Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County. Super. Ct. No. KC046355, Abraham Khan, Judge.
Bradley V. Black for Defendants and Appellants.
Pariser & Pariser, Wayne D. Pariser and Jeffrey A. Needelman for Plaintiffs and Respondents.
ARMSTRONG, J.
Defendants and appellants Alex and Ming-Chu Wang appeal from the judgment entered in favor of plaintiffs and respondents Kilpyung and Insook Auh, after the trial court found that the parties had previously resolved this dispute with a final, binding agreement, and granted the Auhs' motion for summary judgment. We affirm.
Facts
The Wangs (husband and wife) and the Auhs (husband and wife) are neighbors. Their dispute concerns an easement. The Auhs' complaint alleges that an earlier owner of the Wangs' property granted them written permission "to discharge flow from their drains to the concrete swales that are located on the slope between our properties," and to landscape and irrigate the slope. This was in 1982, and in reliance, the Auhs constructed drainage and irrigation systems on the area of the easement, set up trails, and made other improvements. However, beginning in 2001, the Wangs built a fence and otherwise denied the Auhs entry into the easement area.
The Auhs first filed suit in August 2002 bringing causes of action (prescriptive easement, and so on) arising from those factual contentions. Settlement conferences were held, and on December 26, 2003, Alex Wang, Ming-Chu Wang, and Insook Auh and their lawyers met at the Wangs' house. They walked through the properties, then made numerous hand-written changes to an existing document, a letter from counsel for the Wangs to counsel for the Auhs setting out the parties' positions on the issues. As amended, the document was signed by both counsel, by Alex and Ming-Chu Wang, and by Insook Auh, for herself and her husband.
The document begins "This letter summarizes the points of agreement and disagreement reached between . . ." the parties. Under "Deal Points" it provides that the Auhs are to have use of the disputed area for as long as they occupy (as defined) their home. Then, the document says that "The parties have negotiated on December 26, 2003 on the general terms describing the boundaries of the 'Disputed Slope Area,'" and that "Regardless, a formal survey will be prepared which will create a legal description of the meets [sic] and bounds of the Disputed Slope Area."
The document sets out the agreed-on boundaries. For instance, it states that "The parties agreed that they wish the boundaries of the Disputed Slope Area to be: on the East, the property line running from the Auhs to the Wangs; . . . on the North, on the outer edge of the trail which leads from the concrete swale to the Auhs' property."
The parties also agreed that the Wangs would grant the Auhs "a permanent recorded easement to continue to drain water and to maintain and inspect existing drainage systems," that the parties would cooperate in preparing appropriate easements, that the Auhs would landscape and maintain the easement area and the Wangs pay for the water, and that the Wangs would conduct the survey of the area, using a surveyor of their choice, specifically, their lawyer, Loren Phillips who was also a surveyor.
Concerning an existing fence, the document reads "Issue concerning the fence now constructed along the boundary line between the Wangs' and the Auhs' properties have been resolved," then sets out the parties' original positions on the point. The original letter left a blank space for the "resolution" of the issue. In that space, the parties wrote "Wang to pay $1000 for gate construction. Fence to remain up. Three (3) gates to be constructed, including at rear of the Auh property."
There are many other points. In pertinent part, the document provides that "This Agreement will be replaced by a comprehensive written Settlement Agreement and Mutual Releases," that the parties will meet and confer on any alleged violation of the agreement, that no party shall interfere with the "rights granted under this Agreement," and that "Each party has been explained the terms, rights, duties and conditions of this agreement, understands same, and freely enters in this settlement agreement."
In January, Phillips surveyed the easement area and placed stakes on the boundary lines. By March, counsel for the Auhs was writing to counsel for the Wangs contesting the location of the marker of the north boundary. He noted that the parties had agreed that the boundary would be the outer edge of a specified trail, and that "Point #2," (apparently, the surveyor's mark) was not on the outer border, but "needs to be moved 20" North. [¶] In addition, as we have discussed, pursuant to the Agreement, the Auhs intend to build a gate in the fence at the North end of the easement. In addition, as we have discussed, some minor grading needs to be done along the trail, perhaps the installation of one or two railroad ties to ensure the integrity of the trail. [¶] I have inspected the site personally. It is not practical to build a gate where Point #2 is now located, and it would be dangerous to operate a wheelbarrow along the ungraded trail. Therefore, Point #2 needs to be moved in order to fulfill the intentions of the parties to the Agreement."
When the case was next called, on April 15, 2004, both counsel represented that the case had settled. Counsel for the Auhs referred to the problem with the boundary, saying that the north marker had to be moved 20 inches so that his clients could build a gate. Counsel for the Wangs represented that his clients would not agree to the 20 inches. Counsel for the Auhs then indicated that he would file a motion under Code of Civil Procedure section 664.6. The court dismissed the case without prejudice and retained jurisdiction under Code of Civil Procedure section 664.6.
The agreement provides "Pursuant to California Code of Civil Procedure section 664.6, the Court is to retain jurisdiction to resolve any dispute concerning the Settlement Agreement and Mutual Releases, and any easements recorded pursuant thereto, and alleged violation of same, as well as this agreement."
Correspondence between counsel continued. The Wangs' attorney took the position that the survey marker was in the correct place, per the agreement, and in June, new counsel for the Wangs wrote that the parties had not yet reached a complete and enforceable agreement, in that they had not agreed on the location of the north boundary and such things as the events which would trigger a termination of the easement, liability insurance, and indemnification/hold harmless agreements. The Auhs responded with a draft of a Settlement Agreement and Mutual Release, and drafts of the easements to be recorded. (The Drainage Easement gave the Auhs the right to use the disputed area for drainage. The Slope Easement, gave them the right to landscape and irrigate the area.) The Wangs suggested changes and additions to the draft.
In October 2004 the Auhs moved to enforce the settlement agreement under Code of Civil Procedure section 664.6. The motion was denied because the agreement was not signed by Kilpyung Auh. In June 2005 after some additional negotiations, the Auhs filed this action, bringing causes of action related to the original dispute and a cause of action for breach of contract, the December 26, 2003 agreement. The Wangs cross-complained for declaratory relief and quiet title.
The Auhs soon moved for summary judgment, based on the agreement. The content of the December 26 agreement was undisputed, as were the facts that Alex and Ming-Chu Wang, and Insook Auh signed the agreement, and that Insook Auh wrote that her signature was for herself and her husband.
The Auhs also proffered Kilpyung Auh's declaration that prior to the December 26 negotiation he had authorized his wife to enter into a settlement on his behalf, that he fully embraced, endorsed and consented to the settlement, and that he signed the agreement in January 2005. Based on this declaration, the Auhs proposed that it was undisputed that Insook Auh was authorized to sign for her husband, and that Kilpyung Auh had ratified the agreement. The Wangs disputed the legal conclusion.
The Auhs also proposed as undisputed that the Wangs and Auhs intended to be bound by the December 26 agreement. The Wangs disputed the fact with reference to their declarations. Ming-Chu Wang declared that her primary language is Mandarin Chinese, that during the December 26 negotiations she relied on her husband to translate, that she was concerned that the speed with which the document was prepared would cause her to miss something and was concerned that she would not be able to understand the document. She expressed her concerns to her husband, in Chinese. He spoke to the attorneys in English, then told her that the Auhs' counsel had said "not to worry because the attorneys would clean up the document and that we would have a chance to review the final typed agreement which would all need to sign." She signed the document believing that it was a first draft which was to be negotiated further and expanded into a final agreement covering all the issues related to the settlement. Days later, after she and her husband read and discussed the agreement, they wrote to their attorney with their concerns. That letter was an exhibit.
Alex Wang's declaration is similar: His first language is Mandarin Chinese and he often needs extra time or explanation to understand detailed documents. He did not feel that he fully understood the document. He shared his wife's concerns about speed and was also concerned that he was unable to read the handwriting or understand the specifics. When he expressed those concerns, the Auhs' counsel said "don't worry this won't be the final document, we will prepare another document for everyone to review and sign." When he signed the agreement, he did not think it was a final draft and did not think there would be a binding agreement until there was a final typed document. He thought there would be further opportunity to discuss terms and negotiate. Within days, he and his wife read and discussed the agreement and communicated their concerns to their lawyer.
The court found that the December 26, 2003 agreement was binding and enforceable, and granted summary adjudication of issues on the complaint and cross-complaint. The Auhs represented that they would not proceed on the remaining claims, and the court entered judgment on the complaint and cross-complaint. The judgment found that the December 26, 2003 agreement, was final, binding, and enforceable, and ordered the Wangs to "accurately survey the agreed boundaries of the easements described in the Settlement Agreement," sign and deliver documents fit for recording the easements, restore the Auhs' access to the easement area, install a control box for automatic irrigation, and pay $1,000 for installation of a gate in the existing fence.
Discussion
1. Is the December 26, 2006 agreement a contract?
a. Mutual intent
The Wangs' first argument is that that the agreement is not a contract because there was no mutual intent to be bound (Meyer v. Benko (1976) 55 Cal.App.3d 937, 942), or at least that there are disputed issues of fact concerning that point. They cite the agreement itself and extrinsic evidence. We begin with their contention that the document itself establishes that it is not a binding contract.
The Wangs find this meaning in the fact that the document refers to the "agreements and disagreements of the parties," and the several places in which the document provides that it will be replaced by a comprehensive settlement agreement and mutual release. The Wangs also cite the fact that the document does not say that it is a complete statement of the parties' agreement, or include an agreement to be bound if a contemplated comprehensive agreement is never signed. We do not find the points persuasive.
The agreement announces that it is an agreement settling a case and granting rights, not that it is a non-binding draft. Under this clear language, it is a final agreement. (Sass v. Hank (1951) 108 Cal.App.2d 207, 211; Civ. Code, § 1638.)
The fact that the agreement requires that the parties negotiate and sign additional documents later is not inconsistent with finality. "Where the parties, as in the instant action, have agreed in writing upon the essential terms of their contract, even though several more formal instruments are to be prepared and signed later, the written agreement which they have already signed is a binding contract." (Mann v. Mueller (1956) 140 Cal.App.2d 481, 487.)
We make a similar observation about the references to points of disagreement. The final version (that is, the letter with its changes) lists the parties' original positions, that is, their disagreements, in only one portion of the document, concerning the existing fence. The agreement sets out the resolution of the disagreement, making the earlier statements about the parties' original positions no more than recitals of the background, common in contracts.
Nor do we see any significance in the lack of a statement that the agreement is a complete statement of the parties' agreement, or an agreement to be bound if final documents were never prepared. An integration clause is not required, and given the language of the agreement, its absence does not make the agreement a non-binding draft. Similarly, the parties had no need to provide for the contingency that there would be no formal settlement agreement and releases. By signing the December 26 agreement, they bound themselves to do "everything that the contract presupposes they will do to accomplish its purpose" (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 589), that is, to sign formal documents.
Next, the Wangs ask us to look at evidence extrinsic to the contract. They contend that such evidence is admissible under Pacific Gas & Elec. Co. v. G. W. Thomas Drayage & Rigging Co. (1968) 69 Cal.2d 33. In that case, the Supreme Court considered the admissibility of extrinsic evidence to explain the meaning of an indemnity clause in a contract. The Court reiterated the long-standing rule that "extrinsic evidence is not admissible to add to, detract from, or vary the terms of a written contract," but also held that "Where the meaning of the words used in a contract is disputed, the trial court must provisionally receive any proffered extrinsic evidence which is relevant to show whether the contract is reasonably susceptible of a particular meaning." (Id. at pp. 39-40.)
The case does not assist the Wangs. "[T]he actual holding of [Pacific Gas & Elec.] is a fairly modest one: courts should allow parol evidence to explain special meanings which the individual parties to a contract may have given certain words." (ACL Technologies, Inc. v. Northbrook Property & Casualty Ins. Co. (1993) 17 Cal.App.4th 1773, 1793.) The Wangs have not identified any ambiguous language, and do not seek to introduce extrinsic evidence to show the special meaning of any term. Instead, they argue that their declarations, and exhibits such as their post-December 26 letter to counsel, indicate that they believed (and were told by opposing counsel) that the agreement was not a binding contract.
Actually, that is not quite what the declarations say. Both Wangs declared that the Auhs' counsel said that additional documents would be prepared. That is not the same as saying that the agreement itself was not binding.
This is an attempt to use extrinsic evidence not to explain a term, but to negate one. Extrinsic evidence is not admissible for such a purpose. "'Whether a writing constitutes a final agreement or merely an agreement to make an agreement depends primarily upon the intention of the parties. In the absence of ambiguity this must be determined by a construction of the instrument taken as a whole.' [Citation.]" (Beck v. American Health Group Internat., Inc. (1989) 211 Cal.App.3d 1555, 1562.) As we earlier found, this agreement, taken as a whole, is a binding agreement.
b. Material terms
The Wangs next argue that there is no contract because the agreement did not resolve all material terms. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811.) We see no such difficulty. A contract is formed if the terms of an agreement are "reasonably certain," that is, if they provide a basis for determining the existence of a breach and for giving an appropriate remedy. "If, by contrast, a supposed 'contract' does not provide a basis for determining what obligations the parties have agreed to, and hence does not make possible a determination of whether those agreed obligations have been breached, there is no contract. [Citation.]" (Ibid.) Under that standard, the terms of this contract are reasonably certain.
Many of the Wangs' arguments amount to no more than contentions that the agreement lacks the detail that a final settlement agreement would have. For instance, they contend that the agreement is uncertain because it does not specify when the $1,000 must be paid, or how the easement will be re conveyed after termination, or what the "existing drainage systems" are.
These things may be left to the final, formal agreement. "The enforceability of a contract containing a promise to agree depends upon the relative importance and the sever ability of the matter left to the future; it is a question of degree and may be settled by determining whether the indefinite promise is so essential to the bargain that inability to enforce that promise strictly according to its terms would make unfair the enforcement of the remainder of the agreement. [Citation.] Where the matters left for future agreement are unessential, each party will be forced to accept a reasonable determination of the unsettled point or if possible the unsettled point may be left unperformed and the remainder of the contract be enforced. [Citation.]" (City of Los Angeles v. Superior Court (1959) 51 Cal.2d 423, 433.)
In City of Los Angeles, supra, the Court considered the contract through which Dodger Stadium was built, and found it sufficiently certain even though it left to future agreement such "important matters" as the location and size of the site to be used for oil drilling, the nature of the recreational facilities to be constructed and maintained, and the rental to be paid under certain circumstances. (Ibid.) This rule applies to lack of detail concerning such things as the procedure for terminating the easement, and so on. Similarly, the Wangs' attempt to complicate this case by arguing that the terms of the release were not negotiated, and suggesting a plethora of options, must fail. The agreement indicates that it is in settlement of claims and litigation, and that is what must be released. (Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899, 906.)
The Wangs' most substantive contention is that the parties did not agree on the boundaries of the easement, which we agree is a fundamental matter. However, the correspondence between counsel after the agreement does not show that the parties failed to agree on the boundaries. They did agree, and set them out in the agreement. The dispute arose because the Auhs contended that the surveyor did not place the marker on the agreed-on boundary.
2. Is the contract enforceable?
a. Code of Civil Procedure section 1971
The Wangs' first claim under this heading is that the agreement is subject to the statute of frauds and is unenforceable because Kilpyung Auh did not sign it until after they "repudiated" the agreement and "withdrew from the terms." They rely on Code of Civil Procedure section 1971, which provides that "No estate or interest in real property, other than for leases for a term not exceeding one year, nor any power over or concerning it, or in any manner relating thereto, can be created, granted, assigned, surrendered, or declared, otherwise than by operation of law, or a conveyance or other instrument in writing, subscribed by the party creating, granting, assigning, surrendering, or declaring the same, or by the party's lawful agent thereunto authorized by writing."
Even if the statute of frauds applies to this agreement, we see no barrier to enforcement. The agreement was signed by "the party creating, granting, assigning, [or] surrendering . . ." the interest in real property, that is, the Wangs. The Wangs argue that with the agreement, the Auhs surrendered the earlier interest they claimed in the land, but the agreement says nothing about any earlier interest, and required no surrender from the Auhs.
The statute provides that "The intentional destruction, cancellation, or material alteration of a written contract, by a party entitled to any benefit under it, or with his consent, extinguishes all the executory obligations of the contract in his favor, against parties who do not consent to the act."
The Wangs' argument is that Kilpyung Auh's January 2005 signature was an alteration of the contract, and was material because, if it had been done before the Auhs sought enforcement under Code of Civil Procedure section 664.6, it could have resulted in enforcement under that section. But Kilpyung Auh signed after the motion for summary judgment was denied, so any effect his signature could have had on the motion is purely theoretical. We cannot see that a contract is materially altered when it is signed by a party who had already bound himself by authorizing another to sign for him, especially when the content of the contract itself indicates that all parties intended that he would sign, and would be bound.
Disposition
The judgment is affirmed. Respondents are to recover costs on appeal.
We concur: TURNER, P. J., KRIEGLER, J.