Opinion
B227427
10-31-2011
RAYNOL, LLC, Plaintiff and Appellant, v. INNOVATIVE ENGINEERING DESIGN, INC., et al., Defendants and Respondents.
Feldsted & Scolney and Peter N. Scolney for Plaintiff and Appellant. Manning & Kass, Ellrod, Ramirez, Trester, Rinat Klier Erlich, Niv V. Davidovich and Candace E. Kallberg for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. LC084738)
APPEAL from a judgment of the Superior Court of Los Angeles County, Richard A. Adler, Judge. Affirmed.
Feldsted & Scolney and Peter N. Scolney for Plaintiff and Appellant.
Manning & Kass, Ellrod, Ramirez, Trester, Rinat Klier Erlich, Niv V. Davidovich and Candace E. Kallberg for Defendants and Respondents.
Raynol, LLC (Raynol), appeals from a summary judgment for Innovative Engineering Design, Inc., and its principal, Phillip Berger (collectively, IED). Raynol contends the trial court erred in granting summary judgment and in denying its motion for new trial. We disagree and therefore affirm the judgment.
FACTS
M.S. Properties, LLC (MS), owned four parcels of land on Raynol Street in Los Angeles. On or about May 10, 2004, IED entered into a written contract with MS to prepare architectural and structural drawings for four single family homes to be built on the Raynol Street properties. The contract provided that IED would perform specific tasks, namely: "Phase I - Site inspection [¶] Phase II - Concept drawings for four lots -Two floor plans [¶] Phase III - Prepare final plans with structural design. [¶] Phase IV -Processing." The contract called for IED to: meet with representatives of MS for plan approval, file plans with the appropriate government agency for checking, make any corrections required by the agency, and obtain an agency sign off for the permits.
Under the title "LIMITATION OF LIABILITY," the contract between MS and IED further provided: "1. It is mutually understood and agreed that our services and obligations are limited in scope to those items of work hereinabove set forth in this proposal and that IED . . . in no way assumes responsibility for the work as administered or designed by others. [¶] 2. IED . . . will not be responsible for the failure of others to meet commitments or for the performance or workmanship of contractors, workrooms, or trade sources." The contract also contained an integration clause stating, "This Agreement shall be altered, amended, or modified, in whole or in part, only upon the written consent of all parties to this Agreement." The contract was never amended.
The contract further contained an arbitration clause providing any claim, dispute or controversy between the parties arising out of or relating to the agreement or its breach shall be settled by arbitration and that a demand for arbitration must be made "within a reasonable time after the claim, dispute or controversy has arisen."
MS retained Dash Hartley to be the general contractor on the project. Hartley in turn hired Richard Pachorek as his superintendent.
IED proceeded with original plans for the homes pursuant to the contract. Subsequently, Hartley asked for certain changes to the design. IED completed the new designs, and Hartley reviewed and approved them in late August 2004. The new designs were then submitted to the Los Angeles Department of Building and Safety for plan checking. In September 2004, Hartley created a budget that estimated a cost of $247,000 to construct each home. In June 2005, MS quitclaimed all of its interests in the four Raynol Street properties to Raynol.
As a result of comments made by the building department, minor revisions were made to the permit drawings in May 2005 and June 2005. On August 17, 2005, Hartley created a new and final budget in which he indicated each home would cost $259,000 to build under IED's updated plans.
On October 20, 2005, building and grading permits were issued for the plans drawn by IED. IED was not involved in the construction of the project.
Grading of the lots commenced in the first week of December 2005. At this time, Hartley's onsite supervisor, Pachorek, called Hartley's attention to what Pachorek perceived to be a 2.5 foot discrepancy in elevation between the grading plan and the site plan for the garage at one of the homes. Pachorek asked Hartley which plan he should follow. Without consulting IED, Hartley, who was neither an architect nor engineer, told Pachorek to use the site plan.
Raynol subsequently contended it was unable to obtain certificates of occupancy for the four homes and that an issue regarding the slope of the driveways remained to be remedied before certificates of occupancy could be obtained.
Pursuant to the arbitration clause, Raynol made a demand for arbitration with the American Arbitration Association on November 6, 2007. However, no substantive discovery or litigation took place in arbitration. In October 2008, the parties mutually decided to remove the case from arbitration.
PROCEDURAL HISTORY
On March 12, 2009, Raynol filed the present action. In a second amended complaint, Raynol asserted claims for negligence and for breach of written contract.
A fraud cause of action was dismissed after several rounds of demurrers.
Raynol alleged that MS had intended to construct and sell the four single family homes for a profit, and MS assigned its interest to Raynol prior to completion of the four homes. Allegedly, the general contractor relied upon IED's bid drawings and offered to build the four homes for $247,000 and to complete construction by May 15, 2005. Raynol contended only one home was substantially completed, and the City of Los Angeles has not issued certificates of occupancy for any of the homes. Raynol alleged that the building permits were issued on the basis of the permit drawings, and IED had assured Raynol and MS the permit drawings would not significantly increase construction costs or delay the planned May 15, 2005 completion date. Raynol claimed it had anticipated selling the four homes for approximately $450,000 to $500,000 apiece, but instead lost profits of about $1 million and incurred additional interest expenses and loan fees as a result of IED's actions.
In January 2010, IED moved for summary judgment or, in the alternative, summary adjudication of issues. IED asserted, among other things, that the negligence and breach of contract causes of action are barred by the applicable statute of limitations, that Raynol did not sustain any damages caused by IED's acts and that IED was not obliged to perform the duties Raynol alleged were breached in the contract claim.
The motion for summary judgment was heard on March 29, 2010. After taking the matter under submission, the trial court issued an order granting the motion for summary judgment on April 1, 2010.
As to the first cause of action, for negligence, the court determined the second amended complaint did not contain any allegation regarding the certificates of occupancy but rather specified six other aspects in which Raynol claimed IED was negligent. Specifically, Raynol alleged that: (1) IED failed to inform Raynol the costs for construction under the permit drawings would be substantially more than the estimated costs based on the bid drawings; (2) IED failed to inform Raynol the estimated completion date of May 15, 2005, was not reasonable based on the permit drawings; (3) the permit drawings contained inaccurate elevations so that driveways, sidewalks and gutters could not be constructed in compliance with applicable building codes; (4) IED failed to include "building code mandated features" in designing the four homes; (5) IED used unlicensed individuals in Europe to prepare drawings without adequate supervision by licensed individuals; and (6) IED failed to include "customary features" in the homes, such as separate dining rooms, reducing the potential sales prices.
The court observed that a certificate of occupancy issued by the City of Los Angeles "may be denied based upon the plans of an architect, but plaintiff still must [plead] that the architect's plans, in some respect, fell below the standard of care" and Raynol produced no evidence nor made an offer of proof of IED's negligence other than in the manner specified above.
The trial court also agreed with IED that Raynol's negligence cause of action was barred by the applicable two-year statute of limitations set forth in Code of Civil Procedure section 339 and that the limitations period of section 337.1 was inapplicable.
All further statutory references are to the Code of Civil Procedure unless otherwise noted.
As to the second cause of action, for breach of contract, the trial court noted Raynol's second amended complaint claimed that IED breached its obligations because the homes constructed according to IED's drawings "are, according to the [C]ity of Los Angeles, not entitled to certificates of occupancy." However, the written contract does not mention the certificate of occupancy but rather is based on the issuance of a building permit. The court stated, "[IED] performed pursuant to the terms of the agreement. [Raynol], though, seeks to add additional terms to the agreement by way of using an 'implied duty.' However, such is improper since such would be adding terms to the contract to which the parties did not agree upon." The court observed, "adding terms to a contract is particularly inappropriate when, as in the current case, the contract has a full integration clause and, moreover, a limitation of liability." The court indicated that, to the extent Raynol was asserting a joint venture between IED's principal Berger and contractor Hartley, "such was already raised and rejected" when the court denied Raynol leave to file a third amended complaint. The court observed that the motion to amend had been denied without prejudice, but Raynol had never renewed its motion, nor had Raynol requested leave to amend at the summary judgment hearing. The court further ruled that IED's additional contention that the breach of contract cause of action is barred by the statute of limitations was moot.
The court directed IED to serve and file an order incorporating the court's April 1, 2010 ruling.
On April 19, 2010, Raynol filed a motion for reconsideration, for a new trial or for leave to file a third amended complaint. Raynol asserted it had discovered new or different facts after the summary judgment hearing. Specifically, Raynol claimed it took the deposition of IED's Berger on April 1, 2010. Raynol asserted that Berger testified (1) he had never designed a hillside home notwithstanding he represented the contrary to MS; (2) he hired a subcontractor to do the design work because the underlying project was "too complex" for him and his firm; (3) he never informed MS or Raynol that the project was too complex for him and his firm; (4) he had previously entered into a written agreement to form a partnership with Hartley to provide design and construction services for the project; and (5) he had continued to provide services for the project into 2007.
This agreement never went into effect, and Hartley ultimately persuaded MS to develop the project.
The parties stipulated that judgment could be entered immediately waiving any time to object to entry of judgment. However, the stipulation signed by the parties expressly provided that "this stipulation does not in any way waive any appellate rights that the parties may otherwise have." The trial court granted IED's motion to dismiss the complaint in its entirety and entered a judgment for IED on July 16, 2010. Raynol timely appealed from the judgment.
From this express reservation, it appears consent to a judgment was given by Raynol only to facilitate an appeal. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 399400 [general rule is that party may not appeal consent judgment, but exception exists if consent merely given to facilitate appeal following adverse determination of critical issue]; Aloha Pacific, Inc. v. California Ins. Guarantee Assn. (2000) 79 Cal.App.4th 297, 306, fn. 6 ["Where it appears, as it does here, that the parties intended that their consent to a judgment was given only pro forma to facilitate an appeal, the rule that a party may not appeal a consent judgment does not apply"].) We thus reject the contention made in the respondents brief that by stipulating to entry of judgment Raynol waived its right to appeal.
STANDARD OF REVIEW
A motion for summary judgment should be granted if the papers submitted show that "there is no triable issue as to any material fact," and that the moving party is entitled to judgment as a matter of law. (§ 437c, subd. (c).) A defendant meets his burden of showing a cause of action has no merit if he shows that an element of the cause of action cannot be established, or that there is a complete defense to the cause of action. (Id., subd. (p)(2).) Once the defendant has made that showing, the burden shifts to the plaintiff to show that a triable issue of material fact exists. (Ibid.)
When a plaintiff would have the burden of proof by a preponderance of the evidence, the moving defendant must present evidence that would preclude a reasonable trier of fact from finding it was more likely than not that the material fact was true, or the defendant must establish that an element of the cause of action cannot be established, by presenting evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 851, 854.)
We review a summary judgment motion de novo to determine whether triable issues of material fact exist and whether the moving party is entitled to judgment as a matter of law. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767; Galanty v. Paul Revere Life Ins. Co. (2000) 23 Cal.4th 368, 374.) We apply the same rules and standards that govern a trial court's determination of a motion for summary judgment. (Lenane v. Continental Maritime of San Diego, Inc. (1998) 61 Cal.App.4th 1073, 1079.) We identify the issues framed by the pleadings, determine whether the moving party has negated the opposing party's claims, and determine whether the opposition has demonstrated the existence of a triable, material issue of fact. (Yuzon v. Collins (2004) 116 Cal.App.4th 149, 162-163; AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064-1065.)
We review an order denying a motion for new trial for abuse of discretion. (Nazari v. Ayrapetyan (2009) 171 Cal.App.4th 690, 693-694.) We review the entire record, including the evidence, and make an independent determination of whether there were grounds for granting the motion for new trial. (Whitlock v. Foster Wheeler, LLC (2008) 160 Cal.App.4th 149, 158.)
DISCUSSION
1. Negligence Claim Barred by Limitations
Raynol asserts the trial court erred in finding that the negligence claim was barred by the two-year statute of limitations under section 339. Raynol argues (1) IED proffered no evidence either Hartley or Pachorek was Raynol's agent and their knowledge should not be attributed to Raynol, and (2) the court erroneously rejected the four-year limitations period of section 337.1. We disagree.
A. Knowledge of Agent
In the trial court, Raynol did not dispute that Raynol and its predecessor MS hired Hartley to be the general contractor on the project. Contrary to Raynol's contention, the record establishes that the principal of Raynol and MS admitted he did not have the skills to interpret architectural drawings but relied on Hartley and that communications with IED were accomplished primarily through Hartley.
In opposition to the motion for summary judgment, Raynol claimed in the trial court, as on appeal, that Raynol had no right to control "how the Contractor would construct the four homes." But that is beside the point.
Under the doctrine of imputed knowledge, "[a] principal is chargeable with and is bound by the knowledge of, or notice to, his agent received while the agent is acting within the scope of his authority and which is with reference to a matter over which his authority extends." (Columbia Pictures Corp. v. De Toth (1948) 87 Cal.App.2d 620, 630 (Columbia); see Civ. Code, § 2332 ["As against a principal, both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other"].) The fact that knowledge acquired by the agent was not actually communicated to the principal does not prevent application of the rule. (See 3 Witkin, Summary of Cal. Law (10th ed. 2005) Agency and Employment, § 150, p. 195; O'Riordan v. Federal Kemper Life Assurance Co. (2005) 36 Cal.4th 281, 288.) Although an agent may be guilty of breaching a duty to his principal by not communicating a matter to the principal, "knowledge [of the agent] has the same effect as to third persons as though his duty had been faithfully performed. The agent acting within the scope of his authority, is, as to the matters existing therein during the course of the agency, the principal himself." (Columbia, supra, at p. 630.)
The record shows that Hartley admittedly relayed information to Raynol, reviewed plans, revised the budget and kept Raynol informed. Raynol, a limited liability company, could only act through agents. Hartley was the disclosed agent for Raynol, with whom IED dealt with respect to the project. As against Raynol, both Raynol and Hartley are deemed to have notice of "whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other." Notice to Hartley is thus imputed to Raynol as a matter of law. Additionally, either Raynol or its predecessor had notice based upon the revision of the budget on each occasion. In Chaplis v. County of Monterey (1979) 97 Cal.App.3d 249, 262, it was held that, despite the principal's claim of ignorance, the contractor's knowledge he did not have a building permit for a Laundromat was imputed to the principal. Here, Hartley saw and approved the grading plans in August 2004, and Hartley was advised by Pachorek of a possible grading problem in December 2005, both events falling within the scope of Hartley's agency in acting for Raynol.
Raynol erroneously attempts to rely upon portions of a declaration to which objections were sustained by the trial court. However, it failed to challenge the trial court's order in its opening brief and thus has forfeited appellate review of the evidentiary ruling. (Lopez v. Baca (2002) 98 Cal.App.4th 1008, 1014-1015.) We accordingly consider such evidence to have been properly excluded. (Ibid.)
The record therefore discloses knowledge by Raynol through its agent, Hartley.
B. Two-year Limitations Bar
Raynol contends the trial court incorrectly ruled that the negligence claim is barred by the two-year statute of limitations of section 339, because claims arising from patent deficiencies in construction are governed by section 337.1 and the period of limitations under that statute would only begin to run upon "substantial completion." However, section 337.1 exists solely to "provide a final point of termination, to protect some groups from extended liability." (Sevilla v. Stearns-Roger, Inc. (1980) 101 Cal.App.3d 608, 611.) It simply sets an outside limit to the period for which designers and contractors can be held liable. (Tomko Woll Group Architects, Inc. v. Superior Court (1996) 46 Cal.App.4th 1326, 1333-1334.)
With certain exceptions not here relevant, section 339, subdivision (1) provides for a two-year statute of limitations as to actions upon a contract, obligation or liability not founded upon an instrument in writing.
Section 337.1 provides, in pertinent part: "(a) Except as otherwise provided in this section, no action shall be brought to recover damages from any person performing or furnishing the design, specifications, surveying, planning, supervision or observation of construction or construction of an improvement to real property more than four years after the substantial completion of such improvement for any of the following: [¶] (1) Any patent deficiency in the design, specifications, surveying, planning, supervision or observation of construction or construction of an improvement to, or survey of, real property; . . . [¶] . . . [¶] (c) Nothing in this section shall be construed as extending the period prescribed by the laws of this state for the bringing of any action. . . . [¶] . . . [¶] (e) As used in this section, 'patent deficiency' means a deficiency which is apparent by reasonable inspection. . . ."
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In this respect, we find Kralow Co. v. Sully-Miller Contracting Co. (1985) 168 Cal.App.3d 1029 (Kralow) particularly instructive. In Kralow, a developer of a public improvement project (Western States) brought a cross-complaint against the contractor and its subcontractor who were retained to construct the project. Western States asserted the cross-defendants caused "'improper soil compaction and other patent deficiencies'" in the project, which required corrective work. Western States alleged those deficiencies caused construction delays resulting in its incurring substantial damages, including: additional direct and indirect construction costs; taxes, insurance, and other incidental costs; loss of income; and loss of profits as to other transactions due to impaired credit. (Id. at pp. 1031-1032, 1034.) Western States argued that the four-year limitations period under section 337.1 applied. (Kralow, at pp. 1033-1034.)
The trial court granted a motion for partial summary judgment, finding Western States' claims time-barred under the two-year limitations period of section 339. (Kralow, supra, 168 Cal.App.3d at pp. 1032-1033.) The Court of Appeal affirmed and held that section 337.1 did not apply to the negligence claims, because Western States admittedly was seeking damages solely for the delay, and not for deficiencies still existing upon the project's completion. (Kralow, at p. 1035.) The court explained that "[a]lthough we have been unable to find any legislative history regarding section 337.1 . . . , we believe the intent of the Legislature in enacting section 337.1 was to provide a cause of action for patent deficiencies existing upon substantial completion of a project." (Ibid., italics added.)
In Kralow, damages were sought for the delay in construction, including damages for additional construction costs and damages incident to the delay as a result of cross-defendants' negligent performance of services, not for patent deficiencies that existed in the project upon substantial completion. In the present case, unlike in Kralow, no contention was ever made that the project in issue was substantially completed. However, similar to the cross-complainant in Kralow, Raynol seeks recovery for damages supposedly resulting from the negligent provision of services by IED rather than for patent deficiencies in a completed project. Under such circumstances, a two-year, rather than a four-year, period of limitations should apply. We therefore conclude that when an architect or engineer's professional negligence causes delays in completion of the project and costs incident to the delay, such as additional construction costs, loan fees, interest expenses and lost profits, the two-year statute of limitations under section 339 applies.
The record before us establishes Raynol's cause of action for negligence accrued no later than December 2005, more than two years before Raynol filed its action. Hartley saw and approved the grading in the plans in August 2004 and had the opportunity to discover any deficiencies in the plans at that time. However, he certainly should have known of a purported grading problem when he was advised by Pachorek in December 2005 that there was a discrepancy in the plan elevations requiring corrective work. The negligence cause of action thus began to accrue by December 2005 at the latest.
At the minimum, the statute of limitations had already run for over 22 months when Raynol filed a demand for arbitration on November 6, 2007. Assuming the statute of limitations was tolled while the matter was in arbitration, the statute of limitations began to run again when the parties agreed to take the matter out of arbitration in October 2008. At that juncture only a little over one month would have remained of the two-year limitation period. However, Raynol did not file its complaint until March 13, 2009, a date well beyond the one-month-plus period remaining in the two-year statute of limitations.
No triable issue of material fact remains whether Raynol's claim is barred by limitations under this calculation, and we find the negligence claim barred as a matter of law.
2. No Triable Issue Regarding Breach of Contract
Raynol complains that summary judgment was improperly granted on the contract claim because there was a triable issue of fact whether the contract between MS and IED contained an implied covenant on IED's part that the permit drawings would result in certificates of occupancy for the four residences. Our Supreme Court has acknowledged that the covenant of good faith and fair dealing "is not susceptible to firm definition but must be examined on a case-by-case basis. Instead of defining what is consistent with good faith and fair dealing, it is more meaningful to concentrate on what is prohibited." (Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 372 (Carma Developers).)
"[T]he scope of conduct prohibited by the covenant of good faith is circumscribed by the purposes and express terms of the contract." (Carma Developers, supra, 2 Cal.4th at p. 373.) The covenant is read into contracts to protect their express covenants and terms. (Ibid.) However, the covenant "cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement." (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-350.) Implicit in a contract such as the one at issue is an obligation on the part of each contracting party not only "'to refrain from doing anything which would render performance of the contract impossible by any act of his own, but also the duty to do everything that the contract presupposes that he will do to accomplish its purpose.'" (Harm v. Frasher (1960) 181 Cal.App.2d 405, 417 [implied covenant of good faith and fair dealing arose between sellers of business when each sale agreement contingent upon performance by all, notwithstanding sellers not signatories of each other's agreements]; Brown v. Superior Court (1949) 34 Cal.2d 559, 564-565 [party to agreement to make reciprocal wills estopped from making other disposition of property notwithstanding lack of express agreement against revocation of mutual wills].)
There is a long established rule that applies to implied covenants in contracts: "'(1) the implication must arise from the language used or it must be indispensable to effectuate the intention of the parties; (2) it must appear from the language used that it was so clearly within the contemplation of the parties that they deemed it unnecessary to express it; (3) implied covenants can only be justified on the grounds of legal necessity; (4) a promise can be implied only where it can be rightfully assumed that it would have been made if attention had been called to it; (5) there can be no implied covenant where the subject is completely covered by the contract.'" (Lippman v. Sears, Roebuck & Co. (1955) 44 Cal.2d 136, 142, quoting Cousins Inv. Co. v. Hastings Clothing Co. (1941) 45 Cal.App.2d 141, 149; see also Third Story Music, Inc. v. Waits (1995) 41 Cal.App.4th 798, 805.) Implied conditions and covenants are not favored in the law. (See 1 Witkin, Summary of Cal. Law, supra, Contracts, § 795, p. 886.)
In the instant case, a review of the specific language of the contract between MS and IED demonstrates there is no requirement or express term that IED had any obligation to secure certificates of occupancy. The contract between the parties provides that IED agreed to "prepare plans per the project scope," meet with client representatives "for approval of the plans," file plans with the appropriate government agency "for checking," make any corrections to the plans required by the government agency, if called for and "[o]btain sign off for permit.'" (Italics added.) IED further agreed to meet with the client as necessary, coordinate all support documents and perform "[f]inal processing of plans for all clearances and obtaining permit." (Italics added.)
Nowhere does the written agreement provide that IED would secure certificates of occupancy. Indeed, a limitation of liability in the contract provides that "[i]t is mutually understood and agreed that [IED's] services and obligations are limited in scope to those items of work as hereinabove set forth in this proposal and that IED . . . in no way assumes responsibility for the work as administered or designed by others." The contract further provides under such limitations that "IED . . . will not be responsible for the failure of others to meet commitments or for the performance or workmanship of contractors, workrooms, or trade sources." The express terms of the contract thus unambiguously make clear the parties contemplated that IED would not be an insurer of "work as administered or designed by others," nor did it undertake liability for "the failure of others to meet commitments or for the performance or workmanship of contractors, workrooms, or trade sources." It was undisputed that MS and Raynol retained Hartley as contractor to actually perform the construction work for the homes, and it was Hartley who erred in selecting the site plan over the grading plan without consulting IED.
Here, the trial court correctly found that a term requiring certificates of occupancy could not be implied into the fully integrated contract. In the City of Los Angeles, no building or structure may be erected or used in the absence of "all permits and licenses required by all laws and ordinances." (L.A. Mun. Code, § 12.21(A)(1)(a).) Los Angeles Municipal Code section 12.26(E) further bars the occupation or use of buildings lacking a certificate of occupancy. (L.A. Mun. Code, §§ 12.26(E), 91.109; Carter v. Cohen (2010) 188 Cal.App.4th 1038, 1044.) A certificate of occupancy is issued only when a structure is completed in conformity with building code regulations. (L.A. Mun. Code, § 12.26(E)(1)(a); Carter, at p. 1044; Pope v. State Bd. of Equalization (1983) 146 Cal.App.3d 1132, 1139.) Thus, beyond the securing of appropriate permits authorizing construction, the building must be properly constructed in order for a certificate of occupancy to issue.
An implied duty to secure certificates of occupancy does not arise from the language of the contract in this case. It cannot be implied from the contract language that IED was obligated to secure certificates of occupancy, which required that the structures be actually built in compliance with building standards and which MS and Raynol contracted with others to perform. We cannot say that an obligation to ensure the buildings were properly constructed was so clearly within the contemplation of the parties in contracting for design and architectural services they deemed it unnecessary to separately mention that obligation. There is no necessity to read an implied term into the contract as the express terms of the contract effectively bound IED to perform services expressly described. Nor can it be assumed that the additional responsibility for construction services would have been included in the contract had the parties' attention been called to the matter. Absent provision for additional payment for such services, it is clear the omission of construction services in the contract was intentional. Finally, the express terms of the integrated contract completely covered the subject and expressly limited the scope of IED's work to preparation of plans, plan checking and securing permitted plans. The express terms also specified and limited IED's role in the project.
We conclude no triable issue of material fact remained for resolution of Raynol's claim for breach of an implied covenant.
3. No Abuse of Discretion in Denying New Trial Motion
We also reject Raynol's contention that the trial court abused its discretion in denying the motion for new trial.
Even if the trial court was mistaken in concluding the motion for new trial was premature absent a judgment (see § 659, subd. (1) [notice of intention to move for new trial may be made "[b]efore the entry of judgment . . ."]), Raynol suffered no prejudice because the trial court went on to rule that there was insufficient basis to grant a new trial based on "new evidence."
Raynol argues that IED frustrated its attempts to depose its principal Berger earlier, first by not responding to Raynol's request for available deposition dates, and then by not making Berger available until April 1, 2010, i.e., three days after the hearing of the summary judgment motion and the very date the clerk mailed the minute order granting the motion. Raynol complains that the trial court thereby implicitly rewarded IED for its counsel's failure to cooperate in discovery. We are not persuaded.
"A judge may grant a new trial based on newly discovered material evidence that the moving party could not, with reasonable diligence, have discovered and produced at the trial." (Cal. Judges Benchbook: Civil Proceedings--After Trial (Cal CJER 1998) Motions Attacking Verdict or Judgment After Trial, § 2.23, p. 59; see Code Civ. Proc., § 657, subd. (4).) A party moving for a new trial must establish three essential elements: (1) the evidence is newly discovered; (2) the moving party exercised reasonable diligence in the discovery and production of the new evidence; and (3) the evidence is material to the moving party's case. (Elysium Institute, Inc. v. County of Los Angeles (1991) 232 Cal.App.3d 408, 438; White v. Dorfman (1981) 116 Cal.App.3d 892, 899.) When evidence in support of the motion for new trial lacks an essential element, the trial court has no discretion but to deny a new trial. (Schultz v. Mathias (1970) 3 Cal.App.3d 904, 910, disapproved on another ground in Scala v. Jerry Witt & Sons, Inc. (1970) 3 Cal.3d 359, 364, fn. 1.) A movant claiming discovery of new evidence following a summary judgment is held to a less demanding standard of reasonable diligence than after a trial. (Scott v. Farrar (1983) 139 Cal.App.3d 462, 468 (Scott) [party exercised reasonable diligence in noticing witness's deposition within seven months of complaint and less than four months after answer, and facts disclosed in deposition could not have been discovered earlier]; but see Doe v. United Air Lines, Inc. (2008) 160 Cal.App.4th 1500, 1509 [no reasonable diligence when counsel knew expert's opinion at time of summary judgment but neither submitted expert's declaration nor sought continuance of motion in order to do so].)
Unlike the movant in Scott, supra, 139 Cal.App.3d at page 468, Raynol failed to show reasonable diligence in discovering the new evidence. The trial court expressly found, "to the extent [Raynol] asserts that the deposition could not have been done before the prior motion for summary judgment because of [IED's] claiming that they were not available before April 1 . . . , such is without merit as [Raynol] could have (1) noticed the deposition earlier, and (2) could have brought a motion to compel. The court also notes that [Raynol] did not seek a continuance of the motion for summary judgment. As noted in the opposition: [¶] ['][Raynol] also had the option under . . . §437c[, subdivision] (h) of asking for a continuance of the summary judgment motion in order to take Berger's deposition, which the court would be required to permit [Raynol] did not do this. It just waited until after the motion was granted . . . .[']"
The trial court's findings establish Raynol's lack of diligence in the matter. Raynol further made no showing the "new" evidence was material to Raynol's case. "To justify a new trial, newly discovered evidence, among other criteria, must be shown to be material 'in the sense that it is likely to produce a different result.'" (In re Marriage of Smyklo (1986) 180 Cal.App.3d 1095, 1101.) Raynol never refuted IED's argument that the allegedly "new" facts were known or should have been known to Raynol before Berger's deposition. (See New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 213 [party seeking relief must offer "some fact or circumstance not previously considered by the court"].) A deposition that could have been taken during discovery is not considered "new" evidence. (Id. at pp. 212-213.) Raynol never established that the "newly discovered" matters would have made a difference to the result.
DISPOSITION
The judgment is affirmed. IED is to recover costs on appeal.
FLIER, J. WE CONCUR:
RUBIN, Acting P. J.
GRIMES, J.