Case Name: Hall Palmer, Trustee of the Bruse W. Palmer Trust U/A dtd. November 5, 2014 v. Loren J. Toews, et al.
Case No.: 16-CV-299284

Currently before the Court is the motion by defendants Loren J. Toews (“Loren”) and Valerie J. Toews (collectively, “Defendants”) for summary judgment or, alternatively, summary adjudication.

Factual and Procedural Background

This is an action for breach of contract. In February 1988, Defendants were interested in purchasing a particular parcel of property in Los Altos (“the Toews Property”). (First Amended Complaint (“FAC”), ¶¶ 2 and 15.) Bruce Palmer (“Palmer”), owner of the property adjacent to the Toews Property (“the Palmer Property”), wanted to ensure the Toews Property would not be purchased by a developer who might construct a home too close to the Palmer Property. (Ibid.)

On February 22, 1988, Palmer and Defendants entered into an agreement (“the Agreement”) regarding the Toews Property. (FAC, ¶¶ 2, 16 and Ex. 1.) Under the terms of the Agreement, Palmer agreed not to bid against Defendants for the Toews Property and Defendants agreed to convey to Palmer a 20 foot wide strip (“the Strip”) along the boundary line between the two properties if they were successful in their bid to acquire the Toews Property. (Ibid.) Palmer also agreed to pay Defendants a portion of the Toews Property purchase price as consideration for conveyance of the Strip. (Ibid.) The consideration for the Strip would be placed in an escrow account and the funds would be released to Defendants “as a loan represented by a promissory note, with interest …, secured by a deed of trust on” the Toews Property “with the close of escrow in the Toews/Landels transaction ….” (Ibid.) Additionally, Defendants agreed that, “[a]s soon as practical following acquisition of the [Toews Property],” they would “apply to the City of Los Altos for approval of a lot line adjustment” transferring the Strip to the Palmer Property and use their “best efforts to obtain approval of such lot line adjustment.” (Ibid.) Lastly, the Agreement provided that if Defendants were “unable to secure approval from the City of Los Altos for a lot line adjustment,” then they would “notify Palmer in writing” and Palmer would purchase an easement on the Strip, granting him the exclusive use and enjoyment of the Strip. (Ibid.)

On February 23, 1988, Toews was the successful bidder for the Toews Property. (FAC, ¶ 17.) Approximately one month later, Palmer delivered $112,557 to Defendants so Defendants could purchase the Toews Property and convey the Strip to the Palmer Property. (Id., at ¶¶ 3 and 18.) Subsequently, the Toews Property was conveyed to Defendants. (Ibid.)

Thereafter, Palmer and Defendants “attempted to complete the conveyance of the Strip to [Palmer] through a lot line adjustment, but the parties mutually agreed to discontinue those efforts with the City of Los Altos sought to require the dedication of five feet of street frontage along both the Palmer Property and the Toews Property as a condition of approval (the ‘Dedication Requirement’).” (FAC, ¶ 19.) The City of Los Altos also sought this dedication to neighboring properties, which the neighbors challenged. (Ibid.) “The parties learned through others that neighboring property owners were challenging the Dedication Requirement and if that challenge were successful, the City of Los Altos would withdraw the Dedication Requirement as to such neighboring properties as well as to the Toews Property and the Palmer Property. [Palmer and Defendants] mutually agreed to wait until the challenge of the Dedication Requirement had been resolved before attempting to obtain the lot line adjustment.” (Ibid.)

“Temporarily unable to obtain the lot line adjustment, [Defendants] moved the fence” dividing the two properties twenty feet to the west reflecting where the property line would be if the lot line adjustment or easement were granted. (FAC, ¶ 20.) Since that time, Palmer used the Strip as if it were his own. (Ibid.) Between 1988 and 2015, Palmer and Defendants periodically reaffirmed their intention to obtain a lot line adjustment, but that adjustment was never completed. (Id., at ¶ 21.)

Between June 30 and December 15, 2015, counsel for plaintiff Hall Palmer (“Plaintiff”), trustee of the Bruce W. Palmer Trust U/A dtd. November 5, 2014, corresponded and met with Loren. (FAC, ¶ 23.) Plaintiff’s counsel and Loren discussed the possibility of Defendants purchasing the Strip, but they could not agree on a price. (Ibid.) On December 15, 2015, Defendants acknowledged their obligation to obtain the lot line adjustment and “agreed to effect a refinancing of the Toews Property in order to … reflect the altered configuration of the Toews Property resulting from the lot line adjustment.” (Id., at ¶ 24.)

Two days later, Defendants sent a letter to the City Planning Division ratifying “the oral acknowledgment of the contractual obligation by authorizing Plaintiff’s counsel … to act on their behalf in seeking a lot line adjustment from the City of Los Altos ….” (FAC, ¶ 25 and Ex. 3.) Plaintiff’s counsel sent a similar letter to the City of Los Altos on behalf of Plaintiff for the same purpose. (Id., at ¶ 26 and Ex. 4.)

On January 28, 2016, Plaintiff’s counsel notified Plaintiff and Defendants that the City approved the lot line adjustment. (FAC, ¶ 28.) Plaintiff’s counsel inquired as to the status of Defendants’ refinance and Loren replied, “I’ve been approved and have 58 days left on my lock. As far as I now, my hay’s in the barn.” (Ibid.)

In March 2016, Plaintiff’s counsel sought to confirm with Defendants that their bank had approved the lot line adjustment and they were going to proceed with the lot line adjustment. (FAC, ¶ 29.) On March 7, 2016, Plaintiff counsel sent an email to Loren, amongst others, seeking to confirm the process by which the lot line adjustment documentation would be executed and recorded. (Id., at ¶ 30.) Loren replied, “I’ll need to send docs out for review as well so allow time for that. Also am working on property tax number and should have to you shortly.” (Ibid.) Two days later, Loren sent an email to Plaintiff’s counsel setting forth his calculation of the property taxes related to the Strip, including interest. (Id., at ¶ 31.) Thereafter, Plaintiff’s counsel advised Loren that Plaintiff was willing to pay the property taxes, but not the interest. (Id., at ¶¶ 32-33.)

On or about April 8, 2016, after Plaintiff’s counsel sent a letter reaffirming Plaintiff’s position, he received a communication that Defendants retained counsel, “reneged on the Agreement,” and “refused to go forward with the lot line adjustment or grant an easement in lieu thereof.” (FAC, ¶ 35.) In response, Plaintiff requested an easement, which was rejected. (Id., at ¶¶ 36-39.) To date, Defendants have not delivered the lot line adjustment or easement. (Id., at ¶ 39.)

Based on the foregoing allegations, Plaintiff filed a complaint against Defendants on August 29, 2016. Subsequently, Defendants demurred to the complaint, arguing that the claims were barred by the applicable statute of limitations. Defendants’ demurrer was overruled in its entirety on December 13, 2016. Thereafter, Defendants filed an answer to the complaint. On August 11, 2017, Plaintiff filed the operative FAC against Defendants, alleging claims for (1) specific performance of written contract, (2) quiet title to lot line adjustment or express easement, and (3) unjust enrichment.

On January 12, 2018, Defendants filed the instant motion for summary judgment or, in the alternative, summary adjudication. Plaintiff filed papers in opposition to the motion on March 20, 2018.

Discussion

Pursuant to Code of Civil Procedure section 437c, Defendants move for summary judgment of the “entire complaint” or, in the alternative, “summary adjudication of each issue ….” (Ds’ Ntc. Mtn., pp. 1:22-2:1.)

I. Procedural Issue

As a preliminary matter, Defendants’ notice of motion states that this is a motion for summary judgment or, in the alternative, summary adjudication of “issues.” However, the contents of the notice of motion do not identify any issues for summary adjudication. (See Homestead Sav. v. Super. Ct. (1986) 179 Cal.App.3d 494, 498 [if a party desires adjudication of particular issues, that party must make its intentions clear in the motion]; see also Maryland Cas. Co. v. Reeder (1990) 221 Cal.App.3d 961, 974 [where only certain claims or defenses are raised, the court has no power to adjudicate others].) Therefore, the Court construes the motion as one for summary judgment only.

II. Evidentiary Objections

In connection with his opposition papers, Plaintiff submits evidentiary objections.

Plaintiff’s evidentiary objections do not comply with California Rules of Court, rule 3.1354. Rather than submit two separate documents as required by the rule—one setting forth the objections and another setting forth a proposed order—Plaintiff submitted a single packet of objections signed by counsel, with blanks apparently for the Court to indicate its rulings, but with no place for the Court to sign. (See Cal. Rules of Ct., rule 3.1354(b) [a party must provide written objections that comply with one of the formats described in the rule] (c) [a party must provide a proposed order that complies with one of the formats described in the rule].) This hybrid document does not comply with California Rule of Court, rule 3.1354.

Because Plaintiff’s evidentiary objections do not comply with the California Rules of Court, the Court declines to rule on the objections. (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only have duty to rule on evidentiary objections presented in proper format]; see also Hodjat v. State Farm Mut. Auto. Ins. Co. (2012) 211 Cal.App.4th 1, 8 [trial court is not required to rule on objections that do not comply with California Rules of Court, rule 3.1354 and is not required to give objecting party a second chance at filing properly formatted papers].)

III. Legal Standard on Motions for Summary Judgment

The pleadings limit the issues presented for summary judgment and such a motion may not be granted or denied based on issues not raised by the pleadings. (See Government Employees Ins. Co. v. Super. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a summary judgment motion”].)

A motion for summary judgment must dispose of the entire action. (Code Civ. Proc., § 437c, subd. (a).) “Summary judgment is properly granted when no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. A defendant moving for summary judgment bears the initial burden of showing that a cause of action has no merit by showing that one or more of its elements cannot be established or that there is a complete defense. Once the defendant has met that burden, the burden shifts to the plaintiff ‘to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.’ ‘There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.’ ” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267, 1272, internal citations omitted.)

For purposes of establishing their respective burdens, the parties involved in a motion for summary judgment must present admissible evidence. (Saporta v. Barbagelata (1963) 220 Cal.App.2d 463, 468.) Additionally, in ruling on the motion, a court cannot weigh said evidence or deny summary judgment on the ground that any particular evidence lacks credibility. (See Melorich Builders v. Super. Ct. (1984) 160 Cal.App.3d 931, 935; see also Lerner v. Super. Ct. (1977) 70 Cal.App.3d 656, 660.) As summary judgment “is a drastic remedy eliminating trial,” the court must liberally construe evidence in support of the party opposing summary judgment and resolve all doubts concerning the evidence in favor of that party. (See Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389; see also Hepp v. Lockheed-California Co. (1978) 86 Cal.App.3d 714, 717-718.)

IV. Analysis

Defendants argue that they are entitled to summary judgment of the FAC because each of Plaintiff’s claims are time-barred by the applicable statute of limitations. (Ds’ Mem. Ps. & As., p. 1:3-6.) Defendants contend that the claims for specific performance of written contract, quiet title to lot line adjustment or express easement, and unjust enrichment are governed by the four-year statute of limitations set forth in Code of Civil Procedure section 337, and Palmer knew that the alleged breach of contract occurred in 1989 thereby triggering the statute of limitations. (Id., at pp. 5:5-27, 6:5-17, 9:13-22, 11:13-17, and 12:1-3.)

Specifically with respect to the claim for specific performance, Defendants assert that:

Palmer knew by September 1988 that the parties had not succeeded in obtaining the lot line adjustment for the Strip, despite his belief that this would occur ‘fairly quickly.’ [Citation.] Moreover, Defendants and Palmer agreed to abandon the lot line adjustment efforts shortly thereafter due to the City’s unreasonable demand and after agreeing litigation would not resolve the matter. Defendants also never wrote to Palmer or offered an easement to the Strip per the Contract. [Citation.] Instead, the parties considered alternatives to a lot line adjustment and easement in late 1988, including for Palmer to lease the Strip from Defendants and moving the border fence. [Citation.] By early 1989 at the latest, Palmer knew or reasonably should have known that Defendants would not ‘as soon as practically,’ as required in the Contract, obtain the lot line adjustment [Citation.]; that Defendants had not notified Palmer in writing of the abandonment of the lot line adjustment in favor of an easement [Citation.]; that Defendants had not granted Palmer an easement [Citation.]; and that Defendants had not paid on the Promissory Note. [Citation.]
(Ds’ Mem. Ps. & As., pp. 5:26-6:10.) Based on the foregoing, Defendants conclude that “[o]nly one legitimate conclusion exists: Palmer knew by early 1989 of the facts giving rise to his present claim for specific performance and yet sat on his rights.” (Id., at p. 6:15-16.)

As is relevant here, Defendants’ undisputed material facts and evidence establish that Palmer and Defendants executed the Agreement on February 22, 1988. (Undisputed Material Fact (“UMF”) No. 4.) In or around March 1988, Defendants bid on and purchased the Toews Property. (UMF No. 5.) On March 22, 1988, a promissory note was executed wherein Defendants promised to pay Palmer $112,557.00, the set contract sum, with interest until paid in full. (UMF No. 6.) Palmer deposited the sum of $112,557.00 into the Toews Property’s escrow account. (UMF No. 7.) A deed of trust to the Toews Property was executed on March 22, 1988, in Palmer’s favor. (UMF No. 8.) On the same day, a letter was executed wherein Palmer agreed to subordinate the promissory note to any other permanent loan, including bank mortgage, on the Toews Property. (UMF No. 9.)

Around June 1988, Defendants submitted a request to the City of Los Altos for a lot line adjustment for the Strip. (UMF No. 10.) On June 16, 1988, the City of Los Altos’ Planning Department issued a staff report, recommending approval of the lot line adjustment so long as Palmer and Defendants agreed to dedicate a necessary setback to widen Hawthorne Avenue. (UMF No. 11.) At its June 28, 1988 meeting, the City’s Planning Commission followed the staff report, consenting to the lot line adjustment if Defendants and Palmer dedicated a portion of their properties to the City to widen Hawthorne Avenue. (UMF No. 12.) Defendants and Palmer were frustrated by the City of Los Altos’ demand that they dedicate a portion of their properties to the City to widen Hawthorne Avenue in exchange for the lot line adjustment, and they believed the demand unreasonable. (UMF No. 13.) By September 1988, in response to the City of Los Altos’ demand, Defendants and Palmer agreed to stop pursing the lot line adjustment. (UMF No. 14.)

In or around October 1988, an attorney for Palmer drafted a residential land lease for Palmer to rent the Strip from the Defendants for ten years, from March 23, 1988 through March 22, 1998. (UMF No. 15.) At the same time, Defendants and Palmer agreed to move the fence on the boundary between the Toews Property and the Palmer Property to account for the Strip. (UMF No. 16.) Since that time, Palmer has had unfettered use of the Strip. (UMF No. 17.)

Defendants never notified Palmer in writing that the parties had abandoned the lot line adjustment, instead believing that the parties had orally agreed to the abandonment. (UMF No. 18.) Defendants and Palmer discussed an easement, but agreed not to pursue the easement; neither ever drafted an easement. (UMF No. 19.) On March 16, 1989, Defendants and Palmer recorded a Substitution of Trustee and Reconveyance of Palmer’s deed of trust to the Toews Property. (UMF No. 20.)

Finally, after working with Palmer’s counsel to secure the lot line adjustment, Defendants refused to proceed any further in spring 2016. (UMF No. 30.)

Civil Procedure section 337 states that the statute of limitations is four years for action upon any contract in writing. (Code Civ. Proc., § 337, subd. (1) [“Within four years: 1. An action upon any contract, obligation or liability founded upon an instrument in writing,”].) A cause of action for breach of written contract accrues when all of the elements of the claim are present, i.e. a cause of action for breach of contract ordinarily accrues when the plaintiff discovers, or could have discovered through reasonable diligence, the failure of the promisor to do the thing contracted for at the time and in the manner contracted. (Waxman v. Citizens Nat. Trust & Savings Bank of Los Angeles (1954) 123 Cal.App.2d 145, 149; Gilkyson v. Disney Enterprises, Inc. (2016) 244 Cal.App.4th 1336, 1341; Angeles Chemical Co. v. Spencer & Jones (1996) 44 Cal.App.4th 112, 119.)

Here, Defendants do not meet their initial burden as their undisputed material facts and evidence reveal there is a triable issue of material fact regarding whether Defendants breached the Agreement as of 1989. As indicated above, Plaintiff’s cause of action accrued when he discovered, or could have discovered through reasonable diligence, the failure of Defendants to do the thing contracted for at the time and in the manner contracted. However, Defendants fail to cite any particular provision of the Agreement that they violated as of 1989. Moreover, it is not readily apparent that Defendants breached any provision of the Agreement as of 1989.

First, with respect to Defendants’ obligations, the Agreement provides that “[i]n the event that Toews is successful in his bid to acquire the property, Toews shall convey to Palmer a portion of Parcel 29 being 20 feet in width along the common boundary between Parcels 29 and 30, being the west boundary line of Parcel 29, comprising an area of approximately 3,000 square feet.” (Loomis Dec., Ex. C, ¶ 2.) The Agreement does not specify a time for Defendants’ performance. When a contract to transfer real property is silent regarding the time for performance, the law implies a reasonable time. (House of Prayer v. Evangelical Association For India (2003) 113 Cal.App.4th 48, 53-54.) Here, Defendants do not cite any legal authority, or present reasoned argument, establishing that a reasonable time for the conveyance was by 1989, and no later. Furthermore, Defendants do not present any undisputed material facts or evidence demonstrating that they refused to convey the Strip to Palmer as of 1989. In fact, Defendants’ undisputed material facts and evidence indicate that Defendants first refused to convey the Strip to Palmer in the spring of 2016. Thus, Defendants have not shown that they breached this provision of the Agreement as of 1989.

Second, with respect to Defendants’ obligations, the Agreement also provides that “[a]s soon as practical following acquisition of the property, Toews shall apply to the City of Los Altos for approval of a lot line adjustment transferring the aforesaid 20 foot strip of land from Parcel 29 to Parcel 30, and shall use his best efforts to obtain approval of such lot line adjustment.” (Id., at ¶ 5.) Defendants’ undisputed material facts and evidence show that Defendants submitted a request to the City of Los Altos for a lot line adjustment for the Strip around June 1988. (UMF No. 10.) Thus, a reasonable jury could find that Defendants fulfilled their obligation to, “[a]s soon as practical following acquisition of the property,” “apply to the City of Los Altos for approval of a lot line adjustment ….” (Loomis Dec., Ex. C, ¶ 5.) Thus, Defendants have not shown that they breached this provision of the Agreement as of 1989.

Third, only in the event that Defendants are “unable to secure approval from the City of Los Altos for a lot line adjustment,” does the Agreement provide that they must then “notify Palmer in writing” and Palmer would purchase an exclusive easement on the Strip. (Loomis Dec., Ex. C, ¶ 8.) Here, Defendants do not explain what “unable to secure approval” means under the terms of the Agreement. “Unless given some special meaning by the parties, the words of a contract are to be understood in their ‘ordinary and popular sense,’ focusing on the usual and ordinary meaning of the language used and the circumstances under which the agreement was made. [Citations.]” (City of Bell v. Super. Ct. (2013) 220 Cal.App.4th 236, 248.) The term “unable” is generally understood to mean not able or incapable. (See Merriam-Webster Dict., https://www.merriam-webster.com/dictionary/unable [as of March 29, 2018].)

Based on the undisputed facts and evidence presented by Defendants, a reasonable jury could conclude that Defendants were not “unable to secure approval from the City of Los Altos for a lot line adjustment” and, thus, they were not required to notify Palmer in writing of the same. Defendants’ undisputed material facts and evidence show that the City of Los Altos tentatively approved Defendants’ application in June 1988. (UMF Nos. 11-12.) Defendants do not offer undisputed material facts or evidence establishing that they were incapable of meeting the City of Los Altos’ conditions for the approval of the lot line adjustment. Rather, Defendants’ undisputed material facts and evidence simply show that they “were frustrated by the City of Los Altos’ demand,” they believed the demand was unreasonable, and they and Palmer agreed to stop pursing the lot line adjustment. (UMF Nos. 13-14.) Based on the foregoing, a reasonable jury could infer that Defendants were not unable to secure the City of Los Altos’ approval, but instead voluntarily chose not to obtain it, at that time, in light of the conditions imposed by the City of Los Altos. Thus, Defendants have not shown that they breached this provision of the Agreement as of 1989.

For these reasons, there remains a triable issue of material fact as to whether Defendants breached the Agreement as of 1989. Therefore, Defendants have not shown that Plaintiff’s claim for specific performance is time-barred by the applicable statute of limitations.

Accordingly, the motion for summary judgment is DENIED.