Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Kern County No. S-1500-CV259545, Sidney P. Chapin, Judge.
Law Offices of Richard J. Papst and Richard J. Papst for Plaintiff and Appellant.
Klein, DeNatale, Goldner, Cooper, Rosenlieb & Kimball, Catherine E. Bennett, Paul A. Lafranchise and Andrew Heglund for Defendants and Respondents.
OPINION
HILL, J.
Plaintiff appeals from the judgment entered against him after defendants’ motion for summary judgment was granted. We conclude the trial court improperly shifted the burden of producing evidence to plaintiff, when defendants had not met their burden of demonstrating that his action lacked merit. Accordingly, we reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff’s first amended complaint contains causes of action labeled breach of oral contract, constructive trust, fraud, specific performance, and declaratory relief. It alleges that, in March 2000, plaintiff and Wayne Hall, on behalf of all defendants, entered into an oral agreement pursuant to which defendants agreed to sell certain real property, described as plaintiff’s personal residence, to plaintiff for $40,000. The terms of the agreement required plaintiff to pay $2,000 initially, and at least $250 monthly, plus an additional amount for property taxes. Plaintiff alleged he substantially performed the contract by paying defendants $32,275, plus taxes. He alleged defendants breached the contract in early 2006 by refusing to accept further payments and claiming plaintiff had no interest in the property other than as a tenant or guest. The fraud cause of action alleged defendants promised to convey title to the property to plaintiff with the express intent of defrauding plaintiff of his $40,000.
Defendants answered, asserting among other defenses that plaintiff’s causes of action were barred by the statute of frauds. Subsequently, defendants moved for summary judgment, asserting the alleged contract was not in writing as required by the statute of frauds and “no exceptions to the statute of frauds apply.” They also asserted the fraud cause of action could not be proved, and the declaratory relief cause of action and the remedies of constructive trust and specific performance failed along with the contract and fraud causes of action.
Plaintiff dismissed the fraud cause of action and filed opposition to the remainder of defendants’ motion. After two hearings, the court granted defendants’ motion, stating plaintiff had “failed to carry his burden of demonstrating any exceptions to the application of the statute of frauds” and his claims were “barred as a matter of law.” Plaintiff appeals.
DISCUSSION
A defendant “may move for summary judgment … if it is contended that the action has no merit.” (Code Civ. Proc., § 437c, subd. (a).)
“A defendant … has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action … cannot be established, or that there is a complete defense to that cause of action. 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.” (Code Civ. Proc., § 437c, subd. (p)(2).)
Defendant “bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) “A burden of production entails only the presentation of ‘evidence.’ [Citation.]” (Ibid.) If defendant meets this burden, the burden of production shifts to plaintiff “to make a prima facie showing of the existence of a triable issue of material fact.” (Ibid.) “[F]rom commencement to conclusion, [however,] the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Ibid.)
“A responding plaintiff has no evidentiary burden unless the moving defendant has first met its initial burden. [Citation.]” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 840, italics added.) A moving defendant is not entitled to summary judgment if the undisputed material facts set out in the separate statement are not dispositive of all the claims included in the complaint. (Pultz v. Holgerson (1986) 184 Cal.App.3d 1110, 1117.)
“An appellate court reviews the trial judge's decision to grant summary judgment de novo. [Citations.]” (Reliance Nat. Indemnity Co. v. General Star Indemnity Co. (1999) 72 Cal.App.4th 1063, 1074 .) The appellate court applies the same three step analysis as the trial court: (1) identify issues framed by the pleadings; (2) determine whether the moving party's showing established facts that negate the opponent's claim and justify a judgment in the moving party's favor; and (3) if so, determine whether the opposition demonstrates the existence of a triable, material factual issue. (Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342.) In this case, both the moving defendants and the trial court failed to properly address step one and, as a result, misapplied step two.
Even when plaintiff has the burden of proof at trial, “the initial duty to define the issues presented by the complaint and to challenge them factually is on the defendant who seeks a summary judgment.” (Conn v. National Can Corp. (1981) 124 Cal.App.3d 630, 638.) The first amended complaint alleged that plaintiff substantially performed the oral agreement for the sale of the real property. Generally, the statute of frauds requires that a contract for the sale of real property be in writing in order to be valid. (Civ. Code, § 1624, subd. (a)(3); Code Civ. Proc., § 1971.) A contract that has been fully or partially performed by the purchaser is excepted from this requirement. (Code Civ. Proc., § 1972, subd. (a); Sutton v. Warner (1993) 12 Cal.App.4th 415, 422.)
Thus, one of the issues raised by plaintiff’s pleading was the issue of part performance of the oral contract, as an exception to the requirement that the contract be written. When a plaintiff in his complaint anticipates a defense that may be raised by the defendant and includes allegations that would make the defense inapplicable, the defendant moving for summary judgment must not only establish the elements of the defense, but also demonstrate that the exception invoked by the plaintiff does not apply.
“If, as in this case, the plaintiff pleads several theories or anticipates affirmative defenses by a show of excusing events or conditions, the challenge to the opponent is made by the complaint, requiring the moving defendant to affirmatively react to each theory and excusing or justifying event, or condition which supports a theory, if the motion is to be successful. The moving defendant whose declarations omit facts as to any such theory or its qualifying excuse or justification permits that portion of the complaint to be unchallenged. In that event the plaintiff properly uses his own complaint. He does so, not to controvert the moving party's declaration, or in lieu of one for himself, but rather to show that certain facts or theories remain unchallenged.” (Conn v. National Can Corp., supra, 124 Cal.App.3d at p. 639.)
Defendants did not properly address the part performance issue in their motion. “[W]here assertion of the statute of frauds would cause unconscionable injury, part performance allows specific enforcement of a contract that lacks the requisite writing. [Citation.]” (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1108.) “‘Under the doctrine of part performance, the oral agreement for the transfer of an interest in real property is enforced when the buyer has taken possession of the property and either makes a full or partial payment of the purchase price, or makes valuable and substantial improvements on the property, in reliance on the oral agreement.’ [Citation.]” (Sutton v. Warner, supra, 12 Cal.App.4th at p. 422, fn. omitted.) The acts constituting part performance must either “‘unequivocally refer[]’ to the contract [citation], or ‘clearly relate’ to its terms. [Citation.]” (Benson, supra, at p. 1109, first bracketed insertion in the original.)
“It is settled law that a verbal contract for the sale of land is taken out of the operation of the statute of frauds and may be specifically enforced when there has been a part performance of the contract. And the taking of actual possession of the land by the vendee, with the consent of the vendor, is held to be a sufficient act of part performance. … The ground upon which this doctrine is based is that the vendee might be treated as a trespasser, and thus placed in a situation which would be a fraud upon him, if he could not invoke the protection of the contract. [Citations.]” (Calanchini v. Branstetter (1890) 84 Cal. 249, 253.)
The court in Francis v. Colendich (1961) 193 Cal.App.2d 128 enforced an oral agreement for the sale of real property where defendant’s son, from whom she had inherited the property, had paid for the land and fenced it, and he and defendant had occupied and used it continually thereafter. The court concluded defendant’s claim to the property was not barred by the statute of frauds because her “possession and that of her son before her under the oral contract of sale was sufficient part performance to take the contract out of the statute of frauds.” (Id. at pp. 131-132.)
In Wood v. Anderson (1926) 199 Cal. 440, the court found plaintiff had not proved part performance of an oral contract sufficient to take it out of the statute of frauds. The contract was for the sale of a strip of land adjoining plaintiff’s property. Defendants had given plaintiff permission to use the strip as a driveway. The only evidence of plaintiff’s possession was evidence that he placed a few loads of gravel on the lot, planted some trees on it, and claimed the property as his own to third parties. He did not pay or offer to pay the purchase price or the property taxes; he did not have the property surveyed or marked off in any way. (Id. at p. 445.)
The first amended complaint alleged the property was plaintiff’s “personal residence,” from which possession can be reasonably inferred. It also alleged plaintiff paid a substantial portion of the purchase price and the property taxes pursuant to the agreement. Although the memorandum of points and authorities in support of defendants’ motion argued that no exception to the writing requirement of the statute of frauds applied, the separate statement did not include facts negating plaintiff’s allegations.
All undisputed material facts must be included in the separate statement. The “‘“Golden Rule”’” of summary judgment and summary adjudication is: “‘“if it is not set forth in the separate statement, it does not exist.”’ [Citation.]” (North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 31.) This is so in part because the opposing party, in its separate statement, is required to respond only to the facts set out in the moving party’s separate statement; if facts are stated elsewhere in the moving papers, the opposing party is not required to state whether it disputes them or to present evidence controverting them, and the court will not know whether they are undisputed or not.
Defendants’ separate statement contained these facts: neither party executed a written agreement for sale of the house; years after the alleged sale, plaintiff wrote a memo, dated December 15, 2004, which he claims identifies the terms of the oral contract, but which was not signed by the Halls; plaintiff paid Wayne Hall money each month; and plaintiff made no improvements to the house. Plaintiff did not dispute those facts, but contended they were insufficient to establish defendants’ right to judgment as a matter of law, because they failed to address all the claims raised in plaintiff’s complaint.
Defendants concede plaintiff was in possession of the property and made payments to them. They argue, however, that the payments were “not unequivocally – clearly and convincingly – related to an oral agreement for the sale of the house.” They assert the payments could have been for rent. Their separate statement contained no facts or evidence suggesting the payments were made for any reason other than the performance of the oral contract, as alleged. Defendants proffered no facts or evidence demonstrating that the payments were for rent, that plaintiff was merely a tenant on the property, or even that there was no oral agreement to sell the property to plaintiff. Defendants also did not controvert plaintiff’s allegations that he made a $2,000 down payment toward the purchase of the property and that he paid the property taxes.
Defendants failed to meet their initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact. While they demonstrated there was no written contract for the sale of the real property, they failed to controvert any of the facts alleged by plaintiff as the basis of his claim that the contract fell within an exception to the statute of frauds for oral contracts that were substantially performed.
In their separate statement of undisputed material facts, defendants presented no facts or evidence showing that the money plaintiff paid them was not paid pursuant to the purchase contract. They failed to demonstrate that plaintiff did not take possession of the property, or did not do so in reliance on the oral contract. They did not contradict plaintiff’s allegation that he paid the taxes on the property. Thus, they failed to present undisputed facts negating plaintiff’s allegations of part performance that would take the contract out of the statute of frauds. Consequently, defendants failed to meet their initial burden and the burden never shifted to plaintiff to make a prima facie showing of the existence of a triable issue of material fact.
Because the burden never shifted to plaintiff, we need not discuss what burden of proof would apply at trial or how that burden would have affected plaintiff’s attempt to raise a triable issue of material fact. In light of defendants’ insistence that plaintiff is required to prove his claims by clear and convincing evidence pursuant to Evidence Code section 662, however, we observe that section 662 applies to claims that the legal owner of property holds title for the benefit of another. (Murray v. Murray (1994) 26 Cal.App.4th 1062, 1067-1068.) Plaintiff dismissed his quiet title and fraud causes of action, leaving only a claim of breach of contract, which does not rely on any claim that defendants hold legal title for his benefit. The breach of contract claim recognizes defendants’ legal title to the property; it alleges defendants contracted to sell the property to plaintiff and convey that legal title to him, but they breached the contract and should be required to perform it or pay damages. Evidence Code section 662 does not apply to such a claim.
Evidence Code section 662 provides: “The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.”
DISPOSITION
The judgment is reversed with directions to vacate the order granting summary judgment and to enter a new order denying summary judgment. Plaintiff is awarded his costs on appeal.
WE CONCUR: LEVY, Acting P.J., DAWSON, J.