Akbarzadeh v. Ben Ish Hai, Inc.

Filed 4/3/07 Akbarzadeh v. Ben Ish Hai, Inc. CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court of Los Angeles County. Stanley M. Weisberg, Judge. Affirmed.

Michael P. Rubin & Associates and Michael P. Rubin for Plaintiffs and Appellants.

Luna & Glushon, Robert L. Glushon; Schreiber & Schreiber and Edwin C. Schreiber for Defendant and Respondent.

_____________________________

Property owners sued their adjoining neighbor for declaratory and injunctive relief seeking to prevent the neighbor from building a residence on what had been a vacant lot. The property owners claimed the declaration of restrictions governing the tract limited each lot to a single family residence, and because their residence already existed on the lot originally designated in 1948, the neighbor was prohibited from placing any improvements on the earlier subdivided portion of the same lot. The trial court found the declaration of restrictions permitted building on any legal lot in the tract, and not just on the original lots designated in 1948. Accordingly, the trial court found the property owners were unlikely to prevail on the merits of their claims and denied injunctive relief. We affirm.

FACTS AND PROCEEDINGS BELOW

The dispute in this case concerns land in a residential area of the City of Los Angeles commonly known as Encino. The subdivision was created in 1948 with 44, variously shaped, large lots. Prior to sale of any of the lots, the original grantor recorded a declaration of restrictions. The declaration of restrictions states it applies to LOTS 1 to 44, inclusive, of TRACT 14661. The particular restriction at issue in this appeal is in a section of the document entitled Purposes and Uses. This restriction provides as follows: The lots in said Tract shall be used for no purpose other than the erection and construction of a detached, single family dwelling, and private garage for not more than 3 cars, upon each lot, which Main Structure shall not exceed two stories in height, and shall have a ground floor area, excluding patios and garages, of not less than 1800 square feet.

In 1979 appellants, Jim and Peggy Akbarzadeh, purchased the northern half of lot 34 of tract 14661. They have resided continuously in a single family residence located on this real property since that date. In 1954 one of their predecessors in interest deeded the southern half of lot 34 to a third party. It has been a vacant lot since.

The lot cut was legal when done in 1954. This vacant lot on the southern portion of lot 34consisting of over 20,000 square feetis still considered a legal lot within the meaning of Los Angeles current zoning standards for tracts zoned as very low residential.

In November 2005 respondent corporation, Ben Ish Hai, Inc., took title in a series of transactions to the vacant lot on the southern half of lot 34. Respondent proposed to build a single family residence on the lot and sought the necessary permits to develop the lot.

Appellants attended a hearing before the Los Angeles Building and Safety Commission to voice their objections to the proposed construction. Appellants argued against granting of a grading permit, pointing out the sewer and water lines servicing their residence ran across the proposed development site. Appellants also informed the commissioners any building on the southern portion of lot 34 would violate the 1948 recorded restrictions limiting building to a single family residence on each lot. The City of Los Angeles considered and rejected appellants arguments and issued the required grading and building permits. Thereafter, appellants attempted to persuade Farhad Hakakha, respondents president, to refrain from developing the lot, but without success.

Respondent began grading and other preparations for construction a few months later.

On March 27, 2006 appellants filed suit against respondent seeking, among other things, to enjoin further construction on the southern portion of lot 34 in accordance with the deed restriction. The next day appellants applied ex parte for a temporary restraining order and for an order to show cause for a preliminary injunction. Appellants sought an injunction to restrain respondent from improving the lot and to restrain respondent from interfering with the quiet enjoyment of their residence pending disposition of the case. Appellants informed the court respondent could not properly respond in any event because of the corporations then suspended status.

The trial court granted appellants application for a temporary restraining order, to become effective upon their filing proof of an undertaking of $50,000.

Respondent opposed appellants application for a restraining order. Respondent argued, among other matters, the declaration of restrictions did not prohibit further subdivision of the lots; the 1954 cut of lot 34 created two legal lots; the proposed construction of a single family residence was in compliance with the declaration of restrictions; several other original lots in the tract had already been subdivided and improved with single family residences; and it would be inequitable to interpret the deed restriction to render its lot unimprovable and thus worthless. Respondent requested the trial court to take judicial notice of official City of Los Angeles documents showing how other lots in the tract had already been legally subdivided and improved with single family residences.

Farhad Hakakha filed a declaration in support of respondents opposition. He stated he was a rabbi and the president of respondent, a non-profit corporation created to operate an orthodox Jewish synagogue. He explained the Internal Revenue Service had already approved respondents non-profit, tax exempt status. However, respondent was still awaiting approval from the Franchise Tax Board and had been suspended for nonpayment of back taxes pending approval as a non-profit corporation. In addition to its arguments on the merits, respondent presented evidence and argument to convince the court the ordered undertaking should be increased to $750,000 in order to cover expected damages from any delay in the construction.

Appellants filed a reply objecting to the courts consideration of respondents opposition, claiming respondent had no standing to defend the action because of its suspended status. Appellants also objected to respondents request for judicial notice. Appellants argued respondents equitable defenses of waiver, acquiescence, changed circumstances and other arguments were inapplicable where even respondents evidence showed building occurred on no more than three or four subdivided lots cut from the original 44 in the over 50 years the deed restriction had been in place.

All parties appeared at the hearing on appellants request for a preliminary injunction. After hearing oral argument from counsel and even entertaining input from the interested parties themselves, the court took the matter under submission. Later the court issued its order denying appellants application for a preliminary injunction. The court noted appellants had failed to post the $50,000 undertaking as ordered. On the merits, the court found appellants had failed to demonstrate they were likely to prevail. On this point, the court stated: The Declaration of Restrictions at issue does not limit the tract to the original 44 lots, nor does it restrict subdivision of the lots. Indeed, plaintiffs reside on a lot that was subdivided, each lot may well be subject to the enforceable restrictions. Plaintiffs, however, have failed to show that defendant is in violation of the Declaration of Restrictions by constructing the single family dwelling on defendants lot. The court stated it disregarded respondents opposition when making its decision because defendant, a suspended corporation, has no standing to defend the action.[1]

Appellants appeal from the denial of their application for a preliminary injunction.

DISCUSSION

I. GENERAL PRINCIPLES REGARDING THE INTERPRETATION OF DEED RESTRICTIONS.

The construing of a written contract is essentially a judicial function to be exercised according to generally accepted canons of interpretation so that the purpose of the instrument may be given effect. As the Supreme Court stated in Parsons v. Bristol Development Co., [(1965)] 62 Cal.2d 861, 865: It is . . . solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence. Accordingly, An appellate court is not bound by a construction of the contract based solely upon the terms of the written instrument without the aid of evidence . . . where there is no conflict in the evidence . . . or a determination has been made upon incompetent evidence . . . .

In the interpretation of contracts, the paramount consideration is the intention of the contracting parties  . . . as it existed at the time of contracting, so far as the same is ascertainable and lawful. (Civ. Code, 1636; Stewart Title Co. v. Herbert, [(1970)] 6 Cal.App.3d 957, 963.) This intention must be ascertained from the words used, after taking into consideration the entire contract and the circumstances under which it was made. (Civ. Code, 1641, 1647; Code Civ. Proc., 1860; Pacific Gas & E. Co. v. G.W. Thomas Drayage etc., Co., [(1968)] 69 Cal.2d 33, 38-39; Universal Sales Corp. v. Cal. etc. Mfg. Co., [(1942)] 20 Cal.2d 751, 760-761.)

The words used in a contract must be given their ordinary meaning, unless there is evidence that the parties intended to use them in a unique sense or to give the words some different meaning. (Civ. Code, 1644; Stewart Title Co. v. Herbert, supra, 6 Cal.App.3d 957, 962.) . . . [] In construing a contract, it is not a courts prerogative to alter it, to rewrite its clear terms, or to make a new contract for the parties. (Apra v. Aureguy, [(1961)] 55 Cal.2d 827, 830-831; Barker v. Sherman, [(1954)] 123 Cal.App.2d 810, 812.) Courts will not add a term to a contract about which the agreement is silent. (Code Civ. Proc., 1858; Jensen v. Traders & General Ins. Co., [(1959)] 52 Cal.2d 786, 790.)[2]

We review de novo the deed restriction with these principles in mind.

II. THE LANGUAGE OF THE RESTRICTIONDOESNOTLIMITBUILDING OF SINGLE FAMILY RESIDENCES TO ONEPER ORIGINAL LOT.

To recall, the deed restriction at issue in this case provides: The lots in said Tract shall be used for no purpose other than the erection and construction of a detached, single family dwelling, and private garage for not more than 3 cars, upon each lot, which Main Structure shall not exceed two stories in height, and shall have a ground floor area, excluding patios and garages, of not less than 1800 square feet.[3]

Appellants contend the proper construction of this provision is this restriction forbids more than one single family home per original lot.[4] We have independently reviewed the provision. To accept appellants interpretation would require this court to alter the language of the restriction by rewriting it to include the term original. However, courts are not free to, and will not, add a term to a contract about which the agreement is silent.[5]

We are also unpersuaded by appellants proffered interpretation. The restriction speaks only of each lot in the tract. It does not limit building of a single family residence to one on each of the original 44 lots only. Nor does it state only the original 44 lots are, or will be, the only 44 lots in the tract. Reinforcing the view building of a single family residence is not limited to only one per original lot, we note the restriction does not prohibit subdivision of the original 44 lots. Interestingly, appellants themselves purchased the other part of the now subdivided lot 34 and would not have been able to do so had the declaration of restrictions specified all original lots had to remain undivided. Nor does the restriction contain language limiting, for example, each lot to a specified size consistent with the respective sizes of each of the original 44 lots in the tract. Indeed, the restriction does not even specify a minimum lot size. Finally and contrary to appellants argument, there is no language in the restriction limiting either the number of houses in the tract or the number of lots in the tract.

A reasonable reading of the restriction indicates its overriding purpose is to ensure the low density residential character of the tract by limiting building to only single family residences to prohibit, for example, commercial, retail or multi-family dwellings. There is nothing to show the grantors intent was to preserve in perpetuity the identical lots in the tract as they existed in 1948, as appellants essentially urge us to find.

In short, the interpretation urged by appellants does not find support in the plain language of the provision.[6]

In 1954 original lot 34 was subdivided into two lots with the southern portion conveyed to a third person. Appellants cannot seriously dispute this third person acquired a legal lot in the tract. Because respondents predecessor in interest acquired a legal lot, respondent, as this third persons successor, similarly acquired a legal lot in the tract.[7]

Having acquired a legal lot respondent is subject to the restriction in the declaration of restrictions limiting improvements upon each lot to a single family residence of the specified size.[8]

DISPOSITION

The judgment is affirmed. Respondent is awarded its costs of appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

JOHNSON, Acting P. J.

We concur:

WOODS, J.

ZELON, J.

Publication Courtesy of California lawyer directory.

Analysis and review provided by Escondido Property line Lawyers.

[1] By the time of the hearing on appellants application for a preliminary injunction the water line/sewer line/easement issues had been resolved. Appellants sewer line runs along the very edge of the lot and has remained undisturbed. Appellants water line, by contrast, ran though the middle of the south portion of lot 34 to the meter. As part of the construction project, respondent had appellants water line rerouted to avoid further interference with appellants water supply.

[2]Moss Development Co. v. Geary (1974) 41 Cal.App.3d 1, 8-9 [it was solely the courts function to interpret an ambiguous covenant in a declaration of CC&Rs and the developers secret intention was inadmissible for this purpose]; see also, Zabrucky v. McAdams (2005) 129 Cal.App.4th 618, 622 [the appellate court independently interprets the provisions of a document].

[3] It is immaterial respondent may not have had actual knowledge of this restriction, or that the declaration of restrictions was not mentioned in either its deed or other documents when it purchased the lot. The declaration of restrictions pertained to a common plan for the tract, pertained to use of the land so described in the tract, states the covenants are to run with the land and bind all subsequent purchasers (unless a majority of the owners of the lots agree to change the covenants) and was recorded prior to sale of any of the lots. In this situation respondent had constructive notice of the declaration of restrictions and is deemed to intend and agree to be bound by, and to accept the benefits of, the common plan[.] (Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 349.)

[4] Italics added.

[5] Code of Civil Procedure section 1858 [In the construction of a statute or instrument, the office of the Judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted; . . . ].

[6] Civil Code section 1644 [the words of a contract are to be understood in their ordinary and popular sense].

[7]Ojavan Investors, Inc. v. California Coastal Commission (1994) 26 Cal.App.4th 516, 527 [a successor in interest takes property with the same rights or restrictions which bound its predecessor in interest].

[8] In our independent review we are able to resolve this appeal by simple reference to the language in the declaration of restrictions. Because the language of the clause is itself sufficient to resolve the issue we did not need to rely on respondents evidence in its request for judicial notice or its arguments in its brief on appeal or in its opposition in the trial court to properly interpret the clause. It is accordingly unnecessary to resolve the issue whether all such materials proffered by respondent must be stricken from the record for being a suspended corporation and disabled from participating at the time of the hearing on appellants application for a preliminary injunction. (See, e.g., Palm Valley Homeowners Assn., Inc. v. Design MTC (2000) 85 Cal.App.4th 553 [suspended corporation was disqualified from participating in the litigation]; Color-Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599 [suspension of corporate powers results in a lack of capacity to sue, not a lack of standing to sue].

For the same reason, we need not address the alternative arguments whether the equitable defenses of waiver, acquiescence, estoppel or change of circumstances warrant a finding the deed restriction is unenforceable. (See Nahrstedt v. Lakeside Village Condominium Assoc., Inc. (1994) 8 Cal.4th 361, 385-386 [Courts will enforce an equitable servitude unless it violates a fundamental public policy, it bears no rational relationship to the protection, preservation, operation or purpose of the affected land, or its harmful effects on land use are otherwise so disproportionate to its benefits to affected homeowners that it should not be enforced.]; see also, Harrisonv.Frye (1957) 148 Cal.App.2d 626 [doctrines of waiver and estoppel precluded enforcement of a restrictive covenant permitting improvements with only first class buildings]; Wedum-Aldahl Co. v. Miller (1937) 18 Cal.App.2d 745 [doctrines of changed circumstances, waiver and acquiescence precluded enforcement of deed restriction requiring land to revert to the grantor in the event an owner knowingly permitted alcoholic beverages to be sold on any of the lots now commonly known as downtown Long Beach].