Filed 1/9/18 Gillespie v. Hoffman CA5





NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
FIFTH APPELLATE DISTRICT

COURTNEY GILLESPIE et al.,

Plaintiffs, Cross-defendants and Appellants,

v.

NICKLAS HOFFMAN et al.,

Defendants, Cross-complainants and Respondents.

F073250

(Super. Ct. No. VCU238961)


OPINION

APPEAL from a judgment of the Superior Court of Tulare County. Lloyd L. Hicks, Judge.
Courtney Gillespie, in pro. per., for Plaintiff, Cross-defendant and Appellant Courtney Gillespie.
Melody Gillespie, in pro. per., for Plaintiff, Cross-defendant and Appellant Melody Gillespie.
No appearance for Defendants, Cross-complainants and Respondents.
-ooOoo-
Appellants, Courtney Gillespie and Melody Gillespie, challenge the judgment quieting title to a 10-acre parcel of real property.
Appellants entered into an agreement to purchase a portion of this property from respondents. After appellants did not receive permission from the county to subdivide the parcel, respondent, Nicklas Hoffman, returned the promissory note executed by Courtney Gillespie marked “void” and returned the payments Gillespie made under the agreement. Following a bifurcated trial, the court ruled that Hoffman had successfully rescinded the agreement in phase one. In phase two, the court balanced the equities, awarded appellants over $18,000 in compensation, ordered appellants to remove all their personal property from the premises, and entered the quiet title judgment.
Appellants argue that the trial court granted relief that was not available under the facts and law. Appellants further contend that the statute of limitations barred relief based on rescission. They also assert the trial court committed various procedural errors.
The trial court did not err as appellants allege. Accordingly, the judgment will be affirmed.
BACKGROUND
The H.M. Wysocki Irrevocable Trust (Trust) owns the approximately 10-acre parcel in dispute. Nickol Gerritsma and Nicklas Hoffman are the trustors and trustees of the Trust. Hoffman resided on the north eight and one-quarter acres and appellants were in possession of the remaining one and three-quarter acres.
Appellants moved onto the property in 2004 pursuant to an oral agreement with Hoffman. In early 2005, Hoffman and Courtney Gillespie entered into an agreement for appellants to purchase the portion of the parcel they were in possession of for $60,000. Appellants were required to make minimum monthly payments of $600. Courtney Gillespie gave Hoffman a promissory note dated February 1, 2005. Courtney Gillespie was to apply for a subdivision of the property at his expense instead of a cash down payment. Until subdivided, the parcel was to remain in the Trust.
Courtney Gillespie did not get county approval to subdivide the property. Further, Gillespie wanted to change the division line the parties agreed to. In response, Hoffman wrote “VOID” over the face of the promissory note and returned it to Courtney Gillespie in late 2005. Hoffman also gave Courtney Gillespie a check for the payments Gillespie had made and told him they did not have an agreement. However, Hoffman also told appellants that they could stay on the property while they looked for a new place.
In 2009, Hoffman told appellants that he wanted to sell the property and that they needed to look for another place.
In August 2010, appellants filed a complaint against Hoffman and the Trust. Appellants alleged that Hoffman was threatening to remove all of appellants’ belongings unless appellants signed a lease for the property they were possessing. Appellants further alleged that Hoffman had already removed many of their tools and materials. According to appellants, they did not rent the property from Hoffman but, rather, they co-owned the property with the Trust and intended to follow through with the original purchase agreement. Based on these allegations, appellants sought an injunction.
The Trust, through its trustees Hoffman and Gerritsma, filed a cross-complaint against appellants for ejectment, declaratory relief, and quiet title. The Trust sought to recover possession of the property. The Trust further requested a judicial determination of its rights and duties under the proposed land sale agreement and a declaration that the agreement is void and of no legal effect. Finally, the Trust asked for a judgment that it is the sole owner of the property and that appellants have no interest in the property.
The Trust moved to bifurcate the quiet title action from the other issues in the case. According to the Trust, ownership of the property in appellants’ possession was a foundational issue for other issues in the case. The trial court granted the motion over appellants’ objection and set the quiet title cause of action for trial.
The court tried the quiet title cause of action over several days and took the matter under submission. Thereafter, the court ruled the purchase agreement clearly set forth the intent of the parties to transfer real property held in the Trust to Courtney Gillespie. However, the agreement contained an implied condition that required Courtney Gillespie to “take reasonable action in a timely fashion to accomplish the transfer of one half the subject properties by obtaining approval of the County of Tulare.”
The court found that Courtney Gillespie did not obtain a split of the 10-acre parcel and therefore breached the agreement. The court further noted that Gillespie determined that a division of the property not provided for in the agreement was more appropriate and that Hoffman, on behalf of the Trust, disagreed. The court concluded, “[t]he failure of Courtney Gillespie to proceed to obtain County of Tulare approval of a lot split, with the assistance of the Trust, and his decision to change the boundaries of the lot split make the Trust the injured party. Nicholas Hoffman returned to Courtney Gillespie the payments made and successfully rescinded the agreement.” Accordingly, the court held that neither of the appellants had any interest in title to the subject property.
Thereafter, the court tried the remaining issues. The court balanced the equities between the parties due to the rescission of the purchase agreement and entered an interlocutory judgment on August 5, 2014. The court credited sums to appellants for their direct payments, their payment of Hoffman’s electricity, and the increase in the value of the land. The court then offset this amount by the value of appellants use and occupancy of the one and three-quarter acres from September 1, 2004 until September 30, 2014 at $250 per month. This left a net credit in favor of appellants of $18,533. The court ordered appellants to remove all of their personal property from the premises and ordered the Trust to pay what it owed to appellants.
The parties complied with the interlocutory order and the court entered the final order. The court confirmed and quieted the Trust’s title to the 10-acre parcel as against any claims by appellants and ruled that neither appellant had any interest in title to this real property.
DISCUSSION
1. The trial court correctly found that Hoffman rescinded the purchase agreement.
Appellants argue that the trial court exceeded its jurisdiction in finding Hoffman successfully rescinded the agreement because Civil Code section 1689 does not authorize rescission for failure to obtain a subdivision of the property.
Civil Code section 1689, subdivision (b)(2), provides that a party to a contract may rescind the contract “[i]f the consideration for the obligation of the rescinding party fails, in whole or in part, through the fault of the party as to whom he rescinds.”
Although the trial court did not specify this subdivision, it is clear from the statement of decision that the trial court relied on this ground to find rescission. The trial court determined that an implied condition of the agreement was that Courtney Gillespie would seek authorization from the county to split the 10-acre parcel. The court further found that Courtney Gillespie failed to obtain the required authorization and unilaterally decided to change the boundaries of the lot split. Thus, the court concluded Courtney Gillespie was the party at fault. The record supports the trial court’s conclusion and appellants do not argue otherwise.
The implied condition that Courtney Gillespie obtain authorization for the lot split was part of the consideration for the agreement. In fact, this obligation replaced the down payment on the property. When Courtney Gillespie did not obtain the required authorization, he caused a failure of consideration. Therefore, the Trust was entitled to rescind the agreement unilaterally. (Civ. Code, § 1689, subd. (b)(2); Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1337.)
2. The statute of limitations did not bar the trial court’s rescission finding.
Appellants note the trial court found that Hoffman rescinded the agreement in late 2005. Based on this fact, they argue that the four-year statute of limitations under Code of Civil Procedure section 337 for actions based on breach of contract and rescission barred the trial court from finding that appellants had no interest in the property.
However, the Trust did not file its cross-complaint to either rescind the agreement or recover damages for appellants’ breach. Rather, the Trust sought to eject appellants from the property and quiet its title after appellants claimed that they co-owned the parcel. Whether Hoffman’s unilateral effort to rescind the agreement in 2005 was successful was merely a foundational issue for the quiet title cause of action. There was no need for the Trust to sue to rescind the agreement because the rescission had already taken place. Therefore, the rescission statute of limitations is irrelevant.
3. The alleged procedural errors are meritless.
a. Appellants’ motion to vacate the August 5, 2014, interlocutory judgment.
Appellants moved to vacate the August 5, 2014, interlocutory judgment under Code of Civil Procedure section 663 on the ground that the trial court’s earlier decision on the quiet title cause of action was void. The trial court denied this motion. Appellants argue the trial court erred.
As discussed above, the trial court correctly found that Hoffman rescinded the agreement. Thus, no error occurred.
b. Appellants’ motion to amend their answer to the cross-complaint.
Following the trial on the quiet title cause of action, appellants filed a motion to amend their answer to the cross-complaint to conform to proof. Appellants sought to add quantum meruit and specific performance as affirmative defenses to the quiet title action. Appellants argue the trial court should have granted this motion.
However, when appellants filed their motion, the trial court had ruled on the quiet title cause of action in favor of the Trust. Thus, the litigation on that cause of action at the trial court level was complete. Therefore, an amendment to the answer to that cause of action would have been meaningless. Thus, no error occurred.
c. The bifurcation of the action.
Appellants assert that the bifurcation of the action prevented them from litigating their claims for damages based on allegations of Hoffman’s misconduct. According to appellants, at the trial on the issues remaining after the quiet title trial, the court ignored their damages claims.
While the judgment does not specifically address appellants’ damages claims, appellants did not provide a reporter’s transcript of the trial. Thus, we do not know whether the court addressed and ruled on those claims during the trial.
We presume the trial court’s judgment is correct. (Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554, 563.) The burden is on the appellants to show reversible error by an adequate record. (Ballard v. Uribe (1986) 41 Cal.3d 564, 574-575.) Appellants have not met this burden.
DISPOSITION
The judgment is affirmed. No costs on appeal are awarded.


LEVY, Acting P.J.
WE CONCUR:



FRANSON, J.



MEEHAN, J.