Bravo v. Buelow

• Decision Date: 15 May 1985
• Court: California Court of Appeals Court of Appeals
• Parties: Bonifacio BRAVO and Mary Bravo, Plaintiffs, Cross-Defendants and Respondents, v. Pari Jessica Wegner BUELOW et al., Defendants, Cross-Complainants and Appellants. Civ. B008075.

Page 65

214 Cal.Rptr. 65

168 Cal.App.3d 208

Bonifacio BRAVO and Mary Bravo, Plaintiffs, Cross-Defendants and Respondents, v. Pari Jessica Wegner BUELOW et al., Defendants, Cross-Complainants and Appellants.

Civ. B008075.

Court of Appeal, Second District, Division 5, California.

May 15, 1985.

[168 Cal.App.3d 209] Ronald S. Sofen, Encino, for defendant, cross-complainant and appellant Pari Jessica Wegner Buelow.

Michael R. Totaro, Maureen J. Shanahan, Beverly Hills, and Lucille J. Boston, Marina Del Rey, for plaintiffs, cross-defendants and respondents Bonifacio Bravo and Mary Bravo.

Frank, Greenberg & Simone and Martin Simone, Beverly Hills, for plaintiffs, cross-defendants and respondents Encino Realty and Inv. Co., Inc., and Michael Fried.

EAGLESON, Associate Justice.

In this case we hold that the purchaser of real property, as an incident to an underlying decree of specific performance, is entitled to compensation for increased costs of intended construction of a home occasioned by the seller's delay in conveying title.

FACTS

In 1978, appellant (seller) and respondent (buyer) entered into a written contract of purchase and sale of an unimproved residental lot in Bel Air, California.

[168 Cal.App.3d 210] In order to facilitate the transaction, the parties entered into a written escrow. The purchase price was $93,000; $27,000 down and the balance to be evidenced by a note secured by a deed of trust with a due date in two years. On the escrow closing date, June 17, 1978, respondent tendered a check for the amount of the agreed down payment but appellant refused to sign the escrow instructions or complete her part of the transaction.

Respondent sued appellant for specific performance and breach of contract. Appellant answered and cross-complained against respondent for reformation and against the real estate broker for fraud. The broker cross-complained against appellant for a sales commission.

After a court trial, respondent was awarded a judgment of specific performance. In addition, the court found: "... that the plaintiff buyer [respondent] is entitled to an offset allowance of increased building costs from $40.00 [sic] square foot in 1978 upward to $60.00 per square foot in June, 1983, or $20.00 per square foot times 3500 square feet--$70,000.00."

Although the broker prevailed on its cross-complaint, and appellant took nothing on her cross-complaint, she appeals only from that portion of the specific performance judgment decreeing that respondent purchaser is entitled to $70,000.

DISCUSSION

During the trial, respondent testified that in 1978 he was involved in the construction of residential buildings and built a duplex that year. In 1979, he built a four-unit condominium. He testified further that these buildings cost approximately $42 per square foot to build.

Penn, respondent's expert, testified that at the time of trial in 1983, building costs had risen 31.8 percent since 1978.

Appellant's expert, Condit, testified that building costs were $40 per square foot in 1978, and $60 per square foot at the time of trial in 1983.

Respondent testified that he intended to build a residence on the lot of "[a]bout 35 to 4,000 square feet." Other testimony, although conflicting, confirms that there were 2,000 to 4,000 square foot homes in the area, and that Penn, respondent's expert, had seen house plans. Respondent testified that he believed the home would cost approximately $150,000 to build and [168 Cal.App.3d 211] that he had $100,000 in the bank with which to make the $27,000 down payment on the lot and partially defray initial construction costs. ¹

In a document entitled "Multiple Listing Service, Contract of Sale and Deposit Receipt," respondent reserved the right as a condition of purchase that he "obtain a soil report to his satisfaction and approval within 30 days of acceptance of this offer." Appellant signed the reverse side of this

instrument which, inter alia, contained the following: "All terms are exceptable [sic] on the reverse side accept [sic] the following: ..."

Appellant generally contends there is no evidentiary support in the record for the $70,000 damage award in favor of respondent for increased construction costs.

"With rhythmic regularity it is necessary for us to say that where the findings are attacked for insufficiency of the evidence, our power begins and ends with a determination as to whether there is any substantial evidence to support them; that we have no power to judge of the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom." (Overton v. Vita-Food Corp. (1949) 94 Cal.App.2d 367, 370, 210 P.2d 757; emphasis in original; disapproved on other grounds in Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 866, fn. 2, 44 Cal.Rptr. 767, 402 P.2d 839.)

Appellant specifically attacks the finding that respondent intended to construct a home of 3,500 square feet. Bravo, the respondent, testified that he planned to build a home of "[a]bout 35 to 4,000 square feet." The evidence clearly supports the view that this language meant a 3,500 to 4,000 square foot house. This was the interpretation placed on this evidence by the trial court when on the following day, in ruling on other evidence, it stated: "That, at least in the judgment of the court, does not indicate any rational relationship to a house of 3500 to 4000 square feet."

Appellant further asserts that there is no evidence in the record that respondent took any concrete steps toward formulating a plan to construct a residence on the property. There are no bids, no estimates, no geological reports, no surveys, no blueprints, no sketches, no drawings, no maps or anything else which would substantiate the finding in the judgment that there was to be a 3,500 square foot house constructed. The answer to these assertions[168 Cal.App.3d 212] is that the failure to produce the type of evidence adverted to merely impacts on the other evidence that was introduced, and the weight that evidence was to be afforded by the trial court. Also, many of these pre-building analyses could not be readily completed without full and unrestricted possession of the lot. Given a currently active builder, with $100,000 cash on hand, a set of plans and approval of a soil report as condition precedent to consummation of the sale, there was sufficient evidence before the trial court to conclude that respondent had the intent, ability and necessary financing after conveyance of title to begin construction within a reasonable time.

Appellant further posits that there is no evidence in the record that the increase in construction costs should have been measured from June 1978. She continues that the trial court's award presupposes that respondent would have commenced construction in 1978 at the time the escrow was to close, so that his damages would run from that time. She argues that based on certain testimony, respondent did not intend to commence construction for a minimum of 18 months after the close of escrow, and may not have started to commence construction until such time as appellant's note secured by deed of trust on the property was paid off, which was to have been two years after the close of escrow. Therefore, the appropriate starting date from which to measure the increase in construction costs should be 1980 rather than 1978.

Since appellant refused to convey the lot to respondent, he was not in a position to finalize plans, secure permits, enter into subcontracts or commence construction. Agreements with subcontractors would have stabilized many of the construction costs. We will not speculate what might have happened if respondent had been in a position to move forward.

Appellant next complains there is insufficient evidence to support the trial court's finding that the cost of construction was $40 per square foot in 1978. Since the

appellant's expert himself testified this was the square foot cost at that time, this argument is without merit. ²

Appellant's major contention is that there is no California precedent for allowing increased costs of intended construction as an incident to a decree of specific performance. In short, he argues that as a matter of law increased costs of construction are not permitted.

[168 Cal.App.3d 213] The general rule and underlying rationale for an award of compensation as an incident to a decree of specific performance are discussed in American Jurisprudence 2d. "Undoubtedly, where a purchaser of land is awarded the specific performance of his purchase contract, he is entitled to an allowance for what he has lost by reason of the vendor's delay in conveying the property. In some cases, this allowance is referred to, loosely or otherwise, as 'damages.' According to most courts, this is not an accurate statement of the principle on which the court acts. The compensation awarded as incident to a decree for specific performance is not for breach of contract and is therefore not legal damages. The complainant affirms the contract as being still in force and asks that it be performed. He cannot have it both ways, performed and broken. It follows from this theory of the remedy by decree of specific performance that damages as such and as at law for breach of contract by the vendor, in not conveying the property at the time fixed by the contract, are not recoverable by the purchaser as supplementary to the decree, because inconsistent with the retrospective erasure of the breach. The situation is simply that, if the court orders it to be performed, the decree must as nearly as possible order it to be performed according to its terms, and one of those terms is the date fixed by it for its completion. This date having passed, the court in order to relate the performance back to it, equalizes any losses occasioned by the delay by offsetting...