River Rock Development v. Paik

Filed 4/10/07 River Rock Development v. Paik CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

THIRD APPELLATE DISTRICT

(Yolo)

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Landowners agreed to sell land to a buyer for purposes of development. The purchase agreement called for a continuing relationship between the parties, with the sellers to receive a small percentage of profits from the development. The buyer sought the sellers approval for assignment of the buyers interests to an assignee, pursuant to an assignment agreement requiring the assignee to provide minimum funding. The buyer then signed amendments to the assignment agreement (including deletion of the minimum funding clause), without advising the sellers of the changes. The sellers agreed to consent to the original assignment agreement but never signed anything to that effect.

In this appeal, the buyers purported assignee--cross-complainant River Rock Development, an Arizona limited liability company (River Rock)--appeals from summary judgment entered in favor of the sellers--cross-defendants Young J. Paik and Sue K. Paik, individually and as trustees of the Young J. Paik Family Trust (the Paiks). River Rock contends the trial court erred in excluding evidence and in determining there was no valid assignment. We shall affirm the judgment.

STANDARD OF REVIEW

Summary judgment shall be granted if all the submitted papers show there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc.,  437c, subd. (c).) A defendant meets his burden of showing that a cause of action has no merit if he shows that one or more elements of the cause of action cannot be established, or that there is a complete defense. ( 437c, subd. (p)(2).) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of material fact exists. (Ibid.) On appeal from summary judgment, we review the trial courts decision de novo. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.) We identify the issues raised by the pleadings, determine whether the moving party has negated the opponents claims, and determine whether the opposition demonstrates the existence of a triable, material factual issue. (Silva v. Lucky Stores, Inc. (1998) 65 Cal.App.4th 256, 261.) Though our review is de novo, our review is limited to issues adequately raised and briefed. (Lewis v. County of Sacramento (2001) 93 Cal.App.4th 107, 116.)

THE PLEADINGS

Although this appeal involves only a cross-complaint by River Rock against the Paiks, we begin with the complaint and identification of the other parties in order to provide context. In brief, the Paiks entered into a contract to sell their land to Stonegate Riverside, LLC, through its owner Alfred F. Smith (collectively Smith/Stonegate). Smith/Stonegate entered into an agreement to assign its interests to River Rock. The complaint was filed by third parties who claimed the purported assignment interfered with a partnership agreement they had with Smith/Stonegate.

Thus, on February 11, 2003, Jamal, LLC, and Masud S. Monfared, doing business as Rahimian Entity, Javad Rahimian, and Majid Rahimian (collectively the Rahimians) filed a complaint for declaratory relief, breach of partnership agreement, breach of fiduciary duty, fraud, intentional interference with contract, and negligent interference with contract, against Smith/Stonegate, River Rock, Hesperia Management, Inc. (River Rocks manager), and the Paiks (Young and Sue).^[1] The complaint alleged as follows:

Smith/Stonegate entered into a contract to buy 361 acres of land from the Paiks in December 2000 (the Paik contract). Smith/Stonegate then entered into an oral and written partnership agreement with the Rahimians to develop a mixed-use project of 964 acres in Yolo County, including the Paik property, as reflected in a written memorandum of understanding (MOU). In reliance on the MOU, the Rahimians provided $300,000 to fund the September 1, 2001, payment due under the Paik contract. On February 1, 2002, Smith/Stonegate entered into a written assignment and assumption agreement (AAA) to transfer its rights under the Paik contract to River Rock -- rights which had earlier been transferred to the Rahimians. On February 12, 2002, River Rock entered into amendment No. 1 to the AAA, whereby River Rocks obligation was expressly conditioned upon receipt, prior to closing, of a written settlement and full mutual release with the Rahimians expressly waiving all rights under the MOU. The Rahimians have not waived their rights under the MOU. The Paiks contend that, in November 2002, there was a default under the Paik contract, because Stonegate and/or River Rock failed to make a $1 million payment necessary to extend the escrow closing date or otherwise breached the contract. The Rahimians are informed and believe that River Rock tendered payment, but the Paik defendants refused the tender and anticipatorily breached the Paik contract. The complaint claimed River Rock interfered with the Rahimians contract (MOU) with Smith/Stonegate.

Smith/Stonegate filed a cross-complaint against the Rahimians for breach of contract, breach of fiduciary duty, fraud, and financial elder abuse.

The pleading at issue in this appeal is River Rocks third amended and supplemental cross-complaint against the Paiks (and against the Rahimians), for interference with contractual relations, intentional interference with prospective economic advantage, and declaratory relief. The cross-complaint alleged that Smith/Stonegate entered into a purchase agreement with the Paiks on December 1, 2000, pursuant to which the Paiks purported to sell to Smith/Stonegate a 361-acre parcel which, though it could be developed as a stand alone project, was intended to be used as the keystone parcel for a mixed use aggregation of land that Smith/Stonegate planned to develop as part of a master planned community (the project) aggregating as much as 991 acres of land. On February 1, 2002, Smith/Stonegate entered into the assignment agreement with River Rock, pursuant to which Smith/Stonegate agreed to assign its rights under the Paik contract. Closing on the assignment contract occurred on February 20, 2002. On February 20, 2002, the Paiks consented to the assignment, and River Rock paid the Paiks $210,000 due under the Paik contract.

The Rahimians were asserting an interest in the Paik acreage and the development project pursuant to a purported August 2001 memorandum of understanding (MOU) with Smith individually. River Rock had no knowledge of the MOU or the Rahimians claims (other than a $300,000 debt obligation to repay the Rahimians for a payment they made to the Paiks on Smith/Stonegates behalf) until February 11, 2002. River Rock ultimately accepted Smiths view that the Rahimians had abandoned the MOU and did not insist on a release from the Rahimians before closing the assignment transaction with Smith/Stonegate.

Because of the Rahimians claims and threats of litigation, River Rock was unable to secure the needed equity funding. River Rock expected to secure funding of up to $12 million through a joint venture agreement with the Graham family^[2]and/or third-party lenders/investors, but as a result of the Rahimians, River Rock was not able to secure the needed financing/funding to acquire the additional parcels resulting in River Rock being defaulted (wrongfully) out of the Paik contract.

On September 13, 2002, the Paiks gave notice that River Rock was in breach of the purchase agreement for failure to perform and for trying to sell its interest in the project rather than proceed with the project. The Paiks subsequently gave notice of default on October 14, 2002.

In December 2003, the Paiks entered into an option agreement with another party.

River Rocks cross-complaint sought a court order commanding the Paiks to convey marketable title to the 361-acre parcel to River Rock, in exchange for payment of the balance of the purchase price under the contract. In the alternative, River Rock sought other remedies.

The Paiks filed an answer to the cross-complaint, asserting in part that River Rock had no valid enforceable assignment because, among other reasons, River Rock failed to obtain a valid written consent to the assignment, as required by the purchase agreement, and misrepresented or concealed material facts regarding the assignment.

THE SUMMARY JUDGMENT MOTION & OPPOSITION

In July 2005, the Paiks filed a motion for summary judgment or summary adjudication of River Rocks cross-complaint, on the grounds that (1) River Rock has no standing because it has no contractual relationship with the Paiks; (2) River Rock is not an assignee under the contract since no written consent of the Paiks was obtained, as required by the purchase agreement; (3) any alleged consent to the assignment was procured by River Rocks constructive fraud in failing to disclose material amendments to the assignment agreement; and (4) any alleged consent was procured on the basis of mistake.

River Rock opposed the Paiks motion. Despite unexcused defects in River Rocks opposition, the trial court nevertheless stated it would consider all admissible evidence, even if not referenced in the separate statements of facts.

A. Undisputed Facts

We begin with an undisputed chronology of the written contracts, events, and letters back and forth between the parties attorneys.^[3]

On December 1, 2000, the Paiks and Stonegate entered into an AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS, pursuant to which the Paiks agreed to sell 361 acres of land in West Sacramento to Stonegate for $20,000,000. The purchase agreement and its subsequent amendments contemplated a continuing relationship between buyer and seller. As specified in the original agreement, the closing date was to be the earliest of (1) a date designated by Stonegate with 60 days notice, (2) a date within a specified time after authorities approved a tentative subdivision map, or (3) December 1, 2002, as the Outside Closing Date. The purchase agreement specified Stonegate would perform certain actions to subdivide and develop the property, would report its progress on its entitlement processing efforts to the Paiks, and would pay periodic deposits toward the purchase price as long as the agreement was in effect.

Paragraph 9.9 of the purchase agreement stated in pertinent part:

Assignment. Buyer may not assign this Agreement and its rights and obligations hereunder without first obtaining Sellers written approval of such assignment, which approval shall not be unreasonably withheld or delayed. Sellers approval of a proposed assignment shall be based upon the proposed assignees reputation, experience, financial resources and access to credit, and capability to successfully carry out the development of the Property to completion.^[4]

On March 27, 2001, a first amendment to the purchase agreement adjusted the amount of the deposits.

On June 11, 2001, a second amendment to the purchase agreement adjusted the deposits and purchase price and added the following: 4. Partial Assignment of Profits. Buyer hereby convenants and agrees to assign to Seller at the Close of Escrow, by a document in form reasonably acceptable to Seller, one-half of one percent (1/2%) of the profits derived from the ownership, development, and/or transfer of the Property (Profits) if the Second Deposit is paid to Seller on or before August 1, 2001, and one percent (1%) of the Profits if the Second Deposit is paid to Seller after August 1, 2001. The assignment document shall include, but not be limited to, provisions obligating Buyer to maintain books and records in accordance with generally accepted accounting principles, obligating Buyer to provide regular income and expense statements and other financial reports to Seller in the same manner and to the same extent as such reports are made to members of Buyer, authorizing Seller and its designated agents to inspect the books and records of Buyer, authorizing Seller and its designated agents to inspect the books and records of Buyer relating to the Property during normal business hours, and entitling Seller to receive distributions of Profits from Buyer at the same time and in the same manner as distributions of Profits are made to members of Buyer. The provisions of this paragraph shall survive the Close of Escrow and recordation of the Grant Deed.

On August 29, 2001, a third amendment to the purchase agreement allowed Stonegate to extend the date for closing escrow.

On November 29, 2001, a fourth amendment to the purchase agreement amended the provision regarding deposits.

On February 1, 2002, Smith/Stonegate executed an AAA to assign its rights in the Paik purchase agreement to River Rock. The assignment agreement noted that, in addition to the 361 acres under the Paik contract, Smith/Stonegate was trying to acquire land from other owners to make a total development of 991 acres. The assignment agreement called for River Rock to carry on the negotiations and try to enter purchase agreements with the other owners, though Smith/Stonegate was to have no responsibility or liability for such agreements.

The original assignment agreement stated in part, under Conditions to Assignment Closing:

3.1 The obligation of Assignor to proceed with and consummate the Assignment Closing (as defined in Section 4.1) shall be conditional upon the occurrence, prior to the Date of Assignment Closing (as defined in Section 4.1) of the following condition:

3.1.1 Assignee shall have obtained at least Minimum Funding in an amount sufficient to fund the budget for the first phase of development (the exact amount of Minimum Funding shall be the amount determined by Assignee in its sole discretion (Minimum Funding), but shall not be less than $4 million and shall not be more than $12 million).

On February 8, 2002, River Rocks attorney (C. Steven Rorke) sent a FAX to the Paiks attorney (David L. Robertson) with a copy of the February 1, 2002, AAA. The FAX said, this is an agreement to effect assignment of the Paik purchase contract. We hope to close the assignment very soon in order to facilitate funding the February 8, 2002 deposit in the amount of $210,000. One thing we will need to obtain in order to close the assignment is your clients consent in accordance with Section 9.9 of the Stonegate/Paik agreement. If you like, you may put together a form of consent or, if you would like me to prepare it or need anything further in order to obtain the consent, please let me know.

On February 12, 2002, Smith/Stonegate and River Rock signed amendment No. 1 to the assignment agreement, which deleted the requirement for minimum funding and waived provisions concerning other properties. This amendment stated in part:

3.3 Section 3 [conditions to closing] of the Assignment and Assumption is deleted in its entirety and replaced with the following:

3. Conditions to Assignment Closing.

3.1 The obligation of Assignor to proceed with and consummate the Assignment Closing (as defined in Section 4.1) shall be conditional upon the occurrence prior to the Date of Assignment Closing (as defined in Section 4.1), or the express written waiver by Assignor, of the following condition:

3.1.1 Assignee shall, concurrently with the Assignment Closing, make the February Payment to Paik, such that the Existing Agreement remains in full force and effect following the February payment.

3.2 The obligation of Assignee to proceed with the Assignment Closing shall be conditional upon the occurrence, prior to the Date of Assignment Closing, of all of the following conditions:

3.2.1 Assignee and Assignor shall have received the written approval and consent of the Owners under the Existing Agreement to the assignment of the Existing Agreement to Assignee, which consent shall be in a form acceptable to Assignee that complies with the requirements of Section 9.9 of the Existing Agreement.

3.2.2 Assignor shall have entered into a written settlement and full mutual release with [the Rahimians] pursuant to which the Rahimians expressly waive all claims under the memorandum of understanding with Assignor dated August 29, 2001, or other claims to any equity ownership interest in the Project, the Property, or the Existing Agreement, subject only to repayment of the Rahimians $300,000 loan on July 1, 2002 . . . .

On February 15, 2002, Smith/Stonegate and River Rock signed amendment No. 2 to the assignment agreement, moving the closing deadline to February 20, 2002.

The amendments to the assignment agreement were not provided to the Paiks.^[5]

On February 20, 2002, several things happened. Smith/Stonegate and River Rock signed the assignment closing agreement (ACA). A $210,000 payment due under the purchase agreement was wired from River Rock to the Paiks.^[6] Paiks attorney (Robertson) met with River Rocks attorney (Rorke) to discuss the assignment, and Robertson sent to Rorke a letter stating in part:

The purpose of this letter is to advise you that our clients [the Paiks] have authorized me to notify you that they have agreed to consent to the assignment set forth in the Assignment and Assumption Agreement entered into as of the 1st day of February, 2002, by and between [Smith/Stonegate] as the Assignor, and [River Rock] as the Assignee.

This agreement to consent by our clients is based upon your agreement to provide me a certified copy of the organizational documents for [River Rock], as well as a letter setting forth the proposed syndication plan for funding the acquisition of our clients property and confirming our clients entitlement to a one percent share of profits derived from the ownership, development and/or transfer of our clients property. The formal assignment document referenced in Section 4 [partial assignment of profits^[7]] of the Second Amendment to Agreement for Purchase and Sale of Real Property and Escrow Instructions should be prepared as soon as possible. As stated in that section, your client is obligated to maintain books and records in accordance with GAAP and to provide to our clients regular income and expense statements, as well as other financial reports, in the same manner and to the same extent as such reports are made to members of [River Rock]. Please advise me whether you will prepare the initial draft.

Please prepare a formal consent to assignment document for execution by our clients which also confirms the changes to the parties entitled to notice under the purchase agreement. As we discussed, I will revise the Memorandum of Agreement to reflect the assignment and have it executed by our clients.

River Rock claims that, before Robertson sent this letter on February 20, 2002, he received a FAXed copy of the assignment closing agreement which made reference to the amendments. However, the trial court excluded this evidence (Exhibit L), and we reject post River Rocks challenge to this ruling.

On February 25, 2002, River Rocks attorney sent a letter to the Paiks attorney, stating it was providing the requested information about River Rock and stating in part: This will confirm that under the Assignment Agreement with Stonegate, the Company [River Rock] has assumed all obligations of Stonegate under the [amended purchase agreement], including the 1% partial assignment of profits . . . . I will prepare a special form of agreement to reflect transfer of such interest to your clients . . . . [] This will also confirm that, as [River Rock] has acquired the Buyers interest in the Paik Agreement, any notice to Buyer [should be sent to River Rock and its attorney]. [] . . . [] As we discussed, I will also prepare a formal consent to assignment for execution by your clients confirming your clients approval of the assignment and, to the extent that the manner in which such approval has been obtained does not fully conform to the requirements of Section 9.9, waiving (for purposes of this assignment to [River Rock] only) the specific requirements of prior written approval under Section 9.9 of the Paik Agreement.

Several months later, on August 19, 2002, River Rocks attorney wrote to the Paiks attorney: With reference to the [purchase agreement] between your client and River Rock Development, LLC as assignee Buyer, and as contemplated by your letter to me dated February 20, 2002, I attach the form of Approval and Consent to Assignment to be signed by Mr. and Mrs. Paid [sic] and the Memorandum of Agreement to be executed by the parties and recorded.

The Paiks did not sign the documents.

On September 12, 2002, the Paiks attorney wrote to River Rocks attorney, stating in part: It has come to my attention that River Rock is actively marketing the purchase agreement at this time, rather than pursuing development of the property as was contemplated, and was a material inducement for our client to enter into [the purchase agreement]. I am currently confirming whether Stonegate Development or River Rock Development [have performed entitlement processing pursuant to the purchase agreement]. If not, I will be sending . . . notice . . . as a condition precedent to declaring a default under [the purchase agreement].

On September 13, 2005, the Paiks attorney sent to River Rock (and to Smith/Stonegate) a Notice of Cure Period (Paik/Stonegate), demanding that River Rock Development, LLC (River Rock) immediately comply with the provisions of [the purchase agreement] . . . . River Rock Development, LLC will be in default under the above-referenced agreement if all of the [specified information] is not delivered to our client within fifteen business days from the . . . date on which this letter was delivered to River Rock by [FAX] in accordance with Section 9.10 of the Purchase Agreement and Section 13.5 of the Assignment and Assumption Agreement dated February 1, 2002. The notice added: Based upon information I recently received, it appears that River Rock has complete[ly] dispensed with any efforts to process entitlements for the Property and instead is attempting to convey its contract rights to a third party for a bonus payment of $5,000,000. This is clearly inconsistent with the intent of both parties at the time of entering into the Purchase Agreement.

On October 14, 2002, the Paiks attorney sent to River Rocks attorney (and to Smith/Stonegate) a Notice of Default (Paik/Stonegate), stating that River Rocks October 2, 2002, attempt to cure the default failed.

B. Moving Partys Position

In their summary judgment motion, the Paiks argued there was no valid assignment of contractual rights from Smith/Stonegate to River Rock, because the purchase agreement required written consent by the Paiks themselves, and the Paiks had not signed any written consent. The Paiks also argued any consent they did give was vitiated by constructive fraud due to River Rocks misrepresentations (failure to disclose the amendments) or by mistake. The Paiks also presented additional arguments, which we need not address.

C. Opposing Partys Position

In opposing summary judgment, River Rock argued the purchase agreement did not require formal consent by the Paiks but merely called for their written approval, and their attorneys letter conveying their approval was binding on them. River Rock argued the Paiks were estopped to disavow the approval conveyed by their attorneys letter, because (1) their attorneys letter indicated a copy was sent to the Paiks, (2) the Paiks accepted from River Rock a $210,000 payment due under the purchase agreement, and (3) the Paiks thereafter treated River Rock as assignee of the purchase agreement and indeed stated in the default notices that River Rock was in default of the purchase agreement.

River Rock submitted as Exhibit L a copy of a FAX transmittal form from Placer Title to the Paiks attorney at 12:47 p.m. on February 20, 2002, which attached a copy of the assignment closing agreement, which said, The Parties have entered into that certain Assignment and Assumption Agreement dated February 1, 2002, as amended by Amendment No. 1 dated February 12, 2002 and Amendment No. 2 dated February 15, 2002 (collectively the Assignment Agreement). However, the trial court sustained the Paiks evidentiary objection on the ground the FAX was not authenticated, and we explain, post, why River Rock fails to show reversible error.

THE RULING

The trial court granted summary adjudication of the two causes of action against the Paiks in River Rocks cross-complaint (the fourth cause of action alleging breach of contract, and the fifth cause of action requesting specific performance). The trial courts October 6, 2005, amended order, after setting forth the background of the case, explained the courts reasoning as follows:

The trial court first declined to find that a writing signed by the Paiks was required by the statute of frauds (a point we need not address in this appeal). However, said the court, Smith was required by the contract with the Paiks to obtain their written approval of the assignment. The parties attorneys treated this contractual provision as requiring that the Paiks themselves sign a formal consent document. Thus, said the court, River Rock did not have a valid contract with the Paiks because the Paiks never signed a document approving of the assignment.

In a footnote, the trial court noted River Rock argued that the question whether the Paiks attorney had authority to bind his clients was an issue of fact precluding summary judgment. The court said the question whether or not the Paiks attorney had authority to bind them was irrelevant, because the attorneys consent related only to the original February 1, 2002, assignment agreement, not to the amended agreement.

The court said even if the attorneys signature was legally sufficient to bind the Paiks, his February 20, 2002, letter could not constitute the Paiks agreement to the assignment ultimately entered into by Smith and River Rock. The letter referred only to the AAA entered into on February 1, 2002. This original agreement required River Rock to obtain minimum funding. The minimum funding requirement was subsequently deleted before Smith and River Rock signed the closing agreement on February 20, 2002. Under the Paiks contract, they were entitled to consider the proposed assignees financial resources and access to credit and capability to carry out the development. Thus, River Rock did not have a valid contract with the Paiks because the Paiks did not agree to an assignment without a minimum funding requirement.

The trial court went on to say that, even though not argued by the parties, the agreement between Smith and the Paiks required Smith to obtain the Paiks written approval before assigning his rights. The undisputed evidence showed Smith executed the assignment and amendments before the Paiks attorney conveyed their consent.

The trial court also noted that River Rock argued at the hearing that the Paiks acceptance of $210,000 from River Rock on February 20, 2002, constituted partial performance of the assignment agreement, equitably estopping the Paiks from denying the assignment. The court said, Unfortunately, that argument was not raised in River Rocks opposition (styled a Response) to the Paik motion for summary judgment. Even if the court were to consider this untimely argument, the undisputed evidence shows that the Paiks previously accepted payments on Smiths behalf from various entities in order for Smith to comply with the payment schedule and preserve his rights to develop the Paik property pursuant to Smiths agreement with the Paiks. The payment simply ensured the continuation of Smiths rights in his agreement with the Paiks, unrelated to any assignment.

The totality of River Rocks estoppel argument in its opposition is quoted here: the Paiks are estopped to make this claim [that the assignment agreement must be signed by the Paiks] first as the correspondence clearly indicates, Mr. Paik was sent a copy of [his attorneys] letter [of February 20, 2002]. No claim has been made that he did not receive it. Moreover, the Paiks treated River Rock from and after February 20, 2002 as the assignee of the contract. The argument is without merit. On its face, the February 20, 2002, letter from Robertson contemplates a formal consent that must be drafted and signed by the Paiks. This is consistent with Mr. Paiks undisputed testimony that his signature was required. As to the claim that River Rock was treated as an assignee, assuming this is true for purposes of this motion, it is consistent with the attorneys finalizing documents regarding the February 1, 2002 assignment. It is undisputed that the Paiks were unaware of any later amendments to the assignment agreement until this litigation began.^[8]

The trial court concluded: Because the Paiks did not consent to Smiths assignment to River Rock, River Rock did not have a contract with the Paiks. Thus, the Paiks did not breach a contract with River Rock and River Rock may not obtain specific performance of a contract with the Paiks. The undisputed facts do not support the application of either the doctrine of partial performance or the doctrine of estoppel. The court accordingly granted summary adjudication in favor of the Paiks as to the fourth and fifth causes of action in River Rocks cross-complaint.

On October 31, 2005, the trial court entered judgment stating that the courts granting of summary adjudication as to River Rocks fourth and fifth causes of action resolved all claims and issues as to the Paiks, and therefore the court entered judgment in favor of the Paiks on River Rocks cross-complaint.

River Rock appeals.

DISCUSSION

I. Contention Re Evidentiary Ruling

River Rock contends the trial court erred in sustaining the Paiks evidentiary objection to Exhibit L -- the February 20, 2002, FAX from Placer Title Company to the Paiks attorney containing the assignment closing agreement. We see no basis for reversal.

River Rock submitted as Exhibit L a FAX transmittal sheet from Placer Title Company bearing the FAX number of the Paiks attorney and a notation of FAX transmittal at 12:47 p.m. on February 20, 2002. The FAX transmittal said, Message: For Your Files. Attached to it was a copy of the assignment closing agreement between Smith/Stonegate and River Rock, stating in part: The Parties have entered into that certain Assignment and Assumption Agreement dated February 1, 2002, as amended by Amendment No. 1 thereto dated February 12, 2002 and Amendment No. 2 thereto dated February 15, 2002 (collectively the Assignment Agreement). River Rock sought to use this evidence to show it advised the Paiks of the amendments before the Paiks attorney sent his February 20, 2002, letter saying the Paiks consented to the assignment.^[9]

The trial court sustained the Paiks objection on the ground Exhibit L was not authenticated but was merely attached to a statement that River Rock submits the following evidence . . . .

Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law. (Evid. Code, 1400.)

On appeal, River Rock argues Exhibit L was authenticated in the depositions of Young Paik, Paiks attorney (Robertson), and River Rocks attorney (Rorke). However, River Rock fails to give us any page cites to the record to back up its assertion. River Rock merely quotes from page 5299 of the appellants appendix, which is River Rocks opposition to the Paiks evidentiary objections, that Exhibit L was authenticated in the Deposition of Steve Rorke, Exhibit 47; Deposition of David Robertson, Exhibit 38; and Deposition of Young Paik, Exhibit 22. We decline to search almost 6,000 pages of appellants appendix to find the cited depositions, particularly since River Rock has not bothered to cite any particular pages of the depositions or even describe what was said in the depositions which River Rock considers helpful to its case. (Aguimatang v. Cal. State Lottery (1991) 234 Cal.App.3d 769, 796 [disregarding evidentiary contentions unsupported by proper page cites to the record]; see also City of Lincoln v. Barringer (2002) 102 Cal.App.4th 1211, 1239, and authorities cited therein.)

River Rock cites case law holding authentication may be shown by circumstantial evidence. However, in the cited cases, such circumstantial evidence existed. (People v. Gibson (2001) 90 Cal.App.4th 371, 382-383 [location of manuscripts in residences owned by defendant and content referring to defendants alias as the author provided circumstantial evidence of authentication]; People v. Olguin (1994) 31 Cal.App.4th 1355, 1372 [content and location of rap lyrics found in defendants home provided sufficient authentication].) Here, River Rock cites no circumstantial evidence that the Paiks attorney saw the FAX before he sent his letter of February 20, 2002.

River Rock considers it significant that the Paiks included a copy of the assignment closing agreement with their summary judgment motion, though the copy they submitted came from River Rocks discovery production of documents and did not have the FAX cover sheet with the time/date stamp. River Rock appears to view the Paiks inclusion of the document as establishing that the assignment closing agreement is authentic. However, the authenticity of the assignment closing agreement is not the problem. The problem for River Rock is it wants to use the FAX transmittal to show it advised the Paiks of the amendments on February 20, 2002. Therefore, River Rock needs to authenticate the FAX transmittal--which it has not done. Indeed, River Rock admits in its reply brief that the Paiks attorney did not recall seeing the assignment closing agreement. We disregard River Rocks belated and unsupported accusation in its reply brief that the Paiks engaged in bait-and-switch by using the document from River Rocks production rather than the copy they assertedly received by FAX.

Even assuming for the sake of argument that the title company FAXed the document to the Paiks attorney at 12:47 p.m. on February 20, 2002, that does not mean the Paiks attorney received it before he mailed his February 20, 2002, letter, or that he read or should have read the FAX before he mailed his letter. River Rock cites no evidence of what time Robertson signed the letter or what time the mail went out. River Rock cites no evidence of the office procedures in the law offices of Trainor Robertson (the Paiks attorneys) to show how long it takes for incoming FAXes to reach the addressee. Even if we assume the FAX was immediately delivered to the inbox of Robertson or his secretary, there is no evidence Robertson saw it before sending his letter, nor has River Rock established that Robertson should have seen it. Nothing on the face of the FAX indicated any urgency. To the contrary, the FAX TRANSMITTAL sheet from the title company merely stated: Message: For Your Files. Even if Robertson received the FAX, his letter conveyed the Paiks willingness to consent only to the original assignment agreement executed on February 1, 2002, not the amended version. We reject, post, River Rocks argument that the Paiks only concern was supposed to be with the assignee, not the assignment terms.

Even assuming for the sake of argument that Exhibit L was admissible and should have been admitted, River Rock fails to show prejudice warranting reversal. (Evid. Code, 354 [judgment shall not be reversed for erroneous exclusion of evidence unless reviewing court is of the opinion that the error resulted in a miscarriage of justice].) Thus, River Rock argues Exhibit L would have shown that the assignment closing agreement (FAXed at 12:47 p.m. on February 20, 2002) was in the possession of the Paiks attorney before he sent the February 20, 2002, letter conveying the Paiks consent to the assignment, and had he read the FAX, he would have been put on notice that River Rock had twice amended the assignment agreement. River Rock argues Exhibit L also demonstrated that River Rock was not trying to hide the fact that the assignment agreement had been amended. River Rock argues Exhibit L was thus relevant on its estoppel claim.

However, Exhibit L would not show the Paiks consented to the amended assignment, because their attorneys February 20, 2002, letter expressly stated the Paiks consented to the assignment agreement of February 1, 2002, i.e., the original assignment agreement. Thus, even assuming the Paiks attorney received and read the FAX, his letter would suggest rejection of the amendments. Moreover, the FAX would not tend to show River Rock was being open and transparent. To the contrary, the opposite is suggested by the facts that (1) River Rock chose to notify the Paiks of the amendments by a FAX [f]or your files (attaching a copy of the assignment closing agreement which referenced the amendments without describing their contents) rather than make a point of presenting the amendments at the meeting that same day; and (2) River Rock made no apparent attempt to clarify the matter when the Paiks attorney wrote the February 20, 2002, letter saying the Paiks agreed to consent to the (original) assignment agreement of February 1, 2002.

We conclude River Rock fails to show prejudicial evidentiary error warranting reversal of the judgment.

II. No Valid Assignment

We shall address River Rocks appellate arguments despite the Paiks somewhat enigmatic position that River Rock fails to raise the issue that there is no basis in the record to support summary judgment.

We begin with the observation that this case does not involve the typical real estate contract where one party sells, the other buys, and the two parties go their separate ways. The purchase agreement in this case called for a continuing relationship between buyer and seller for an extended period of time, indeed extending past the close of escrow.^[10] Additionally, it was hoped that the project contemplated by the purchase agreement would be part of a larger project, in which the purported assignor continued to involve itself after closing the assignment agreement.

The parties argue whether or not the Paiks attorney was authorized to bind them to consent to the assignment. River Rock appears to withdraw this argument in its reply brief. In any event, we need not decide the point. Even assuming for the sake of argument that the letter of the Paiks attorney (stating the Paiks agreed to consent) was binding on them, the letter did not constitute the consent contemplated by paragraph 9.9 of the purchase agreement and did not compel the Paiks to sign the consent form submitted several months later by River Rock. The letter expressly indicated consent only to the original assignment agreement executed on February 1, 2002. Nothing anywhere in the record indicates the Paiks consented to the assignment agreement as amended.

River Rock argues a formal written consent signed by the Paiks was not necessary, and therefore the consent conveyed in their attorneys letter, together with River Rocks responding missive of February 25, 2002, providing information requested in the February 20 letter, sufficed to constitute the Paiks approval of the assignment. River Rock argues that at all times it met all requirements of the purchase agreements assignment clause (paragraph 9.9). River Rock suggests the formal consent it asked the Paiks to sign was for its own peace of mind and was not required by the purchase agreement. Indeed, River Rock claims the purchase agreements requirement for formal consent was for the benefit of the buyer, not the seller.

However, River Rock cites no evidence that the consent requirement was for the benefit of the buyer only, and this nonsensical claim is refuted by the very terms of the assignment clause, which says approval will be based on an assignees capability to carry out the project--a matter of continuing interest to the seller, who will receive a percentage of profits under the purchase agreement.

Moreover, River Rocks own attorney admitted that River Rock did not have a valid consent under paragraph 9.9. Thus, the February 25, 2002, letter from River Rocks attorney to the Paiks attorney said, I will also prepare a formal consent^[[11]]to assignment for execution by your clients confirming your clients approval of the assignment and, to the extent that the manner in which such approval has been obtained does not fully conform to the requirements of Section 9.9, waiving (for purposes of this assignment to the Company [River Rock] only) the specific requirements of prior written approval under Section 9.9 of the Paik agreement. (Italics added.) Even if this referred only to the fact that the assignment agreement was signed before the Paiks attorney sent the letter conveying the Paiks consent, the fact remains that River Rock knew it did not have a valid assignment under the purchase agreement.^[12]

We agree with River Rock that the Paiks treated River Rock as an assignee, rather than a proposed assignee (as the Paiks characterize it on appeal). The Paiks default notices told River Rock it was in breach of the purchase agreement. Though the Paiks also sent notice to Smith/Stonegate, it seems clear that all parties treated the assignment as a fait accompli. Nevertheless, all parties at all times knew they were bound by written instruments. It is those instruments which determine the legal import of what happened. Thus, River Rock cannot now rely on its own informal handling of the matter, or the informal handling of the matter by the Paiks, or the Paiks failure later to withdraw the consent conveyed in their attorneys February 20, 2002, letter, because the written instruments and letters between the parties demonstrate that formal consent to the assignment was required, and the parties understood this required the Paiks signatures. Section 9.2 of the same purchase agreement said the purchase agreement constituted the entire agreement among the parties and [t]his Agreement may be modified only by a writing signed by both parties. We reject River Rocks untenable suggestion that this provision does not apply to the assignment clause because it is not repeated within the assignment clause. Thus, River Rock knew that, in order for the assignment to be valid, it had to obtain the signatures of the Paiks approving the assignment and had to obtain the signatures of the Paiks amending the purchase agreement to waive the requirement that the approval occur before the assignment. River Rock never obtained such signatures and therefore never had a valid assignment. River Rock proceeded at its own risk in failing promptly to secure the necessary signatures.

River Rock cites a letter its attorney sent to Young Paik on October 9, 2002 (after the Paiks sent the initial notice of default), asking the Paiks to sign a formal consent to let River Rock assign the purchase agreement to another party (Baybrook) and to sign a formal acknowledgement of the consent that took place on February 20, 2002. In the October letter, River Rocks attorney characterized the acknowledgement as merely a formality. Contrary to River Rocks view, this belated, self-serving characterization by its attorney does not create a triable issue as to whether the February 20, 2002, letter constituted the approval contemplated by the assignment clause of the purchase agreement.

River Rock argues the trial court erred in concluding the Paiks did not agree to an assignment omitting the minimum funding requirement. River Rock argues the purchase agreement did not allow the Paiks to dissect the terms of any assignment but merely called for the Paiks to approve the assignee, not the assignment terms, and prevented them from unreasonably withholding consent. Thus, River Rock argues it does not matter that the assignment agreement was amended. However, the assignment clause in the purchase agreement (paragraph 9.9) expressly called for the Paiks approval of the assignment, not just the assignee. Moreover, River Rock gave a copy of the original assignment agreement to the Paiks when it initially asked for their consent. It is disingenuous for River Rock to now say the assignment terms are immaterial.

We also reject River Rocks argument that the minimum funding requirement was for the protection of Smith/Stonegate only and therefore Smiths decision to waive that protection was none of the Paiks business. Even assuming the minimum funding provision was put into the original assignment agreement for the benefit of Smith/Stonegate rather than River Rock, the assignment clause in the purchase agreement allowed the Paiks to consider the financial resources of the assignee in deciding whether to approve assignment of the purchase agreement, and River Rock told the Paiks attorney about the terms of the original assignment agreement.

River Rock cites evidence that the Paiks attorney did not even bother to read the original assignment agreement. River Rock concludes the Paiks therefore never knew of the minimum funding requirement and cannot complain of its deletion. River Rock suggests the Paiks discovery during litigation (that the Grahams put a hold on their funding commitment) gave the Paiks the opening to claim they were misled by deletion of the minimum funding provision. However, the Paiks attorney was not completely unaware of the original assignment terms. Rather, he relied on verbal representations of River Rocks representative. Thus, the Paiks attorney (Robertson) testified in deposition as follows:

Q Did you read the document [the identity of which is not stated in the deposition excerpt in the record] at some point?

A I dont recall reading it, no. We [the Paiks] were not a party to that assignment.

[] . . . []

Q . . . Did you undertake any investigation, with regard to River Rock, under that paragraph [9.9 re assignment]?

[Objection overruled.]

THE WITNESS: At the meeting with Mr. Rorke [River Rocks attorney], I requested certain documents, which are set forth in the [February 20, 2002] letter, whereby I advised Mr. Rorke that the Paiks have agreed to consent to the assignment.

Q . . . Other than that communication to Mr. Rorke, did you undertake any effort to try to do any investigation under paragraph 9.9 of the contract?

A No.

Robertson testified he did not ask for any financial references from Tom Church, a River Rock contact person identified in deposition. Robertson said Church told him River Rock had commitments for $4 to $12 million that was going to be the basis for funding the project.

It does not help River Rocks case that the Paiks attorney relied on River Rocks representations and did little or no investigation concerning the assignment.

River Rock suggests the amendment deleting the minimum funding requirement from the assignment agreement did not hurt the Paiks, because at all relevant times River Rock did have the minimum funding. However, River Rocks evidence did not prove it always had the funding. River Rock submitted a declaration from Herbert Graham (uncle of River Rock principal William Billy Graham), stating he and his brother (Williams father) considered themselves to be legally committed to fund the $12 million investment since Christmas of 2001, but before the lawyers got to the point of preparing the paperwork, we received the threat of litigation from the Rahimians and I told Billy that there would be no funding until this problem was resolved.^[13]

River Rock says the Graham declaration indicated this hold on the funding did not occur until March 2002, which was after the February 20, 2002, letter from the Paiks attorney indicating their consent. However, the more salient point is that River Rock did not have the funding at the time it tried to

get the Paiks to sign a formal consent form in August 2002. Moreover, it seems unpalatable for River Rock to rest on the March 2002 date as the date when the investors learned of the Rahimian threat, when the investors are the father and uncle of River Rocks principal, and (1) River Rocks cross-complaint alleged it learned about the Rahimian threat on February 11, 2002, and (2) River Rock signed an amendment to the assignment agreement on February 12, 2002, acknowledging the Rahimian threat.^[14]

Indeed, River Rocks cross-complaint against the Rahimians alleged that because of the Rahimians claims, River Rock was unable to secure the needed equity funding, and River Rock expected to secure funding of up to $12 million through a joint venture agreement with the Graham family and/or third-party lenders/investors, but as a result of the Rahimians, River Rock was not able to secure the needed financing/funding to acquire the additional parcels resulting in River Rock being defaulted (wrongfully) out of the Paik contract. Thus, the evidence does not show that River Rock at all relevant times had the funding.

In any event, there is a difference between having the funding and committing it to the project in which the Paiks had a financial interest.

We need not address River Rocks arguments that the Grahams were bound by an oral joint venture agreement with River Rock, or that the assignment clause would not require the Paiks approval of the joint venture agreement. Even assuming the Grahams were bound by an oral agreement, River Rock cannot force the Paiks to accept such terms. Additionally, even assuming River Rock always had the funding, its removal of the funding requirement from the assignment agreement without informing the Paiks of this action puts River Rock on shaky ground. It is not up to River Rock to say what should and should not matter to the Paiks. It is immaterial whether, as River Rock asserts, the deletion of the funding requirement in the assignment agreement resulted from the Paiks refusal to extend a payment date under the purchase agreement.

To the extent that River Rock argues the Paiks willingness to approve the assignment, as reflected in their attorneys letter of February 20, 2002, compelled them to sign the formal consent form, River Rock is not in a position to seek such enforcement, because River Rock changed the terms of the assignment, deleting the minimum funding requirement. River Rock never obtained even a promise from the Paiks to approve the amended assignment agreement.

River Rock argues the Paiks should be estopped from denying the validity of the assignment, because they treated River Rock as assignee and even asserted in their default notices that River Rock had breached the purchase agreement (not that River Rock had no rights under the purchase agreement). River Rock cites Evidence Code section 623: Whenever a party has, by his own statement or conduct, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, in any litigation arising out of such statement or conduct, permitted to contradict it.

The Paiks respond that River Rock failed to plead estoppel, failed to raise this issue properly in the trial court, and the estoppel argument presented by River Rock on appeal differs from that presented in the trial court and should not be considered. We need not address these points. Even assuming for the sake of argument that River Rocks estoppel argument is properly raised, it fails on its merits.

Thus, estoppel may be decided as a question of law when the evidence is not in conflict and is susceptible of only one reasonable inference. (Juodakis v. Wolfrum (1986) 177 Cal.App.3d 587, 593.) One of the essential elements of estoppel is that the person asserting estoppel must have been ignorant of the true state of facts. (Hair v. State of California (1991) 2 Cal.App.4th 321, 328.) The true state of facts in this case (under an estoppel theory) would be that the February 20, 2002, letter from the Paiks attorney did not satisfy the written

approval requirement of the assignment clause of the purchase agreement. However, as indicated, River Rock always knew the letter was not enough. Thus, while it is true the Paiks treated River Rock as assignee (and indeed sent notice to River Rock that it was in default of the purchase agreement), it is also true that (1) the Paiks always referred to the assignment as the February 1, 2002, assignment and thus do not appear to have known of the amendments deleting the funding guarantee,^[15]and (2) as we have seen, River Rock knew it did not have a valid assignment, because its lawyers letter dated February 25, 2002, said, I will also prepare a formal consent to assignment for execution by your clients confirming your clients approval of the assignment and, to the extent that the manner in which such approval has been obtained does not fully conform to the requirements of Section 9.9, waiving . . . the specific requirements of prior written approval under Section 9.9 of the Paik Agreement. Thus, River Rocks attorney acknowledged there was no valid consent yet. As indicated, River Rock cannot rely on the informal handling of the matter by the parties or the Paiks treatment of River Rock as having rights as an assignee, because Section 9.2 of the same purchase agreement said the purchase agreement constituted the entire agreement among the parties and [t]his Agreement may be modified only by a writing

signed by both parties. Thus, River Rock knew that, in order for the assignment to be valid, it had to obtain the signatures of the Paiks approving the assignment and had to obtain the signatures of the Paiks amending the purchase agreement to waive the requirement that the approval occur before the assignment. River Rock never obtained such signatures and therefore never had a valid assignment. There is no basis for a finding of estoppel.

Even assuming for the sake of argument that River Rock adequately raised the matter of estoppel, estoppel is an equitable doctrine. It appears both sides in this case may have been hedging their bets. River Rock has not shown itself to have entirely clean hands in this whole affair.

River Rock argues the Paiks waived the formal requirements for assignment set forth in paragraph 9.9 of the purchase agreement, and waiver is usually a question of fact. The Paiks respond River Rock failed to plead or adequately argue waiver in the trial court. Even assuming for the sake of argument that River Rock can pursue the issue of waiver on appeal, River Rock fails to show grounds for reversal.

Waiver is the intentional relinquishment of a known right. (DRG/Beverly Hills, Ltd. v. Chopstix Dim Sum Caf & Takeout III, Ltd. (1994) 30 Cal.App.4th 54, 60.) Though normally a question of fact, waiver can be decided as a question of law on undisputed facts. (Old Republic Ins. Co. v. FSR Brokerage, Inc. (2000) 80 Cal.App.4th 666, 679.)

River Rock argues the fact that the Paiks accepted the $210,000 payment due on the purchase agreement that was wired by River Rock demonstrates waiver or at least raises a triable issue. We disagree. Before the purported assignment to River Rock, Smith/Stonegate met its previous payment obligations to the Paiks by borrowing or otherwise getting the money from the third parties and having the third parties send the payment directly to the Paiks. Correspondence from Smith/Stonegate to the Paiks referred to investors and loan source[s]. Thus, in August 2001, a payment due from Smith/Stonegate under the purchase agreement was made by Jamal, LLC. An earlier payment to hold the property was made on Smith/Stonegates behalf by the Presidio Group in March 2001. Accordingly, the Paiks acceptance of money from River Rock means nothing.

In its waiver argument, River Rock