, but are not employees under section 3357. This omission from the proposed

instruction is significant because the statute's "express exclusion of 'independent

contractors' is purposeful . . . and has a limited but important function" (S. G. Borello &

Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341, 354) in determining

when the "risk of 'no fault' work injuries [should be placed] directly on the provider,

rather than the recipient, of a compensated service." (Ibid.) Because Yacoub's proposed




1      All statutory references are to the Labor Code unless otherwise specified.

                                              5
instruction was not legally accurate, the trial court did not err in declining to submit it to

the jury.

       3. Conclusive Presumption Instruction

       Yacoub contends he was entitled to a jury instruction that he was conclusively

presumed to be defendant's employee under section 2750.5. That section deems a person

an employee when he or she performs work for which a contractor's license is required,

but the person does not have the required license. The applicable licensing statutes

require a license for certain tree trimming work unless the aggregate value of the project

is less than $500. If Yacoub was required to have a contractor's license to trim the trees

outside the Bi-Rite Market--and is not exempt from the licensure requirement because of

the $500 value exception to the license requirement--he is conclusively presumed to be

defendant's employee. However, Yacoub presented no evidence of the value of the tree

trimming work he performed prior to his fall, and there was evidence that suggested he

would not have been paid more than $500. The court did not err when it found Yacoub

had not provided sufficient basis to give the instruction.

       Section 2750.5 establishes a "presumption affecting the burden of proof that a

worker performing services for which a license is required [by Business and Professions

Code section 7000 et seq.] . . . is an employee rather than an independent contractor." A

worker who does not secure a required license is conclusively presumed to be an

employee under this section. (Neighbours v. Buzz Oates Enterprises (1990) 217

Cal.App.3d 325, 330-331.)



                                               6
       Further, Business and Professions Code section 7026.1, subdivision (a)(4),

requires persons performing "tree pruning" to have a contractor's license except under

certain circumstances that do not apply here. However, Business and Professions Code

section 7048 provides that the licensing provisions of the Contractors' State License Law

(Bus. & Prof. Code, §§ 7000 et seq.) do not apply "to any work or operation on one

undertaking or project by one or more contracts, the aggregate contract price which for

labor, materials, and all other items, is less than five hundred dollars ($500), that work or

operations being considered of casual, minor, or inconsequential nature."

       Yacoub contends section 2750.5 establishes that he was defendant's employee

because the work he performed required a contractor's license, which he did not have.

The trial court disagreed, finding first that there was a "failure of proof " and "no showing

whatsoever that a license is at all required to do this work." The court also found, even

had Yacoub shown he was required to have a license, he did not show the aggregate

value of the work he performed was more than $500. To the contrary, the court found

Yacoub had never been paid more than $500 for prior jobs he had performed for

defendant. The court found section 2750.5 did not apply, and Yacoub was not entitled to

his proposed jury instruction.

       Without deciding whether a license is required to do the type of work Yacoub

performed, we conclude the trial court did not err because a sufficient basis did not exist

to give the conclusive presumption jury instruction in section 2750.5. Yacoub did not

present evidence of the aggregate cost of the project, as the parties did not agree to a

specific payment, and Yacoub did not purchase any materials to complete the project.

                                              7
Moreover, no evidence in the record suggests Talia would have ever given Yacoub more

than $500 for the tree trimming job. To the contrary, Yacoub had performed work

without a preset price in the past, and Talia paid him much less than $500 each time.

Because it appeared Yacoub was exempt from the licensure requirement, he was not

entitled to the conclusive presumption that he was defendant's employee under section

2750.5.

       Yacoub contends the exemption in Business and Professions Code section 7048

does not apply in this case because he operated without a contract with defendant. As a

result, it follows, that section is inapplicable because an "aggregate contract price" did not

exist in the first place. We are not persuaded. Yacoub's position would require a class of

persons whom the Legislature intended to exclude from the licensure requirement to have

licenses. However, the Legislature plainly intended to exclude persons who perform

"work or operations being considered of casual, minor, or inconsequential nature" from

having to obtain a contractor's license. (Bus. & Prof. Code, § 7048.) In doing so, the

Legislature considered projects with total values of less than $500 as "casual, minor, or

inconsequential." (Ibid.) This section's legislative history provides insight into the basis

for exempting certain persons from the full licensure requirement:

          "There appears to be a common sense argument for exempting
          certain types of small projects that carry very minimal risk to the
          consumer from current law's requirements for full licensure by [the
          California State License Board]. For example, it seems to be
          completely reasonable for a homeowner to legally hire a
          'handyman'--perhaps a retired neighbor, or a friend of a friend--to
          replace a section of wallboard in a garage, or to repair a leaky
          faucet."


                                              8
(Sen. Com. on Business & Professions, Analysis of Sen. Bill No. 2217 (1997-1998 Reg.

Sess.) April 27, 1998.) At trial, the parties testified Yacoub essentially acted as a

"handyman" who performed odd jobs for Talia on an infrequent and as-needed basis for

sums never more than $500. However, Yacoub asserts persons who casually perform

odd jobs or favors for family members, neighbors, or friends would be required to be

fully licensed by the California State License Board as contractors--even if they perform

the work for free--simply because they did not enter into a formal contract. We find no

basis to sanction such an incongruous result. The trial court did not err when it refused to

give Yacoub's proposed special jury instruction on the conclusive presumption in section

2750.5.

       B. Reduction of Yacoub's Damages

       The trial court reduced Yacoub's claimed damages by the $16,878.60 uninsured

discount Scripps Mercy Hospital deducted from his medical services bill. Invoking the

"collateral source rule," Yacoub contends the court erred in doing so and also in

precluding evidence or argument on the "reasonable value" of the costs he incurred.

However, the collateral source rule does not apply in this case. Moreover, the trial court

properly reduced Yacoub's damages because he was not liable for the amount by which

the hospital discounted his bill, and, as a result, he did not suffer a detriment in that

amount.

       The collateral source rule provides that the damages awarded to an injured

plaintiff cannot be reduced by the amount paid on the plaintiff's behalf by a source

independent of the tortfeasor, such as an insurer. (Howell v. Hamilton Meats &

                                               9
Provisions, Inc. (2011) 52 Cal.4th 541, 551 (Howell); Helfend v. Southern Cal. Rapid

Transit Dist. (1970) 2 Cal.3d 1, 6.) "The rule thus dictates that an injured plaintiff may

recover from the tortfeasor money an insurer has paid to medical providers on his or her

behalf." (Howell, at p. 551.) "Examples of collateral sources that may not be used to

decrease a plaintiff's recovery include medical insurance, pension and disability benefits,

and continued wages paid by an employer." (McKinney v. California Portland Cement

Co. (2002) 96 Cal.App.4th 1214, 1222.) The plaintiff's insurance is wholly independent

from, and collateral to, the tortfeasor, and the tortfeasor is not permitted to benefit from

the plaintiff's prudence. (Helfend, at pp. 6, 10.)

       Yacoub argues he "incurred" his medical expenses "when he received his bills."

He further contends the distinguishing fact in Howell was the negotiation of the discount

before the plaintiff sustained her injury. Thus, his logic follows, the costs the plaintiff in

Howell incurred at the moment she received her bill reflected the prenegotiated discount

with her insurance company. Here, Yacoub seems to contend that because his original

bill did not reflect the discount, he incurred the medical costs in his original,

undiscounted bill. Yacoub's theory fails for two fundamental reasons.

       First, the collateral source rule is not applicable in this case. It is undisputed

Yacoub was uninsured, and an insurance company did not pay any portion of his medical

bill on his behalf. The record does not reveal that any other third party paid any portion




                                              10
of the bill on his behalf. Yacoub did not receive any compensation from a source

independent of the defendant in this case.2

       Second, Yacoub is incorrect that he incurred the full liability of the original

medical bill at the moment he received it despite the hospital's later reduction of the bill.

In Howell, the Supreme Court explained the following pertinent principles related to past

medical damages:

          "California decisions have focused on 'reasonable value' in the
          context of limiting recovery to reasonable expenditures, not
          expanding recovery beyond the plaintiff's actual loss or liability. To
          be recoverable, a medical expense must be both incurred and
          reasonable. [Citations.]

          "The rule that a plaintiff's expenses, to be recoverable, must be both
          incurred and reasonable accords, as well, with our damages statutes.
          'Damages must, in all cases, be reasonable . . . .' (Civ. Code,
          § 3359.) But if the plaintiff negotiates a discount and thereby
          receives services for less than might reasonably be charged, the
          plaintiff has not suffered a pecuniary loss or other detriment in the
          greater amount and therefore cannot recover damages for that
          amount. (Id., §§ 3281, 3282.)" (Howell, supra, 52 Cal.4th at
          p. 555.)

Whether Yacoub negotiated the uninsured discount himself, the timing of the discount

and whether Yacoub received notice of the discount are irrelevant. The critical factor is

the amount for which Yacoub is liable because that amount represents the detriment he


2      Although Yacoub contends the uninsured discount is a "gift" the Supreme Court
referenced in Howell, supra, 52 Cal.4th at p. 560, he is mistaken. Howell stated: "When
an injured plaintiff has received collateral compensation or benefits as a gift, allowing a
deduction from damages in that amount would result in a windfall for the tortfeasor and
underpayment for the injury." (Ibid.) In this same paragraph, the Supreme Court cited a
law review article that examined charitable gifts to victims in relation to tort
compensation. The uninsured discount Yacoub received is not a gift as denoted in
Howell.
                                              11
suffered. Here, he is not liable for the $16,878.60 deduction from his medical bill

because neither he nor anyone else on his behalf was responsible for paying it, and he has

therefore not suffered a detriment in this amount. To hold otherwise would allow

Yacoub a windfall beyond his actual loss. (See Howell, supra, 52 Cal.4th at p. 555 ["[A]

plaintiff may recover as economic damages no more than the reasonable value of the

medical services received and is not entitled to recover the reasonable value if his or her

actual loss was less."] [second italics added], 559 fn. 6 ["[A] plaintiff who lacks health

insurance would not be entitled to recover the reasonable value of the medical services if

that amount exceeded the liability he or she incurred for the services. The rule that

medical expenses, to be recoverable, must be both incurred and reasonable [citations]

applies equally to those with and without medical insurance."]; see also Corenbaum v.

Lampkin (2013) 215 Cal.App.4th 1308, 1327, fn. 8 ["Damages for past medical expenses

are limited to the amount that the medical providers accepted or agreed to accept as full

payment."].) The court did not err when it adjusted Yacoub's damages.

       C. The Tax Return Privilege

       Yacoub contends the trial court erred when it "permitted evidence that taxes were

never withheld for the work [he] performed . . . ." The introduction of this evidence, he

contends, violated the "taxpayer privilege" and prevented him from receiving a fair trial.

We conclude the trial court did not err because the tax return privilege does not apply

under the circumstances of this case.

       There is no recognized federal or state constitutional right to maintain the privacy

of tax returns. (See Couch v. United States (1973) 409 U.S. 322, 336-337; Deary v.

                                             12
Superior Court (2001) 87 Cal.App.4th 1072, 1075, fn. 2, 1077-1078.) However,

California courts have interpreted state taxation statutes as creating a statutory privilege

against disclosing tax returns. (Schnabel v. Superior Court (1993) 5 Cal.4th 704, 718-

721; Webb v. Standard Oil Co. (1957) 49 Cal.2d 509, 513.) The purpose of the privilege

is to encourage voluntary filing of tax returns and truthful reporting of income, and thus

to facilitate tax collection. (Webb, at p. 513.) This limited privilege covers tax

documents and the information contained in them. (Schnabel, at pp. 719-720; Sav-On

Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 7.)

       Here, defense counsel asked Yacoub on cross-examination whether he had ever

signed a W-2 form or received a 1099 from Josiey, Inc., and Yacoub answered "no" to

both questions. Moreover, Talia's wife, Linda, testified that a W-2 form had never been

prepared for Yacoub, and he had never been on the company's employee payroll.3

Finally, in closing argument, defense counsel argued: "The simple common sense,

logical answer is if he wasn't hired, he wasn't an employee. And what is the evidence

here? Never had a W-2, never had a 1099, was never on the [business's] work schedule."

Yacoub argues this evidence of the nonexistence of 1099 and W-2 forms violated the



3      Although Talia argues Yacoub waived this issue when he did not object to Linda's
testimony, the record reveals his counsel objected to defense counsel's cross-examination
of Yacoub, the court overruled the objection, and the court allowed the line of
questioning. Although counsel did not object to Linda's testimony, his objection had
been overruled once, and further objection would have been futile given the court's prior
ruling permitting Yacoub's testimony on the same matter. (See People v. Welch (1993) 5
Cal.4th 228, 237 ["Reviewing courts have traditionally excused parties for failing to raise
an issue at trial where an objection would have been futile . . . ."].)

                                             13
privilege against disclosure of tax return information. However, Yacoub does not direct

us to, and we have not found, any authority that supports his argument. From our review

of the authorities, it is evident the tax return privilege exists to prevent the affirmative

disclosure of financial information that exists in a tax return, W-2, or similar documents.

Because Talia did not disclose any financial information, the tax return privilege does not

apply here.4 The court did not err in allowing the testimony and argument regarding W-2

and 1099 forms.

                                        DISPOSITION

       The judgment is affirmed. Talia is entitled to costs on appeal.




                                                                              McDONALD, J.

WE CONCUR:


McCONNELL, P. J.


NARES, J.




4      Yacoub also argues his tax return privilege was violated "because [the evidence]
created the inference that (1) [he] was required to pay taxes on his income, and (2) [he] in
fact did not pay taxes on the income." However, Webb and its progeny protect only the
disclosure of financial data, not, as Yacoub contends, the inference of payment or
nonpayment of taxes.

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