Opinion
E052027 Super.Ct.No. RIC505230
11-08-2011
MICHAEL MURRAY et al., Plaintiffs and Appellants, v. CALIFORNIA BANK & TRUST, as Assignee, etc., Defendant and Respondent.
Lieber Williams & Labin and Stanley P. Lieber for Plaintiffs and Appellants. Troutman Sanders, Dan E. Chambers and Amy A. Hoff for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
APPEAL from the Superior Court of Riverside County. Sharon J. Waters, Judge. Affirmed.
Lieber Williams & Labin and Stanley P. Lieber for Plaintiffs and Appellants.
Troutman Sanders, Dan E. Chambers and Amy A. Hoff for Defendant and Respondent.
Plaintiffs and appellants Michael Murray and Donald Lee (plaintiffs) filed a complaint for breach of contract, seeking damages and specific performance on a contract for purchase of real property. They contend that the purchase contract or an amended version of the contract required the seller, Vineyard Bank (Vineyard), to convey marketable title and that Vineyard had failed to do so. The trial court granted a motion for summary judgment and entered judgment in favor of defendant California Bank & Trust. Plaintiffs appeal, contending that by producing evidence showing that the contract had been amended to require conveyance of marketable title, they demonstrated the existence of a triable issue of fact. They also contended that they showed that they have a viable claim for rescission of the contract.
The defendant in this action, California Bank & Trust, is Vineyard's successor in interest in the property. In 2009, the Office of the Controller of the Currency closed Vineyard. After the Federal Deposit Insurance Corporation was appointed receiver, it assigned all of its rights, title and interest in the property to California Bank & Trust.
We will affirm the judgment.
FACTUAL AND PROCEDURAL HISTORY
On or about March 3, 2008, plaintiffs entered into a contract to purchase real property in Riverside County from Vineyard for $5,300,000, including a nonrefundable deposit of $100,000 which they paid upon execution of the contract. The property was an uncompleted residential subdivision which included several single-family residences in various stages of construction and additional lots which had not yet been built upon.
The contract provided that since Vineyard had not been involved in the construction and had acquired the property from a receiver, it was "unwilling to make any representations or warranties whatsoever" regarding the property and was willing to sell it only on an "'as is' and 'where is' basis." Prior to execution of the contract, Vineyard provided plaintiffs with a "due diligence" package and a preliminary title report, and plaintiffs acknowledged that they had reviewed the due diligence package and inspected the property. Plaintiffs agreed that they had been given a "full and complete opportunity to conduct their own investigation" as to any matter which might influence their decision to purchase the property, and they agreed that they were willing to purchase the property without any representations or warranties whatsoever, and on an "as is" and "where is" basis, subject to limited provisions for curing defined material deficiencies.
The contract expressly excluded from its definition of "material deficiencies" any items which were "referenced or disclosed" in the due diligence package. The contract also disclosed that three parties who allegedly had contracts to purchase three of the lots within the property had filed suit against Vineyard and others in Riverside County Superior Court. The contract provided for a period of time during which plaintiffs could give notice of any material deficiencies and a period of time during which Vineyard could attempt to cure any such deficiencies using "commercially reasonable efforts." If Vineyard was unable or unwilling to cure any material deficiencies as provided in the contract, plaintiffs' sole remedy was to complete the purchase or terminate the contract.
In a letter dated March 7, 2008, plaintiffs notified Vineyard of several material deficiencies. Notably, the sole deficiency which concerned title was the fact that the preliminary title report showed unpaid tax liens. On April 15, 2008, Vineyard replied that it had paid all outstanding taxes and had remedied the other deficiencies noted in plaintiffs' March 7 letter. Apparently, other concerns regarding marketability of the title arose and were not resolved through negotiation. Plaintiffs filed suit on August 5, 2008. Vineyard answered the complaint, and, as we discuss below, after it succeeded Vineyard as owner of the property, California Bank & Trust (defendant) filed a motion for summary judgment.
The motion was granted and judgment was entered for defendant. Plaintiffs appealed.
LEGAL ANALYSIS
THE MOTION FOR SUMMARY JUDGMENT WAS PROPERLY GRANTED
A party moving for summary judgment has the burden of demonstrating that no triable issue of material fact exists and that the party is entitled to judgment as a matter of law. A moving defendant must make a prima facie showing that there is a complete defense to the plaintiff's action or an absence of an essential element of the plaintiff's case. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849.) "Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff . . . may not rely upon the mere allegations or denials [of his] pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto." (Code Civ. Proc., § 437c, subd. (p)(2).) The grant of summary judgment is reviewed de novo to determine whether triable issues of material fact exist. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.)
Here, the complaint alleged that one of the terms of the contract was that Vineyard would deliver marketable title and that Vineyard had not done so. It further alleged that although the contract required Vineyard to convey the property subject only to "permitted encumbrances," as defined in the contract, Vineyard had not been able to convey the property without encumbrances, and that Vineyard had not cured material deficiencies in title, despite notice from plaintiffs to do so, in accordance with the terms of the contract. The complaint sought monetary damages and specific performance.
Defendant, as successor in interest to Vineyard, filed a motion for summary judgment. Defendant asserted that the contract did not require it to deliver marketable title or to convey the property free of encumbrances. It asserted further that even if it had failed to cure any material deficiency, the contract provided that plaintiffs' sole remedy was to terminate the contract, and that plaintiffs had expressly agreed that the contract's termination provisions would be plaintiffs' sole rights and remedies with respect to any deficiencies in the property.
In their opposition to the summary judgment motion, plaintiffs did not assert that defendant had failed to make a prima facie showing that no triable issue of material fact existed. And, although they continued to maintain that defendant was obligated under the contract to deliver marketable title, they did not assert any factual basis in support of that contention. On the contrary, they implicitly acknowledged that they could not meet their burden with respect to the breach of contract claim: They stated that although they had initially sought damages and specific performance, they had decided not to pursue those claims. Rather, they stated that they were now seeking only to rescind the contract and recover the $100,000 deposit they had paid upon execution of the contract. They contended that by filing suit, they had rescinded the contract and were therefore entitled to the return of their deposit.
On appeal, plaintiffs now explicitly concede that the original contract did not require the seller to convey marketable title. Instead, they contend that the contract was amended and that the operative amended contract did require the seller to convey clear title. They cite an email from defendant's attorney which explicitly stated that the contract had been amended and which stated that although marketable title had not yet been obtained, defendant was using "'every contact and method at its disposal to obtain the desired marketability coverage.'"
Because the alleged contract provision that the seller would convey marketable title is the essence of both the claims for damages for breach of contract and the prayer for specific performance, this concession suffices to establish that summary judgment was properly granted. Moreover, as defendant points out, even if it did breach some provision of the contract pertaining to material deficiencies, plaintiffs' sole remedy was to terminate the contract within the time frame specified by the contract. Consequently, summary judgment was proper on that basis as well.
The complaint did not allege any amendment of the contract. Plaintiffs' new contention that the parties amended the contract to require the seller to provide clear title cannot be asserted for the first time on appeal. "'[I]n reviewing a summary judgment, the appellate court must consider only those facts before the trial court, disregarding any new allegations on appeal. [Citation.] Thus, possible theories that were not fully developed or factually presented to the trial court cannot create a "triable issue" on appeal. [Citations.]'" (Uriarte v. United States Pipe & Foundry Co. (1996) 51 Cal.App.4th 780, 790, italics omitted.) "Whether summary judgment is appropriate in light of a significant new factual development in any case is an issue that should first be presented to the trial court and not to an appellate court." (Id. at p. 791.)
If the contract was amended, as plaintiffs assert, we are at a loss to understand why they did not seek leave to amend the complaint to allege the amendment.
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Plaintiffs' contention that they stated a viable claim for restitution of their deposit based on rescission of the contract is also unavailing. In their opposition to the motion for summary judgment, plaintiffs contended that they are entitled to rescind the contract because Vineyard failed to place plaintiffs' $100,000 deposit in escrow, as required by the contract. They contended that they had sought restitution of the deposit in their complaint. They repeat this contention on appeal, and contend that although termination of the contract is the sole remedy for a failure to remedy a material deficiency, that limitation does not apply to Vineyard's failure to place the funds in escrow. However, their complaint contains no allegation that Vineyard breached the contract by failing to place the funds into escrow. A motion for summary judgment is directed solely to the issues raised by the pleadings. The moving party need address only the theories actually pled, and an opposition which raises new issues is not a substitute for an amended pleading. (S.M v. Los Angeles Unified School Dist. (2010) 184 Cal.App.4th 712, 716- 717.) Since they did not assert that theory in the complaint, they cannot rely on it to defeat the motion for summary judgment. (Ibid.)
DISPOSITION
The judgment is affirmed. Defendant California Bank & Trust is awarded costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKinster
J.
We concur:
Ramirez
P.J.
King
J.