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Full Opinion
EILEEN A. RODDENBERRY, Plaintiff and Appellant,
v.
MAJEL RODDENBERRY, as Executor, etc., et al., Defendants and Appellants.
Court of Appeals of California, Second District, Division Two.
*640 COUNSEL
Greenberg, Glusker, Fields, Claman & Machtinger, Michael A. Greene, Brian Edwards, Greines, Martin Stein & Richland, Kent L. Richland and Barbara W. Ravitz for Defendants and Appellants.
Jones, Day, Reavis & Pogue, Elwood Lui, Thomas M. McMahon and Laura A. Matz for Plaintiff and Appellant.
OPINION
ZEBROWSKI, J.
The meaning of a term used in a contract is sometimes so obvious to the contracting parties that neither side sees any need for an express definition. Later, after circumstances have changed and new financial incentives have arisen, one side may wish it had a different agreement. Remanufactured memories and new advice then combine to ascribe an updated and previously uncontemplated meaning to the term. This is such a case.
The plaintiff is Eileen A. Roddenberry (the first Mrs. Roddenberry). Until his death shortly before trial, the primary defendant was her former husband, Gene Roddenberry. Gene Roddenberry created the Star Trek television series, movies, animations, and other Star Trek properties. Majel Roddenberry (the second Mrs. Roddenberry) is now a defendant in her capacity as an executor of Gene Roddenberry's estate. Gene Roddenberry's loan-out corporation "Norway" is also a defendant.
The case presents two issues. A rough summary of the first issue is whether certain profits generated by Star Trek projects created after Gene Roddenberry and the first Mrs. Roddenberry divorced (while Gene Roddenberry was married to the second Mrs. Roddenberry) belong to the second Mrs. Roddenberry and Gene Roddenberry's estate, or to the first Mrs. Roddenberry. The second issue is whether punitive damages for fraud were properly awarded against Norway after Gene Roddenberry's death.
FACTUAL SUMMARY
The original Star Trek television series.
In the 1960's, during his marriage to the first Mrs. Roddenberry, Gene Roddenberry developed a television series entitled Star Trek. Star Trek (hereafter Star Trek 1) appeared on NBC for three seasons, from 1966 to 1969.
*641 By the time Gene Roddenberry and the first Mrs. Roddenberry divorced in 1969, Star Trek 1 had rated third in its time slot for each of its three seasons, had amassed a multimillion-dollar production deficit, was considered a commercial failure, and had been cancelled by NBC. Efforts were underway to syndicate Star Trek 1 for rerun on local television stations. Norway's contract with the Star Trek 1 production company provided that Norway was entitled to several types of income from syndications, including a set payment per rerun and "profit participation" payments if reruns ever yielded profits according to the contractual formula.[1]
The divorce settlement agreement and judgment.
In mid-1969, Gene Roddenberry and the first Mrs. Roddenberry agreed to a divorce settlement covering the typical numerous issues and resulting from the typical numerous trade-offs. Among the many community assets distributed was Norway, which held the rerun payment and profit participation rights in "Star Trek." Norway also owned a copyright interest in Star Trek.[2] The settlement agreement allocated Norway to Gene Roddenberry; the first Mrs. Roddenberry received other marital property. The settlement agreement thus allocated to Gene Roddenberry all the previous community property rights in Star Trek, including the marital copyright interests, with only one exception: The first Mrs. Roddenberry was allocated a "one-half interest in all future profit participation income from `Star Trek' to which [the first Mrs. Roddenberry] and/or [Gene Roddenberry] are entitled."[3]
The agreement was handwritten (mostly by the first Mrs. Roddenberry's attorney), read into the court record (by the first Mrs. Roddenberry's attorney), and entered as a judgment in 1969. The judgment provided that subject to its provisions, "all future income of each party is that party's separate property." Thus except for whatever was included in the category of "profit participation income from Star Trek," the first Mrs. Roddenberry had bargained away all property interests she might have had in Gene Roddenberry's postdivorce income.[4]
*642 The terms "profit participation" and "Star Trek" used in the 1969 settlement agreement and resulting judgment were not expressly defined. The current dispute was possible because of this lack of express definition.
Postdivorce Star Trek projects.
After these events, Gene Roddenberry devoted the remaining 21 years of his life to various Star Trek projects. He married the second Mrs. Roddenberry within days of his divorce and remained married to her until his death in 1991. The second Mrs. Roddenberry assisted in his postdivorce Star Trek efforts.
These postdivorce efforts gradually bore fruit. From 1973 to 1975, a Star Trek animation series was broadcast on NBC. It won an Emmy and was rerun in syndication. In 1979, STAR TREK: THE MOTION PICTURE (Paramount Pictures) was released. Five sequels followed. A new Star Trek television series, Star Trek: The Next Generation (hereafter Star Trek 2) appeared in 1987. Additional projects included television specials, merchandising, music, etc. In January 1993, after Gene Roddenberry's death, a spin-off television series entitled Star Trek: Deep Space Nine (hereafter Star Trek 3) began.
Star Trek 1 goes into profits, suit is filed.
By 1984, 15 years after its cancellation as a financial failure, Star Trek 1 had recouped its production deficit, and Norway began to receive "profit participation" payments. Norway began making payments to the first Mrs. Roddenberry.
Near the end of 1987, the first Mrs. Roddenberry filed suit claiming correctly, it was later determined to have been shorted. Initially, she claimed only half of Norway's profit participation in Star Trek 1. Later, she expanded her claim to half of all income from all of Gene Roddenberry's postdivorce Star Trek efforts.[5] She also sued Norway and Gene Roddenberry for fraud in connection with Norway's handling of payments to her.
THE TRIAL COURT JUDGMENT
After trial in part to the court and in part to a jury, and subject to adjustments and qualifications not necessary to detail here, the trial court entered a multipart judgment.
*643 The Star Trek 1 "profit participation" interest.
The trial court found that the first Mrs. Roddenberry was entitled to half the profit participation payments from Star Trek 1. Offsets claimed by Norway and the estate were disallowed. (This portion of the judgment has not been appealed, and would be affirmed in any event.)[6]
The fraud claim.
The trial court also entered judgment on a jury verdict against Norway for $900,000 in punitive damages for fraud in Norway's handling of profit participation payments to the first Mrs. Roddenberry.
The postdivorce Star Trek projects.
On the first Mrs. Roddenberry's claim to half of all income generated by Gene Roddenberry's postdivorce Star Trek projects, the trial court rendered a split and inconsistent decision.
Preliminarily, the trial court simply ignored the first Mrs. Roddenberry's testimony that she was entitled to half of all postdivorce Star Trek income. This testimony was contrary to the express language of the settlement agreement and resulting judgment, and was inconsistent with all other evidence. The trial court properly ignored it and focused on the issue of profit participation.
In evaluating the profit participation issue, the trial court identified six categories of Star Trek projects, five of which (all except Star Trek 1) postdated the 1969 divorce: (1) Star Trek 1, (2) the Star Trek animations in 1973 through 1975, (3) the six motion pictures from 1979 to 1991, (4) the Star Trek 2 television series beginning in 1987, (5) the Star Trek 3 television series beginning in 1993, and (6) various merchandising ventures on an ongoing basis.
With regard to the postdivorce projects designated as (2) the Star Trek animations, (3) the six Star Trek movies, and (6) the merchandising ventures, the trial court employed a traditional contractual intent analysis. Based on this analysis, the trial court found no contractual intent that the first Mrs. Roddenberry would receive any profits generated by these postdivorce projects. As to animations, movies and merchandising, judgment was therefore for defendants.
*644 With regard to Star Trek 2 and 3, the trial court employed a markedly different analysis. Instead of applying the same traditional contractual intent analysis which resulted in a defense verdict on animations, movies and merchandising, the court instead inquired whether Star Trek 2 and 3 were "continuations" of Star Trek 1. Finding that both Star Trek 2 and 3 were "continuations" of Star Trek 1, the trial court awarded the first Mrs. Roddenberry half the profits from Star Trek 2 and 3.[7]
THIS APPEAL
The first Mrs. Roddenberry appeals the ruling that she is not entitled to profits from the animations, movies, and merchandising, on the grounds that this ruling is not supported by substantial evidence.
Norway and the estate appeal the award of half the Star Trek 2 and 3 profits to the first Mrs. Roddenberry on the grounds that this award is not supported by substantial evidence. Norway also appeals the punitive damage award on several grounds.
DISPOSITION ON APPEAL
That part of the judgment which denies the first Mrs. Roddenberry profits from the postdivorce animations, movies and merchandising is affirmed. That part of the judgment which awards the first Mrs. Roddenberry $900,000 in punitive damages against Norway for fraud is also affirmed. That part of the judgment which awards the first Mrs. Roddenberry profits from Star Trek 2 and 3 is reversed.
THE EVIDENCE AND CONTENTIONS REGARDING CONTRACT INTERPRETATION
Phase I of the trial was a declaratory relief phase supposedly limited to determining the meaning of "profit participation income from Star Trek." Subsequent phases concerned accounting and damage issues and the fraud claim. The evidence and contentions relevant to the phase I contract interpretation issue are summarized next below. Phase I alone consumed 15 days *645 and the record is hence voluminous. However, the evidence ranged far afield and is more notable for its bulk than its relevance. The irrelevant evidence and contentions are noted where necessary.[8]
The contentions regarding the meaning of "profit participation income from Star Trek" in the settlement agreement and judgment.
Norway and the estate contended first that the term "profit participation" as used in the settlement agreement referred to the "Profit Participation" section of Norway's contract with the Star Trek 1 production company. Second, they contended that the term "Star Trek" as used in the 1969 settlement agreement and judgment referred to the only "Star Trek" property then in existence, contemplated, or discussed during the settlement negotiations, Star Trek 1. The first Mrs. Roddenberry contended that the settlement agreement entitled her to half the profits from all Star Trek projects, including those developed by Gene Roddenberry postdivorce while he was married to the second Mrs. Roddenberry.[9]
In the abstract, the language in the settlement agreement is reasonably susceptible to either meaning. The trial court therefore correctly received parol evidence. (Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37 [69 Cal. Rptr. 561, 442 P.2d 641]; Appleton v. Waessil (1994) 27 Cal. App.4th 551, 554-555 [32 Cal. Rptr.2d 676]. See generally, Wegner et al., Cal. Practice Guide: Civil Trials and Evidence 2 (The Rutter Group 1995) ¶ 8:3102 et seq., and cases there cited.)
Categories of phase I evidence.
The phase I evidence fell roughly into three categories. The first and largest category was evidence regarding events long after the divorce: Gene Roddenberry's postdivorce Star Trek efforts, his postdivorce Star Trek contracts, Norway's fraudulent handling of Star Trek 1 profit participation payments, various entertainment industry accounting practices, etc. Most of this evidence had no relevance to the question of what the parties intended by the language used in their 1969 settlement agreement and judgment, and *646 it is unclear why much of this evidence was admitted in phase I.[10] (See Cedars-Sinai Medical Center v. State Bd. of Equalization (1984) 162 Cal. App.3d 1182, 1187 [208 Cal. Rptr. 837] [intention at time of contracting is paramount]; Thomas v. Buttress & McClellan, Inc. (1956) 141 Cal. App.2d 812, 816 [297 P.2d 768] [contractual intent is to be ascertained as of the time the contract was made; subsequent unforeseen events do not control determination of intent]; Civ. Code, § 1636 [contract must be interpreted to give effect to mutual intention of the parties as it existed at the time of contracting].)
The second largest category of evidence presented in phase I identified possible forms of exploitation of a story idea in the entertainment industry. This evidence defined the universe of meanings to which the term "Star Trek" is susceptible. Within the broadest conceivable universe was the meaning advanced by the first Mrs. Roddenberry: everything. (1) It was because the term "Star Trek" was susceptible to so broad an interpretation, as well as to the more limited interpretation advanced by defendants, that parol evidence was properly received to determine the meaning actually intended by the parties.
Evidence identifying a range of possible meanings merely identifies possibilities. Such evidence is inherently incapable of proving which meaning was actually intended. If evidence is presented that one meaning was actually intended, the mere existence of a contrary linguistic possibility does not constitute substantial evidence supporting the contrary choice. A theoretical possibility is not the equivalent of substantial evidence.[11] Showing the theoretical possibility is merely a prerequisite to the admission of parol evidence. A theoretical meaning unsupported by evidence cannot be arbitrarily preferred over an alternative meaning which is supported simply because the theoretical meaning is within the abstract universe of linguistic possibility. Hence the determination of contractual intent depended upon the third category of evidence: evidence bearing directly on what the parties actually intended.
The circumstances at the time of contract.
At the time of contract in 1969, the only "Star Trek" property in existence was Star Trek 1. By the time it was cancelled shortly before the settlement *647 negotiations, it had amassed a production deficit of $3 million.[12] No further Star Trek projects were in development or contemplated.
The negotiation of the settlement agreement.
Gene Roddenberry would not agree to allow the first Mrs. Roddenberry to share in his postdivorce income except by way of alimony. The first Mrs. Roddenberry would not part with certain items of marital property. The negotiations therefore considered various scenarios, and one asset ultimately allocated to Gene Roddenberry was Norway. The first Mrs. Roddenberry received only the half-interest in profit participation from Star Trek.
In a handwritten proposal by the first Mrs. Roddenberry's attorney, Jerry Edelman, early in the negotiations, he proposed that the first Mrs. Roddenberry be allocated "any income directly or indirectly generated by `STAR TREK', whether in the form of royalties, rerun fees, profit participation, or otherwise." Gene Roddenberry would not agree, and the allocation to the first Mrs. Roddenberry was limited by negotiation to the "profit participation" item only. Both sides had copies of Norway's contract with the Star Trek 1 production company in which "Profit Participation" was a specific category of revenue.
During their negotiations, the parties regularly defined the profit participation interest as a 30 percent interest. When Attorney Edelman read the parties' settlement agreement into the record, Mr. Edelman referred to the first Mrs. Roddenberry's share of the profit participation income from Star Trek as "one-half of 30 percent - 15 percent." Thirty percent was the figure both sides believed to be Norway's profit participation interest in Star Trek 1 syndications. Later, because of doubt about the precise percentage figure (which was subject to calculation because of competing interests) the 30 percent figure was not included in the judgment.[13]
The evidence thus showed, and the trial court found, that in their negotiations the parties specifically discussed only profit participation in Star Trek 1. There was no evidence that the parties discussed any postdivorce Star Trek project, or any Star Trek project other than Star Trek 1.
The Edelman declaration.
Except for the profit participation item, the first Mrs. Roddenberry had traded away all her marital interest in Star Trek income. Nevertheless, when *648 Gene Roddenberry began receiving rerun payments in 1970, she contended that she was entitled to half. As part of her effort to extract half the rerun payments, she filed the declaration of her former attorney Edelman with the court in early 1970.
Mr. Edelman declared that he had personally "negotiated almost continuously" in the judge's chambers, the corridor, and the cafeteria of the courthouse for three days in 1969 with the representatives of Gene Roddenberry. Attorney Edelman declared that "[i]t was my intention, and the intention of [Gene Roddenberry's representatives] that [the first Mrs. Roddenberry] participate in one-half (1/2) of all of the income from Star Trek, so long as that income was earned on account of services already performed as distinguished from income for services to be performed, in which [the first Mrs. Roddenberry] was not to participate. It was my intention, and I am informed and believe the intention of [Gene Roddenberry's counsel and advisers] that the language we used in the Stipulation, which language was later incorporated in the Interlocutory Decree of Divorce, would accomplish an even division of income from Star Trek, attributable to past services." (Italics added.) Mr. Edelman therefore claimed that the first Mrs. Roddenberry was entitled to half the rerun payments. He declared that he had prepared his declaration at the request of new counsel and understood that it would be used in an effort to obtain a new trial.
The new trial motion was denied in early 1970. The minute order does not state reasons, but the settlement agreement was negotiated partly in the judge's chambers and presumably at least partly in the judge's presence. The evidence in this action shows that the first Mrs. Roddenberry had initially demanded an interest in rerun payments, but later had bargained away that item in the course of the settlement negotiations.
At trial, the first Mrs. Roddenberry was asked this about Mr. Edelman's 1970 declaration: "Is it your belief or contention that Mr. Edelman was being untruthful when he made this statement?" She answered: "Mr. Edelman was not untruthful." The evidence was thus uncontradicted that the first Mrs. Roddenberry had no contractual right to income generated by services performed after the divorce. Her case was thus dependent upon proving that the income share she claimed was generated by services performed before the divorce.
Mr. Edelman himself testified, but could recall nothing of significance regarding the events over 20 years before.
The first Mrs. Roddenberry's testimony.
The first Mrs. Roddenberry claimed to have been unaware of the Star Trek animations, movies, and merchandising until the litigation. The evidence *649 was strongly against her claim of unawareness, and the trial court found that she was aware of these developments as they occurred. Nevertheless, she did not claim a share of income from the postdivorce Star Trek projects until many years after the divorce, and then only as an addition to a lawsuit initially seeking only profits from Star Trek 1.
The first Mrs. Roddenberry testified that she was present in the courthouse during the entire three days in 1969 on which the settlement agreement was negotiated, but did not directly participate in the negotiations. Instead, the negotiations were conducted by attorney Edelman and Gene Roddenberry's advisers outside her immediate presence. She did not read the stipulation handwritten by Mr. Edelman before Mr. Edelman read it into the court record. She did not remember any of the terms and conditions which he read to the court. Her testimony demonstrated continuing unfamiliarity with the terms of the settlement agreement and resulting judgment.
She nevertheless claimed half of all of Gene Roddenberry's postdivorce Star Trek income, including income from postdivorce rendition of personal services (expressly excluded by the judgment), rerun royalties (the same argument rejected on the new trial motion in 1970), and all other Star Trek income of every kind.[14] It was the type of baseless demand that would cause all prudent observers to check for their wallet. Her testimony was more in the genre of wishful thinking than factual testimony based on personal knowledge. The trial court ignored or rejected most of her testimony.
The uniqueness of Star Trek's resurgence.
The evidence was uncontradicted that Star Trek's postdivorce resurgence was unprecedented in entertainment industry history. Never before had a financially failed television series enjoyed such subsequent popularity, attracted subsequent investment, and inspired subsequent ventures.
Even though the first Mrs. Roddenberry was unfamiliar with the terms of the settlement agreement, she claimed to have anticipated the postdivorce Star Trek projects and their unprecedented success, and to have intended to obtain an interest in them via the settlement agreement, with which she was unfamiliar.
The judicial admissions.
In the first Mrs. Roddenberry's first amended complaint filed in 1990 (only two years before trial), her claim to "profit participation" from "Star *650 Trek" was defined as "all profits and income that might thereafter be generated from Gene [Roddenberry's] and [the first Mrs. Roddenberry's] community property interest in `Star Trek' as it existed under the Contracts at the time of the Judgment."[15] (Italics added.) The claims advanced at trial, by contrast, went far beyond a claim to an interest in Star Trek as it existed at the time of the divorce.[16]
The first amended complaint also contained 14 references to the first Mrs. Roddenberry's interest as a 15 percent profit participation interest, clear references to half of the 30 percent profit participation percentage the parties originally believed payable pursuant to Norway's contract with the Star Trek 1 production company. (Cf. Magnolia Square Homeowners Assn. v. Safeco Ins. Co. (1990) 221 Cal. App.3d 1049 [271 Cal. Rptr. 1] [a pleading constitutes an evidentiary admission, although it may be shown that the statements were mistaken].) For example, the pleading stated that the divorce judgment awarded the first Mrs. Roddenberry a "one-half (15%) interest in future profit participation income from `Star Trek,'" and "15% of the 30% constituting one-half of the community property to which Plaintiff and Defendant were entitled at the time of the divorce decree." The 15 percent and 30 percent figures applied only to profit participation in Star Trek 1. The postdivorce Star Trek projects carried different profit-sharing provisions. Later, the first Mrs. Roddenberry moved to amend her complaint to delete the percentage references, claiming they were mistakes. The motion was denied. The case was nevertheless tried as if the pleading laid claim to half of all postdivorce profits.
CONTENTIONS ON APPEAL REGARDING PROFIT PARTICIPATION
Norway and the estate advance two contentions concerning the award of Star Trek 2 and 3 profits: First, they contend that the award is not supported by substantial evidence. Alternatively, they contend that the objective evidence regarding contractual intent is not in conflict, and that we must therefore conduct a de novo review on appeal. (See generally, 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 681, p. 615; Mission Valley East, Inc. v. County of Kern (1981) 120 Cal. App.3d 89, 99 [174 *651 Cal. Rptr. 300] [appellate court must independently determine the meaning of contractual language if the extrinsic evidence is not in conflict].) The first Mrs. Roddenberry contests the denial to her of profits from the animations, movies and merchandising, contending there is no substantial evidence to support this denial.
After reviewing the record for substantial evidence, we find ample evidence to support the denial of animation, movie and merchandising profits to the first Mrs. Roddenberry. We find no substantial evidence to support the award of half the Star Trek 2 and 3 profits to the first Mrs. Roddenberry. We therefore need not consider the law regarding the nature of evidence permitting or requiring de novo review on appeal.
THE SUBSTANTIAL EVIDENCE TEST
The verbal formulation.
(2) "... [W]here extrinsic evidence has been properly admitted as an aid to the interpretation of a contract and the evidence conflicts, a reasonable construction of the agreement by the trial court which is supported by substantial evidence will be upheld." (In re Marriage of Fonstein (1976) 17 Cal.3d 738, 746-747 [131 Cal. Rptr. 873, 552 P.2d 1169].) "Substantial evidence" is evidence of ponderable legal significance, evidence that is reasonable, credible and of solid value. (Kuhn v. Department of General Services (1994) 22 Cal. App.4th 1627, 1633 [29 Cal. Rptr.2d 191], quoting Estate of Teed (1952) 112 Cal. App.2d 638, 644 [247 P.2d 54].) "Substantial evidence ... is not synonymous with `any' evidence." Instead, it is "`"substantial" proof of the essentials which the law requires.'" (Toyota Motor Sales U.S.A., Inc. v. Superior Court (1990) 220 Cal. App.3d 864, 871-872 [269 Cal. Rptr. 647]; Kruse v. Bank of America (1988) 202 Cal. App.3d 38, 51 [248 Cal. Rptr. 217].) The focus is on the quality, rather than the quantity, of the evidence. "Very little solid evidence may be `substantial,' while a lot of extremely weak evidence might be `insubstantial.'" (Toyota Motor Sales U.S.A., Inc. v. Superior Court, supra, 220 Cal. App.3d 864, 871-872.) Inferences may constitute substantial evidence, but they must be the product of logic and reason. Speculation or conjecture alone is not substantial evidence. (Louis & Diederich, Inc. v. Cambridge European Imports, Inc. (1987) 189 Cal. App.3d 1574, 1584-1585 [234 Cal. Rptr. 889]; Marshall v. Parkes (1960) 181 Cal. App.2d 650, 655 [5 Cal. Rptr. 657].) Expert opinion testimony constitutes substantial evidence only if based on conclusions or assumptions supported by evidence in the record. Opinion testimony which is conjectural or speculative "cannot rise to the dignity of substantial evidence." (Pacific Gas & Electric Co. v. Zuckerman (1987) 189 Cal. App.3d 1113, 1135 [234 Cal. Rptr. 630].)
*652 The ultimate test is whether it is reasonable for a trier of fact to make the ruling in question in light of the whole record. (Kuhn v. Department of General Services, supra, 22 Cal. App. 4th 1627, 1633.) "A formulation of the substantial evidence rule which stresses the importance of isolated evidence supporting the judgment, ... risks misleading the court into abdicating its duty to appraise the whole record. As Chief Justice Tray nor explained, the `seemingly sensible' substantial evidence rule may be distorted in this fashion, to take `some strange twists.' `Occasionally' he observes, `an appellate court affirms the trier of fact on isolated evidence torn from the context of the whole record. Such a court leaps from an acceptable premise, that a trier of fact could reasonably [have believed] the isolated evidence, to the dubious conclusion that the trier of fact reasonably rejected everything that controverted the isolated evidence. Had the appellate court examined the whole record, it might have found that a reasonable trier of fact could not have made the finding in issue. One of the very purposes of review is to uncover just such irrational findings and thus preclude the risk of affirming a finding that should be disaffirmed as a matter of law.' (Traynor, The Riddle of Harmless Error (1969) p. 27.) (Fns. omitted.)" (People v. Johnson (1980) 26 Cal.3d 557, 577-578 [162 Cal. Rptr. 431, 606 P.2d 738, 16 A.L.R.4th 1255].)
(3) Substantial evidence is therefore not merely an appellate incantation designed to conjure up an affirmance. To the contrary, it is essential to the integrity of the judicial process that a judgment be supported by evidence that is at least substantial. An appellate court need not "blindly seize any evidence ... in order to affirm the judgment. The Court of Appeal `was not created ... merely to echo the determinations of the trial court. A decision supported by a mere scintilla of evidence need not be affirmed on review.'" (Kuhn v. Department of General Services, supra, 22 Cal. App.4th 1627, 1633 quoting in part Bowman v. Board of Pension Commissioners (1984) 155 Cal. App.3d 937, 944 [202 Cal. Rptr. 505].)
The substantial evidence test as applied in case law.
The verbal formulation set forth above provides general guidance. Cases applying the test provide additional guideposts to proper application. In the summary judgment context, for example, a declaration which simply contradicts a prior discovery admission is not normally acceptable as substantial evidence. (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-22 [112 Cal. Rptr. 786, 520 P.2d 10].) This is because "admissions against interest have a very high credibility value" and are "entitled to and should receive a kind of deference not normally accorded evidentiary allegations in affidavits." (D'Amico, at p. 22; see also Thompson v. Williams (1989) 211 *653 Cal. App.3d 566, 573-574 [259 Cal. Rptr. 518] ["[a]fter-the-fact attempts to reverse prior admissions are impermissible because a party cannot rely on contradictions in his own testimony to create a triable issue of fact. [Citations.] The assertion of facts contrary to prior testimony does not constitute `"substantial evidence of the existence of a triable issue of fact."'"].) Numerous other cases have followed D'Amico's lead. (See, e.g., Roth v. Rhodes (1994) 25 Cal. App.4th 530, 545 [30 Cal. Rptr.2d 706]; Visueta v. General Motors Corp. (1991) 234 Cal. App.3d 1609, 1613 [286 Cal. Rptr. 402]; Rivera v. Southern Pacific Transportation Co. (1990) 217 Cal. App.3d 294, 299 [266 Cal. Rptr. 11]; Nunez v. R'Bibo (1989) 211 Cal. App.3d 559, 563 [260 Cal. Rptr. 1]; Leasman v. Beech Aircraft Corp. (1975) 48 Cal. App.3d 376, 382 [121 Cal. Rptr. 768].)
Niederer v. Ferreira (1987) 189 Cal. App.3d 1485, 1503 [234 Cal. Rptr. 779], provides a variation and an escape valve. In Niederer, plaintiff testified at deposition that she had not been assigned a promissory note. The true fact was that she had been assigned the note. Later, in moving for summary judgment, plaintiff filed a declaration contradicting her deposition testimony and explaining that she had not understood the concept of assignment at the time of deposition, and hence had answered incorrectly. The evidence was otherwise clear that the note had in fact been assigned to her. The defendant opposed summary judgment, contending that plaintiff's prior contrary testimony established a triable issue of fact. After noting the holdings of D'Amico and Leasman that "`the credibility of admissions [is] valued so highly that the controverting affidavits may be disregarded as irrelevant, inadmissible or evasive,'" the Niederer court noted that the reasons for the conflict were explained in plaintiff's declaration. (Id., at p. 1503.] The court accepted the explanation, disregarded the prior conflicting testimony, and affirmed the summary judgment. Thus in Niederer, it was the second version of the facts but a version accompanied by an innocent explanation that was accepted as substantial evidence.
In the nonsuit context, the law is similar. In Mikialian v. City of Los Angeles (1978) 79 Cal. App.3d 150, 158, 161 [144 Cal. Rptr. 794], plaintiff tow truck driver sued the city, contending that the police breached a duty to place flares around his truck while he installed a dolly under a car to be towed. In his deposition, he testified that no one told him to park his truck at the location involved. At trial, however, he testified inconsistently he testified that he had been told by police where to park and that he had decided where to park himself. He made no attempt to withdraw or explain the admissions in his deposition. The trial court granted a nonsuit. The Court of Appeal affirmed on the ground that the contradictory testimony was not substantial evidence, stating: "If plaintiff's testimony in this respect as given *654 in his deposition was in error, he had nine months prior to trial within which to correct it. Had he done so, he would have been called upon to explain the former testimony as a misreporting of his answers, a mistake on his part, or the product of a misunderstanding. Such an explanation would have created a fact issue. But plaintiff did not choose this course. He chose, instead, simply to make contradictory statements to the effect that he was directed where to park while continuing to make corroborative admissions that the decision was his own. Under these circumstances, we conclude that there was no substantial evidence that the officers directed plaintiff where to park." (Mikialian v. City of Los Angeles, supra, 79 Cal. App.3d 150, 160.)
Involved in the instant case is not prior deposition testimony, but rather a prior attorney declaration, representations to the court, admissions in pleadings, and a long history of conduct. (4) Whatever the nature of the evidence, truth is an ascendant value in litigation. Not every bald assertion rises to the dignity of substantial evidence. Transparent prevarication is not an acceptable basis for decision. In an appropriate context such evidence may even be rejected summarily without trial. In every context, the courts must be diligent not to base an award on testimony tailored by financial expediency rather than by truth. (See also Kruse v. Bank of America, supra, 202 Cal. App.3d 38, and Louis & Diederich, Inc. v. Cambridge E