Cueto v. 2 River Labs, Inc.

California Court of Appeal, 3rd District

Sep 1, 2026

C102017

Plaintiff Hiram Cueto appeals from the judgment entered after a bench trial on claims arising out of his investment in and employment with defendant 2 River Labs, Inc. (2RL). Cueto challenges the ruling on his wrongful termination claim, which was based on his contention that he was not terminated in compliance with the terms of a buy and sell agreement. Cueto argues it was error for the trial court to find a breach of that agreement but not award him damages or order specific performance of the agreement. We conclude Cueto has forfeited his claims of error and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

We dispense with a detailed recitation of the underlying facts and procedural background because it is unnecessary to resolve this appeal. Suffice it to say that, in July 2018, Cueto invested in 2RL, a licensed cannabis testing laboratory. As reflected in a buy and sell agreement, Cueto invested $200,000 in 2RL by purchasing 1,230 shares of stock. Around the same time, 2RL hired Cueto as its lab director and chief science officer. At some point thereafter, Cueto loaned $45,000 to 2RL. Although Cueto alleged that, “ultimately,” he would be paid an annual salary of $100,000,¹ he conceded at trial that there was never an agreement he would receive a salary and that he never received a salary during his employment with 2RL.

After Cueto was terminated in March 2019 due to poor performance, he filed the instant action against 2RL and two of its shareholders—Matthew Bailey and Michael Roman (collectively defendants). The operative second amended complaint was filed in July 2020. It alleged 11 claims for relief, including breach of contract, fraudulent deceit, breach of fiduciary duty, and non-payment of wages.

Prior to the commencement of trial, the trial court ruled that Cueto could pursue a claim for wrongful termination in violation of the terms of the buy and sell agreement and a claim for failure to purchase shares, as alleged for the first time in Cueto‘s pretrial brief. In connection with this ruling, the trial was continued to allow 2RL the opportunity to depose Cueto for an additional day on the subject of whether there was a breach of the buy and sell agreement.

Following a three-day bench trial in July and October 2023 and the submission of posttrial briefing, the trial court issued a detailed written decision. As for the merits of Cueto‘s claims, the trial court generally ruled in favor of defendants, with two exceptions relevant to this appeal. First, the court found that Cueto had been terminated in a manner that did not comply with the terms of the buy and sell agreement.² The court, however, determined that Cueto was not entitled to damages because he had not been paid during his employment with 2RL.³ The court further determined that Cueto was not entitled to specific performance of the terms of his “employment contract” (i.e., the buy and sell agreement).⁴ Second, the trial court found that 2RL had failed to purchase Cueto‘s shares of stock upon his termination as required under the terms of the buy and sell agreement, and that Cueto was entitled to recover the amount he loaned to 2RL—$45,000. As a result, the court concluded that Cueto was entitled to an aggregate sum of $245,000, plus 10 percent interest.⁵

After judgment was entered in July 2024, Cueto timely appealed. Cueto did not file a reply brief.

DISCUSSION

Cueto argues the trial court erred in determining that he was not entitled to damages or specific performance as a remedy for his wrongful termination in violation of the terms of the buy and sell agreement. As we explain next, Cueto has forfeited his appellate contentions.

I

Appellate Rules of Procedure

Well-established principles of appellate review guide our analysis. “[I]t is a fundamental principle of appellate procedure that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment. [Citations.] ‘This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.’ ” (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609.)

In order to secure the reversal of an adverse judgment, it is not enough for the appellant to establish that the trial court committed some error; the appellant must also affirmatively demonstrate the error complained of was prejudicial. (Cal. Const., art. VI, § 13; F.P. v. Monier (2017) 3 Cal.5th 1099, 1108; see In re Marriage of McLaughlin (2000) 82 Cal.App.4th 327, 337 [” ‘The burden is on the appellant in every case to show that the claimed error is prejudicial; i.e., that it has resulted in a miscarriage of justice’ “].) Error is prejudicial when ” ‘it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.’ ” (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800.)

A party challenging a judgment “has the burden of showing reversible error by an adequate record.” (Ballard v. Uribe (1986) 41 Cal.3d 564, 574.) ” ’ “A necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed.” ’ ” (Jameson v. Desta, supra, 5 Cal.5th at p. 609.) Thus, where the appellant fails to provide an adequate record as to any issue the appellant has raised on appeal, the issue must be resolved against the appellant. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295-1296.)

The burden of overcoming the presumption of correctness includes the obligation to present argument and legal authority on each point raised. This requires more than simply stating a bare assertion that the judgment or challenged order is erroneous and leaving it to the appellate court to figure out why; it is not the appellate court‘s role to construct theories or arguments that would undermine the judgment or order and defeat the presumption of correctness. (Dilbert v. Newsom (2024) 101 Cal.App.5th 317, 323; see also Allen v. City of Sacramento (2015) 234 Cal.App.4th 41, 52.) An “appellant must present meaningful legal analysis supported by citations to authority and citations to facts in the record that support the claim of error.” (In re S.C. (2006) 138 Cal.App.4th 396, 408.) When an appellant asserts a point but fails to support it with reasoned argument and citations to pertinent authority, the court may treat it as waived or forfeited. (People v. Stanley (1995) 10 Cal.4th 764, 793.)

II

Analysis

We conclude Cueto has forfeited his appellate contentions. As an initial matter, the record is inadequate. In designating the record on appeal, Cueto elected to provide us with a reporter‘s transcript and an appendix in lieu of a clerk‘s transcript. In doing so, he did not designate certain essential documents to be included in the appendix. For example, the appellate record does not include the parties’ pretrial and posttrial briefs, which the parties agreed would be a substitute for opening and closing statements. Nor does the record include the motions in limine filed by defendants or the 20 trial exhibits admitted into evidence.⁶

In addition to providing us with an incomplete record, Cueto filed an inadequate opening brief and did not file a reply brief. Cueto‘s opening brief does not include any meaningful legal analysis, supported by citation to pertinent authority and evidence in the record, showing how and why the trial court prejudicially erred. Indeed, the legal argument portion of Cueto‘s brief cites no legal authority. The only case cited appears in the portion of the brief summarizing the trial court‘s decision, and the only statute cited appears in the statement of appealability portion of the brief. Consequently, no further discussion of his arguments is required.

It is not our role as an appellate court to construct arguments for appellants that would undermine the judgment and defeat the presumption of correctness. (Siskiyou Hospital v. County of Siskiyou (2025) 109 Cal.App.5th 14, 39.) Rather, where, as here, the appellant‘s opening brief makes contentions unsupported by citation to legal authority, we may treat the contentions as forfeited. (County of Sacramento v. Singh (2021) 65 Cal.App.5th 858, 861; see also Hernandez v. First Student, Inc. (2019) 37 Cal.App.5th 270, 277 [we may and do disregard conclusory arguments that are not supported by pertinent legal authority.)

In sum, there is no basis for reversal. Cueto did not carry his burden to overcome the presumption of correctness. He did not cite or apply any legal authority showing how and why the trial court committed prejudicial error. We will affirm.⁷

DISPOSITION

The judgment is affirmed. Defendants shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a).)

/s/

WISEMAN, J.^*

We concur:

/s/

ROBIE, Acting P. J.

/s/

MESIWALA, J.

Notes

According to Cueto, he was going to start receiving a salary “whenever [2RL] was profitable and able to pay that money.”

Specifically, the trial court found that Cueto was terminated in violation of the provision which specified that a shareholder would be given three attempts over the course of 180 days to rectify performance related issues, and that a mediator would make the final determination as to the removal of a shareholder.

Cueto sought damages “at either $95,000 per year or $140,000,” the latter of which was the salary the other shareholders—Roman and Bailey—“began receiving in October 2020,” more than a year and a half after Cueto was terminated.

In so finding, the trial court cited and Civil Code section 3390, for the proposition that “an employee is generally not entitled to compel the specific performance of the terms of an employment contract, absent statutory authorization.” (See ; Civ. Code, § 3390 [listing the obligations that cannot be specifically enforced].) The court also found that Cueto had “not proven he has met all the elements for specific performance.”

As part of its written decision, the trial court found that Cueto was “not a credible witness.” In so finding, the court noted that Cueto‘s testimony was “rambling,” “difficult to understand,” and included contradictions. By contrast, the court found that Roman and Bailey (2RL shareholders) were credible witnesses, explaining that their testimony was “clear and direct.” The court also found that the person hired to replace Cueto as the new lab director—Renee Engle-Goodner—was “a thoughtful and credible witness.”

The record includes a document purporting to be the buy and sell agreement executed by the parties. However, the document lacks an exhibit marking. As a result, we do not know whether it is an accurate copy of the buy and sell agreement admitted into evidence by the trial court.

Because Cueto has forfeited his appellate contentions, we need not and do not consider any of the other issues raised by the parties. For the same reason, we deny defendants’ request for judicial notice, which asked us to consider matters (i.e., Web site & document) related to the cancellation of 2RL‘s license to test cannabis. (See , fn. 2 [request for judicial notice properly denied where additional documents or information are unnecessary to resolve the appeal].) We also deny defendants’ alternative request for us to consider these matters “as documentary evidence in this appeal.”

Retired Associate Justice of the Court of Appeal, Fifth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.