Lai v. Little

Filed 5/15/07 Lai v. Little CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION FIVE

Mary Sue Little (seller) appeals the trial courts decision after a bench trial that her claims of breach of contract, rescission, and cancellation were time barred. She argues there is no evidence to support the trial courts finding that all of the contractual obligations of David Lai (buyer) were due on October 11, 1999, and that the court erred in determining the statute of limitations began to run on this date. We affirm the judgment.

Background

Seller was the owner of five vacant residential lots in Oakland, and on March 31, 1998, she entered into an agreement to sell the lots to buyer. The purchase agreement set the total price for the lots at $75,000. On October 1, 1998, the parties reduced the purchase price to $23,000, reflecting the existence of liens on the property, and buyer agreed to take responsibility for the liens. Seller executed a grant deed dated October 1, 1998, which conveyed her interest in the property to buyer.

As of September 8, 1999, buyer had not yet recorded the grant deed, paid the balance of the purchase price, or paid the liens on the property. The parties modified the terms of the purchase agreement by a letter dated September 8, 1999, requiring buyer to deliver the remainder of the purchase price, record the grant deed, and take possession of the premises by October 11, 1999. The letter provided that if buyer did not perform the terms of the agreement, seller had the right to cancel the sale in its entirety and to keep the sums paid to date as liquidated damages.

Buyer paid the remainder of the purchase price, but did not record the grant deed on or before October 11, 1999. On August 15, 2000, seller notified buyer that she was rescinding the purchase agreement and requested that buyer return the grant deed. Buyer recorded the grant deed on August 29, 2000. Seller then recorded a notice of rescission of grant deed on September 14, 2000. On February 18, 2004, buyer paid the property taxes and liens recorded on the title.

On April 28, 2004, buyer filed a complaint alleging slander of title and sought cancellation and expungement of sellers notice of rescission; however, buyer did not serve his complaint until July 2004. On May 4, 2004, seller filed a complaint, in which she pled claims to quiet title, to cancel the deed and underlying purchase agreement, for declaratory judgment regarding ownership of the property, for breach of the October 1998 purchase agreement, to enjoin further acts interfering with her ownership interest, and for rescission of the October 1998 grant deed and purchase agreement. The actions were consolidated and came on for court trial on May 11, 2006. A proposed decision was issued on May 23, 2006, and seller filed a motion for reconsideration on May 26. The trial court issued its statement of decision on May 30, and on June 12, denied sellers motion to reconsider and entered judgment.

The trial court found that buyers performance under the purchase agreement was required on or before October 11, 1999. The court stated it was undisputed that buyer did not fully perform by that date, and seller considered him in breach as of that date and formally advised buyer of the breach in a letter dated November 11, 1999. Seller did not commence her action until May 4, 2004, over four years after the breach. The court held that sellers causes of action for breach, cancellation, and rescission were time barred. Also, because the contractual claims were barred, buyer was the owner of the property when the action was filed, and sellers claims to quiet title and for injunctive relief and declaratory judgment were not viable.

The court entered judgment in favor of buyer on his cause of action for cancellation and expungement of instrument. The court ordered sellers notice of rescission and any other document recorded by seller purporting to challenge the validity of buyers grant deed to be canceled and expunged. This appeal followed.^[1]

Discussion

On appeal, seller argues the trial court erred in its determination that all of buyers contractual obligations were due, and the statute of limitations began to run on October 11, 1999. She asserts buyers obligation to pay the taxes and liens was not governed by the October 11, 1999 deadline, and the purchase agreement remained executory until she chose to abandon the agreement on August 15, 2000. We find seller provided an insufficient record on appeal, but even based on the material provided, we disagree with sellers contentions.

I. Standard of Review

The interpretation of a written instrument, even though it involves what might properly be called questions of fact [citation], is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. [Citations.] Extrinsic evidence is admissible to interpret the instrument, but not to give it a meaning to which it is not reasonably susceptible [citations], and it is the instrument itself that must be given effect. [Citations.] It is therefore 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 [citations], where there is no conflict in the evidence [citations], or a determination has been made upon incompetent evidence [citation]. [Citations.] (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865-866.) [I]t is only when conflicting inferences arise from conflicting evidence, not from uncontroverted evidence, that the trial courts resolution is binding. (Id. at p. 866, fn. 2.)

Here, the parties draw different inferences from the evidence about whether the October 11, 1999 deadline governed the obligation to pay property taxes and liens. There does not appear to be conflicting extrinsic evidence, but instead, both parties and the trial court judge base their conclusions on the same set of documents. We therefore exercise our independent judgment on review.

II. Inadequate Record on Appeal

The appellant must affirmatively demonstrate error by an adequate record. In the absence of a contrary showing in the record, all presumptions in favor of the trial courts action will be made by the appellate court. [I]f any matters could have been presented to the court below which would have authorized the order complained of, it will be presumed that such matters were presented. [Citations.] (Bennett v. McCall (1993) 19 Cal.App.4th 122, 127 [refusing to second guess the trial courts determination that the action was barred by the statute of limitations given the appellants failure to include his complaint in the record].)

Here, we are charged with interpreting a purchase agreement, as set forth by an original agreement and follow up correspondence. In concluding that buyers performance was due by October 11, 1999, the trial court referred to the parties October 1, 1998 agreement, the September 8, 1999 letter modification, and a November 11, 1999 letter from seller advising buyer of the breach. Further, in sellers trial brief, she stated she notified buyer that he had breached the purchase agreement in this November 11 letter, and cited the letter as her own Exhibit 7. This November 11 letter is nowhere in the appellate record, however, precluding our consideration of this potentially informative document. In addition, seller failed to provide a reporters transcript of the trial, and thus our review cannot include the parties own testimony about their contractual agreement.^[2] Seller also failed to include any of buyers pleadings from the case in the clerks transcript.

Seller has failed to present portions of the proceedings below which may have provided grounds for affirmance of the trial courts decision. We can presume these missing portions would support the trial courts conclusion. (Bennett v. McCall, supra, 19 Cal.App.4th at p. 127.)

III. Interpretation of the Purchase Agreement Based on the Record Presented

Even if we interpret the contract based on the materials provided by seller on appeal, we agree with the trial court that all of buyers obligations were due on October 11, 1999, and buyers failure to perform as of this date constituted a breach and triggered the statute of limitations.

The purchase agreement of October 1, 1998 set forth various terms for the sale of the five lots, including a total purchase price of $23,000, a down payment of $10,000, an additional payment of $4,300 due one week following October 1, 1998, and an additional payment of $2,000 two weeks later. The agreement also stated, The buyer will take responsibility for the lien of the property.

Because buyer had not yet fulfilled his obligations, on September 8, 1999, seller sent a letter to buyer modifying the terms of the purchase agreement. In this letter sellers counsel stated, My client is willing to honor the contract of sale provided that she is paid the balance due on the purchase price and [buyer] takes possession and title to the subject property as set forth herein. . . . Within thirty days, [buyer] will deliver the remainder of the purchase price, $8,500 plus interest due to complete the purchase. [Buyer] should then record his deed of trust and take possession of the premises on payment of the final installment on or about October 11, 1999.

The September 8, 1999 letter does not specifically state that the payment of taxes and liens was required by October 11, 1999. On appeal, seller argues [t]he October 11, 1999 due date only modified that date for payment of the balance of the cash purchase price and the ultimate date for recording the October 1, 1998 [g]rant [d]eed. It did not modify the obligation for payment of sums towards the taxes and liens contained in the October 1, 1998 [p]urchase [a]greement. We disagree.

Sellers own statement of undisputed facts provided, As of September 8, 1999, [buyer] had failed to perform his obligations under the October 1, 1998 purchase agreement by, among other things . . . failing to pay the property taxes or the liens on the title [citation] and by failing to assume responsibility for the liens and property taxes by recording the October 1, 1998 grant deed. Seller went on to state, The September 8, 1999 agreement set forth specific terms in regard to the payment of the remainder of the down payment, payment of the principal balance due on the purchase price, plus interest, and a date certain by which [buyer] would record the October 1, 1998 [g]rant [d]eed so as to assume responsibility for the liens and property taxes as he had agreed in the October 1, 1998 purchase agreement.

In a declaration submitted to the trial court, seller stated, The [September 8, 1999] agreement also provided that [buyer] would record the October 1, 1998 grant deed not later than October 11, 1999, thereby performing his obligation to assume responsibility for the liens and the property taxes. (Italics added.) In a post trial brief, seller reiterated, In addition to assuming responsibility for the property taxes and liens and paying sums towards the liens and taxes, [buyer] was required to pay the balance of the cash purchase price by October 11, 1999. (Emphasis omitted.)

There is no express reference in the September 8, 1999 agreement to buyers obligation to pay the liens and taxes. However, that agreement does require buyer to record the grant deed to the property by October 11, 1999, and the record is clear that the parties understood this act would relieve seller of any obligation for these liens and taxes, and buyer would bear sole legal responsibility for them. Buyers failure to record the grant deed and assume responsibility for the liens and property taxes was a breach of the agreement as of October 11, 1999.

IV. The Statute of Limitations Began to Run on October 11, 1999

An action upon any contract, obligation or liability founded upon an instrument in writing, or an action based upon the rescission of a contract in writing, must be brought within four years from the time the cause of action shall have accrued. (Code Civ. Proc.,  312, 337.) Here, sellers cause of action accrued when buyer failed to record the grant deed and assume responsibility for the liens and property taxes by October 11, 1999. Seller did not commence her action until May 4, 2004, and thus, the trial court was correct in determining her claims were time barred. Because we reject sellers argument that the September 8, 1999 agreement did not modify the timing of buyers obligation to pay the taxes and liens, we also reject her argument, premised on Union Sugar Co. v. Hollister Estate Co. (1935) 3 Cal.2d 740 and Baugh v. Garl (2006) 137 Cal.App.4th 737, that the purchase agreement remained executory, and the statute of limitations did not begin to run until August 15, 2000, when she contends she abandoned the agreement.

Disposition

The judgment is affirmed.^[3] Respondent shall be awarded costs on appeal.

SIMONS, J.

We concur.

JONES, P. J.

GEMELLO, J.

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^[1] Judgment was entered for seller on buyers cause of action for slander of title, and this is not challenged on appeal.

^[2] Seller states in her opening brief that she and buyer were the sole witnesses at trial.

^[3] In his respondents brief, buyer requests sanctions for sellers failure to properly present a complete record on appeal. California Rules of Court, rule 8.276(e)(1) (former rule 27(e)(1)) provides in relevant part, On a partys or its own motion, a Court of Appeal may impose sanctions . . . . Buyers failure to make a motion was procedurally improper, and we deny his request on this basis.