Opinion
H042202
09-29-2017
CHERYL POLAND et al., Plaintiffs and Appellants, v. PETER RUNYAN, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Cruz County Super. Ct. No. CV178036)
This is a dispute between neighbors over the use of an easement comprising a right of way. Plaintiffs Cheryl and Thad Poland filed this action seeking to quiet title to the portion of their property burdened by the right of way. Plaintiffs argued that the easement appurtenant to their neighbor's property—currently owned by defendant Peter Runyan—was abandoned in perpetuity as the result of litigation involving defendant's predecessor to the property. The trial court granted summary judgment in favor of defendant, finding that plaintiffs failed to create a triable issue of material fact regarding defendant's predecessor's intent to abandon the easement, which was not binding on defendant. Plaintiffs appeal the judgment. For the reasons expressed herein, we shall affirm.
I. BACKGROUND
Plaintiffs' property (Poland property) is located on Summit Road in the Santa Cruz Mountains. In March 2012, defendant purchased the neighboring property via grant deed from Lisa A. Strugala. Recorded in the grant deed to both properties is an easement comprising a right of way to access defendant's property from Summit Road by using a private driveway along the Northwest boundary of the Poland property. The driveway along the easement runs a few feet from plaintiffs' house.
Shortly before defendant purchased his property, plaintiffs settled a lawsuit with Strugala concerning Strugala's alleged violation of certain covenants, conditions, and restrictions (CC&Rs) recorded against the properties and concerning her use of the easement. Plaintiffs and Strugala signed a settlement agreement and mutual general release (settlement agreement) memorializing the terms of the settlement. The settlement agreement was not recorded.
The settlement agreement refers to the Polands and Strugala as the parties to the settlement and as the owners of the respective properties. The following provisions of the settlement agreement are relevant here:
"[1]f. Use, Possession and Occupancy Restrictions. After February 20, 2012, STRUGALA, agrees that she shall not use, occupy or possess, nor allow any other person to use, occupy, or possess any part of the STRUGALA Property (including any access easements appurtenant thereto) for any reason.
"[1]g. Use of Private Driveway. After February 20, 2012, STRUGALA agrees that neither she, her children, nor anyone else acting in concert with her or on her behalf, shall use the private driveway alongside the POLAND Property, in perpetuity, unless as an invitee of some other property owner which the driveway services (excluding the POLAND Property and the STRUGALA Property). STRUGALA shall not stop on the portion of the private driveway that traverses the POLAND property or otherwise block or impede the POLANDS' ingress and egress to any portion of their property. [¶] . . . [¶]
"6. This Agreement and each and all of the representations, warranties, and covenants of the PARTIES hereto are binding upon the successors, assigns, heirs, and representatives of the PARTIES and each and all of their respective successors, assigns, heirs, and representatives."
Also of note, the settlement agreement contained a nondisparagement provision, in which the Polands and Strugala agreed "not to vex, annoy, or harass each other in any manner" and "not [to] disparage the other party in any way," and a liquidated damages provision. Strugala agreed to pay $30,000 to the Polands as part of the settlement.
When plaintiffs heard that Strugala was selling her property, they notified the real estate agents of the settlement and met with defendant before the transaction closed. Defendant reviewed an unsigned copy of the settlement agreement.
The parties offered different recollections of the meeting and whether the subjects of the easement and of building a new driveway to defendant's property were discussed. According to plaintiffs, as set forth in the declaration of Cheryl Poland (Poland declaration), defendant told Ms. Poland and her husband that he was a lawyer and very aware of the settlement, and not to worry as he had no problem putting in a driveway for his property directly from Summit Road. According to defendant, as set forth in his declaration (Runyan declaration), they did not discuss the easement or driveway access at the meeting; rather they discussed the CC&Rs restricting commercial use of defendant's property and a water and well agreement (pertaining to a common well that the properties share).
Strugala testified in deposition that when she entered the settlement agreement, the only provisions that were intended to apply to future owners were those relating to the recorded well agreement and the CC&Rs. As to the easement and use of the driveway, Strugala stated that once she vacated her property as of February 20th—the expected date for close of escrow of the then-pending sale, the agreement precluded her from returning or from using the driveway except as an invitee of other property owners.
Plaintiffs filed this action in October 2013 seeking to quiet title following the alleged abandonment of the easement. The complaint alleged that litigation between plaintiffs and defendant's predecessor had "resulted in a settlement whereby defendants' predecessors in interest agreed to abandon, extinguish and/or terminate the easement in perpetuity." It alleged that "[b]efore purchasing the property, defendant was informed of, and given a copy of, the settlement agreement abandoning, extinguishing and/or terminating the easement" yet "knowingly and intentionally continues to use the easement in violation of the agreement."
Defendant's verified answer admitted that he "was made aware" of the settlement agreement between plaintiffs and Strugala but denied that he was informed of the purported abandonment of the easement or of any purportedly binding effect on him or his property rights. Defendant cross-complained against the Polands to quiet title and for declaratory relief, seeking to establish the validity of the easement and of his ownership and right of use as the dominant tenement.
In September 2014, the trial court denied a motion for summary judgment filed by plaintiffs, finding that a triable issue of material fact existed as to Strugala's intent when she executed the settlement agreement between herself and plaintiffs.
Defendant subsequently moved for summary judgment in November 2014, asserting three grounds for summary judgment. These were: (1) that the undisputed evidence showed that Strugala did not intend to abandon the easement, so any purported abandonment was ineffective as a matter of law; (2) the settlement agreement could not be reasonably interpreted to be binding on defendant; and (3) Civil Code section 1217 does not make the settlement agreement binding on defendant, because although defendant briefly reviewed the settlement agreement before purchasing the property, he was not aware that plaintiffs believed it to extinguish his rights to the easement. In support, defendant submitted his declaration, copies of the relevant grant deeds, the settlement agreement produced by the Polands, and excerpts from the transcripts of plaintiffs' depositions as well as the deposition of Lisa Strugala.
The statute states, "An unrecorded instrument is valid as between the parties thereto and those who have notice thereof." (Civ. Code, § 1217.)
Plaintiffs opposed the motion for summary judgment. They contended that the trial court's prior finding of a disputed issue of material fact as to the intent of the settlement agreement precluded summary judgment in this instance as well. They argued that intent to abandon the easement is a question of mutual intent of the parties at the time of the settlement, properly determined from the text of the settlement agreement itself, and only if necessary, from extrinsic evidence based on the testimony and declarations of Strugala and the Polands.
Plaintiffs further argued that the settlement agreement was expressly binding on successors, and defendant's admission that he knew about the settlement and reviewed the settlement agreement was sufficient to show that he had notice of the unrecorded instrument under Civil Code section 1217. Defendant responded that plaintiff Cheryl Poland's speculation about intent was insufficient to create a material dispute as to Strugala's subjective intent to abandon the easement, and that plaintiffs had not raised a triable issue as to interpretation of the settlement agreement and its nonbinding effect on defendant.
During the hearing on defendant's summary judgment motion, the trial court distinguished the respective burdens in plaintiffs' earlier motion for summary judgment and explained that "[t]his time," defendant had met his burden in bringing the motion, but plaintiffs had not presented a triable issue of fact in response. The court identified the governing framework as that of "the owner's intent, not a mutual agreement issue." Given this framework, the court found that defendant had provided "very strong and somewhat overwhelming" proof that "Strugala never intended to abandon this easement . . . ." The court found that plaintiffs' showing in response was "not strong in rebutting" the testimony and made "some assumptions" and "speculat[ed] as to what [Ms. Poland] believed and her husband believed Ms. Strugala's intent was and what the intent was of the agreement."
The trial court reasoned that to interpret the settlement agreement, extrinsic evidence of Strugala's testimony was "relevant to prove a meaning which the instrument might be reasonably susceptible." It found Strugala's deposition testimony "made very clear . . . that [the] agreement was applying to her and her family, not any subsequent purchaser like the defendant in this case."
The trial court also addressed the argument under Civil Code section 1217. It noted that Runyan had reviewed an "unsigned draft" of the settlement agreement and found "no evidence" that he "had actual or constructive knowledge of the [operative,] final signed settlement agreement . . . ."
In a written order dated February 6, 2015, the trial court granted defendant's motion for summary judgment. The court found that defendant met his burden by submitting evidence sufficient to demonstrate that Strugala never intended for the easement at issue to "be abandoned, terminated and/or extinguished, in perpetuity, or that any purported abandonment, termination and/or extinguishment be binding on Defendant," and that the settlement agreement was not binding on defendant. The court further found that plaintiffs had failed to create a triable issue of material fact as to the issues in their complaint and thus failed to meet their responsive burden in opposing the summary judgment. The court entered judgment for defendant, and this appeal followed.
II. DISCUSSION
A. SUMMARY JUDGMENT PRINCIPLES AND STANDARD OF REVIEW
A trial court properly grants a motion for summary judgment when there is no triable issue of material fact and the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A defendant moving for summary judgment has the burden of demonstrating that one or more elements of the plaintiff's cause of action cannot be established, or that there is a complete defense to that cause of action. (Id., subd. (p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849 (Aguilar).) Once the defendant meets that burden, justifying a finding in its favor as to one or more elements of the cause of action, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or the defense. (§ 437c, subd. (p)(2).)
Unspecified statutory references are to the Code of Civil Procedure.
The plaintiff opposing summary judgment may not "rely upon the allegations or denials of its pleadings" but must set forth "specific facts" beyond the pleadings to show the existence of a triable issue of material fact. (§ 437c, subd. (p)(2).) A triable issue of fact exists if "the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof." (Aguilar, supra, 25 Cal.4th at p. 850.)
On appeal from the granting of a motion for summary judgment, the reviewing court "examine[s] the record de novo, liberally construing the evidence in support of the party opposing summary judgment and resolving doubts concerning the evidence in favor of that party." (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 460 (Miller).)
B. ANALYSIS
Plaintiffs contend that the trial court misapplied the law and improperly disregarded disputed material facts in two specific areas. These are whether Strugala intended to abandon the easement, and whether the settlement agreement was binding on defendant under Civil Code section 1217. Because plaintiffs do not dispute that defendant met his initial burden in support of the summary judgment motion, we do not examine defendant's showing under section 437c, subdivision (p)(2) except insofar as it may be relevant to the discussion.
1. Whether the Settlement Agreement Conferred an Abandonment Hinges on the Easement Owner's Subjective Intent , not Mutual Agreement of the Settling Parties
Plaintiffs challenge the trial court's finding regarding the alleged abandonment of the easement on two grounds. First, plaintiffs argue that the court ignored the evidence of both the settlement agreement and the Poland declaration, controverting defendant's showing that Strugala did not intend to abandon the easement. Second, plaintiffs argue that while abandonment generally centers on the demonstrated intent of the owner of the easement, here the abandonment was part of the settlement of contested issues and therefore it is the mutual intent of the parties to the settlement that must determine the intent to abandon. Defendant responds that only Strugala's subjective intent is relevant in the abandonment analysis.
This latter issue presents the apparently novel question of how abandonment of an easement created by grant should be determined when the intent to abandon is allegedly expressed in a written settlement agreement. Whereas a claim of abandonment generally requires examination of the subjective intent of the owner of the dominant tenement, interpretation of a settlement agreement concerns the mutual intent of the contracting parties—as may be objectively determined from the writing itself. These approaches appear incompatible: either the subjective intent of the individual owner controls, or the mutual intent of the settling parties as it appears on the face of the contract controls.
We address this apparent dilemma first by examining certain relevant aspects of the law of easements. As this court recently explained in Vieira Enterprises, Inc. v. McCoy, " 'An easement is an incorporeal interest in the land of another which gives its owner the right to use another's property.' (Tract Development Services, Inc. v. Kepler (1988) 199 Cal.App.3d 1374, 1384 (Kepler).) A right-of-way is among the easements that may be created by grant. (Civ. Code, § 802.) 'A transfer of real property passes all easements attached thereto . . . .' (Civ. Code, § 1104.) A reserved right-of-way is appurtenant to the retained land and passes by subsequent conveyance of that land without a particular reference in the grant deed. (Nay v. Bernard (1919) 40 Cal.App. 364, 370.)" (Vieira Enterprises, Inc. v. McCoy (2017) 8 Cal.App.5th 1057, 1075 (McCoy).)
Abandonment or termination of an easement thus requires an affirmative showing of intent. Plaintiffs bear the burden of proof to show the loss of defendant's right of use as the dominant tenement. (See Ward v. City of Monrovia (1940) 16 Cal.2d 815, 820 [plaintiff's burden to prove right to use waters which plaintiff claimed the city had abandoned]; Lema v. Ferrari (1938) 27 Cal.App.2d 65, 73 [" 'A party who bases his right on . . . the abandonment or forfeiture of prior rights, has the burden of proof as to such matters.' "].)
The court in Kepler addressed the requisite showing of intent when a purchaser of subdivision lots asserted rights to an easement for a street described in the subdivision map, as against owners of the adjoining lot who argued in relevant part that the easement was excepted by the terms of an earlier deed, or abandoned. (Kepler, supra, 199 Cal.App.3d at pp. 1377-1381.) The court explained that the rights to an express easement created by grant "cannot be lost by mere nonuse" (id. at p. 1382, italics omitted; accord McCoy, supra, 8 Cal.App.5th at p. 1076) and pass with transfers of the property unless "specifically excepted" by the terms of the deed. (Kepler, supra, at p. 1383; see also Civ. Code, § 1084 ["[t]he transfer of a thing transfers also all its incidents, unless expressly excepted; . . ."]; Civ. Code, § 1104 ["[a] transfer of real property passes all easements attached thereto . . ."].) The court in Kepler rejected the argument that the easement was expressly excepted by an earlier deed referring to the road at issue " 'as now abandoned,' " because the purported abandonment was in reference to public use and did not "evidence an unambiguous intent on the part of the [prior owner] to except the private easement from the grant . . . ." (Kepler, supra, at p. 1383.)
The court also rejected the argument that the easement was abandoned when the prior owners planted trees on the road and obtained a grant of easement to a different portion of the road. (Kepler, supra, 199 Cal.App.3d at pp. 1384-1385.) The court explained that planting trees on the road might have indicated nothing more than "intent not to use the way as a way until some time in the distant future," such as once development of certain lots fronting the way had occurred, and obtaining an easement over another portion of the avenue indicated only a misapprehension of the nature of the former owners' rights to the private easement. (Id. at p. 1385.) Critical to its analysis was the requisite showing for abandonment: "Abandonment hinges upon the intent of the owner to forego all future conforming uses of the property, and there must be conduct demonstrating that intent which is so decisive and conclusive as to indicate a clear intent to abandon." (Ibid., citing Gerhard v. Stephens (1968) 68 Cal.2d 864, 889 (Gerhard).)
California case authority demonstrates that evidence revealing "intent which is so decisive and conclusive as to indicate a clear intent to abandon" (Kepler, supra, 199 Cal.App.3d at p. 1385) establishes a high threshold for abandonment, as the outcome in Kepler indicates. Another example is the California Supreme Court's decision in Gerhard, supra, 68 Cal.2d 864. In the context of reviewing the adjudication of several quiet title actions to mineral interests underlying private property, the high court examined the showing required for the "abandonment of perpetual easements created by grant." (Gerhard, supra, at p. 890, fn. omitted.) The court explained that "the trier of fact, before decreeing an abandonment, must find that the owner's conduct clearly and convincingly demonstrates the necessary intent." (Ibid.) Most cases involve evidence of nonuse " ' "accompanied by unequivocal and decisive acts on the part of the [dominant tenant], clearly showing an intention to abandon." ' " (Ibid., quoting People v. Southern Pac. Co. (1916) 172 Cal. 692, 700.)
Analysis of the law of easements was essential in Gerhard based on the court's holding that classified the rights to drill for oil and gas as an incorporeal hereditament and therefore "essentially indistinguishable from easements" which, like other incorporeal hereditaments, "can be abandoned." (Gerhard, supra, 68 Cal.2d at p. 877.)
In the case of Gerhard, the California Supreme Court found insufficient evidence that certain parties had abandoned their interests despite "47 years of nonuser, their apparent lack of concern with their interests, and their failure to give any visible indication of intent to make future use of the property." (Gerhard, supra, 68 Cal.2d at pp. 893-894, fn. omitted.) Yet the court found sufficient evidence that other parties had abandoned their interests due to their predecessors' rejection of certain corporate assets in an earlier probate proceeding, in combination with their subsequent nonuse of the property "for an extended period of time that lengthened into almost a half century." (Id. at p. 897.)
Gerhard underscores the fact-driven focus of courts examining a claim to quiet title as against an easement created by grant; the trier of fact examines " 'the totality of facts and circumstances' " in order to test the " 'force and validity of the' " purported intent to abandon. (Gerhard, supra, 68 Cal.2d at p. 896.)
We hold that the legal framework requiring inquiry into the facts and circumstances surrounding an alleged abandonment does not change simply because the abandonment may have occurred in the context of settling a legal dispute and not under more commonplace circumstances like prolonged nonuse. We also observe that this case arises from a quiet title dispute; it is not a contractual dispute between plaintiffs and defendant. Accordingly, we conclude that the trial court correctly decided that abandonment hinges on the owner's intent, not a mutual agreement issue. Insofar as the alleged expression of Strugala's intent to abandon the easement is contained in the settlement agreement, interpretation of that writing is required; but other evidence of Strugala's intent may also be relevant.
2. The Settlement Agreement Did Not Evidence Abandonment of the Easement
Plaintiffs rely on the text of the settlement agreement, as well as the Poland declaration, in support of their argument that Strugala intended to abandon the easement, or at least that disputed facts create a triable issue as to Strugala's intent to abandon. We agree that to the extent the purported abandonment was memorialized in the settlement agreement, that instrument provides the appropriate starting point for ascertaining intent.
Courts interpret settlement agreements by applying "the same rules that apply to any other contract." (In re Tobacco Cases I (2010) 186 Cal.App.4th 42, 47 (Tobacco Cases).) These rules require the court to give effect to the mutual, expressed intention of the parties as it existed at the time of contracting. (Ibid.; see Civ. Code, § 1636.) For present purposes, however, we are concerned with what reasonable inferences may be drawn about Strugala's intent from the outward manifestation of mutual consent to the contract. (See Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1027 (Rodriguez) [" '[I]n the absence of fraud, mistake, etc. . . . , the outward manifestation or expression of consent is controlling"].)
We ascertain this intent "by determining what the parties meant by the words they used." (Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 38 (Pacific Gas & E.).) The trial court provisionally considers "all credible evidence offered to prove the intention of the parties." (Id. at pp. 39-40.) If the court decides, after considering this evidence and in the light of all the circumstances, that "the language of a contract . . . 'is fairly susceptible of either one of the two interpretations contended for . . . ,' [citations] [then] extrinsic evidence relevant to prove either of such meanings is admissible." (Id. at p. 40.) That is, " ' "[w]hen two equally plausible interpretations of the language of a contract may be made . . . parol evidence is admissible to aid in interpreting the agreement, thereby presenting a question of fact which precludes summary judgment if the evidence is contradictory." ' " (Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351.)
Here, the settlement agreement resulted from the lawsuit between the Polands and Strugala. It was not a short-lived dispute; the Polands filed their complaint in December 2008 and settled their claims against Strugala in January 2012. The trial court took judicial notice of the fact of the lawsuit, and both sides offered the Polands' complaint against Strugala as evidence in support of their positions on summary judgment. The complaint and settlement agreement show that in addition to the dispute over the easement, the Poland-Strugala lawsuit involved claims including Strugala's alleged breach of the CC&Rs recorded in the deed restrictions by conducting commercial boarding and training of horses on her property, nuisance violations caused by the commercial activities, trespass on the Polands' property, breach of a recorded agreement concerning a water well shared by the two properties, and an assault claim based on an incident in which Strugala allegedly threw a heavy sign at Cheryl Poland.
With this background, we turn to consider whether the language of the settlement agreement is reasonably susceptible to the interpretation that plaintiffs urge. (Pacific Gas & E., supra, 69 Cal.2d at p. 40; Hartzheim v. Valley Land & Cattle Co. (2007) 153 Cal.App.4th 383, 389 [" ' " 'When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is "reasonably susceptible" to the interpretation urged by the party.' " ' "].) We construe the contract "as a whole, 'so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.' " (Epic Communications, Inc. v. Richwave Technology, Inc. (2015) 237 Cal.App.4th 1342, 1349; see also Lemm v. Stillwater Land & Cattle Co. (1933) 217 Cal. 474, 480 ["Although the language of the contract must govern its interpretation (Civ. Code, [§§] 1638, 1639), nevertheless the meaning is to be obtained from the entire contract and not from any one or more isolated portions thereof."].)
Two provisions of the settlement agreement directly address the easement. Section 1f. provides that after February 20, 2012, Strugala agrees not to "use, occupy or possess, nor allow any other person to use, occupy, or possess any part of the STRUGALA Property (including any access easements appurtenant thereto) for any reason." Section 1g. provides that after February 20, 2012, Strugala "agrees that neither she, her children, nor anyone else acting in concert with her or on her behalf, shall use the private driveway alongside the POLAND Property, in perpetuity, unless as an invitee of some other property owner which the driveway services (excluding the POLAND Property and the STRUGALA Property)." Section 1g. further prohibits Strugala from stopping on the portion of the private driveway that traverses the Poland property or otherwise blocking or impeding the Polands' ingress and egress to any portion of their property.
Plaintiffs argue that sections 1f. and 1g., together with the provision in section 6 applying the terms of the agreement to all successors and assigns, leave no doubt that Strugala abandoned the easement and the abandonment applies to Runyan as a successor-in-interest. We find to the contrary and conclude that the settlement agreement is not reasonably susceptible to plaintiffs' interpretation.
First, the settlement agreement contains no mention of modifying the grant deeds to the Poland and Strugala properties or extinguishing the easement recorded in those deeds. This omission is notable because the settlement agreement directly addresses both the "deed restrictions currently of record," which under section 1d. are to "remain unmodified," as well as the recorded well agreement. For the well agreement, the settlement agreement provides "that the Water Well and Maintenance Agreement recorded in the Santa Cruz County official records on June 8, 1990, shall be amended and modified as set forth as attached hereto . . . ." Thus, to the extent that certain aspects of the settlement agreement were intended to modify—or leave unmodified—recorded instruments affecting title, the settlement agreement did so expressly.
Second, "we must interpret a contract in a manner that is reasonable and does not lead to an absurd result." (Roden v. AmerisourceBergen Corp. (2010) 186 Cal.App.4th 620, 651; Civ. Code, § 1638 ["The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity."].) The plain meaning of sections 1f. and 1g. is to eliminate Strugala's use, occupancy, and possession of her own property (including any access easements appurtenant) after February 20, 2012, and to prohibit "in perpetuity" Strugala's use of the private driveway alongside the Poland property after that same date, including use by her children or anyone acting in concert with her or on her behalf. Strugala retained, however, the right to use the private driveway "as an invitee of some other property owner which the driveway services . . . ."
So construed, these provisions are internally consistent. Moreover, they make sense given the dispute leading to the settlement agreement and the fact that the agreed-upon date of February 20, 2012, by which Strugala would no longer use her property or the driveway, was intended to correlate with the close of escrow on the sale of her property. (Pacific Gas & E., supra, 69 Cal.2d at p. 40 [court considers "the 'circumstances surrounding the making of the agreement . . .' so that the court can 'place itself in the same situation in which the parties found themselves at the time of contracting' "].) In fact, the dispute is not whether the Polands and Strugala agreed to these terms as to Strugala, her family, and "anyone acting in concert" with her. The question is whether, by consenting to the terms of the settlement agreement, Strugala evidenced a broader intent to abandon the easement, thereby extinguishing the rights of future owners of the property to use the right of way contained in the grant deed.
We find no indication of such intent in the settlement agreement and are not persuaded by plaintiffs' argument that the successor provision in section 6 supplies this result. To the contrary, broad application of the successor provision to a subsequent purchaser like Runyan would lead to an absurd outcome by prohibiting a subsequent owner, under section 1f., from the "use, occupancy or possession" of his or her property. Plaintiffs address this apparent absurdity by maintaining that section 1f. contains a scrivener's error. They assert that rather than prohibiting Strugala from having rights to her own property, section 1f. should be read to state that Strugala agreed not to use, occupy or possess any part of the Poland property.
Defendant responds that plaintiffs did not make this argument in the trial court or present any evidence regarding the so-called scrivener's error, which they raise for the first time on appeal. Plaintiffs contend, however, that the issue was before the trial court, as defendant himself pointed out the absurdity of section 1f. in arguing that the settlement agreement was not intended to be binding on unknown third parties like Runyan. Plaintiffs further argue that even without considering the scrivener's error, the contract is only susceptible to one interpretation, which is that Strugala gave up all access easements appurtenant to the property and any use of the driveway in perpetuity.
These arguments highlight the problems with plaintiffs' interpretation of the agreement. If there were a scrivener's error as plaintiffs contend, substituting "Poland property" for "Strugala property" in section 1f. would mean that Strugala agreed not to "use, occupy or possess, nor allow any other person to use, occupy, or possess any part of the [POLAND] Property (including any access easements appurtenant thereto) for any reason." This would render nonsensical the language about the "access easements appurtenant thereto," since the access easement benefited the Strugala property, not the Poland property. In addition, it appears no less absurd that Strugala would have agreed, essentially, to vacate (not "use, occupy, or possess") the Polands' property after the agreed-upon date—retaining the rights to her own property—while nevertheless agreeing under section 1g. to refrain from ever using the private driveway alongside the Poland property. Since the private driveway, which the access easement traverses, was the only means of accessing the Strugala property, section 1g. would have prevented Strugala, her family, and anyone "acting in concert with her or on her behalf" from accessing her property in any event. What is more, Strugala would have faced liquidated damages of $500 per day under section 1i. each time that she used the driveway to get to her property.
As plaintiffs state in paragraph three of the complaint in this action, defendant's predecessor (Strugala) "owned an Easement appurtenant to Defendants' Property and burdening Plaintiffs' Property."
Plaintiffs urge this latter interpretation under the theory that by abandoning the easement in perpetuity, Strugala by implication was promising to build a separate driveway directly from her property to Summit Road. Indeed, this is what the Poland declaration states was plaintiffs' "assumption." But based on the date that the Polands and Strugala executed the settlement agreement, Strugala would have had only a few weeks to arrange for permitting and construction of a new driveway to her property, and if unsuccessful she would have faced liquidated damages for using the easement. We find this interpretation of the settlement agreement dubious, unless the parties also intended that Strugala vacate her property at the same time (which, of course, is what the plain terms state). Accordingly, we reject the scrivener's-error argument.
The Polands, Strugala, and their attorneys executed the settlement agreement on January 30, 2012. The date by which Strugala agreed in section 1g. to give up any use of the private driveway alongside the Poland property was February 20, 2012.
Instead, we construe sections 1f. and 1g. to mean that at the same time that Strugala agreed that she would not use or occupy her own property, including any access easements appurtenant, she also agreed to give up "in perpetuity" the only means of access to her property, which was "use [of] the private driveway alongside" the Poland property. The general language of the successor provision does not impart an " ' "unequivocal" ' " and " ' "decisive" ' " intent to extend what can only be understood as a personal obligation to successive owners in the form of an abandonment of the dominant tenant. (Gerhard, supra, 68 Cal.2d at p. 890.) In order to avoid interpreting absurdities into the agreement, the successor provision must be construed in a limited manner, consistent with the personal slant of the settlement agreement and even with plaintiffs' conduct in seeking to enforce its terms. It would be irrational to interpret Runyan as a successor or assignee of section 1g.—the purported abandonment of the "use [of] the private driveway" in perpetuity, while relieving his obligation to perform under the other contractual provisions, including section 1f.
Other provisions of the settlement agreement reinforce this interpretation, including the nondisparagement clause, the liquidated damages provision (which applies to the nondisparagement clause as well as to any violations of sections 1f. or 1g.), and the provision requiring Strugala to pay the Polands $30,000.
Plaintiffs did not seek to enforce liquidated damages against Runyan for his ongoing use of the driveway easement, nor did they pursue binding arbitration to resolve his purported violation of sections 1f. and 1g., as the settlement agreement requires in section 1i.(5).
We conclude for these reasons that the settlement agreement cannot be construed as an abandonment of the easement such as would affect title, and, quite absurdly, prohibit subsequent owners from the "use, occupancy or possession" of their property and prohibit use of the private driveway in perpetuity, except as an invited guest of the neighbors. Even if the agreement were ambiguous on this point (Tobacco Cases, supra, 186 Cal.App.4th at p. 48 ["[a] contract is ambiguous only if it is reasonably susceptible of two or more interpretations"]), the evidence in the record unequivocally supports defendant's interpretation of the settlement agreement.
We note that while "extrinsic evidence" of subjective intent in the contract setting would be admissible only if the contract terms were ambiguous (Rodriguez, supra, 212 Cal.App.4th at p. 1027), in the context of plaintiffs' quiet title action, evidence of Strugala's subjective intent was not only admissible, but required. (Kepler, supra, 199 Cal.App.3d at p. 1385 [owner of dominant tenement must demonstrate "intent which is so decisive and conclusive as to indicate a clear intent to abandon"].)
3. Plaintiffs Failed to Introduce a Triable Issue of Material Fact as to Strugala's Intent to Abandon the Easement
Having concluded that the settlement agreement, by its terms, does not confer a clear intent to abandon the easement or bind subsequent owners of the dominant tenement to cease use of the easement, we consider whether other evidence in the record creates a triable issue of material fact regarding Strugala's alleged intent. In support of his motion for summary judgment, defendant offered excerpts of Strugala's deposition testimony about her understanding and intent when she entered the settlement agreement with the Polands. Plaintiffs in response offered the Poland declaration. Plaintiffs argue that the trial court, in deciding the summary judgment motion, improperly weighed the evidence and failed to accept the Poland declaration as true. Our review of the record is de novo, and plaintiffs—as the party opposing summary judgment—are entitled to have the evidence construed in their favor. (Miller, supra, 36 Cal.4th at p. 460.)
Plaintiffs also requested that the trial court take judicial notice of certain exhibits submitted in support of plaintiffs' motion for summary judgment about six months earlier. Among these were an e-mail exchange between defendant and his realtor concerning the settlement agreement, excerpts of the deposition testimony of defendant's realtor, and additional excerpts from the deposition of Lisa Strugala.
Strugala testified about the circumstances of the settlement and her understanding of the settlement agreement. Regarding section 1f., Strugala explained, "[T]he idea was after February 20th, I was no longer the owner of the property and that I would not, you know, squat on it or basically—you know, I'd be gone. I would never come back." She added, "And the same thing with [section] G, except that I kept a right to—if some of the other friends I had down there, except for not my property, not the Runyans' or the Polands' property, but if anybody else invited me, for some reason, to their—I could use the driveway." She testified that it was never her intent for the easement provisions to apply to Runyan, as the subsequent owner, because they affected only her and her family's use of the driveway.
"Q. Did you have any understanding when you signed this document that . . . section G would be binding on Mr. Runyan?
"A. That he couldn't . . . oh, I see what you're asking. No, that wouldn't be binding on—it was only my family and me.
"Q. Let me rephrase the question. . . . Did you have any understanding when you signed this document that section G, 'Use of a Private Driveway,' would be binding on Mr. Runyan?
"A. Not as far as his use of it, no.
"Q. Okay. So as far as you were concerned, section G had nothing to do with Mr. Runyan?
"A. It was just me, yes.
"Q. As far as you were concerned, did the settlement agreement have anything to do with Mr. Runyan?
"A. No. The settlement agreement had nothing to do with Mr. Runyan except that there was a new water and well agreement, right? And that the CC&Rs, which, you know, the deed restrictions had been unmodified."
Strugala responded "No" when asked if she intended to abandon the right of future owners of her property to use the easement, stating that "I did not intend to modify or in any way extinguish the easement that runs with the 21954 Summit Road property." When asked whether the settlement agreement affected her disclosures in the sale of her property, she responded that "the only things that changed were relative to me personally. In other words, the driveway was personal to me and the restrictions on me coming back was personal to me, and the non-disparagement was personal to me, and staying there past the 20th was personal to me."
In her declaration, Poland described the circumstances leading to the settlement and her understanding of the agreement. She explained in pertinent part: "Problems with cars disturbing our peace as they drove [along the easement] so close to the house arose and we tried to work out alternatives with defendant's predecessor, Lisa Strugala to limit the use of the driveway. . . . This was a major issue and subject of an eventual settlement agreement. We eventually achieved a settlement whereby Ms. Strugala agreed to abandon the easement for all time. [¶] It had been our assumption that she would put in a driveway directly from her house to Summit Road, about 30 feet in distance. That, however, did not occur before the sale of the house to Mr. Runyan. We were concerned that this was not happening before the sale . . . so I contacted the realtors for both [Strugala and Runyan] to be sure everyone knew about the settlement." Poland stated that she and her husband met with Runyan in early February 2012 to discuss the settlement before he bought the house, at which time "he told us he was a lawyer, very aware of the settlement, not to worry and that he had no problem putting a driveway in directly to Summit Road."
The trial court noted at the hearing on defendant's motion that "Strugala was very, very clear that she didn't intent to abandon this easement. [¶] Now, Ms. Poland's declaration, while somewhat helpful, is not strong in rebutting it, and she makes some assumptions and some speculation as to what she believed and her husband believed Ms. Strugala's intent was and what the intent was of the agreement." The court explained that Strugala's deposition testimony was relevant to prove a meaning of which the settlement agreement might be reasonably susceptible. The court further explained, "It's a judicial function to interpret a written instrument, and it's not a matter of the credibility of extrinsic evidence. This isn't a matter of credibility at all. . . . By taking plaintiff's [sic] interpretation, this would have created an ambiguity, and I don't see it as a personal covenant on Mr. Runyan."
The trial court did not err in its assessment. Under these unique circumstances, plaintiffs' understanding and expectations at the time that they entered the settlement agreement are largely irrelevant to the court's determination of whether the agreement conferred an abandonment. As we discussed ante, "[a]bandonment hinges upon the intent of the owner to forego all future conforming uses of the property, and there must be conduct demonstrating that intent which is so decisive and conclusive as to indicate a clear intent to abandon." (Kepler, supra, 199 Cal.App.3d at p. 1385.) The relevant conduct was Strugala's assent to the settlement agreement. Strugala's testimony concerning her intent at the time was unequivocal. Further, her explanation of the pending sale of her property and her intent to never again use the easement, except if invited to visit one of the other properties along the right-of-way, helps to clarify the literal terms of the agreement and avoids absurdity in its interpretation.
While the trial court's reference to the Poland declaration as "not strong in rebutting" the evidence of Strugala's intent could imply an improper weighing of the evidence, the court's decision ultimately was based on plaintiffs' failure to raise a triable issue of material fact—a determination that our de novo review of the evidence confirms. --------
The Poland declaration does not satisfy plaintiffs' burden to raise a triable issue of material fact as to Strugala's intent to abandon the easement. Drawing all reasonable inferences in plaintiffs' favor, the declaration indicates that Strugala's use of the driveway was a "major issue" in the litigation and in the subsequent settlement, in which—according to plaintiffs' understanding and assumptions—Strugala "agreed to abandon the easement for all time." Plaintiffs' stated interpretation of the settlement agreement and conjecture about what Strugala was going to do as a result does not create a triable dispute on the issue of Strugala's intent.
Accordingly, we find that the trial court did not err in determining that plaintiffs failed to meet their burden to demonstrate a triable issue of fact in opposing defendant's motion for summary judgment.
4. Defendant's Notice of an Obligation Affecting Title Under Civil Code section 1217
Plaintiffs contend that the trial court erred in its analysis of whether defendant had notice of the unrecorded settlement agreement—and by extension of the alleged abandonment of the easement—under Civil Code section 1217. Defendant responds that the notice statute is inapplicable because defendant had no actual or constructive knowledge that the settlement agreement purportedly constituted abandonment of the easement.
Civil Code section 1217 states, "An unrecorded instrument is valid as between the parties thereto and those who have notice thereof." The trial court's order granting summary judgment for defendant did not address this issue or rely on it as a basis for its ruling. But at the motion hearing, the trial court expressed skepticism that Runyan "had actual or constructive knowledge of the final signed settlement agreement" given that the evidence showed only that Runyan had reviewed an "unsigned draft" of the agreement and that "he conducted a title search that produced nothing of the settlement agreement, which as we know is unrecorded . . . ."
The evidence shows that defendant reviewed an unsigned copy of the settlement agreement, discussed some aspects of it with the Polands at their meeting, and also discussed the settlement agreement with his realtor, who according to deposition testimony, delayed removing contingencies until defendant "understood what was going on with [the] Polands." Plaintiffs argue that this evidence is more than sufficient, under California authority interpreting Civil Code section 1217, to constitute actual or constructive notice. (See, e.g., Ocean Shore R.R. Co. v. Spring Valley W. Co. (1933) 218 Cal. 86, 88 [actual notice of plaintiff's easement when negotiating purchase of property was not required where defendant "had actual notice of circumstances sufficient to put it upon inquiry which, if prosecuted, would have disclosed plaintiff's interest and right in the property"].)
Plaintiffs raise valid questions about whether the evidence raised a triable issue as to notice under Civil Code section 1217. But unfortunately for plaintiffs, our conclusions in the preceding sections render inconsequential any triable issues of material fact as to notice. "Since at least 1868, the California courts have held that: ' "[W]hen a purchaser has knowledge of any fact sufficient to put him on inquiry as to the existence of some right or title in conflict with that he is about to purchase, he is presumed to have made the inquiry and ascertained the extent of such prior right or to have been guilty of a degree of negligence equally fatal to his claim to be considered as a bona fide purchaser." ' " (Natural Resources, Inc. v. Wineberg (9th Cir. 1965) 349 F.2d 685, 689-690, italics added, quoting Pell v. McElroy (1868) 36 Cal. 268, 277; see also Triple A Management Co. v. Frisone (1999) 69 Cal.App.4th 520, 531 [a party "is not entitled to ignore information that comes to him from outside the recorded chain of title, to the extent such information puts him on notice of information that reasonably brings into question the state of title reflected in the recorded chain of title"].)
Here, whether defendant had actual or constructive notice of the settlement agreement within the meaning of Civil Code section 1217 would be germane only if that instrument actually conferred an abandonment. Given our conclusion that the settlement agreement is not reasonably susceptible to that interpretation, and insofar as plaintiffs have otherwise raised no triable issue of material fact as to Strugala's alleged abandonment of the easement, there was no " 'right or title in conflict with that [Runyan was] about to purchase . . . .' " (Natural Resources, Inc. v. Wineberg, supra, 349 F.2d at p. 689.) We therefore need not reach a determination as to whether the trial court improperly assessed the evidence pertaining to notice.
III. DISPOSITION
The judgment is affirmed.
/s/_________
Premo, J. WE CONCUR: /s/_________
Rushing, P.J. /s/_________
Elia, J.