Cinmark Inv. Co. v. Reichard

• Decision Date: 17 November 1966
• Citation: 246 Cal.App.2d 498,54 Cal.Rptr. 810
• Court: California Court of Appeals Court of Appeals
• Parties: CINMARK INVESTMENT COMPANY, Cross-Defendant and Appellant, v. Donald B. REICHARD and Alta M. Reichard, Cross-Defendants and Respondents. Civ. 29033.

Page 810

54 Cal.Rptr. 810

246 Cal.App.2d 498

CINMARK INVESTMENT COMPANY, Cross-Defendant and Appellant, v. Donald B. REICHARD and Alta M. Reichard, Cross-Defendants and Respondents.

Civ. 29033.

Court of Appeal, Second District, Division 4, California.

Nov. 17, 1966.

Daniel L. Rothman, Los Angeles, and Neville H. Shear, Hollywood, for cross-defendant and appellant.

Ross & Feinberg, James R. Ross, Canoga Park, for cross-defendants and respondents.

JEFFERSON, Justice.

In 1958, appellant Cinmark Investment Company entered into an agreement leasing with option to purchase, for an 11 year term, approximately 15 acres of unimproved farming land owned by respondents Donald and Alta Reichard. Thereafter, a portion of the property subject to the lease and option agreement, about 4% Or .6 acres, was condemned for highway purposes by the city. Appellant and respondents were both named as party defendants in the condemnation proceedings. An award of $12,489 was subsequently made. Appellant, by a cross-complaint in the same proceedings, instituted this action seeking a declaration of its rights under the part of the agreement providing the option to purchase. Respondents brought a cross-action, with a cross-complaint, alleging entitlement under the terms of the lease, to the full condemnation award rather than the usual apportioned amount compensating the lessee for the loss of its leasehold interest. The matter was tried and the trial court entered a judgment, in appellant's favor, ordering that the $12,489 award be apportioned pursuant to Code of Civil Procedure section 1246.1, appellant to receive $2,150 and respondents $10,339. The trial court, however, did not render the declaration of rights sought by appellant.

There is no argument with respect to the court's decision as to the apportionment of the condemnation award. Appellant brings this appeal contending that the trial court erred in failing to declare its rights under the option agreement.

The lease-option agreement provided that any time during the period the lease was in effect, the lessee (appellant) had the option to purchase the approximately 15 acres of leased land, in parts at $17,500 per acre, or for a total price not to exceed $210,000 for all of the land--an amount considerably less than the per-acre price. The contract contains intricate provisions for fixing the terms of the trust deeds to be given to secure portions of the purchase price.

Appellant, in its prayer for declaratory relief, asked the court below to declare that, in the event it should exercise the option to purchase the entire leased land, it would be entitled to an offset on the $210,000 total option price equal to the amount of the condemnation award received by respondents. Appellant contended that this declaration is necessary in order to preserve the original intention and true agreement of the parties. It was argued that, without the set-off, appellant would have to pay $210,000 for a lesser parcel of land--diminished by the amount taken by the condemnation--while respondents would have a windfall, for they would receive the full option price of $210,000, plus the amount of the apportioned option award, namely $10,339, or a total of $220,339.

The following rules are pertinent: 'A complaint for declaratory relief is legally sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a written instrument and requests that these rights and duties be adjudged by the court. (Citations.)' (Maguire v. Hibernia S. & L. Soc., 23 Cal.2d 719, 728, 146 P.2d 673, 677, 151 A.L.R. 1062; Rubin v. Toberman, 226 Cal.App.2d 319, 325, 38 Cal.Rptr. 32; Code Civ.Proc. § 1060.) 'Although under the declaratory relief statute Code Civ.Proc., §§ 1060--1062a, wide powers have been conferred upon the trial court, its discretion is not unlimited. * * * Where, therefore, a case is properly before the trial court, under a complaint which is legally sufficient and sets forth facts and circumstances showing that a declaratory adjudication is entirely appropriate, the trial court may not properly refuse to assume jurisdiction; * * *' (Columbia Pictures Corp. v. DeToth, 26 Cal.2d 753, 762, 161 P.2d 217, 221, 162 A.L.R. 747; Browning v. Aymard, 224 Cal.App.2d 277, 280, 36 Cal.Rptr. 604.

Here, appellant filed a cross-action for declaratory relief in the condemnation proceedings and the matter was tried with respondents' cross-action. The trial court gave judgment only in the latter action failing to make any declaration of rights one way or the other in appellant's action. We conclude, in the light of the above rules, that a justiciable controversy was presented and that appellant was entitled to the declaratory relief sought. However, instead of reversing the judgment and sending it back to the trial court for the required declaration, we have concluded that it is proper for us to undertake this task. At the trial the parties had the opportunity to offer such evidence as they wished to aid the interpretation of the contract. Both in the trial court and in their briefs here they have argued their...