Hart v. Giannini

Filed 6/25/08 Hart v. Giannini 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

Plaintiff Phillip M. Hart (appellant)^[1]appeals a summary judgment in favor of defendants Joseph B. Giannini, Drena Steljes and Steve Robinson, doing business as Northern California Property (NCP) (collectively respondents), in appellants action for breach of contract and other civil wrongs. Appellant contends summary judgment was improperly granted. We reject the contention and affirm.

BACKGROUND

The following facts are undisputed. On May 29, 2004, appellant/buyer, entered into a form Vacant Land Purchase Agreement (the contract) with respondents/sellers, Giannini and Steljes, to purchase a parcel of Shelter Cove property. Respondent Robinson,^[2]a licensed real estate broker, represented both buyer and sellers in the transaction. Also on May 29, appellant and Robinson executed an AGENTS INSPECTION DISCLOSURE (SELLERS AGENT).

Prior to appellants purchase of the property, Robinson walked the entire property, looking carefully for any defects or other problems. The property appeared to be relatively flat with no evidence of the addition of soil. There was no indication that the property had any kind of fill or loose or unstable soil conditions. Prior to assisting appellant with the purchase of the property, Robinson was unaware of anything that would lead him to believe there was fill on the property. Robinson made no representation to appellant as to whether or not there was fill on the property. Robinson did not tell appellant he had done anything to determine if the property was buildable, that he had obtained a soils report, or that he had the expertise to evaluate the property. Appellant, who had done construction work for 20 years, inspected the property and saw nothing on it that led him to believe it contained fill. Because the property had a sewage system, it did not need a soil report for a septic system.

The Contract

Paragraph 10 of the contract states: CONDITIONS AFFECTING PROPERTY: [] A. Unless otherwise agreed: (i) the Property is sold (a) in its PRESENT physical condition as of the date of Acceptance and (b) subject to Buyer investigation rights; and (ii) the Property is to be maintained in substantially the same condition as on the date of Acceptance. [] . . . [] C. SELLER SHALL . . . DISCLOSE KNOWN MATERIAL FACTS AND DEFECTS AFFECTING THE PROPERTY AND MAKE OTHER DISCLOSURES REQUIRED BY LAW. [] D. NOTE TO BUYER: You are strongly advised to conduct investigations of the entire Property in order to determine its present condition since Seller may not be aware of all defects affecting the Property or other factors that you consider important. . . . [] E. NOTE TO SELLER: Buyer has the right to inspect the Property and . . . , based upon information discovered in those inspections: (i) cancel this Agreement; or (ii) request that you make Repairs or take other action. (Boldface type omitted.)

Paragraph 12 of the contract entitled BUYERS INVESTIGATION OF PROPERTY AND MATTERS AFFECTING PROPERTY provides, in relevant part: B. . . . [] BUYER IS STRONGLY ADVISED TO INVESTIGATE THE CONDITION AND SUITABILITY OF ALL ASPECTS OF THE PROPERTY AND ALL MATTERS AFFECTING THE VALUE OR DESIRABILITY OF THE PROPERTY . . . . IF BUYER DOES NOT EXERCISE THESE RIGHTS, BUYER IS ACTING AGAINST THE ADVICE OF BROKERS. BUYER UNDERSTANDS THAT ALTHOUGH CONDITIONS ARE OFTEN DIFFICULT TO LOCATE AND DISCOVER, ALL REAL PROPERTY CONTAINS CONDITIONS THAT ARE NOT READILY APPARENT AND THAT MAY AFFECT THE VALUE OR DESIRABILITY OF THE PROPERTY. BUYER AND SELLER ARE AWARE THAT BROKERS DO NOT GUARANTEE, AND IN NO WAY ASSUME RESPONSIBILITY FOR, THE CONDITION OF THE PROPERTY. BROKERS HAVE NOT AND WILL NOT VERIFY ANY OF THE ITEMS IN THIS PARAGRAPH 12, UNLESS OTHERWISE AGREED IN WRITING. [] . . . [] G. GEOLOGIC CONDITIONS: Geologic/seismic conditions, soil and terrain stability, suitability and drainage including any slippage, sliding, flooding, drainage, grading, fill (compacted or otherwise), or other soil problems. (Boldface type omitted.)

Paragraph 29 of the contract provides, in relevant part: All understandings between the parties are incorporated in this Agreement. Its terms are intended by the parties as a final, complete and exclusive expression of their Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. . . . Neither this Agreement nor any provision in it may be extended, amended, modified, altered or changed, except in writing Signed by Buyer and Seller. (Boldface type omitted.)

Paragraph 30 of the contract entitled OTHER TERMS AND CONDITIONS provides, in relevant part: Contingent upon buyers satisfaction with all government requirements affecting the use or development of the property and approval of the preliminary title report. (Boldface type omitted.)

Agents Inspection Disclosure

The agents inspection disclosure executed by appellant and Robinson on May 29, 2004, provides, in relevant part: Buyer hereby acknowledges that any future costs connected with this property such as any possible sewer connection or hookup to utilities is solely the responsibility of the Buyer. If the property is to be developed or further improved, determining the costs and requirements for the development is the sole responsibility of the Buyer. The Buyer should consult with his/her contractor and various city/county departments including, but not limited to: Health, Planning and Fire Departments, Engineers, Resort Improvement District, etc.

The Complaint

In May 2006, appellant filed the instant action against respondents which alleged the following: Prior to entering into the contract, appellant told Robinson he wanted to purchase a lot he could improve by building a single-family residence with a conventional foundation. Robinson falsely represented to appellant that the subject property had native soil and was buildable for a residential dwelling, when in fact the land was comprised mostly of fill material. A year after purchasing the subject property, appellant was informed that the proposed structure should not be placed on the unconsolidated fill, and a conventional foundation on the fill would be an unacceptable foundation. Respondents knew or should have known that the subject property was comprised mostly of fill and was essentially unbuildable.

Appellants complaint alleged the following causes of action: The first cause of action for breach of the contract against Giannini and Steljes alleged Giannini and Steljes failed to disclose to appellant that the property contained fill and was unsuitable for construction of a residence with a conventional foundation, and failed to transfer the property in the condition promised. The second cause of action against Robinson alleged Robinson breached the written disclosure agreement. The third cause of action alleged that Robinson breached his fiduciary duty by not acting in appellants best interest in the property transaction. The fourth cause of action for intentional misrepresentation against respondents alleged that Robinson represented to appellant that the property was essentially flat with a gentle slope that would be suitable for constructing a single residence. The fifth cause of action against respondents alleged negligent misrepresentation and alleged the identical specific representation by Robinson. The sixth cause of action against respondents alleged concealment.^[3] The seventh cause of action against respondents alleged respondents reckless disregard regarding their representations about the fitness of the property constituted intentional infliction of emotional distress. The same conduct formed the basis of the eighth cause of action against respondents for negligent infliction of emotional distress. The ninth cause of action against Giannini and Steljes alleged rescission of the contract. The complaint sought rescission, and compensatory and exemplary damages.

The Summary Judgment Motions

Robinson moved for summary judgment/summary adjudication of issues on the grounds that: (1) he diligently performed all of his duties owed to appellant; (2) he was unaware of any alleged undisclosed problems with the subject property; and, (3) the alleged misrepresentations by Robinson are barred by the parol evidence rule. Gianninis and Steljess summary judgment motion incorporated by reference Robinsons summary judgment motion. Giannini and Steljes moved for summary judgment on the grounds that: (1) appellant could not establish Giannini and Steljes or Robinson knew the subject property contained fill; (2) the contract provides the sale is as is, and (3) appellant could not establish Robinson represented that the property was easily buildable or that appellant relied on any such alleged representation.

Appellant opposed respondents motions on the ground that the parol evidence rule did not render Robinsons misrepresentations and misstatements about the subject property inadmissible, and Giannini and Steljes were bound by Robinsons statements because he was their agent. In support of his opposition, appellant submitted his deposition testimony that prior to appellants execution of the contract, Robinson told him the property was easily accessible and easily buildable; and appellant could put a slab foundation in there. Appellant could not remember the exact language regarding Robinsons alleged misrepresentations.

In granting respondents motions for summary judgment, the court made the following findings:^[4] (1) Giannini and Steljes acquired the subject property from the successor trustee of their mothers trust in 1974; (2) Giannini and Steljes had no knowledge that the property contained fill; (3) Robinson did not observe from his inspection of the lot or learn from other sources anything leading him to believe there was fill on the property; and (4) Robinson would have been unable to determine there was fill on the property without having soil tests performed. The court ruled: (1) the contract is an integrated written agreement; (2) appellants alleged misrepresentations by Robinson are inconsistent with the integrated written agreement; and (3) extrinsic evidence of statements by Robinson inconsistent with the written agreement is not admissible as an exception to the parol evidence rule.

DISCUSSION

I. Standard of Review

Summary judgment is properly granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc.,  437c, subd. (c).)^[5] As to each claim framed by the complaint, the defendant moving for summary judgment must present facts to negate an essential element or to establish a defense; only then will the burden shift to the plaintiff to demonstrate the existence of a triable material issue of fact. (Overton v. Walt Disney Co. (2006) 136 Cal.App.4th 263, 268.) When the defendant has met its evidentiary burden, the burden of proof shifts to the plaintiff to show, by responsive separate statement and admissible evidence, that a triable issue of material fact exists. (Rosenblum v. Safeco Ins. Co. (2005) 126 Cal.App.4th 847, 856.) In ruling on the summary judgment motion, the trial court must draw all reasonable inferences from the evidence in favor of the opposing party. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) On appeal, we review the trial courts grant of summary judgment de novo. (Id. at p. 860.)

II. The Parol Evidence Rule Barred Appellants Extrinsic Evidence

Appellant contends the court erroneously determined that the parol evidence rule barred the extrinsic evidence of statements by Robinson that created a triable issue of material fact. Appellant argues that the thrust of his complaint is that Robinsons fraudulent representations induced him to purchase the subject property, and that the parol evidence rule is inapplicable thereto.

The parol evidence rule is a substantive rule of law which generally prohibits the introduction of any extrinsic evidence, whether oral or written, to vary, alter or add to the terms of a final and complete (integrated) written instrument. ( 1856, subd. (a);^[6]Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 343.) Whether the parol evidence rule applies in a given set of circumstances is a question of law, which we consider de novo to the extent that no evidentiary conflict exists. [Citations.] (EPA Real Estate Partnership v. Kang (1992) 12 Cal.App.4th 171, 176.)

Respondents appear to argue that Robinsons alleged representations were offered to contradict and modify the terms in the integrated written contract and constituted collateral oral promises directly at odds with the contract, and are therefore barred by the parol evidence rule. Appellant argues that Robinsons statements do not establish a collateral agreement at odds with the contract. Instead, he argues that Robinsons statements are fraudulent misrepresentations, admissible to establish that the contract was induced by fraud.

Subdivision (g) of section 1856 provides: This section does not exclude other evidence of the circumstances under which the agreement was made or to which it relates, as defined in Section 1860, or to explain an extrinsic ambiguity or otherwise interpret the terms of the agreement, or to establish illegality or fraud.

 Promissory fraud is a promise made without any intention of performing it. [Citations.] The fraud exception to the parol evidence rule does not apply to such promissory fraud if the evidence in question is offered to show a promise which contradicts an integrated written agreement. Unless the false promise is either independent of or consistent with the written instrument, evidence thereof is inadmissible. [Citations.] (Alling v. Universal Manufacturing Corp. (1992) 5 Cal.App.4th 1412, 1436-1437.)

 It is . . . settled that parol evidence of fraudulent representations is admissible as an exception to the parol[] evidence rule to show that a contract was induced by fraud. [Citations.] (Pacific State Bank v. Greene (2003) 110 Cal.App.4th 375, 389 (Greene); accord, Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 42; Ron Greenspan Volkswagen, Inc. v. Ford Motor Land Development Corp. (1995) 32 Cal.App.4th 985, 995.) Fraud in the inducement occurs  when  the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.  [Citation.]  (Green, at p. 389, fn. 7.) However, the fraud exception does not apply if the evidence is offered to show a promise directly at variance with the written agreement. (Id. at pp. 389-390.)

Greene, relied on by appellant, held that a factual misrepresentation regarding the content of a written agreement made at the time of the contracts execution is not barred by the parol evidence rule and is admissible evidence of fraud to invalidate an agreement under section 1856, subdivision (g). (Greene, supra, 110 Cal.App.4th at p. 396.) Greene is inapposite since this is not a case in which appellant claims that he misunderstood the terms of the contract or that Robinson misunderstood the terms of the contract.^[7]

In opposition to respondents summary judgment motions, appellant submitted evidence that prior to appellants execution of the contract, Robinson represented that appellant could put a slab foundation in the property, and that the property was easily accessible and easily buildable. Those alleged representations by Robinson, allegedly relied on by appellant as a guarantee regarding the condition of the property, are directly contrary to paragraph 12 of the contract which provided in part, Buyer and Seller are aware that brokers do not guarantee and in no way assume responsibility for the condition of the property. Brokers have not and will not verify any of the items in this paragraph, including geologic/seismic conditions [regarding] soil and terrain stability, suitability . . . , grading, fill (compacted or otherwise), or other soil problems. The trial court properly concluded that the parol evidence rule barred evidence of Robinsons statements.

Citing Civil Code section 2338,^[8]appellant argues the fiduciary relationship between Robinson and [appellant] avoids the parol[] evidence rule. Civil Code section 2338 is not authority for appellants argument and we have found no such authority. We thus reject the assertion and conclude that summary judgment was properly granted.

DISPOSITION

The judgment is affirmed.

SIMONS, J.

We concur.

JONES, P.J.

NEEDHAM, J.

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^[1] Although the judgment was also against plaintiff Anita Hart, she is not a party to this appeal. Appellant asserts that Anita Hart is his ex-wife and that he is the assignee of her interest in the subject property.

^[2] Robinson and NCP are jointly referred to as Robinson.

^[3] Footnote 5 in appellants opening brief states that he would be willing to dismiss his cause of action alleging concealment. We treat this statement as an abandonment of his appeal as to that cause of action.

^[4] Because these facts are undisputed, we presume the findings refer to the facts the court found to be undisputed.

^[5] All undesignated section references are to the Code of Civil Procedure.

^[6] Subdivision (a) of section 1856 provides: Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.

^[7] Appellant improperly cites and relies on an unpublished California case in violation of California Rules of Court, rule 8.1115.

^[8] Civil Code section 2338 provides: Unless required by or under the authority of law to employ that particular agent, a principal is responsible to third persons for the negligence of his agent in the transaction of the business of the agency, including wrongful acts committed by such agent in and as a part of the transaction of such business, and for his willful omission to fulfill the obligations of the principal.