Opinion
B225417
10-04-2011
SONIA ALYESHMERNI, Plaintiff and Appellant, v. MRRM LLC et al., Defendants and Respondents.
Law Offices of William R. Ramsey, William R. Ramsey for Plaintiff and Appellant. Susan Barilich for Defendant and Respondent MRRM LLC. Alan Ross for Defendant and Respondent Mike Massoodnia.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC358784)
APPEAL from a judgment of the Superior Court of Los Angeles County. Jane Johnson and Coleman Swart, Judges. Affirmed.
Law Offices of William R. Ramsey, William R. Ramsey for Plaintiff and Appellant.
Susan Barilich for Defendant and Respondent MRRM LLC.
Alan Ross for Defendant and Respondent Mike Massoodnia.
Following the purchase of 18 vacant lots of real estate, the buyer sued the seller, contending that the seller should have disclosed an alleged property line dispute along the southern boundary of the property. Following a bench trial, the trial court denied the plaintiff buyer's claim for rescission and other causes of action.
In this appeal, our review is limited due to the plaintiff's failure to properly request and obtain a statement of decision. Since substantial evidence supports denial of the rescission claim, we affirm the judgment.
Factual and Procedural Background
The Purchase
This lawsuit arose out of the purchase of 18 vacant lots of real estate lying at or near the southern boundary of the "Atwood Addition" in Newhall, California. Plaintiff Siona Alyeshmerni purchased 16 of the lots with the assistance of her husband, Mansoor Alyeshmerni, who had considerable experience purchasing investment real estate.
Siona and Mansoor Alyeshmerni, as well as their respective trusts, are often referred to interchangeably in the record. While Siona's name was signed on many of the documents, Mansoor was actually the person primarily involved in the transaction. For ease of reference, since Siona is the named plaintiff, the Alyeshmernis (and their trusts) will be referred to generally as "plaintiff" and in the feminine.
The lots (or "property") were owned by defendant MRRM, LLC (MRRM). Defendant Mike Massoodnia was the principal of MRRM. In late October of 2004, Michael Nazarian, a friend and relative of the Alyeshmernis, discussed with Massoodnia how he was interested in buying the lots. Nazarian could afford only two of the lots, however, so he approached plaintiff about buying the other 16. Plaintiff was intrigued and went to view the property and meet with the broker. Plaintiff and Nazarian decided to buy the property, and chose amongst themselves how they would allocate the purchase price and the lots.
After two meetings with the broker and a phone conversation with Massoodnia, plaintiff and Nazarian both entered into purchase agreements with MRRM on November 11, 2004. Nazarian's agreement provided that he would receive the two lots he was interested in for $250,000, and plaintiff's agreement provided that she would purchase the remaining 16 lots for $1,800,000. Nazarian's agreement had language indicating that the sale to Nazarian was contingent on the sale of the 16 lots to plaintiff; plaintiff's agreement did not have a similar provision.
Plaintiff requested and received an extension of the escrow period to obtain a mortgage. Plaintiff was unable to obtain a mortgage, however, and went forward with the purchase by paying cash instead. Escrow closed in early February 2005.
The Complaint
Plaintiff filed suit against the defendants, MRRM and Massoodnia, in September 2006. In the operative second amended complaint, plaintiff alleged that in 2003, Massoodnia engaged a land surveyor, Brandon Hahn, to prepare a topography survey of the property, and was informed by the surveyor that a "major property line conflict" existed in the Atwood Addition tract map. The surveyor prepared the topography survey showing approximate boundaries of the property, but affixed a legend containing a disclaimer that the survey was not a boundary survey and did not show actual property lines. The legend further stated that "many errors" existed in the Atwood Addition survey map, which would require extensive work by competent professionals to resolve.
Plaintiff alleged that despite knowing of the property line conflict, defendants represented the property as prime real estate, without disclosing the purported defect. Plaintiff further alleged that after she signed the purchase agreement, but before expiration of the contingency period, Massoodnia presented a "portion" of the topography survey that only included the 18 lots at issue, and did not include the legend containing the disclaimer. Plaintiff claimed she did not discover the property line issue until months after escrow closed. She sued MRRM and Massoodnia for rescission, breach of contract, fraud, and negligence.
The Southern Boundary
In February 2010, in a bench trial, the superior court heard plaintiff's case. Much of the testimony at trial centered around the historical renderings of the southerly boundary line of the Atwood Addition. Eight of the lots purchased by plaintiff lie along the center portion of this lengthy southern boundary line, as do both of the lots purchased by Nazarian.
Many other lots (not purchased by plaintiff or Nazarian) also lie along this southern boundary line.
The Atwood Addition was created in an area of approximately 145 acres, known many years ago as lot 45. In 1915, a surveyor named Harry Wheeler filed and recorded tract map number 2703. This survey defined the border between lot 45, which lay to the north, and lot 44, which lay to the south. In 1917, lot 45 was subdivided into 13 smaller (though still large) lots, as was shown in tract map number 3165, also created and recorded by Wheeler. The southernmost lots of the subdivided lot 45 appeared to have the same southern boundary as that shown in tract map number 2703. Then, in 1928, the area previously known as lot 45 was subdivided again, this time into hundreds of much smaller lots, each conducive in size to single-family housing. This survey, which created the Atwood Addition, was again performed by Wheeler. However, the 1928 survey map, which was recorded, appeared to show a somewhat different southern boundary for the southernmost lots when compared to the two prior tract maps. Some of the southernmost lots appeared to have southern boundaries that lay south of the southern boundary shown in the 1915 and 1917 maps.
The basic boundaries of this 1928 Atwood Addition survey map were perpetuated through the years. In 1965, the Los Angeles County Engineer conducted a survey of the southern area of the Atwood Addition, and the resulting survey, which was filed in the county field book, showed a southern boundary that basically matched the boundary shown in the 1928 Atwood Addition map. In 1986, a surveyor, Gilbertson, conducted a survey and recorded a map showing the same southern boundary. Gilbertson performed and recorded further surveys in 1988 and 1991 that again showed the same southern boundary for the area in question. Other surveys performed by other surveyors also had the same southern boundary line.
Appellant's request for judicial notice filed concurrently with the reply brief is granted.
One recorded survey, however, differed from the 1928 map. In approximately 1993, a surveyor, Robert Mollenhauer, was retained by a title insurance company to resolve a property line dispute at the southeast corner of the Atwood Addition. Mollenhauer decided that the southern boundary line for the southeast corner was incorrect on the 1928 map and ensuing maps, and should have been approximately 50 feet north of where those maps showed it. Mollenhauer recorded a survey map in 2001 showing the border discrepancies that he determined existed along the southern boundary of the Atwood Addition. Mollenhauer testified at trial that the title company that retained him was forced to purchase land from the owner of lot 44 to protect the house of their insured, which mistakenly had been built south of the actual boundary of the Atwood Addition, on lot 44.
Mollenhauer's account of alleged boundary discrepancies was distinguished and disputed by the defendants at trial. Defendants' retained expert, surveyor David Grimes, testified that the southerly boundaries for the 1915 and 1928 maps matched, except for a portion at the southeast corner of lot 45, which was east of the lots at issue in this lawsuit. According to Grimes, the southerly boundary of the Atwood Addition (and lot 45) always ran along a ridge line. Confusion arose because the 1915 and 1917 maps done by Wheeler contained a 50-foot mathematical error in dimensions along the westerly edge, which had the effect of making the southerly boundary appear to be in a different location on the maps than its actual location. Grimes testified that the 1928 map contained no mathematical or measurement errors and correctly delineated the southerly boundary. Thus, according to Grimes, the boundary line never moved—it was originally notated with incorrect measurements, which were corrected in the 1928 map, and the 1928 map was properly followed throughout the years.
Purchase Agreement and Disclosures
The trial also focused on the parties' respective responsibilities to determine important information regarding the property, including the property boundaries, prior to close of escrow. The purchase agreement signed by plaintiff in November 2004 had several provisions advising plaintiff to investigate the boundaries of the property. Per the agreement, the buyer was to pay to have the "property corners" identified. The agreement also "strongly advised" the buyer to investigate property lines and stated "property lines may be verified by survey." In addition, a "buyer's inspection advisory" advised the buyer to conduct investigations of the property boundaries. On the other hand, the purchase agreement required the seller to disclose "known material facts and defects affecting the property."
Plaintiff's husband testified that he was not told there was a possible property line conflict prior to closing and was not given the map with the legend created by Brandon Hahn stating that a property line conflict existed. Before the purchase agreement was signed, he discussed the provision about identifying the property corners with Massoodnia. Massoodnia told him that he did not know about the corners of the property. Plaintiff's husband also testified that, with previous properties he had bought, he never found it necessary to survey the boundaries unless he intended to develop the property. Since there was no intention to develop this property, plaintiff did not have a survey of the property corners or boundaries done before closing. In fact, even after years of litigation, up through the time of trial, plaintiff never had an actual survey of the property boundaries completed.
Massoodnia testified that he knew about the Mollenhauer map showing possible boundary discrepancies but did not discuss it with plaintiff. He also testified that he did not provide to plaintiff a letter to him from surveyor Brandon Hahn discussing the property line issue. However, according to Massoodnia, he investigated the issue in 2003, and through extensive research he satisfied himself that the prevailing boundary line originally shown in the 1928 map was correct, and therefore felt there was no need to discuss the Mollenhauer map with plaintiff. He also testified that prior to closing he provided to both Nazarian and plaintiff a copy of the Hahn map with the legend noting the property line issue.
Hahn testified that he never determined where the actual southern boundary of the property was. He also testified that he did not know if there actually was a significant discrepancy along the southern boundary, but thought that there "may be."
Tentative Findings and Order
On February 23, 2010, after 11 days of testimony and evidence, and after reviewing trial and closing briefs, the court read its preliminary findings from the bench. Among other things, the court preliminarily found that the Alyeshmernis were sophisticated and experienced real estate developers; that Massoodnia was aware of Hahn's opinion that there was a major property line conflict; that there were discussions among the parties in November 2004 regarding the corners of the property, and it was agreed that plaintiff was responsible for identification of the corners; that the parties agreed the closing of escrow on all 18 lots would occur concurrently; and that at least one copy of the Hahn map with the disclaimer was given to plaintiff's representative prior to the close of escrow.
The court stated that there was insufficient evidence to show that Massoodnia intended to mislead anyone. The court further found that, in all likelihood, there was no boundary dispute, and plaintiff failed to show any damages. Plaintiff never had a survey of the property boundaries done, and had never sought to have the boundaries determined through a quiet title or declaratory relief action. Further, plaintiff failed to investigate the boundaries. The court stated that although information relating to the possible boundary dispute should have been disclosed, Massoodnia had an honest belief that there was no problem, and did not intend to deceive plaintiff by withholding information.
Plaintiff orally requested "written findings of fact," and the court ordered plaintiff to "submit questions," and for defendants to "prepare a response." Following the hearing, the court issued a minute order reiterating some of its preliminary findings and finding in favor of defendants on all causes of action. Judgment was entered on May 17, 2010.
DISCUSSION
Plaintiff appeals only the denial of the rescission cause of action. She argues that her agreement to purchase the 16 lots should have been rescinded due to fraud committed by defendants. I. A Statement of Decision Was Waived.
On appeal, the underlying judgment is presumed to be correct and all intendments and presumptions are indulged in favor of its correctness. (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58.)
Our review is further confined by the absence of a statement of decision. Code of Civil Procedure section 632 provides in part that the superior court "shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial." Plaintiff argues that she requested a statement of decision by orally asking for written findings of fact. This request was obviously insufficient. "The request for a statement of decision shall specify those controverted issues as to which the party is requesting a statement of decision." (Code Civ. Proc., § 632.) Plaintiff's request did not contain any specification of controverted issues. In what should have at least been taken as a helpful reminder, the trial court ordered plaintiff to submit questions pertinent to a statement of decision. This order was apparently ignored; no submitted questions appear in the record. Thus, plaintiff's right to obtain a statement of decision was clearly waived. (See City of Coachella v. Riverside County Airport Land Use Com. (1989) 210 Cal.App.3d 1277, 1292-1293; Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 558-559.)
California Rules of Court, rule 3.1590 does not assist plaintiff. Similar to Code of Civil Procedure section 632, rule 3.1590(d) requires a party requesting a statement of decision to specify principal controverted issues, which plaintiff never did. The trial court's preliminary findings do not constitute a statement of decision; the court did not elect to make the preliminary findings become the statement of decision pursuant to rule 3.1590(c)(4).
Since there is no statement of decision, pursuant to the doctrine of implied findings we "will presume that the trial court made all factual findings necessary to support the judgment for which substantial evidence exists in the record. In other words, the necessary findings of ultimate facts will be implied and the only issue on appeal is whether the implied findings are supported by substantial evidence." (Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 267.) Although preliminary findings may be reviewed for interpretive purposes, they are not a substitute for a statement of decision. (Id. at pp. 268-269.) The preliminary findings are insufficient to form the basis of reversible error. (Id. at p. 268.) II. Substantial Evidence Supports Denial of the Rescission Claim.
Plaintiff has only appealed the denial of her rescission cause of action. Grounds for unilateral rescission of a contract include mistake, duress, menace, fraud, and undue influence. (Civ. Code, § 1689, subd. (b)(1).) Throughout the case and on appeal, the sole ground that plaintiff has relied on for rescinding the purchase is fraud. She contends that Massoodnia's failure to disclose the existence of the Mollenhauer survey and the letter from Hahn discussing boundary discrepancies constituted fraud warranting rescission. The trial court did not agree.
In determining whether sufficient evidence existed for the court to make this determination, we resolve any factual conflicts and draw all reasonable inferences in favor of the prevailing party. (See Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 422.) We do not reweigh the evidence or reexamine the credibility of witnesses. (Eidsmore v. RBB, Inc. (1994) 25 Cal.App.4th 189, 195.) Since there is no statement of decision, if substantial evidence supports denial of plaintiff's claim for rescission on any ground we must affirm.
We find that substantial evidence supported denial of the rescission claim. In order to rescind a contract on the basis of fraud, a plaintiff must actually prove that fraud occurred. It must be shown that (1) there was a false representation or concealment of a material fact susceptible of knowledge; (2) made with knowledge of the falsity or without sufficient knowledge to justify a representation; (3) made with the intent to induce the person to whom it is made to act upon it; and (4) the person must act in reliance upon the representation (5) to his damage. (Reed v. King (1983) 145 Cal.App.3d 261, 264.)
Plaintiff's theory of fraud is one of concealment. Concealment includes nondisclosure when a party has a duty to disclose. (Id. at p. 265.) Generally a seller of real property has a duty to disclose facts that materially affect the value or desirability of property which are known or accessible only to the seller, and that are not known or obtainable through diligent attention and observation of the buyer. (Lingsch v. Savage (1963) 213 Cal.App.2d 729, 735.) The issue of whether a fact is material has been described as a "'question of law'" that "'depends on the facts of the particular case'" (Reed v. King, supra, 145 Cal.App.3d at p. 265), and has alternatively been described as "a question of fact." (Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1544.) Under either of these standards, a determination of the materiality of a fact entails a factual analysis.
In order for rescission to be warranted, not only did the concealed fact have to be material, but the concealment must have been accomplished with the intent to induce conduct differing from what plaintiff would have done if informed of the concealed fact. (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 869.) The question of intent is a factual one. (See Leasure v. MSI Ins. Co. (1998) 65 Cal.App.4th 244, 247.) Although intent may be inferred from the circumstances and the parties' actions (Continental Airlines, Inc. v. McDonnell Douglas Corp. (1989) 216 Cal.App.3d 388, 428), this is an inference for the fact-finder to make or not make, and we must draw all reasonable inferences in support of the fact-finder's determination.
Based on its views of the evidence and the witnesses' credibility, the trial court reasonably could have found that Massoodnia did not possess the requisite intent, as indicated in its tentative findings. Massoodnia had a conceivably valid basis for believing that the Mollenhauer map and Hahn letter were insignificant. The trial court stated that it considered Mollenhauer's map a "rogue survey." Since the time the Atwood Addition was mapped in 1928, numerous subsequent surveys followed the boundary lines shown on the 1928 map. Mollenhauer's map was the only filed boundary survey that differed. The Hahn letter was simply based on Mollenhauer's map, not an independent boundary survey performed by Hahn. Furthermore, Mollenhauer testified that his survey was only intended to address a boundary dispute at the far southeast corner of the Atwood Addition, an area east of the lots at issue in this case. Massoodnia testified that he spoke to Mollenhauer in 2003 and investigated the alleged boundary issue, and found nothing that would affect the lots at issue in this case. Indeed, to this day the possibility that there is an actual boundary discrepancy along the southern border of the lots at issue is (at most) speculative. Defendants' expert Grimes, who the trial court stated was the most credible surveyor, surveyed the area and determined there is no boundary discrepancy. Thus, the trial court could have reasonably concluded that Massoodnia truly did consider the Mollenhauer map and the Hahn letter unimportant and did not harbor any improper intent. Such a determination would necessarily be highly dependent on observations of the witnesses' credibility. It is not proper for us to second-guess the trier of fact on these matters. (See Thompson v. Occidental Life Ins. Co. (1973) 9 Cal.3d 904, 919.)
Substantial evidence would also support the conclusion that plaintiff's reliance was not reasonable. The reasonableness of a plaintiff's reliance is a question of fact. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.) Normally, negligence by a plaintiff in failing to discover the falsity of an intentional misrepresentation does not prevent the plaintiff from pursuing a fraud claim.(Hefferan v. Freebairn (1950) 34 Cal.2d 715, 719.) "'If the conduct of the plaintiff in the light of his own intelligence and information was manifestly unreasonable, however, he will be denied a recovery.'" (Alliance Mortgage Co. v. Rothwell, supra, at p. 1240; Seeger v. Odell (1941) 18 Cal.2d 409, 415.)
The evidence showed that the Alyeshmernis were sophisticated and experienced real estate developers. Plaintiff's husband had a great deal of experience buying and selling investment real estate. Further, it was not claimed that Massoodnia made any misrepresentations regarding the boundaries of the property. In fact, Massoodnia told plaintiff's husband that he did not know where the corners of the property were. The purchase agreement required plaintiff to pay to have the corners identified, and it "strongly advised" plaintiff to investigate property lines. The court preliminarily found that the parties agreed plaintiff was responsible for identification of the corners. In addition, substantial evidence supports the conclusion that plaintiff's representative received the Hahn map with a disclaimer stating that it was not to be relied upon for accurate property lines and that "many errors exist in the Atwood Addition survey map." Thus, prior to closing, plaintiff was aware of the same sort of information that she now claims was concealed and should have been disclosed. In spite of all this information, plaintiff chose not to investigate the property boundaries. Drawing all reasonable inferences in favor of the prevailing party, we find that plaintiff's reliance was not reasonable. (See Stevenson v. Baum (1998) 65 Cal.App.4th 159, 166 [warnings of easement in purchase agreement and immediately ascertainable information in public records put buyer on notice].)
Because substantial evidence supported denial of the rescission claim on these two bases, we need not decide the issue of whether the Mollenhauer map and the Hahn letter were of sufficient material significance to be subject to disclosure. Indeed, in its preliminary findings, the trial court indicated that such information should have been disclosed, but denied the rescission claim anyway. The denial of the rescission claim was not erroneous as a matter of law and does not warrant reversal.
We also need not determine whether the trial court erred in other respects as argued by plaintiff, including the issue of whether rescission could have been ordered as to just plaintiff's purchase given that Nazarian's purchase was interrelated. The trial court's preliminary finding that rescission would have to "involve all 18 lots" was just one of the several possible bases to deny the rescission claim. Since the record supports denial on other grounds, resolution of this issue is unnecessary.
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DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
BOREN, P.J. We concur:
ASHMANN-GERST, J.
CHAVEZ, J.