Warren v. Lawler

• Decision Date: 19 March 1965
• Docket Number: No. 19357.,19357.
• Parties: Harry E. WARREN, Appellant, v. John P. LAWLER, H. Glenn Lawler, Edna S. Lawler, Elizabeth L. Ashley, Individually and as Executors of the Estate of John Lawler, Deceased, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

343 F.2d 351 (1965)

Harry E. WARREN, Appellant, v. John P. LAWLER, H. Glenn Lawler, Edna S. Lawler, Elizabeth L. Ashley, Individually and as Executors of the Estate of John Lawler, Deceased, Appellees.

No. 19357.

United States Court of Appeals Ninth Circuit.

March 19, 1965.

COPYRIGHT MATERIAL OMITTED

Rudolph J. Scholz, Everett S. Layman, Jr., San Franciso, Cal., for appellant.

Wm. Dopkins, Cameron & Dopkins, Dunnell & Dunnell, Fairfield, Cal., for appellees.

Before MADDEN, Judge of the Court of Claims, and HAMLEY and KOELSCH, Circuit Judges.

HAMLEY, Circuit Judge.

Harry E. Warren brought this action in the district court on February 6, 1964, to recover damages alleged to have been sustained in connection with a certain option agreement. The defendants are John P. Lawler, H. Glenn Lawler, Edna S. Lawler and Elizabeth L. Ashley, named individually and as executors and executrices of the estate of John Lawler, Sr., deceased (Lawler). Federal court jurisdiction rests on diversity of citizenship.

Defendants moved to dismiss the action on the ground that, for several independent reasons, the complaint fails to state a claim upon which relief can be granted. The district court granted the motion, but did not indicate its reasons for doing so. The court thereafter entered a judgment dismissing the action with prejudice. Warren appeals, contesting the merits of each ground advanced by defendants in support of the motion to dismiss.

The complaint sets forth three claims. In the first, Warren states that, on February 28, 1955, he and Lawler entered into an agreement whereby Warren acquired the exclusive option to purchase a two-thousand-acre tract of land in Solano County, California owned by Lawler. He asserts that on May 26, 1956, he sold and assigned his interest in this agreement to James A. McKeller for the sum of twenty-one thousand dollars, none of which he received. Warren further alleges that, also on May 26, 1956, McKeller and Lawler entered into a revised option agreement, referred to herein as the McKeller option, completely superseding the 1955 agreement.¹

In his first claim Warren also asserts that on May 26, 1956, he and Lawler entered into a second option agreement, referred to herein as the Warren option.² Warren alleges that the McKeller option was terminated by mutual agreement on March 11, 1959, except that McKeller retained a "credit" of twenty-one thousand dollars. At a subsequent date unknown to him, Warren avers, McKeller abandoned his "claim" and Warren became entitled to it. He further alleges that, upon termination of the McKeller option, the Warren option became effective.

As a part of his first claim Warren also states that Lawler died on July 31, 1960, and that defendants are the duly qualified and acting executors of his estate. Warren avers that, by written agreement between him and defendants, the Warren option expired September 1, 1961, and that, prior thereto, Warren offered to purchase one hundred acres pursuant to the terms of the Warren option. In consideration of Warren's cancellation of this offer, Warren states, defendants orally agreed that the Warren option would be extended to October 1, 1961. In reliance upon this extension, Warren alleges, he changed his position to his detriment by cancelling his offer.

With further reference to his first claim, Warren avers that, on September 27, 1961, he entered into a written agreement with one York Boyajian to sell to the latter, for the sum of $150,000, a described parcel of one hundred acres of the property covered by the Warren option. Warren alleges that, on or about September 28, 1961, he requested defendants to comply with the terms of the Warren option by depositing in escrow a deed to the one hundred acres to be sold to Boyajian, the purchase price of which, under the option, would be $120,000. According to the complaint, defendants refused to comply upon the ground that Warren had no option. In his first claim Warren therefore seeks damages in the sum of thirty thousand dollars, representing the asserted profit he would have made on the sale of the one-hundred-acre tract.

In his second claim Warren, after incorporating by reference the allegations of his first claim, asserts that over a period of six years prior to the commencement of this suit, he expended $47,501.47 in preparing for the fulfillment and exercise of his rights under the Warren option. Recovery of this amount is sought. In his third claim, Warren alleges that defendants are indebted to him in the sum of twenty-one thousand dollars for money had and received by defendants for the use and benefit of Warren, demand therefor having been made and refused. The total recovery sought on all three claims is $108,501.47.

In their motion to dismiss the action upon the ground that the complaint fails to state a claim upon which relief can be granted, defendants advance the following independent reasons why the motion should be granted: (1) the matters embraced in the complaint have been adjudicated between the same parties in action No. 37213 in the Superior Court of the State of California, in and for the County of Solano; (2) in filing the federal court action Warren is attempting to split a cause of action which could have been adjudicated in the state action; (3) the complaint fails to set forth, and Warren cannot allege, that a timely claim was filed by Warren in the Lawler estate, and the claims are therefore barred under California Probate Code § 707; (4) any claim that Warren might have on a breach of a purported oral agreement made by defendants is barred by the statute of limitations set forth in California Code of Civil Procedure § 339(1); and (5) the option agreements in question do not contain a description of the parcels of real property sufficient for ready identity, and these agreements are therefore barred under California Civil Code § 1624(4) and California Code of Civil Procedure § 1973(4).

In support of one or more of these asserted reasons for granting the motion to dismiss, defendants attached to their motion copies of three documents in the state court action and an affidavit.

From the state court documents it appears that the defendants, individually and as executors of the estate of Lawler, brought the state action to quiet title to the two-thousand-acre Lawler tract referred to in the McKeller and Warren options. Warren and McKeller were named defendants in that action. On June 15, 1962, Warren filed an answer and cross complaint. In the latter, Warren attempted to state two causes of action. As to the first, he made allegations generally similar to those contained in his first claim in his complaint in the district court action now before us. He further alleged in the first cause of action in his cross complaint, however, that his remedy at law would not be adequate. Accordingly, he asked for specific performance of defendants' "oral agreement and said option agreement."

The second cause of action stated in Warren's cross complaint in the state proceeding incorporated by reference the background allegations of the first cause of action in the cross complaint. Warren further alleged that, in August, 1961, defendants, with the intent to induce Warren to cancel his "bona fide" offer to purchase a portion of the two-thousand-acre tract so that the Warren option would thereafter expire, fraudulently represented to him that they would extend that option to September 30, 1961.

Warren further averred that defendants fraudulently failed to disclose their true intention to treat the Warren option as expired on September 1, 1961, if not validly exercised before that time. Relying on these representations, Warren alleged, he failed to exercise his option rights prior to September 1, 1961, and did not exercise them until September 27, 1961. On the basis of these allegations Warren asked that, in the event the state court determines that the option agreement was terminated on September 1, 1961, that general damages in the sum of $315,000 and exemplary damages in the sum of one hundred thousand dollars be awarded.

The documents appended to the motion to dismiss further show that appellees demurred to Warren's cross complaint in the state action on numerous grounds. They also show that, on December 19, 1962, the court sustained the demurrer on the ground that there is nothing in the option agreement which indicates where any of the one-hundred-acre parcels of the two-thousand-acre Lawler tract which might be purchased shall be located or what their dimensions or shape shall be. The superior court indicated in its order sustaining the demurrer that, in view of this fact, the California statute of frauds is applicable.

The third state court document attached to the motion to dismiss is a judgment in the state court action, entered on March 13, 1964, declaring defendants (plaintiffs in that action) to be the owners of the two-thousand-acre Lawler tract, and declaring that Warren has no right, title or interest therein. This judgment contains a recital to the effect that Warren had stipulated that defendants should have judgment as to the first cause of action, and had waived findings of fact and conclusions of law. We presume that this first cause of action was one to quiet title since that is the nature of the judgment. While the judgment recites that Warren waived findings of fact and conclusions of law, the judgment contains several such findings and conclusions.³

The affidavit attached to the motion to dismiss recites that the final decree of distribution in the Lawler estate was entered on February 3, 1964, and that prior thereto, Warren had not presented any claim therein.

Since these matters outside the complaint were presented to and not excluded by the court, the motion to dismiss for failure to state a claim upon which relief can be granted must be treated as one for summary judgment.⁴

Warren contends that, on the showing...