Horowitz v. Noble

• Decision Date: 28 March 1978
• Citation: 144 Cal.Rptr. 710,79 Cal.App.3d 120
• Court: California Court of Appeals Court of Appeals
• Parties: Jonathan B. HOROWITZ, Arlene G. Horowitz, Richard J. Passer and Judith H. Passer, Plaintiffs, Appellants, Cross-Defendants and Respondents, v. Lowell NOBLE, Lowell Development Corporation and Charles R. Rittenberry, Defendants, Respondents, Cross-Complainants and Appellants. Civ. 40789.

Page 710

144 Cal.Rptr. 710

79 Cal.App.3d 120

Jonathan B. HOROWITZ, Arlene G. Horowitz, Richard J. Passer and Judith H. Passer, Plaintiffs, Appellants, Cross-Defendants and Respondents, v. Lowell NOBLE, Lowell Development Corporation and Charles R. Rittenberry, Defendants, Respondents, Cross-Complainants and Appellants.

Civ. 40789.

Court of Appeal, First District, Division 1, California.

March 28, 1978.

William J. Scammon, San Mateo, for plaintiffs, appellants, cross-defendants and respondents

Lowell Noble, in pro per.

William M. Gwire, William E. Taggart, Jr., San Francisco, for defendants, respondents, cross-complainants and appellants.

STATEMENT OF THE CASE

ANELLO, ^* Associate Justice.

This is an appeal by plaintiffs and cross-defendants and a cross-appeal by defendants and cross-complainants from a judgment by the trial court.

Plaintiffs' complaint stated four causes of action. In the first cause of action plaintiffs sought declaratory relief of their rights under an easement concerning ingress and egress over a paved driveway (hereafter referred to as "the passageway") which existed, in part, on each of two adjoining parcels of real property (hereinafter referred to as "Lot 1" and "Lot 2"). In the second cause of action plaintiffs sought to recover damages for breach of contract to purchase both lots. In the third cause of action plaintiffs sought to recover additional damages because of defendants' refusal to grant an easement over the above-mentioned passageway. In the fourth cause of action plaintiffs sought specific injunctive relief, predicated upon a separate agreement of the parties.

In addition to defendants filing their answer containing specific and general denials, defendant Lowell Development Corporation filed its cross-complaint, alleging five causes of action, to wit, fraud, fraudulent nondisclosure, negligent misrepresentation, breach of contract and bad faith breach of contract. Plaintiffs' answer to the cross-complaint contained specific and general denials. It also contained the following affirmative defenses: (1) estoppel, (2) laches, (3) unclean hands, (4) failure/lack of consideration, and (5) that the proximate cause of any damages alleged to have been suffered by defendant Lowell Development Corporation was the acts and/or omissions to act done or not done by defendant.

After a trial without a jury, the trial court filed its memorandum decision which provided that: (1) plaintiffs were awarded an easement on Lot 1, the size of which was smaller than that requested by them; (2) plaintiffs were awarded damages on the second cause of action in the amount of $1,042.19, as and for loss of rents, and $798.50 as and for the expenses of re-leasing and costs; (3) plaintiffs were awarded judgment as to each cause of action in the cross-complaint; and (4) plaintiffs were denied the requested injunction prohibiting the construction on Lot 1. Thereafter, the trial court filed its second memorandum decision in which it adopted the findings proposed by plaintiffs, subject to the following modifications: "The defendants are individually liable. The defendant Lowell A. Noble acted and signed documents as an individual as well as officer of the corporation during portions of the various transactions. (P) The easement was found to be by necessity as well as by reservation, and the description set forth in the memorandum decision by this Court describes the scope and size of the easement. (P) There is no other reasonable or feasible substitute passageway available to the owners and tenants of Lot No. 2. (P) The Court made no finding as to other burdens existing at the time of the acquisition of the land as set forth in Plaintiff's Proposed Conclusion B. (P) Plaintiff's retention of $20,000.00 was agreed upon by the parties as consideration for the extension of time. (P) All other findings proposed by defendant acting in pro per or through his attorney are specifically rejected, objections dealing with matters other than that which has heretofore been set forth are specifically overruled and a request for additional findings is denied."

After the trial court filed its findings of fact and conclusions of law a judgment consistent with the above findings and conclusions was made and entered verba relata inesse videntur.

Defendant Noble filed a notice of intention to move for a new trial which was On appeal, plaintiffs make the following contentions to support amendment, correction or reversal of the judgment: (1) that the trial court erred in reducing the size of the easement; (2) the trial court erred in failing to give plaintiff injunctive relief as requested; (3) that the trial court erred in failing to render findings of fact and conclusions of law necessary to support portions of the judgment; and (4) that the trial court erred in failing to award plaintiffs certain of the general/special damages prayed.

primarily based allegedly upon new evidence of a Pacific Gas and Electric (PG& E) easement over the lots and its effect on any construction on Lot 1 as contemplated by defendants. After the hearing, the trial court filed its order and notice of denial of motion for a new trial.

Defendants Lowell Development Corporation and Charles R. Rittenberry make the following contentions to support reversal or modification of the judgment: (1) that the retention of the $20,000 by plaintiffs was an unenforceable penalty and therefore improper; (2) that the trial court's grant of the easement was improper; and (3) that the trial court's award of damages was based on improper evidence.

Defendant Noble makes these contentions to support amendment, correction or reversal of the judgment: (1) that buyers' obligations under the agreements to purchase Lot 2 were subject to a condition precedent which did not occur, and therefore the court's finding that the buyers were in breach was wrong as a matter of law and (2) that the trial court's denial of defendant's motion for new trial was without reasonable basis and therefore should be reversed.

STATEMENT OF FACTS

The plaintiffs were the owners of two contiguous lots, Lot 1 and Lot 2, located in the City of San Mateo. Each lot was a separate legal entity and had its own legal description.

Lot 1 is an unimproved lot. Lot 2 contains a two-story, 12-unit apartment building built in 1929 and known as Casa Hermosa.

The apartment building on Lot 2 contains garages on the street level, which house parking stalls for use by the tenants of the building. The size of the individual parking stalls was consistent with the size of the cars of the 1920's. Both the trial court and Noble found them to be much too small. Cars entering and leaving the garages drive over a black-topped passageway which overlaps onto Lot 1 in an arc configuration to a maximum radius of approximately 12 feet. This passageway had existed in its present form and dimension since 1930. Its existence and size were known to defendants. Defendant Noble, his agent and his architect, who had made a survey and drawn plans, had personally inspected the area.

In February 1974, plaintiffs and defendant Lowell Development Corporation entered into two separate agreements for the sale and purchase of Lot 1 and Lot 2. Both agreements expressly provided that, inter alia: (1) each sale was conditional upon the completed sale of the other; (2) both sales were to be completed simultaneously with the other; and (3) both escrows were to close on the same date, i. e., July 1, 1974. Furthermore, the agreement for Lot 1 provided that the purchase was "Subject to Architectural Approval by City of San Mateo of the Preliminary Architectural plans"; while the purchase of Lot 2 was subject to the following condition: "Approval of existing building as a condominium by the San Mateo City bureau of planning and adjustments and the San Mateo City council, if necessary."

The plaintiffs had considered constructing a 5-unit apartment building on Lot 1. Preliminary plans had been drawn, but they were never formally submitted for city approval. Instead, the plans were turned over to defendants who did not use them but prepared their own plans which called for 7-8 units.

With regard to Lot 2 the defendants sought to gain approval from the applicable In the early part of May 1974, it became apparent to defendants that they would not be able to conclude the purchase of Lot 2 due to the refusal of American Savings & Loan (actually First Charter Financial), which was the obligee on an outstanding obligation in excess of $200,000 that existed on Lot 2, to sign the subdivision map which had to be recorded as the final step in the conversion process. American Savings & Loan had "a policy at that time of not approving of subdivision maps to convert apartment houses on which they had loans into condominiums." Because of this refusal, by early May 1974, defendant Noble had regarded the deal as having "fallen through."

San Mateo city agencies for the conversion of the apartment building to a condominium. In addition, defendants hired an engineering firm to prepare the subdivision map, and attorneys to draft the necessary legal documents. The San Mateo Board of Zoning Adjustments (hereafter BOZA) approved the application for the conversion on April 9, 1974.

Nevertheless, on May 11, 1974, defendants signed, and on May 25, 1974, plaintiffs signed an agreement ¹ which substantially modified the terms of the February 10, 1974 purchase and sale agreements. Although interpretation of some of the language in this new agreement was disputed, the following undisputed facts emerge: (1) the close of escrow for the purchase of Lot 2 was extended for two months to and including September 1, 1974; (2) the close of escrow on Lot 1 was to be as scheduled, i. e., July 1, 1974; (3) the sum of $20,000 was to be "irrevocably disbursed" to plaintiffs by May 24, 1974; (4) the $20,000 disbursement to plaintiffs would be applied to the total purchase...