Shupe v. Nelson

• Decision Date: 27 September 1967
• Citation: 254 Cal.App.2d 693,62 Cal.Rptr. 352
• Court: California Court of Appeals Court of Appeals
• Parties: Frank B. SHUPE and Geraldine Shupe, Plaintiffs and Respondents, v. Paul C. NELSON, Marion E. Nelson, Jack H. Walters and J. Williwalt, Defendants, Cross-Complainants and Respondents. Garrett M. Webster, Sandra Webster, Thomas H. Smith, Louise D. Smith, Cyrill D. Buresh, Arvilla L. Buresh, Stephen P. Fehrenbach and Betty A. Fehrenbach, Cross-Defendants and Appellants, Civ. 23710.

Page 352

62 Cal.Rptr. 352

254 Cal.App.2d 693

Frank B. SHUPE and Geraldine Shupe, Plaintiffs and Respondents, v. Paul C. NELSON, Marion E. Nelson, Jack H. Walters and J. Williwalt, Defendants, Cross-Complainants and Respondents.

Garrett M. Webster, Sandra Webster, Thomas H. Smith, Louise D. Smith, Cyrill D. Buresh, Arvilla L. Buresh, Stephen P. Fehrenbach and Betty A. Fehrenbach, Cross-Defendants and Appellants,

Civ. 23710.

Court of Appeal, First District, Division 2, California.

Sept. 27, 1967.

Ring, Turner & Ring, Robert J. Athey, Walnut Creek, for appellants.

Condon, Dolgin & Kully, Leonard A Kully, Martinez, for respondents Shupe.

Hamm, Waldie & Rockwell, Antioch, for respondents Walters and Williwalt.

Tinning & Delap, Martinez, for respondents Nelson.

TAYLOR, Associate Justice.

On this appeal from a judgment on a cross-complaint decreeing the reformation of appellants' deeds to provide access to a roadway for a lot owned by plaintiffs and respondents, Frank and Geraldine Shupe (hereafter Shupes), ¹ the contentions are that: respondents had no standing to seek the relief granted pursuant to section 3399 of the Civil Code; the evidence does not support the judgment as to the mutual mistake of the parties in omitting the reservation of access rights for the benefit of the Shupe property; and the court exceeded its jurisdiction by further ordering appellants to execute grant deeds to the Department of Veterans Affairs in conformance with the judgment.

Viewing the record most strongly in favor of the judgment, as we must, the following facts appear: the four contiguous lots involved in this action all front on Sunnyvale Place, a cul-de-sac and roadway that extends southward from Sunnyvale Avenue in Pleasant Hill. Lots 48, 45 and 49 are on the western side of Sunnyvale Place. Lot 48 is a rectangle with its long sides running east and west; its southern boundary is contiguous to the northern boundaries of Lots 45 and 49. Lot 55, located on the eastern side of Sunnyvale Place, is a rectangle with its long sides running north and south; most of its western boundary is contiguous to the eastern boundary of Lot. 48.

In 1961, respondent, Jack Walters, was the president and owner of respondent, J. Williwalt, a corporation (hereafter Corporation); respondent, Paul Nelson (hereafter Nelson), was employed by the Corporation, served as its secretary, and shared in its profits; he did not, however, own any of its shares. When these parties subsequently formed the Jack H. Walters Company, Nelson became its secretary and acquired some of its stock. In 1961, the Corporation acquired adjoining parcels Nos. 48, 45 and 49 and planned to develop them along with Lot 55. To prevent a merger of titles and since the subdivision of Lots 48, 45 and 49 had already been approved and the financing arranged, the property on the east side of Sunnyvale Place was acquired for the Corporation by the Nelsons in their own name rather than in the name of the Corporation. The proposed land division of this property into two lots (52 and 55) was filed by Nelson in May 1961 and showed access to be over Sunnyvale Place. After the division was accomplished, Lot 55 was southernmost and shared most of its western boundary with Lot 48. The Corporation planned to develop the four lots together, with all of the homes fronting and having access to Sunnyvale Place.

The homes on Lots 48, 45 and 49 were built according to the plan, and sold by the Corporation as owner and contractor as follows: on July 25, 1961, Lot 48 to appellants, Garrett M. and Sandra Webster (hereafter Websters); on October 25, 1961, Lot 45 to appellants, Cyrill D. and Arvilla L. Buresh (hereafter Bureshs); and on December 13, 1961, Lot 49 to appellants, Stephen P. and Betty A. Fehrenbach (hereafter Fehrenbachs). Each of these deeds contained an easement for the use of Sunnyvale Place and the necessary reservations of rights-of-way for the use of Sunnyvale Place for the benefit of Lots 48, 45 and 49, but (unbeknown to any of the parties at that time) failed to include a similar grant and reservation for the benefit of Lot 55. As secretary of the Corporation, Nelson had the responsibility of transmitting proper instructions to the title company for these sales.

Appellants (or their predecessors in title) were in possession in 1962, when the house on Lot 55 was built by the Jack Walters Company. The house, like the others, had its garage and driveway fronting on Sunnyvale Place. However, because a row of poplar trees extended almost all along the western boundary of the lot, the garage and driveway were located on the southernmost portion of Lot 55. On May 2, 1962, at the direction of the Corporation, the Nelsons conveyed Lot 55 to the Department of Veterans Affairs; on May 15, 1962, the Department of Veterans Affairs conveyed Lot 55 to the Shupes.

The Shupes and the respective owners of the other three parcels used Sunnyvale Place for ingress and egress for pedestrian and vehicle traffic as well as various utility lines. Appellants, or their predecessors in title, saw the owners of Lot 55 using Sunnyvale Place for these purposes and made no objection.

On April 9, 1964, the Websters conveyed Lot 48 to appellants, Thomas H. and Louise D. Smith (hereafter Smiths). Before completing the purchase, the Smiths saw the location of the driveway and garage on the Shupe property, were also aware of the use of Sunnyvale Place by the owners of all of the lots and the easements of the Buresh and Febrenbach lots. On receipt of the preliminary title report, the Smiths discovered that their deed made no mention of the access rights to Sunnyvale Place for the Shupe property. Thereafter, the other appellants discovered the similar omissions in their deeds and this action ensued.

The trial court found that the Corporation, the Nelsons and Walters had a common interest in and common plan of development for Lots 45, 48, 49 and 55; that as part of this plan, they intended to reserve Sunnyvale Place for the joint use and benefit of all four lots, but as the result of mutual mistake, omitted the reservation for the benefit of Lot 55 in the conveyances to appellants. Accordingly, the court entered its judgment decreeing a reformation of all of the deeds to include the omitted reservation and further ordered appellants to execute and deliver similarly reformed grant deeds to the Department of Veterans Affairs for the benefit of the Shupes.

Appellants contend that since respondents did not own any of the parcels in question at the time this action was filed, they were not 'aggrieved parties' entitled to seek reformation pursuant to section 3399 of the Civil Code. The statute, so far as pertinent, provides: 'When, through * * * mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved, so as to express that intention, so far as it can be done without prejudice to rights acquired by third persons, in good faith and for value.'

The right to reformation of an instrument is not restricted to the original parties to the transaction (Merkle v. Merkle, 85 Cal.App. 87, 105, 258 P. 969). An aggrieved party need not be an original party to the transaction but includes one who has suffered prejudice or pecuniary loss (Watson v. Collins, 204 Cal.App.2d 27, 32, 21 Cal.Rptr. 832). Under these definitions, respondents obviously became aggrieved when the Shupes filed their complaint in this action.

The protected 'third persons' referred to in section 3399 are not those who purchase with notice, actual or constructive, of the rights of other persons whose interests have been described defectively in written instruments (Saxon v. DuBois, 209 Cal.App.2d 713, 718, 26 Cal.Rptr. 196). Notice is a question of fact (Lindsay...