Money Store Investment v. Southern Cal. Bank

Filed 11/30/05 Money Store Investment v. Southern Cal. Bank CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

THE MONEY STORE INVESTMENT CORPORATION, Plaintiff and Appellant, v. SOUTHERN CALIFORNIA BANK, Defendant and Respondent.

G033661 (Super. Ct. No. 811030) O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Kim

G. Dunning, Judge. Affirmed.

Miller, Starr & Regalia and Scott A. Sommer for Plaintiff and Appellant.

Kester & Quinlan, Steven L. Kester and Francis E. Quinlan for Defendant and Respondent.

The Money Store Investment Corporation (the Money Store) appeals from a judgment entered in favor of Southern California Bank (the Bank) in its action for breach of contract. We have had some prior experience with this particular dispute: In 2002, we considered the Money Store’s appeal from a summary judgment entered in favor of the Bank. (Money Store Investment Corp. v. Southern Calif. Bank (2002)

98 Cal.App.4th 722 (Money Store).) We directed summary adjudication of two causes of action (negligence and equitable estoppel), but reversed the judgment entered in the breach of contract action after finding the existence of a triable issue of fact.

We are now asked to review the judgment entered in favor of the Bank, entered after a court trial, on the breach of contract claim. The Money Store complains the trial court (1) failed to appreciate the law of the case arising from our prior opinion, and (2) misapplied and misinterpreted the evidence presented. Finding neither contention has merit, we affirm.

I

This breach of contract action arises out of the performance of written loan escrow closing instructions in the sale of a business. The following facts are taken from the findings made in the trial court’s statement of decision and from our prior opinion (which the trial court referred to in the statement of decision as containing “[t]he salient facts”).

Background Facts

“Robert McKinley contracted with Teddy Springfield to buy Springfield’s chiropractic practice. To facilitate the purchase, Springfield and McKinley entered into escrow with the Bank. The escrow instructions the parties submitted on May 23, 1997, reflected a purchase price of $450,000. McKinley was to secure a Small Business Administration (SBA) guaranteed loan in the amount of $497,000. Of that amount

$450,000 represented the purchase price, $35,203 was designated as working capital, and $11,797 was for the SBA loan guaranty fee.” (Money Store, supra, 98 Cal.App.4th

at p. 726.)

The Money Store is an SBA preferred lender. The trial court concluded the Money Store “did virtually no investigation or ‘due diligence’ to confirm the value[]” of the business. Furthermore, the court determined, “McKinley appeared to be a poor-risk borrower.” Nevertheless, the Money Store approved a $450,000 loan on behalf of the SBA.

The escrow instructions authorized the Bank to comply with the lender’s (the Money Store’s) instructions “and to provide certified copies of escrow instructions, amendments, and other exhibits” the lender might request. The escrow was to close on or after June 25, and all net proceeds due to Springfield were to be paid to attorney Robert Johnson, who was to hold them “in his trust account pending receipt of mutually executed disbursement instructions from” McKinley and Springfield.

The day before the close of escrow, on June 24, the Money Store transmitted “closing instructions” to the Bank. “These instructions indicated $485,203 (the sale price plus working capital funds) would be wire transferred to the Bank ‘upon demand and compliance of [sic] [the Money Store’s] instructions.’” (Money Store, supra, 98 Cal.App.4th at p. 726.)

The Money Store’s “instructions directed disbursal of $450,000 to Springfield and $35,203 for working capital and indicated the Money Store would pay the loan guaranty fee directly to the SBA. The instructions directed the Bank to provide the Money Store ‘[p]rior to the close of escrow . . . with an estimated closing statement for [Money Store’s] review and approval.’ They indicated any deviation from the instructions without the Money Store’s express authorization would be at the Bank’s risk.” (Money Store, supra, 98 Cal.App.4th at p. 726.)

The Bank acknowledged receipt and acceptance of the instructions on

June 25. The same day, Springfield and McKinley submitted addendum instructions to the Bank. Under the terms of the addendum, Springfield’s net proceeds held by Johnson were apportioned as follows: (1) $6,191.91 to Dottie’s Billing Service; and

(2) $172,685.88 to McKinley. In addition, it noted Springfield was to retain “100 [percent] interest in [the] medical lien existing with the attorney for the [Tran family] accident case.”

The Money Store wired loan funds to the Bank on June 25. The same day, the Bank closed escrow. It was disputed when the Money Store was sent the addendum. The court concluded there was no credible evidence “showing the June 25, 1997 addendum . . . was sent to [t]he Money Store before close of escrow[.]”

The court also determined, “McKinley received $172,685.88 from seller Springfield after escrow on the loan closed. That sum represented [Springfield’s] purchase of the bulk of [the] accounts receivable.”

McKinley later defaulted on the loan and declared bankruptcy. The Money Store sued the Bank for breach of contract, maintaining it would not have closed the loan had it known of the change in terms. It maintains the seller received $277,314 instead of $450,000, and McKinley was not entitled to the $172,685 “kick back.” The trial court granted the Bank’s motion for summary judgment.

The First Appeal Concerning the Summary Judgment

In the prior appeal, the Bank argued summary judgment was proper on the breach of contract action because: (1) the Money Store and the Bank were not parties to a contract; (2) the Money Store reserved the right to withdraw or amend its instructions at any time; (3) there was no consideration for a contract; and (4) the Bank did not breach any contract. In short, we determined the first three contentions lacked legal merit and there existed triable issues of material fact as to the fourth. (Money Store, supra,

98 Cal.App.4th at pp. 729-730.)

Specifically, we determined the Money Store and the Bank were parties to a contract because each had “objectively exhibited mutual consent. The Money Store agreed to provide the loan funds to the Bank to facilitate the sale, which was the subject of the escrow, on condition the money would be distributed in a certain manner and the Money Store would be notified before any changes were made to the escrow instructions. The Bank acknowledged acceptance of the conditions . . . .” (Money Store, supra,

98 Cal.App.4th at p. 728.)

We rejected the Bank’s argument the contract was illusory because the Money Store “‘reserved the right to withdraw or amend [its] instructions at any time.’” (Money Store, supra, 98 Cal.App.4th at p. 728.) We relied on the rule, “An agreement that is otherwise illusory may be enforced where the promisor has rendered at least part performance.” (Ibid.) The Money Store, “cured any illusory aspect of the agreement[]” when it performed by providing the loan money necessary to complete the sale.

(Id. at p. 729.) That the Money Store supplied the money also satisfied the consideration element necessary for the contract. (Ibid.)

Finally, as to the issue of breach, we determined there existed triable issues of material fact. The Bank had asserted there was no evidence of breach because:

“(1) its duty was to disburse the funds to [a]ttorney Johnson and it complied with that duty; (2) it sent a preclosing estimated closing statement to the Money Store as the Money Store’s closing instructions required; and (3) it was not faced with conflicting instructions.” We concluded there was conflicting evidence on the first and second contentions, and accordingly, there was no need to address the third. (Money Store, supra, 98 Cal.App.4th at p. 729.) After outlining several significant factual disputes concerning breach, the matter was remanded for trial.

The Court Trial

After considering the submitted exhibits, deposition transcripts, and argument, the trial court issued a detailed statement of decision and entered judgment in favor of the Bank. In its statement of decision, the court stated, “The appellate court has determined that [the Money Store’s] closing instructions to [the Bank] constituted an enforceable contract. That finding is the law of this case. [¶] At this point – with a court trial on the breach of contract cause of action – [the Money Store] has the burden to prove by a preponderance of the evidence that (1) [the] Bank breached the contract and (2) the alleged breach proximately caused its damages. [The Money Store] has not satisfied its burden.”

The court concluded: (1) “Nothing in the [c]losing [i]nstructions can reasonably be construed as conflicting with the original and amended instructions”;

(2) “The Bank complied with the escrow instructions, as amended”; (3) “The Money Store’s [c]losing [i]nstructions were ambiguous, but [the] Bank substantially complied with the material terms”; (4) “The Bank did not breach its contract with the Money Store”; and (5) “The Bank did not cause the borrower’s default.”

The court noted, “Because . . . the Court of Appeal decision has created law for this case, the court makes these additional observations. [¶] The Court of Appeal wrote, ‘A fair interpretation of the Money Store’s instructions is it wanted the ability to determine before the close of escrow whether funds were being disbursed as its instructions required and to be able to prevent the disbursement of funds if they were not. To the extent the instructions may be read otherwise, they are at least ambiguous.’ [Citation.] Uncontroverted evidence concerning both the Money Store’s general loan processing practices and specific procedures in this case does not support the interpretation urged by its attorneys. In any event, the funds were disbursed as its instructions required. The gross loan proceeds for the sale of the business were credited to the seller, who instructed escrow to make a number of payments before issuing a check for the net proceeds payable to his personal attorney’s trust account. The Bank then documented the seller’s further instructions that two separate payments were to be made from the attorney’s trust account, one to Dottie, Dr. Springfield’s bookkeeper/collections person, and one to the borrower.”

Furthermore, the trial court concluded, “No evidence supports a finding that attorney Johnson was the Bank’s agent. Uncontroverted evidence establishes that attorney Johnson was the seller’s agent only. When the Bank complied with . . . Springfield’s directive – memorialized in the original escrow instruction – to issue his net proceeds in a check payable to his personal attorney’s trust account, it did not violate any directive in the Money Store’s [c]losing [i]nstructions. There were not ‘conflicting demands,’ nor a ‘conditional delivery’ or ‘sub-agency.’ Per [t]he Money Store’s own employees, the net proceeds were . . . Springfield’s to do with as he pleased.”

The court focused on the testimony of three witnesses. First was the loan underwriter, Kathleen Todd. The court determined, “Todd’s testimony that she ‘probably would have restructured the loan’ [citation to Todd’s deposition] if she knew the borrower would be able to quickly raise a substantial amount of cash by selling a portion of the account’s receivable is rejected as too speculative. Todd’s testimony that [t]he Money Store was more interested in the borrower’s ability to convert those receivables into cash and ‘applying it back into the business’ was the key. [Citation to Todd’s deposition.]” Indeed, “the borrower’s quick conversion of a large percentage of paper asset (account’s receivable) of the business into cash ‘[could] be a good thing’ in underwriter Todd’s view, who agreed there was nothing bad about it. [Citation to Todd’s deposition.]”

The second witness was a loan processing manager/assistant vice president for loan processing, Bonnie Nichols. Although she did not remember the McKinley loan, she nevertheless “was able to describe [t]he Money Store’s procedures generally as follows: ‘when the loan came into our department, it was approved by the Credit Department. I assigned it to a loan processor [in this case Tami Hughes]. She started processing the file, to ultimately get to closing. Once the loan closed, it was out of our department within ten days, and it was sent up to servicing. That was the end of our involvement.’”

The third Money Store witness was Hughes. She agreed with Nichols the estimated closing statement was necessary for the loan review that always took place before closing. Based on this testimony, the trial court concluded, “The Money Store had the estimated closing statement and determined [the] Bank, was the escrow, was in compliance with its [c]losing [i]nstructions before it wired the loan funds.” The court reasoned, “The loan processor could not recall receiving specific escrow instructions before closing, only the estimated closing statement; but that was standard procedure at [t]he Money Store. [Citation to Hughes’s deposition.] In any event, [t]he Money Store typically received only the borrower’s closing statement, not the seller’s. [Citation to Hughes’s deposition.] And only the seller’s closing statement contained information concerning Springfield’s payment of a portion of his net proceeds to McKinley.”

Based on the above testimony, the court surmised, “No one from [t]he Money Store who was involved in this loan and was deposed had any inkling there was something amiss concerning distribution of the loan proceeds until she spoke with an attorney more than a year later. This makes sense because all witnesses for [t]he Money Store testified [the Money Store] had no interest in how the buyer and seller allocated the values. [Citation to Todd’s deposition.]”

The court did “not find any credible evidence to support a conclusion that the June 25, 1997 addendum . . . was sent to [t]he Money Store before the close of escrow,” but also concluded “[t]here was no reason to send the addendum to [t]he Money Store before the close of escrow; [t]he Money Store typically did not receive any escrow documents, except the estimated closing statement, before the close of escrow. [¶] Most significantly, the addendum did not include any instructions for the escrow itself. It merely recited that seller himself is to pay from his net proceeds a specific sum to his bookkeeper (Dottie) and to the buyer/borrower. The addendum involved disposition of a portion of the seller’s proceeds after the close of escrow, and the evidence is uncontroverted that [t]he Money Store had no interest in what the seller did with his proceeds. [Citation to Hughes deposition.] [¶] . . . [A]nd the court finds no evidence supports the characterization by [t]he Money Store’s counsel of the sale of accounts receivable as a ‘kick back.’”

As for the closing instructions, the court determined that “at best” they were ambiguous. It explained, “Including the name ‘Dr. Teddy Springfield’ under the words ‘Business Purchase’ in the June 24, 1997 [c]losing [i]nstructions was not a directive to deliver the entire purchase price, lump-sum, to the seller. The Springfield name was synonymous with the business the borrower was purchasing, as Dr. Springfield operated his clinic as a sole proprietorship. Support for the court’s conclusion that the Springfield name in item 2 refers to the business is found in the failure of the [c]losing [i]nstructions to include Dr. McKinley’s name under the words ‘Working Capital.’ The [c]losing [i]nstructions did not specify what type of closing statement was to be forwarded, and [t]he Money Store witnesses agreed [the Money Store] only received the buyer’s statement, which would not have referenced items concerning deposition of the loan proceeds due the seller.”

The court rejected the Money Store’s contention it was surprised when Springfield received “considerably less than the sales price” from escrow. It stated, “that from the time escrow opened, it was clear . . . Springfield intended to, and in fact did, satisfy numerous financial obligations from the sum he received for the sale of his practice. A variety of those obligations were satisfied through the escrow: the $50,000 he owed his wife’s attorney, the arrearages on his office rent; and the $25,000 commission to the broker who arranged the sale. He was also responsible for various escrow fees payable to [McKinley], as well as a loan fee to [the Money Store]. [Citation.] These payments ‘off the top’ of the sales price were reflected in several documents. [¶] Moreover, in recognition of his existing debts, the original signed escrow instructions (dated May 23, 1997) included paragraph 14, entitled ‘NET PROCEEDS,’ which explained how escrow was to handle the balance due the seller after other sums were deducted: [¶] ‘After the close of escrow . . . all net proceeds . . . are to be paid to the order of [attorney Johnson] . . . and held in his trust account pending receipt of mutually executed disbursement instructions from [s]eller and [b]uyer.’ (Emphasis added.) [Citation.]” (Original indentation not retained.)

Finally, the court concluded there was no causal link between the Bank’s conduct and the Money Store’s “losses (if any).” It stated, “Any losses were the result of borrower’s default, and there is ample evidence before this court which demonstrates that borrower McKinley was a poor credit risk. No evidence supports [the Money Store’s] arguments that it would have declined to fund the loan had it known the seller would immediately buy back the accounts receivable. Nothing in the [c]losing [i]nstructions obligated [the] Bank to notify [t]he Money Store of the post-escrow sale of the accounts receivable, nor would [t]he Money Store’s procedures result in its learning of the post-escrow sale of the accounts receivable. . . . The Money Store clearly anticipated that the accounts receivable, which contributed considerably to the value of the business on paper, would be quickly converted to cash. [Citation.] There is evidence that seller had a longstanding relationship with his bookkeeper/billings and collection person (Dottie) and a reasonable inference from that relationship is that it made sense for the seller to buy back the risk of collecting the practice’s receivables. It is not a reasonable inference from the evidence before this court that the unexpected, early infusion of cash into borrower’s practice precipitated his default on the loan.”

II

Discussion

A. Law of the Case

The Money Store contends the trial court violated the law of the case doctrine. “As stated by Witkin, ‘[T]he doctrine of “law of the case” deals with the effect of the first appellate decision on the subsequent retrial or appeal: The decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.’ [Citations.] But, the ‘discussion or determination of a point not necessary to the disposition of a question that is decisive of the appeal is generally recorded as obiter dictum and not as the law of the case.’ [Citation.] ‘It is fundamental that the point relied upon as law of the case must have been necessarily involved in the case.’ [Citations.]” (Gyerman v. United States Lines Co. (1972) 7 Cal.3d 488, 498, italics omitted.)

In the first appeal, the Money Store successfully challenged a summary judgment motion. In reversing the judgment on the breach of contract action, it was only necessary for this court to find the existence of a triable issue of material fact on the issue of breach. Although we discussed some circumstances in which “arguably” the Bank may have breached its agreement with the Money Store, we never suggested the Bank breached the contract as a matter of law in any factual scenario. To the contrary, we repeatedly stated the issue of breach was for the trier of fact on retrial. Indeed, in a footnote we alerted the reader, “We say ‘arguably’ [in the opinion] because we do not purport to make such a finding as a matter of law. We merely conclude there is evidence on which such a finding could be based.” (Money Store, supra, 98 Cal.App.4th at p. 729, fn. 4.) It is difficult to imagine how we could have been any clearer.

Nevertheless, the Money Store focuses on snippets of the opinion in which we highlight facts which may establish a breach. The Money Store argues those facts have been proven and the law of the case mandates a finding of breach. For example, in our discussion of why the Money Store could not maintain a negligence action we noted Money Store’s “contract specified what the Bank was to do. McKinley and Springfield authorized the Bank to comply with those directives. The Money Store’s instructions were at least consistent with McKinley’s and Springfield’s original instructions. When the Bank received the addendum, which changed the deal and expressly varied from the Money Store’s instructions, the Bank apparently complied with the addendum without providing the Money Store with an opportunity to object. [¶] Under these circumstances, the Bank’s action – if true as alleged – was morally blameworthy.” (Money Store, supra, 98 Cal.App.4th at p. 731.)

Now the Money Store argues that because the trial court determined the Bank’s action was “true as alleged,” a finding of breach is mandatory. Not so fast. As we explained in our prior opinion, when reviewing a summary judgment motion we were required to construe the facts “in a light most favorable to the party against whom judgment was entered” i.e., in favor of the Money Store. (Money Store, supra,

98 Cal.App.4th at p. 727.) Moreover, in our discussion of the breach of contract action we acknowledged the Money Store’s interpretation of the contract may be a “fair interpretation,” but “[t]o the extent the instructions may be read otherwise, they are at least ambiguous, and the parties disagree over the correct interpretation and the evidence surrounding it. Under the circumstances, summary judgment is improper.”

(Id. at p. 730.)

Indeed, as it turns out, the trial court determined the closing instructions were ambiguous. It considered extrinsic evidence before interpreting the provisions at issue. (See Winet v. Price (1992) 4 Cal.App.4th 1159, 1165 [steps courts undertake to interpret ambiguous contract provisions].) The court concluded the evidence “does not support the interpretation urged by [the Money Store’s] attorneys,” and “the funds were dispersed as [the Money Store’s] instructions required.” Based on the Money Store’s loan processing practices, the court concluded the addendum did not “change the deal.” It reasoned the addendum concerned only distribution of the seller’s proceeds and there was no reason to send the addendum to the Money Store before the close of escrow because the “evidence is uncontroverted that [t]he Money Store had no interest in what the seller did with his proceeds.” Our discussion, giving the Money Store the benefit of its contrary interpretation of the contract, serves only as dictum and cannot be used as law of the case.^[1]

B. Our Standard of Review of the Judgment

Before entering judgment in this case, the trial court first determined the contract was ambiguous. It then considered extrinsic evidence to interpret the salient provisions. The court rejected the interpretation offered by the Money Store and, after considering the evidence, concluded the Money Store had failed to satisfy its burden of proving the contract was breached.

Our standard of review in cases such as this one is well settled. “The threshold issue of whether to admit the extrinsic evidence—that is, whether the contract is reasonably susceptible to the interpretation urged—is a question of law subject to de novo review. [Citations.] [¶] The ultimate construction placed on the contract might call for different standards of review. When no extrinsic evidence is introduced, or when the competent extrinsic evidence is not in conflict, the appellate court independently construes the contract. [Citations] When the competent extrinsic evidence is in conflict, and thus requires resolution of credibility issues, any reasonable construction will be upheld if it is supported by substantial evidence. [Citations.]” (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003)

109 Cal.App.4th 944, 955-956.)

The Money Store does not dispute the contract was ambiguous, and it does not criticize the court’s decision to admit extrinsic evidence. However, the Money Store is under the impression the relevant evidence was undisputed and therefore our review of the ultimate construction of the contract is de novo. We disagree.

The record shows the parties agreed to try the case based on submitted deposition transcripts and exhibits, but never on stipulated facts. This was to be expected since we remanded the case (and reversed summary judgment) after finding the existence of triable issues of material fact. And, as evidenced by the statement of decision, the trial court resolved several significant factual disputes and resolved credibility issues.

There were a variety of factual disputes, ranging from small discrepancies such as when the addendum was sent to the Money Store, to larger matters such as the Money Store’s customary business practices and overall expectations in making the deal. In resolving these disputes, the court evaluated, inter alia, the submitted deposition testimony. Although the court did not have the benefit of seeing the witnesses’ demeanor as they testified, the record shows the court read the transcripts and determined what comments were logical and what opinions were supported by facts. For example, the court “rejected as too speculative” portions of the Money Store’s loan underwriter’s testimony. But the court also cited to other testimony it found credible, and included quoted statements from those witnesses in the statement of decision.

In light of the disputed facts and credibility issues, we cannot independently construe the escrow provisions. Any reasonable construction will be upheld if it is supported by substantial evidence.

C. The Issues on Appeal

The Money Store asserts the Bank breached the contract due to various omissions and actions taken in light of conflicting escrow instructions, including the manner in which it distributed the sale proceeds. But because the Money Store was under the mistaken impression this court would independently interpret the documents at issue, it offered no argument on whether there was sufficient evidence to support the court’s construction of the instructions and subsequent finding of no conflict between the subject provisions. And although the Bank warned the Money Store that it was applying the wrong standard of review, the Money Store steadfastly held onto its belief (and corresponding arguments) this court’s review was de novo. This was an unfortunate tactical decision.

The trial court’s construction of the instructions will not be disturbed if it is reasonable and supported by substantial evidence. Our limited standard of review is well settled: “[W]e are bound by the ‘elementary, but often over-looked principle of law, that . . . the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted,’ to support the findings below. [Citation.] We must therefore view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor in accordance with the standard of review so long adhered to by this court. [Citations.]” (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.)

The court’s ruling is presumed to be correct and the “burden of demonstrating error rests on the appellant.” (See Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 631-632.) To the extent the Money Store disagrees with the trial court’s interpretation of the escrow instructions, on appeal it failed to offer reasoned argument or authority explaining why it believes the court got it wrong. It does not suggest the evidence is insufficient, or that the court relied on improper evidence in making its ruling. An appellant may not simply infer the trial court made a mistake and leave it to the appellate court to figure out why. In such cases, “we treat the point as waived.” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785; see also Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979.)

The Money Store expends a great deal of effort setting forth legal authority and analysis of what should happen when an escrow company is faced with conflicting provisions. Argument VIII asserts the Bank should not have accepted the addendum “because it contradicted the matching instructions previously received in escrow.” (Italics added.) Argument IX recites much case authority holding an escrow holder breaches its fiduciary duty if it fails to “delay payment until resolution of conflicting instructions.” (Italics added.) Argument XIV claims the bank was in breach for failing to comply with contract provisions “regarding receipt of ‘conflicting demands.’” (Italics added.) Argument XV maintains the Bank should have sought clarification of the instructions before distributing the loan funds. Nowhere in these lengthy arguments (or anywhere else in briefs) does the Money Store directly challenge the trial court’s interpretation of the relevant documents or its ultimate finding of no conflict. The court’s ruling is presumed to be correct, and therefore, the Money Store’s legal discussion and argument premised on the finding of conflicting provisions is meritless.

Similarly, the Money Store presents an interesting and lengthy legal discussion of an escrow holder’s duties and liability when utilizing a sub-agent or

sub-escrow (arguments XI, XII, XIII). These arguments assume this court would agree with the Money Store’s premise attorney Johnson was acting as the Bank’s agent or as a sub-escrow. There is no mention of the trial court’s contrary finding or its conclusion, “Uncontroverted evidence establishes that attorney Johnson was the seller’s agent only.” Again, the Money Store has given us no reason to doubt the court’s finding of fact which serves as the basis of its legal conclusions. Accordingly, any legal arguments seeking reversal based on the faulty premise there existed an agency, sub-agency, or sub-escrow are meritless.

We also reject the Money Store’s argument the Bank was in breach for failure to comply with paragraph five of the escrow instructions. That provision stated the Money Store was “to be provided with an estimated closing statement for [its] review and approval[]” before the close of escrow. The Money Store asserts the closing statement it received from the Bank was untimely and inaccurate because it did not reflect the seller’s allocation of $172,684 from his proceeds to McKinley. It claims the Bank submitted a “corrected” statement several days after escrow closed, which the Money Store asserts is a “conclusive admission that its [prior] closing statement transmitted late . . . contained false and incorrect information.” The post-escrow statement delineated the seller’s allocation of the sale proceeds, which included the $172,684 transfer to McKinley.

Sounds good, but for the trial court’s interpretation of the closing instructions to the contrary. It determined the Bank had substantially complied with paragraph five when it submitted the estimated buyer’s closing statement before the close of escrow as there was “no reason to send the addendum.” The court reasoned: (1) the information in the addendum did not include any instructions for the escrow itself; and (2) it concerned disposition of a portion of the seller’s proceeds, and “the evidence is uncontroverted that [t]he Money Store had no interest in what the seller did with his proceeds.” The court found no evidence of an illegal kick back, but concluded the addendum reflected a post-escrow sale of the business’ accounts receivable. Its interpretation of the ambiguous provisions, based on its evaluation of the submitted extrinsic evidence, is presumed correct. The Money Store’s legal argument, based on a contrary interpretation, is not relevant given our limited scope of review.

Finally, we briefly touch upon the remaining two sections of the appeal (VI and VII). In argument VI, the Money Store provides general boilerplate law regarding breach of contract liability in the context of an escrow. It discusses case authority, statutory provisions, and legal treatises, which all agree an escrow holder can be liable for failing to carry out an escrow instruction or for violating an escrow condition. It serves as a preamble to the other arguments raised in more detail later on in the brief. We have no reason to comment upon section VI because the legal analysis (while interesting to read) is inapt. Under the trial court interpretation of the escrow instructions, which was not directly challenged on appeal, the Money Store has failed to establish a breach.

In argument VII, the Money Store asserts the trial court improperly speculated about the Money Store’s future loan practices and about the cause of the Money Store’s damages. It maintains such improper speculation amounted to prejudicial error. We disagree. In making its ruling, the court primarily focused on the Money Store’s failure to establish the essential element of breach. As the Money Store aptly recognized within argument VII, the speculative statements regarding damages and future loan practices were “irrelevant” and had no bearing on the element of breach. Accordingly, the court’s comments about these collateral matters could not have caused any prejudice. The Money Store fails to suggest how the outcome would have been any different if the court had not spoken of matters unrelated to the issue of breach.

III

Disposition

The judgment is affirmed. The Respondent shall recover its costs on appeal.

O’LEARY, J.

WE CONCUR:

RYLAARSDAM, ACTING P. J.

IKOLA, J.

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^[1] For similar reasons, we reject the Money Store’s reliance on other portions of our prior opinion for law of the case. We recognize that we offered several different factual scenarios we thought might indicate a breach when viewing the facts in a light most favorable to the Money Store. But, all the fact patterns were premised on a contract interpretation endorsed by the Money Store. Since the trial court has rejected this interpretation, our discussion of potential breaches obviously cannot be viewed as law of the case.