Schauerman v. Noble, A119960 (Cal. App. 3/25/2009), A119960
| Decision Date | 25 March 2009 |
| Docket Number | A119960 |
| Court | California Court of Appeals Court of Appeals |
| Parties | SAMUEL H. SCHAUERMAN, Plaintiff and Respondent, v. CATHERINE E. NOBLE, Defendant and Appellant. |
Appeal from the Del Norte County, Super. Ct. No. CVUJ 06-1028.
Plaintiff brought an action for specific performance of an agreement for the sale of real property to him from defendant. Following trial before the court in two phases, a verdict was entered in favor of plaintiff. Defendant challenges two findings made by the court: first, that performance of a condition precedent in the contract between the parties was subject to waiver by plaintiff; and second, that the remedy of specific performance of the contract was not barred by the equitable doctrine of unclean hands. We conclude that defendant has failed to show lack of substantial evidence to support the trial court's findings, and affirm the judgment.
Defendant owned a 7.39-acre parcel of real property adjacent to Highway 101 in unincorporated Del Norte County that she proposed to divide into three parcels for sale. In November of 2004, defendant entered into separate contracts to sell two of the parcels: one, with plaintiff Samuel Schauerman, to sell him a 2.89-acre parcel (designated as parcel 1) for the amount of $135,000; and another, to sell a two-acre parcel (designated as parcel 2) to Jack and Linda Martin for the amount of $75,000. Defendant retained ownership of the third parcel.
Plaintiff and the Martins paid defendant deposits, as specified in the two agreements. Defendant agreed to obtain approval from the county for the division of the single lot into three parcels, and within 60 days after the lot split was completed the balance of the purchase price for each of the two sold parcels was to be paid by the buyers. The parties contemplated that approval for the lot split would be obtained in three to four months. The agreement with plaintiff contained the following provision (the access contingency) which is at issue in this appeal: "This sale is contingent on seller obtaining additional access to the property from Turnbull Lane in addition to the deeded easement." The access contingency was added to the agreement at the request of plaintiff and his father.
About a month after the contract was executed plaintiff began to occupy a house on parcel 1, in accordance with another provision of his agreement with defendant that specified he "shall have possession of the property prior to the completion of this sale." Defendant continued to make the mortgage payments on the property. Plaintiff refused to enter into a rental agreement with defendant or pay rent to her while she attempted to effectuate the lot split. Pursuant to the agreement defendant rather than plaintiff paid the property taxes on the parcel before the lot split. Plaintiff did carry liability insurance on the property as provided in the contract, and made improvements to the property — particularly interior painting and sheet rocking — after he took possession.
On January 25, 2005, defendant learned that she could not get approval for access to parcel 1 from Turnbull Lane, and so advised plaintiff of the failure of the contingency. Plaintiff informed defendant that he waived the access contingency, and directed her to proceed with the lot split. Defendant agreed to do so, although she complained to plaintiff that she needed an additional $7,500 to defray the increased costs incurred to complete improvements necessary to obtain the lot split.2
By February of 2006, plaintiff was still living on the property and defendant had yet to obtain approval for the lot split. Defendant brought an unlawful detainer action against plaintiff to evict him from the property. Plaintiff and the Martins brought an action for specific performance of their agreements against defendant.3
The proceeding was bifurcated, with the first phase of the trial devoted to determining the meaning, scope and enforceability of the access contingency in the agreement between defendant and plaintiff. Following a hearing on January 17, 2007, which by stipulation of the parties was not reported, the court found that the access contingency was included in the contract for the sole benefit of plaintiff and was subject to waiver by him. Therefore, the court further found, plaintiff validly waived the access contingency and the contract was not rescinded due to failure of the contingency.
At the second phase of the trial defendant argued that following the execution of the contract plaintiff and his father acted "in an inequitable" or "oppressive manner" in relation to the lot split and sale of the property, which demonstrated "unclean hands" and negated "their entitlement to specific performance" of the contract. Defendant testified in support of her unclean hands defense that on February 6, 2007, she enlisted the Roto-Rooter company to check the septic lines and leach fields on Parcel 1 as part of the drainage work on the property. Defendant offered evidence that plaintiff's presence on the property may have caused the cessation of the work that day, although nothing indicates that plaintiff took any action to prevent the completion of the project.4
Also in February of 2006, a contractor visited Parcel 1 to make an inspection and give defendant an estimate of the cost of excavation work necessary to complete the lot split. Defendant testified that plaintiff swore and yelled, "Get off my property." Plaintiff countered that he directed defendant to leave the property only after she appeared on the premises "to do some work" and started screaming at him in "vulgar language."
Evidence of a rather confusing nature was also presented that in 2005 "clean fill" soil was dumped on the property at the instigation of defendant to backfill a drainage ditch. After consulting with defendant, plaintiff granted the county permission to dump additional soil in the same area in September of 2005. Some of the soil dumped by the county trucks had asphalt and rebar in it, which was unsuitable and "illegal" for use as fill, so defendant asked the county "to not bring any more" fill onto the property. According to defendant, the county failed to remove the "illegal material" until a month later, which caused a further delay in completion of the drainage work.
The evidence also shows without dispute that obtaining the lot split was much more costly and difficult than the parties contemplated. Defendant spent a total of nearly $40,000 to acquire approval for the lot split. By the date of the second phase of the trial, defendant had satisfied all of the obligations imposed by the various county agencies for approval of the lot split, with the exception of the sole and rather perfunctory requirement of designating a name for the frontage road and installing a road sign.
At the conclusion of the second phase of the trial the court found that plaintiff established the elements necessary to obtain specific performance of the agreement, and defendant failed to prove unclean hands on the part of plaintiff that might provide defendant "grounds for rescission of the contract." Specific performance of the contract was ordered. After the lot split was completed a receiver was appointed to execute the documents necessary to transfer ownership of Parcel 1 to plaintiff. This appeal followed.
Defendant argues that the trial court erred by interpreting the access contingency as a condition included in the agreement solely for plaintiff's benefit. She directs our attention to the language in the contingency provision that "uses the word `sale' not `purchase,' " which she maintains supports "the finding that the contingency was for the benefit of the seller and at most for the benefit of both the buyer and the seller." Defendant also suggests that the "extrinsic evidence" necessary to discern the "intent of the parties" is "inconsistent" with the trial court's interpretation of the contingency. She urges that the trial court's interpretation fails to represent the "mutual intention of the parties," and claims that the failure of the access contingency to occur precludes enforcement of the contract.
An established rule of contract law is that where the "defendant's duty to perform under the contract is conditioned on the happening of some event, the plaintiff must prove the event transpired." (Consolidated World Investments, Inc. v. Lido Preferred Ltd. (1992) 9 Cal.App.4th 373, 380; Cochran v. Ellsworth (1954) 126 Cal.App.2d 429, 440-441.) However, (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 319.)
Waiver of a condition precedent may eliminate an excuse for nonperformance. "It is well settled a contracting party may waive conditions placed in a contract solely for that party's benefit." (Sabo v. Fasano (1984) 154 Cal.App.3d 502, 505; see also Ball v. McDonnell Douglas Corp. (1973) 30 Cal.App.3d 624, 629; Isaacson v. G. D. Robertson & Co. (1948) 85 Cal.App.2d 71, 75.) Conditions precedent in a contract, like any other contractual terms, (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1339, italics & fn. omitted.) Whether there has been a waiver of a provision in a contract is a question of fact, "and a finding...
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