Opinion
NOT TO BE PUBLISHED
APPEAL from orders of the Superior Court of Fresno County, No. 04CECG00332 Alan M. Simpson, Judge.
Law Office of Lisa Ehrlich, Lisa Ehrlich; Dowling, Aaron & Keeler and Keith M. White for Defendants and Appellants.
Georgeson and Belardinelli, Richard A. Belardinelli, C. Russell Georgeson; Zinkin & Bruce and Daniel A. Bruce for Plaintiffs and Respondents.
OPINION
Gomes, J.
On October 31, 2006, Rexford Properties LLC and Richard K. Ehrlich (collectively Rexford) entered into a settlement agreement with Paulo Naccarati and Jotionitalat, LLC and Luiz and Gildete Naccarati (collectively the Naccaratis) during trial. The settlement required Rexford to transfer, pursuant to previously executed purchase agreements, two properties to Paulo and the LLC, and a third property to Luiz and Gildete, through a close of escrow within 30 days of the settlement date, and gave the trial court discretion to grant any party’s request to extend the escrow 30 days. The Naccaratis requested and were granted such an extension. Some of the purchase money and documents necessary to close escrow had been placed into escrow by December 29, 2006; the remaining money and documents were placed into escrow on January 2, 2007 (the 60th day after the settlement date, extended by the New Years’ holiday). Pursuant to the county recorder’s practice, however, the deeds could not record until the morning of January 3 because the money and documents had not been placed into escrow before 7:30 a.m. on January 2. Since the deeds could not record on January 2, Rexford instructed the escrow holder not to close the escrows. When Rexford continued to refuse to close the escrows, Paulo and Luiz brought motions to enforce the settlement agreement, which the trial court granted.
Rexford appeals from the trial court’s orders granting the Naccaratis’ request to extend the escrows by 30 days and their motions to enforce the settlement agreement. Rexford asserts the trial court erred in granting the motions. As we shall explain, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Rexford is the developer of a housing tract located in Fresno. During 2002 and 2003, the Naccaratis contracted to purchase from Rexford five properties in that tract pursuant to separate purchase agreements, which contain a provision Rexford contends prohibits double escrows and the buyer’s immediate sale of the property to a third party. When Rexford discovered the Naccaratis had sold the first two homes immediately after completing the purchases from Rexford, Rexford terminated the remaining three open transactions, alleging breach of the anti-flipping provision contained in the purchase agreements. The Naccaratis sued, inter alia, for breach of contract and specific performance, while Rexford cross-claimed against the Naccaratis and others for, inter alia, breach of contract and rescission.
The Settlement Agreement
On October 31, 2006, after a jury trial had begun, the parties orally stipulated to settle the case. The settlement agreement’s pertinent terms and conditions, which were placed on the record by counsel for Paulo and the LLC, included: (1) Rexford would transfer two of the properties, lots 14 and 34, to Paulo, and the remaining property, lot 15, to Luiz pursuant to the terms and conditions of the purchase agreements the parties previously executed; (2) the Naccaratis agreed not to transfer title to the three lots for one year from October 31, 2006; (3) the escrow instructions would be amended to include a condition that an independent home inspector must inspect the lots and note any repairs needed for the properties to be in a condition to be transferred, and “[w]hen the repairs have been made, the escrow for each of the lots will then be in a condition to close”; (4) the Naccaratis agreed to forebear any action based on the physical conditions of the homes; and (5) the three lots “are to be transferred within – transferred, that is, through a close of escrow within 30 days of the date of this settlement. However, each party to this action and a party to the transfers may obtain one 30-day extension of the escrow at the discretion of the Court.”
The Naccaratis were represented by separate counsel in the trial court, with Paulo and the LLC represented by one law firm, and Luiz and Gildete by a different firm.
The agreement also required the parties to execute mutual releases, a written settlement agreement, and whatever documents were necessary to accomplish the settlement. The parties also agreed the settlement was made pursuant to Code of Civil Procedure section 664.6, and the court would retain jurisdiction to “enforce the terms and conditions of this Settlement Agreement,” as well as “any further disputes between the parties.”
In pertinent part, Code of Civil Procedure section 664.6 provides: “If parties to pending litigation stipulate ... orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” All further undesignated statutory references are to the Code of Civil Procedure.
The Supplemental Escrow Instructions
On November 6, 2006, Irene Lehman, an escrow officer with Stewart Title of California who was assigned to handle the transactions between Rexford and the Naccaratis, prepared supplemental escrow instructions for the three transactions. Each of the supplemental escrow instructions contains the following provision: “The phrase close of escrow (COE) as used herein means the date on which instruments/documents are recorded.” All of the parties eventually executed the supplemental escrow instructions, which were deposited into the escrows.
The Naccaratis’ Request to Extend the Escrow
At the request of Paulo’s attorney, a hearing was held on November 30, 2006, at which the Naccaratis requested an extension of the closing date by 30 days, or at least until December 8, since Paulo did not expect to receive the cash to close his escrows until December 4, 2006, when escrow was to close on another property he was selling, and although the parties had selected a home inspector, the home inspections would not be performed until sometime the following week. Rexford argued against an extension, asserting the Naccaratis had not been diligent in attempting to complete the escrow in 30 days as they had chosen a home inspector only the day before, one of the homes had not yet been appraised, and Rexford had not seen anything from the Naccaratis to show they would be in a position to close by “Friday”.
After the parties discussed whether the appraiser made sufficient efforts to contact Rexford’s sales agent to arrange an appraisal and whether the sales agent was at the sales office over the Thanksgiving holiday weekend, the court asked the attorneys if they would be available for a conference on December 7. The attorneys stated they would be and the court set that date for a further status conference. The court instructed the attorneys to “[d]o whatever you can to get this straightened out, and I’ll talk to you on December the 7th.” Paulo’s attorney asked whether the court was extending the settlement agreement’s Friday deadline to the following Thursday, as he was concerned a default would be declared if the Friday deadline was not met. The court responded it was not going to make a decision that day, but believed everyone was doing what they could to facilitate the settlement and “it would be prudent to move as quickly as reasonably possible” toward getting everything resolved. The court explained that if the parties followed up on the issues, there might be a better picture of what was happening by the next hearing.
The December 7, 2006, Status Conference
A status conference was held on December 7. Two days prior to the conference, Rexford’s attorney informed the parties he had received the papers from Stewart Title, which Rexford had executed and would be delivered to Lehman “upon confirmation that the escrow is ready to close.” Rexford’s attorney also requested Paulo’s attorney provide confirmation that Paulo has “the financial where-with-all to close” on the properties and stated the certificates of occupancy had been obtained on all properties.
At the December 7 conference, Paulo’s attorney told the court that, among other things, the following had been done: (1) he had received the escrow instructions for the three lots the day before, which Paulo was reviewing that day; (2) Paulo was funded and ready to wire the money to the escrow company “when all the terms and conditions have been met”; (3) a copy of the settlement transcript had been delivered to the escrow holder and its contents discussed with the escrow officer, who was working out “a mechanism” with counsel to ensure those portions of the settlement agreement that apply directly to the escrow become terms and conditions of the escrow instructions; (4) a home inspector had inspected the three lots on December 5 and delivered an inspection report on December 6; (5) with respect to lot 15, the lender had approved the loan and the loan documents “either have been or will be deposited in the escrow for lot 15”; and (6) he instructed the escrow officer to notify Paulo when the escrows are ready to close so the money could be wired in. Paulo’s attorney explained the inspection reports still needed to be reviewed to determine both the necessary repairs and how long it would take Rexford to make them, and requested a follow-up status hearing. He further asserted the funds for all three lots were available and “when the home inspection company signs off on the repairs or corrections, the money will be wired into the account.”
Rexford’s attorney expressed concern about the absence of proof of the Naccaratis’ financial ability to close. Although Paulo’s attorney could not represent that Luiz had something from the lender showing approval for the funds for lot 15, since he did not represent Luiz, he agreed to contact Luiz’s attorney to see if he could provide documentation to Rexford showing loan approval had been obtained. Rexford’s attorney suggested that since Paulo had represented the funds to purchase the properties were available, he should deposit the money into escrow now so the monies would be there when the properties were ready to close. Paulo’s attorney responded: “Your Honor, the fallacy of that argument is we don’t have the money. The representations are made that are not true. Escrow is ready to close, and the money is not there. They get the house. I mean, it’s not as if the Naccaratis walk away. They lose the real benefit of their entire litigation.”
Rexford’s attorney stated its intent to get the repairs done as quickly as possible, within the next week or two, so that the loan commitment did not expire. Rexford’s attorney suggested a status conference be held in two weeks, when she expected she would be able to tell the court the repairs had been taken care of and ensure the escrows get closed, because if the status conference was held in January and some items remained to be resolved between the parties, the loan commitment could expire and the process would have to start over. Although the court believed counsel had been cooperative and diligent, it did not think the parties would be able to close escrow in two weeks, but “in four weeks that might be a possibility.” Since the court would not be available until January 8, it suggested that date for the hearing, which would “give the maximum reasonable amount of time to everyone to move forward on these issues that need to be resolved, that everyone knows need to be resolved, and everyone’s working on resolving them before we have another hearing.” Rexford agreed to provide a letter to counsel and the court on or before December 21 regarding the estimate for the repairs.
The Parties’ Subsequent Attempts to Complete the Escrow Requirements
On December 21, Rexford’s attorney stated in a declaration filed with the court that she was informed the items in the inspection reports had been repaired and the properties would be re-inspected the following day, which was a Friday. She also stated that on December 18, Rexford had received a December 13, 2006, loan commitment letter for the purchase of lot 15. According to Luiz, once the case settled he resubmitted a loan application to World Savings, which was approved on December 13, and he held off on obtaining the commitment letter because he did not want it to expire before Rexford had completed the repairs. Prior to December 13, he had received a conditional loan approval that was contingent on receiving a satisfactory appraisal, which could not be completed until the City of Fresno had issued “building finals for the properties.” The loan documents were deposited into escrow on December 20, 2006.
The properties were re-inspected on December 22. Rexford’s attorney was told the inspector indicated everything looked fine and “it was believed” the re-inspection report would show all items had been repaired. Accordingly, Rexford’s attorney notified the parties that she was informed the home inspector had cleared the homes with regard to the items listed in his report after the inspection that morning, “[c]onsequently, pursuant to the settlement agreement I am expecting that all monies be deposited into escrow forthwith for closing early next week.” That day, Luiz told his attorneys he had walked around the outside of lot 15 and saw that repairs had not yet been completed. According to Luiz, he could not finalize his loan on December 22 because the house was not repaired.
On December 27, Paulo’s attorney informed Rexford’s attorney he had just seen the December 22 letter since he had “enjoyed the Christmas holiday,” and trusted he would receive written confirmation from the home inspection company that all repairs had been resolved. He further stated that once he and the escrow holder received written confirmation of the repairs, escrow would be in a condition to close. He suggested that due to the holidays “the time period between January 2-5, 2007, will be the most appropriate to close these escrows, assuming all of the conditions precedent have been met.” That same day, Rexford’s attorney sent the parties copies of the re-inspection reports, and stated the only remaining issue appeared to be two cabinet doors at one property, which he believed were in the process of being repaired.
On December 28, Paulo’s attorney advised Rexford’s attorney: (1) he found additional repair work was needed on two of the properties and requested the home inspection company provide reports confirming the repairs had been made; (2) he expected Paulo to deposit the purchase funds for lots 14 and 34 by wire transfer on January 3, 2007; (3) he suggested the parties meet with the escrow officer on January 3 to determine what remains to be done to close the escrows; and (4) he would contact Rexford’s attorney on January 2, 2007, as his office would be closed on December 29.
Not long thereafter, the Naccaratis’ attorneys received a letter from Rexford’s attorney stating he was informed that every condition relating to the close of the escrows the settlement agreement contemplated had been completed and the conditions mentioned in the re-inspection reports had been corrected, which either the clients or counsel could inspect immediately. He further stated he was “also reminded that the absolute deadline for closure was 60 days after the settlement. That date falls on Sunday, December 31st. Because of the January 1, 2007, holiday, the properties need to close by January 2 pursuant to the settlement agreement. My clients will take the position, if the properties fail to close on January 2, 2007, that the settlement agreement has been breached, and that your clients have waived their rights to close on the properties.” He requested notification regarding arrangements to have the properties close on January 2.
A few hours later, Paulo’s attorney advised Rexford’s attorney that the home inspection company must inspect the properties again and confirm in writing that the repairs had been completed, explaining that “[a]bsent the re-re-inspections being delivered to the undersigned and filed with the escrow, a condition precedent to closing the escrows has not been met.” Luiz’s attorney also demanded that the home inspection company re-inspect the property and confirm in writing the escrows are ready to close. In response, Rexford’s attorney informed the parties the home inspection company would inspect the properties on Friday morning, December 29, and provide an amended report.
On December 29, Luiz’s attorney and Paulo’s attorney received copies of the home inspection company’s final re-inspection reports from Rexford at 2:45 p.m. and 4:13 p.m., respectively. Rexford’s attorney hand delivered the final reports into escrow. Upon receiving that notice, Luiz immediately took steps to finalize his loan and deposited the funds that constituted his deposit with the escrow holder.
The Attempts to Close Escrow
On January 2, 2007, Lehman told Paulo’s attorney that Rexford had not filed the re-inspection reports. That same day, the Naccaratis deposited with the escrow company all the funds required to purchase the three lots. At approximately 2:15 p.m. on January 2, Paulo’s attorney faxed a letter to Lehman stating that when Rexford deposits the inspection reports, Paulo and the LLC instructed her “to close the escrows, assuming all other terms and conditions have been met, and record.” At 2:42 p.m., Paulo’s attorney informed Rexford’s attorney of that fact by letter, explaining that the escrows were prepared to close, but were prevented from closing that day because Rexford had not yet submitted the inspection reports into escrow. He further explained that if the documents were deposited with the escrow company by 3:30 p.m., “closing can occur and recordation could occur tomorrow morning.”
Shortly thereafter, Paulo’s attorney learned from Lehman that Rexford had filed the re-inspection reports into the escrows and the previous information she provided was incorrect. At 4:08 p.m. that day, Paulo’s attorney “authorized and instructed” Stewart Title by letter “to close the escrows [for lots 14 and 34] as of 4:50 p.m., January 2, 2007. Paulo Naccarati and Jotionitilat, LLC, agree recordation of their deeds may be accomplished January 3, 2007 after close of escrows.” According to Paulo, he intended to waive “any alleged requirement the deeds to lots 14 and 34 needed to be recorded on January 2, 2007 as a condition to closing the escrows for lots 14 and 34 and authorized and instructed [the escrow holder] to close the escrows to lots 14 and 34 as of 4:50 p.m. January 2, 2007.” At 4:41 p.m. that day, Luiz’s attorney e-mailed Lehman authorization to close Luiz’s escrow as of the date and time of the e-mail and stated Luiz agreed recordation of the deed “may be accomplished on January 3, 2007, after the close of escrow.”
Sometime on January 2, Rexford’s attorney spoke with Lehman, who stated she had received the Naccaratis’ funds that day, but they were received too late to effectuate a closing as verified funds needed to be in escrow by Friday, December 29, 2006, in order to effectuate a closing on Tuesday morning. Rexford’s attorney asked if a special recording could be done and Lehman responded that “Fresno County does not record ‘special.’” Lehman also stated she could not close as the Naccaratis had not approved the inspection reports and she still needed the seller’s documents. Rexford’s attorneys had the documents delivered to escrow within the hour. At 4:45 p.m., Rexford’s attorney received notice that the Naccaratis wanted to close the escrows with recording the next day, but she had no idea what that meant and had never received an estimated closing statement so she could determine whether the charges and credits were accurate. According to Rexford’s attorney, Lehman told her she would not disburse proceeds to Rexford on January 2 because the deeds could not record that day.
At 5:06 p.m., Paulo’s attorney received a copy of a letter Rexford’s attorney sent to Lehman which stated the settlement agreement required transfer of the properties within 30 days of October 31, unless the court granted a 30 day extension, and assuming the court “was to grant such an extension, the sixty-day period required recordation of deeds today. Since this cannot be accomplished, you are not authorized to complete these transactions.”
In a January 3, 2007 letter to Rexford’s attorney, Luiz’s attorney acknowledged the sixty-day time limitation for escrow to close was Tuesday, January 2, 2007, and asserted the Naccaratis deposited the funds necessary to close the transactions immediately after they received notice Rexford had repaired all of the items listed in the independent inspector’s report, thereby satisfying their obligations under the purchase agreements and settlement agreement. He blamed Rexford for the failure to close escrow on January 2, as Rexford did not complete the repairs until December 29, and did not deliver the grant deeds and notices of completion to the escrow holder until about 4:00 p.m. on January 2, although Rexford was well aware that on Monday through Thursday, the recorder’s office records documents forwarded by title companies only at 8:00 a.m. He claimed the purchase funds could have been released to Rexford the day before, with the grant deeds recorded that day, and accused Rexford of not operating in good faith in seeking to conclude the settlement.
The Lehman Declarations
On January 5, 2007, Luiz’s attorney filed Lehman’s declaration. Lehman explained that on Mondays through Thursdays, it was the Fresno County Recorder’s Office’s practice to allow title companies to record grant deeds and other documents affecting title on the same day they are submitted only if such documents are submitted by 7:30 a.m., which requires the deeds to be deposited the day before they are to be recorded. Lehman submitted the grant deeds for lots 14 and 15 to Rexford for execution on November 30, 2006, while the grant deed for lot 34 had remained in escrow since the original escrow account was opened in 2003. Lehman received the funds from the buyers for the purchase of lots 14 and 34 on January 2, 2007. For lot 15, she received Luiz’s funds on December 29, 2006, and funds from his lender on January 2, 2007. Rexford’s counsel did not return the completed grant deeds for lots 14 and 15, or the notices of completion, to Lehman’s office until approximately 4 p.m. on January 2, 2007, and Rexford did not complete all repairs noted in the inspection reports until December 29, 2006. Less than an hour after receiving the grant deeds and notices of completion, Lehman received the letter and a telephone call from Rexford’s attorneys instructing her not to close the escrows since the grant deeds would not be recorded that day. Lehman stated: “Had I not received this instruction, all three escrows, pursuant to instructions from Buyers’ counsel, would have closed on January 2, 2007, with the recordation of the Grant Deeds occurring at 8:00 a.m. on January 3, 2007.”
Rexford’s attorneys filed another declaration from Lehman on January 22, 2007. In that declaration, Lehman explained that in a purchase and sale transaction involving real property, Stewart Title will not disburse sale proceeds to a seller or issue a title insurance policy until Stewart Title receives confirmation that all documents, including the deeds and loan documents, have recorded. Lehman further explained that because she did not receive full closing funds for any of the three transactions until January 2, they could not record until January 3, which was the earliest date she could close escrow. She stated she had re-examined her January 5, 2007 declaration, which Luiz’s attorney had prepared, and wanted to make the following clarifications: (1) she did not have personal knowledge as to when Rexford completed the repairs noted in the inspection reports, she only knew that the reports were delivered into escrow on December 29, 2006; and (2) she “received instructions by way of letter from the Buyer’s counsel to ‘close’ escrow on January 2, 2007. I informed counsel that documents could not record until January 3, 2007, 8:00 a.m. I did not receive instructions from the Seller authorizing any change to the written escrow instructions, including the Supplemental Escrow Instructions executed by the parties. I was instructed by Seller that I was not to record any documents unless they could be recorded on January 2, 2007.”
The Subsequent Status Conferences
On January 8, 2007, a continued status conference was held. After Rexford stated its position that it was relieved of its obligation under the settlement agreement to transfer the properties because the deeds could not record on January 2, the court ordered the parties to close escrow and a written order was subsequently issued to that effect. After being served with the order, Rexford refused to close the escrows and threatened to sue the escrow holder if it did.
At a January 9, 2007, hearing, the court vacated its previous order and scheduled a hearing for the Naccaratis to bring a noticed motion to enforce the settlement pursuant to section 664.6. After Rexford’s attorney argued at that hearing that the court hadn’t granted a 30-day extension of the escrow and shouldn’t do so, the court stated that although it had not previously made a formal statement or ruling regarding the Naccaratis’ request to extend the escrow for 30 days, it had “been implicit or pretty explicit from the actions of the parties and Counsel and the Court that that was the Court’s intention – was that there would be an extension. So you can treat that as though that request was granted, just for the record.”
The Motions to Enforce the Settlement Agreement
Paulo and Luiz filed separate written motions to enforce the settlement agreement, which sought an order to close the escrows. In Paulo’s motion, he argued that Rexford breached the settlement agreement when it instructed the escrow holder on January 2 not to close escrow because: (1) on January 2, 2007, all conditions to close the three escrows had been met and the escrows were closed; (2) recordation of the deeds to lots 14, 15 and 34 was irrelevant to conveying title; (3) when Paulo and the LLC delivered the purchase money into the escrows and Rexford deposited the deeds, Paulo and the LLC acquired possession of the deed through their agent, Stewart Title, and Rexford acquired possession of the purchase money through its agent, Stewart Title; (4) legal title to lots 14 and 34 passed to Paulo and the LLC, irrespective of whether the deeds were recorded or there had been physical transfer of the deeds to them, when they paid the purchase price; (5) if the escrow instructions or settlement agreement required recordation for closing escrows on lots 14 and 34 on January 2, Paulo and the LLC waived the recordation requirement by written instruction to the escrow holder; and (6) but for Rexford’s acts, escrows on lots 14 and 34 would have closed on January 2.
Luiz argued in his motion that (1) since the close of the escrows was expressly conditioned on the completion of any necessary repairs as identified by an independent home inspection, Luiz needed to be sure the repairs were completed before his loan funds were deposited into escrow, as his loan could have expired if he funded before the repairs were completed; (2) escrow could not have closed in 30 days because Rexford was not in a position to close escrow then; (3) Rexford should not be permitted to assert the Naccaratis breached the settlement agreement by failing to close escrow on January 2, 2007, because Rexford prevented the close of escrow when it did not deposit the grant deeds until near the close of business on January 2; (4) neither the settlement agreement nor the purchase agreement requires the deeds record on the same day the escrow closes; (5) Rexford directly contradicted the court’s January 8, 2007, order that the escrows close when it instructed the escrow holder not to close escrow; (6) recording of the deeds is a ministerial act and is not required to convey title; and (7) since the settlement agreement states that each party may request a 30-day extension of the escrow, the escrow could be extended a total of 90 days at the court’s discretion.
Rexford argued the court must deny the motions. Rexford pointed out the settlement agreement requires transfer of lots 14, 15, and 34 through a close of escrow, with an absolute deadline to close escrow of January 2, 2007, and the supplemental escrow instructions define the term “close of escrow” as the date on which instruments or documents are recorded. Rexford reasoned that since time was of the essence and the Naccaratis failed to deposit funds into escrow in a timely manner so as to allow the transfer of the properties through a close of escrow by January 2, 2007, Rexford’s obligations under the settlement agreement were discharged as a matter of law.
Following oral argument on the motions, the court stated it intended to enforce the settlement and grant the motions, but stayed execution of the transaction so Rexford could post a bond and pursue an appeal. On March 13, 2007, a written order was filed granting the Naccaratis’ motions, ordering Rexford to instruct the escrow holder to close escrows for lots 14, 15 and 34, and awarding reasonable attorneys fees and costs to the Naccaratis. On April 18, 2007, a written order was filed which stated that a hearing was held on January 9, 2007, and the court granted “[o]ne thirty-day extension to close the escrows as contemplated by the Settlement Agreement put on the record October 31, 2006.”
DISCUSSION
Rexford contends the trial court abused its discretion when it granted the Naccaratis’ request to extend the escrow by 30 days and erred when it granted their motions to enforce the settlement, asserting the trial court lacked authority under section 664.6 to impose a new closing date for the real estate transactions. We are not persuaded.
As one appellate court recently summarized: “It is, of course, the strong public policy of this state to encourage the voluntary settlement of litigation. [Citations.] To that end, the law treats as confidential statements made during settlement negotiations [citation], provides financial incentives for settlement [citations], and provides, in section 664.6, an expedited procedure for enforcing a settlement once it has been agreed upon. [Citation.] [¶] Section 664.6 permits the trial court judge to enter judgment on a settlement agreement without the need for a new lawsuit. [Citation.] It is for the trial court to determine in the first instance whether the parties have entered into an enforceable settlement. [Citation.] In making that determination, ‘the trial court acts as the trier of fact, determining whether the parties entered into a valid and binding settlement. [Citation.] Trial judges may consider oral testimony or may determine the motion upon declarations alone. [Citation.] When the same judge hears the settlement and the motion to enter judgment on the settlement, he or she may consult his [or her] memory. [Citation.]’ [Citation.] The trial court’s factual findings on a motion to enforce a settlement pursuant to section 664.6 ‘are subject to limited appellate review and will not be disturbed if supported by substantial evidence.’” (Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1359-1360 (Osumi).)
Since the trial court did not make any express factual findings, we presume the trial court made all factual findings necessary to support its orders under the doctrine of implied findings. (Fladeboe v. American Isuzu Motors (2007) 150 Cal.App.4th 42, 61-62.) Although we review the trial court’s factual findings under the substantial evidence standard, when the issue involves a pure question of law, such as the interpretation of the settlement agreement where the extrinsic evidence is not in conflict, our review is de novo. (Timney v. Lin (2003) 106 Cal.App.4th 1121, 1126.)
As Rexford points out, while the trial court “may receive evidence, determine disputed facts, and enter the terms of the settlement agreement as a judgment” and may interpret the settlement agreement’s terms, “nothing in section 664.6 authorizes a judge to create the material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon.” (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810 (italics in original); Fiore v. Alvord (1985) 182 Cal.App.3d 561.)
Here, the trial court did not create a material term of the settlement or otherwise err when it ordered the escrows to close. The parties agreed the properties would be transferred through “a close of escrow” within 30 days of the date of the settlement and that the court had discretion to extend the escrow by 30 days, which it did at the Naccaratis’ request. This extension arguably made the escrow a 60-day escrow, and because the 60th day fell on a weekend, the “close of escrow” was extended at least to the next business day, which was January 2, 2007.
The settlement agreement does not define the term “close of escrow.” The settlement agreement did provide that the escrows would be in a condition to close once the repairs that had been identified by an independent home inspector had been completed. Moreover, the parties’ purchase agreements state that on the close of escrow, the purchase price shall be delivered to Rexford in cash and title conveyed to the Naccaratis.
The evidence shows the repairs were completed by December 29, 2006, and Luiz placed his deposit in escrow that same day. On January 2, 2007, the following occurred: (1) the Naccaratis placed the remainder of their purchase money into escrow; (2) after confirming the documents could not record that day, Rexford placed the grant deeds and notices of completion for lots 14 and 15 into escrow (the grant deed and notice of completion for lot 34 had been in escrow since 2003); (3) the Naccaratis instructed Lehman to close escrow that day and agreed recordation of the deeds could occur on January 3, 2007; and (4) Rexford instructed Lehman not to close the escrows because the deeds would not be recorded on January 2. According to Lehman’s January 5, 2007 declaration, had she not received that instruction, the three escrows “would have closed on January 2, 2007,” with recordation occurring at 8:00 a.m. the following day. Based on this declaration, the trial court could find, as it impliedly did, that Rexford could have received payment of the purchase price on January 2, despite Lehman’s later declaration that it was Stewart Title’s practice not to disburse funds until the deeds recorded, as she never directly contradicted her earlier statement or stated in the subsequent declaration that she could not have made an exception in this case. As we have explained, as an appellate court, we defer to the trial court’s factual findings when the evidence is in conflict, whether the trial court’s ruling is based on oral testimony or declarations. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 479.)
The evidence supports the trial court’s implied finding that the parties complied with the material terms of the settlement agreement. The agreement required transfer of the properties through a close of escrow by January 2, which would occur when the Naccaratis received title and Rexford received payment of the purchase price. On that date, all of the items necessary to effect the transfer were in escrow, including the deeds (which conveyed title to the Naccaratis) and the purchase money (which was available for distribution to Rexford that day). The only thing that remained to be done was to record the deed, which was a ministerial act of the Fresno County Recorder’s Office. But for that office’s practice, the deeds would have recorded on January 2. All of the parties knew about this practice, yet they failed to place the money and deeds in escrow in time to comply with it. Instead, apparently waiting to see who would blink first, the parties held off until January 2 and then, with the exception of the deed for lot 34, each side put in the money and deeds. It was only after putting in the deeds that Rexford told Lehman not to record them the following day, even though escrow would have closed on January 2 if not for this instruction. The evidence fully supports the trial court’s interpretation of the settlement agreement, i.e. that the settlement agreement required the parties to do everything necessary to effect the transfer of the properties by January 2, 2007, and but for Rexford’s instruction to Lehman not to close, escrow would have closed on that date, with the deeds recording the following day.
Rexford contends it was justified in refusing to allow the deeds to be recorded on January 3 because the purchase agreements made time of the essence and the supplemental escrow instructions the parties executed after they entered into the settlement agreement define the close of escrow as the date on which instruments or documents are recorded. Based on these terms, Rexford reasons the settlement agreement required the deeds to be recorded on January 2 in order for escrow to close by that date. The supplemental escrow instructions, however, were entered into after the settlement agreement. No evidence was offered that the parties intended the supplemental escrow instructions to define the terms of settlement agreement. To the contrary, the escrow instructions were to be amended to conform to the settlement agreement.
The cases Rexford relies on do not compel a different result. In Pittman v. Canham (1992) 2 Cal.App.4th 556, the court held where the seller of real property did not tender a notarized deed and the buyer did not tender the purchase price by the date set out in the escrow instructions, which made time of the essence, the result was a discharge of both parties’ duty to perform. (Id. at pp. 559-560.) The court explained the obligations to tender the deed and pay the purchase price are mutually dependent concurrent conditions which are satisfied by a tender of performance, and the failure of both parties to perform the concurrent conditions does not leave the contract open for an indefinite period so either party can tender performance at his leisure. (Id. at p. 559.) Instead, the court explained, “where the parties have made time the essence of the contract, at the expiration of time without tender by either party, both parties are discharged.” (Id. at p. 560.) Similarly in Pitt v. Mallalieu (1948) 85 Cal.App.2d 77, 81-84, the court held that the buyer could not maintain an action for specific performance of a real estate purchase agreement where the buyer did not deposit the purchase price into escrow during the time specified in the agreement.
In contrast to these cases, where the parties failed to perform at all within the time specified, here all of the parties tendered performance of their obligations by the date specified, namely January 2. Rexford asserts, however, the parties’ obligations under the settlement agreement are discharged because the Naccaratis’ performance was not timely, as they did not tender the purchase price in time for the deeds to record on January 2. This argument, however, presumes the settlement agreement required recordation on January 2, a presumption we have already rejected, as explained above. Since all of the parties performed by January 2, with recording to occur the following day, the trial court did not alter the settlement agreement’s material terms or add to them when it granted the Naccaratis’ motion to enforce the agreement – instead, it effected the agreement the parties entered into, i.e. the transfer of the properties within 60 days of the date the parties entered into the settlement agreement. (See, e.g., Osumi, supra, 151 Cal.App.4th at pp. 1360-1361.)
Neither did the trial court abuse its discretion in granting the Naccaratis’ request to extend the escrow for 30 days. Rexford asserts the court could grant the extension in its discretion only after a noticed motion upon showing of good cause and only “in the event of unforeseen circumstances which prevented closing within the first 30-day period.” Rexford argues there are no facts in the record to support a showing of good cause justifying the extension.
Under the applicable abuse of discretion standard of review, we will only interfere with the trial court’s exercise of its discretion if we find that under all the evidence, viewed most favorably in support of the trial court’s action, no judge reasonably could have reached the challenged result. (In re Estate of Billings (1991) 228 Cal.App.3d 426, 430.) The trial court abuses its discretion when it has “‘exceeded the limits of legal discretion by making an arbitrary, capricious, or patently absurd determination.’” (Mendoza v. Club Car, Inc. (2000) 81 Cal.App.4th 287, 301.) The burden rests on the complaining party to demonstrate from the record that such an abuse has occurred. (Forthmann v. Boyer (2002) 97 Cal.App.4th 977, 985.)
Here, we cannot say that no judge would reasonably have granted the request to extend the escrow for 30 days. Although Rexford asserts, based on the settlement discussions, that limits were placed on the trial court’s exercise of its discretion when determining whether to grant such a request, specifically that there must be an unforeseen circumstance preventing the close of escrow, the settlement agreement placed on the record did not contain any such limitation. Instead, the court was given unfettered discretion to extend the escrow. It is apparent from the court’s comments at the November 30 hearing that it believed the parties were doing what they could to facilitate the settlement and the settlement could still be accomplished if more time was given. The evidence supports this belief, as Paulo had nearly completed the sale of another property the funds from which he was going to use to purchase the properties at issue here, the parties had discussions about selecting a home inspector and one had been chosen, albeit not until the day before the hearing, and attempts had been made to have an appraiser evaluate the properties. As there was evidence before the court that the parties were making efforts to effectuate the settlement, we cannot say that the trial court made an arbitrary, capricious or patently absurd determination to extend the escrow for 30 days.
DISPOSITION
The judgment is affirmed. Respondents are awarded their costs on appeal.
WE CONCUR: Wiseman, Acting P.J. Hill, J.