Case Number: BC657037 Hearing Date: March 08, 2018 Dept: 47

Tentative Ruling

Judge Randolph M. Hammock, Department 47

HEARING DATE: March 8, 2018 TRIAL DATE: September 10, 2018

CASE: Robert F. Goldman, Trustee of the Goldman Grandchildrens Trust, dated July 23 2008 v. 18664 Oxnard Avenue, LLC, et al.

MOTION FOR SUMMARY JUDGMENT

MOVING PARTY: Defendants/Cross-Complainants Bruce Edward King and Erin King, as Trustees of the Bruce and Erin King Trust dated April 21, 2008

RESPONDING PARTY(S): Plaintiff/Cross-Defendant Robert F. Goldman, Trustee of the Goldman Grandchildrens Trust, dated July 23, 2008 and Cross-Defendant Janice Goldman

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff seeks an order of partition as to real property located in Los Angeles held as tenants in common with Defendants.

Defendants filed a cross-complaint alleging that Plaintiff breached a settlement agreement by filing the instant partition action.

Plaintiff demurs to the Cross-Complaint filed by Defendants/Cross-Complainants Bruce Edward King and Erin King, as Trustees of the Bruce and Erin King Trust dated April 21, 2008.

TENTATIVE RULING:

Defendants/Cross-Complainants Bruce Edward King and Erin King, as Trustees of the Bruce and Erin King Trust dated April 21, 2008’s motion for summary judgment is GRANTED.

DISCUSSION:

Plaintiff’s Evidentiary Objections

Pursuant to CCP § 437c(q), the Court declines to rule upon Plaintiff’s evidentiary objections, as they are asserted against evidence which the Court does not deem to be material to the disposition of this motion.

Defendants’ Evidentiary Objections

Pursuant to CCP § 437c(q), the Court declines to rule upon Defendants’’ evidentiary objections, as they are asserted against evidence which the Court does not deem to be material to the disposition of this motion.

Motion For Summary Judgment

A. Re: Second Affirmative Defense of Waiver

On September 16, 2015, Bruce King and Janice Goldman signed a written Settlement Agreement. UF No. 14; Def’s Exh. 8. The Settlement Agreement provides in pertinent part at ¶ 5:

Janice agrees that the Real Property Interests described on Exhibit “A” received by Bruce as part of Bruce’s Gifted Property in or about March, 2012 shall remain Bruce’s property and Janice shall take no action directly or indirectly, in any capacity, to challenge Bruce’s ownership of said Real Property Interests.

UF Nos. 16, 17 (Def’s Exh. 8)(bold emphasis and underlining added.)

¶ 6 of the Settlement Agreement provides in pertinent part:

Janice (individually and as Trustee of Renee’s[1] Trust), jointly and severally, on the one hand, and Bruce . . . , on the other hand, for themselves and their respective heirs, spouses, trust (including the GC Trust and Bruce’s Trust), successor, assigns, agents, attorneys, and employees, as the case may be, hereby release and discharge the other and the other’s respective heirs, successor, spouses, trusts (including the GC Trust and Bruce’s Trust), assigns, agents and attorneys . . . and employees as the case may be, from and against any and all claims, demands, . . .actions and causes of action for every kind and nature whatsoever, whether now known or unknown, suspected or unsuspected, at law or in equity . . . which any of the parties now has, owns or holds or at any time heretofore or hereafter ever had, owned or held or could, shall or may hereafter have, own or hold against the other based upon, related to, or by reason of any contract (express, implied-in-fact, or implied-in-law), lien, liability, matter, cause, fact, thing, act or omission whatever occurring or existing at any time prior to the execution of this agreement, including, without limitation, any Claim relating to the Gifted Property and the terms and conditions of this Agreement.

UF No. 18; Def’s Exh. 8 (bold emphasis and underlining added.)

¶ 11 of the Settlement Agreement provides: “This Agreement shall be binding upon and inure to the benefit of each of the parties signing below and their respective spouses . . . agents . . . to the full extent permitted by law.” UF No. 20; Def’s Exh. 8 (bold emphasis added.)

The scope of the above language is broad enough to constitute a waiver (whether considered express or implied) of the right to partition by sale, as a cause of action in equity. Wallace v. Daley (1990) 220 Cal.App.3d 1028, 1035-36. To construe the above language as not precluding a lawsuit for partition by sale would be to permit a lawsuit for partition by sale—seeking to force a sale of Bruce King’s real property interests (see discussion below)—to be filed the day after the Settlement Agreement was signed. This would be contrary to the settling parties’ intent, objectively reflected in the language that the property “shall remain Bruce’s property.”

It is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation. “[It] is now a settled principle of the law of contract that the undisclosed intentions of the parties are . . . immaterial; and that the outward manifestation or expression of assent is controlling.” ( Brant v. California Dairies, Inc. (1935) 4 Cal.2d 128, 133 [48 P.2d 13]; see also Mission Valley East, Inc. v. County of Kern (1981) 120 Cal.App.3d 89, 97 [174 Cal.Rptr. 300]; City of Mill Valley v. Transamerica Ins. Co. (1979) 98 Cal.App.3d 595, 603 [159 Cal.Rptr. 635].)

Titan Group v. Sonoma Valley County Sanitation Dist. (1985) 164 Cal.App.3d 1122, 1127.

In this regard, the Settlement Agreement purports to bind Robert F. Goldman, as the spouse of Janice Goldman (UF No. 2; King Decl., ¶ 4) and as the Trustee of the Goldman Grandchildrens Trust (UF No. 3; King Decl., ¶ 4).

The Court finds no ambiguity in the language of the release in the Settlement Agreement, and thus, no parol evidence is required to interpret any ambiguity in the contractual language:

The standard analysis used to review a trial court’s interpretation of a written contract is set forth in Winet v. Price, supra, 4 Cal.App.4th 1159 and begins with the threshold question of whether the writing is ambiguous—that is, reasonably susceptible to more than one interpretation. (Id. at pp. 1165–1166; see Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 754–755 [106 Cal. Rptr. 3d 318].) The inquiry into ambiguity presents a question of law subject to independent review on appeal. (Winet v. Price, at p. 1165.)

Adams v. MHC Colony Park, L.P. (2014) 224 Cal.App.4th 601, 619.

Interpretation of a written contract is a question of law for the court unless that interpretation depends upon resolving a conflict in properly admitted extrinsic evidence. (City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 395 [75 Cal.Rptr.3d 333, 181 P.3d 142] (Genentech).)

Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 599.

Here, Plaintiff Goldman, as Trustee of the Goldman Grandchildrens Trust, filed the Complaint in this action seeking partition by sale of the properties. By seeking a partition by sale, the outcome could be a forced sale of Bruce King/The King Trust’s interest in the property, and thus a deprivation of Bruce King/The King Trust’s ownership because the entire parcel would be ordered sold. This would constitute a direct (or at the very least indirect) challenge to Bruce King’s ownership of real property interests.

The Schwartz case indicates that the element of unfairness which precludes an absolute right of partition under various circumstances is derived from the fact that when the court orders a sale of the property in a partition action, it is a sale of the entire interest in the property and not [*1016] of the individual interests of the coowners. A partition sale thus becomes a “forced sale” in the same sense as would be a mortgage foreclosure sale, a trust deed sale or a sale under execution. The objecting coowner is thus forced to part with his interest in the property, contrary to his expectations which brought into being defenses such as waiver of the right of partition, estoppel or other conditions which make applicable the equitable principle of fairness.

Most of the cases that have denied the right of partition have been cases in which the coowner who is seeking partition was a party to the agreement which restricted the right of partition either expressly or by implication, or was so intimately connected with the transaction that the court concluded that out of fairness his subsequent acquisition of an interest in the property imposed upon him a limitation or obligation not to seek partition as long as the agreement or plan of ownership could only be carried out through a denial of the right of partition.

American Medical International, Inc. v. Feller (1976) 59 Cal.App.3d 1008, 1015-16 (italics in original, bold emphasis and underlining added).

Plaintiff’s argument that to construe the agreement as a waiver of the right to partition would constitute a restraint on alienation is not at issue based on the facts before the Court. Whether successors-in-interest of the parties to the Settlement Agreement may, at some point in the future, be able to successfully challenge the waiver as an unreasonable restraint on alienation[2] is not yet ripe. Based on the facts before the Court, the Complaint filed by Plaintiff seeking only partition by sale[3] constitutes a challenge to Bruce/The King Trust’s ownership, because it would force Bruce/The King Trust to sell its ownership interest in the property upon the forced sale of the entire parcels of property. The fact that Bruce/The King Trust could purchase the entire parcel at the partition sale does not magically render non-existent the challenge to Bruce/The King Trust presented by Plaintiff’s Complaint seeking partition by sale. Were it otherwise, then no waiver of the right to partition could ever be held valid, because it could always be the case that successors of the waiving party at some time in the future would be precluded from transferring their property interests. Yet, CCP § 872.710(b) expressly recognizes that the right to partition may be waived: “[P]artition as to concurrent interests in the property shall be as of right unless barred by a valid waiver.”

The Court further finds Plaintiff’s unreasaonable restraint on alienation argument of very little persuasive value because, had Plaintiff sought partition in kind—rather than by sale—this would not be deemed a challenge to Bruce/The King Trust’s ownership interest, and the Settlement Agreement would not preclude such relief. A partition in kind would not result in a forced sale, and thus Bruce/The King Trust would not face losing its ownership interest in the property: all parties would retain their ownership interest in the property, but their interests would be held in severalty[4]. If there were a partition in kind, then Plaintiff would be free to transfer its interest in the property to a third party or, alternatively, to purchase from or sell to the other co-owners of the real property (The King Trust and the Michaelson Family entities). “As a rule, the law favors partition in kind, since this does not . . . compel a person to sell his property against his will. Forced sales are strongly disfavored.” Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 757.

Thus, there is no unreasonable restraint on alienation by virtue of the Settlement Agreement as applied to the relief sought in the Complaint.

As such, the Court finds clear and convincing evidence that Plaintiff waived the right to seek partition by sale.

Accordingly, the motion for summary judgment is GRANTED.

Moving Party to give notice, unless waived.

IT IS SO ORDERED.

Dated: March 8, 2018 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

[1] Renee K. Solomon is Bruce King and Janice Goldman’s mother.

[2]

Civil Code section 711 provides: “Conditions restraining alienation, when repugnant to the interest created, are void.” This statute does not prohibit all restraints on alienation, only those which are unreasonable, i.e., not necessary to protect a security or prevent it from being impaired. (See Kendall v. Ernest Pestana, Inc., supra, 40 Cal.3d 488 at p. 498; Wellenkamp v. Bank of America, supra, 21 Cal.3d 943 at p. 948; Tucker v. Lassen Sav. & Loan Assn. (1974) 12 Cal.3d 629, 636, 639 [116 Cal.Rptr. 633, 526 P.2d 1169].) “Reasonableness is determined by comparing the justification for a particular restraint on alienation with the quantum of restraint actually imposed by it. ‘[The] greater the quantum of restraint that results from enforcement of a given clause, the greater must be the justification for that enforcement.'” ( Kendall v. Ernest Pestana, Inc., supra, citing and quoting Wellenkamp v. Bank of America, supra, at p. 949.) Whether a condition is reasonable, i.e., necessary to protect a party’s security in a given transaction, is a question of fact, one whose resolution must be based upon evidence directed to that issue. (See La Sala v. American Sav. & Loan Assn. (1971) 5 Cal.3d 864, 878-884 [97 Cal.Rptr. 849, 489 P.2d 1113] [“[We] cannot rule upon the validity of a . . . clause in the abstract. . . . [it] is not so much that clause itself as the . . . application of it that will effect an invalid restraint on the alienation of property”]; Cohen v. Ratinoff (1983) 147 Cal.App.3d 321, 330.)

Superior Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal.App.3d 1032, 1059.

[3] The Complaint at ¶ 9 seeks a partition by sale and expressly foregoes a partition in kind as impracticable because each owner would retain their ownership interest. The Prayer at ¶ 1 only seeks a partition by sale, not a partition in kind as an alternative.

[4]

“It is well settled that a decree or judgment in partition has no other effect than to sever the unity of possession, and does not vest in either of the co-tenants any new or additional title. After the partition each had precisely the same title which he had before; but that which before was a joint possession was converted into a several one.”

Rancho Santa Margarita v. Vail (1938) 11 Cal.2d 501, 539.