Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. BC396326, Luis A. Lavin, Judge.
Esner & Chang, Stuart B. Esner and Andrew N. Chang for Plaintiff, Barmas, Inc. and Cross-Defendants and Appellants, Barmas, Inc., Michael A. Baruch and Raul G. DeArmas.
Russ, August & Kabat, Steven M. Goldberg and Robert F. Gookin for Defendants, Cross-Complainants, and Respondents, Fred Segal, Michael Segal, 420 Broadway, Fred Segal Family LLC, and 500 Broadway.
MOSK, J.
INTRODUCTION
Plaintiff, cross-defendant, and appellant Barmas, Inc. (Barmas) and cross-defendants and appellants Michael A. Baruch (Baruch) and Raul G. DeArmas (DeArmas) appeal from a judgment in favor of defendants, cross-complainants, and respondents Fred Segal, Michael Segal, 420 Broadway, Fred Segal Family LLC, and 500 Broadway (defendants). Barmas contends that the trial court erred in granting defendants’ motion for directed verdict on the third and fourth causes of action. We affirm.
Although Baruch and DeArmas are appellants, only Barmas’s claims are at issue in this appeal. Also, because defendants Fred Segal and Michael Segal share the same surname, they are referred by their first name; they are collectively referred to as the Segals.
Pursuant to the applicable standard of review discussed below, we state the facts in the light most favorable to Barmas as the party against whom directed verdict was entered. (Margolin v. Shemaria (2000) 85 Cal.App.4th 891, 895.)
Michael is Fred’s son. Fred operated a retail fashion store, and the trade name Fred Segal became associated with fashion. The Segals owned and operated shopping centers at 8126 Melrose Avenue, Los Angeles, California, and 420 Broadway and 500 Broadway, Santa Monica, California. Baruch and DeArmas operated a hair salon as the principals of Barmas.
A. The Lease
In February 1992, the Segals and Barmas executed a Real Property Sublease agreement (lease) pursuant to which Barmas leased space from the Segals in the shopping center located at 420 Broadway to operate a hair salon. The lease was to expire on December 31, 2000.
In April 1992, Barmas opened the hair salon at the 420 Broadway shopping center. Thereafter, the parties entered into several addenda modifying the original lease—including a January 1, 2000 Fifth Addendum to Real Property Sublease, pursuant to which addendum, inter alia, the lease was extended through December 31, 2005.
On March 26, 2003, Baruch sent Michael a letter stating in part that, “I reviewed our present lease agreement and prefer to renegotiate our entire lease. More specifically, I learned that our present lease terminates at the end of 2005 and that there is another increase next year in our rent. Being that we are investing approximately 1 million dollars in our present renovation, coupled with the state of our economy, I am requesting that we revisit both of those terms.”
On April 21, 2003, Baruch sent Michael a letter confirming that the Segals agreed to provide Barmas with a reduction of rent under the present lease. The letter also stated in part that, “[I]n relation to a lease extension, you are both agreeable to an extension. However, you would like to address it once we complete our present expansion and renovation. Being that we anticipate the completion to be in June, 2003, I will contact you then to discuss.” In July 2003, the newly renovated salon opened.
In 2006, Baruch told Michael that the lease had expired and that the Segals agreed to give Barmas an extension of the lease. Michael told Baruch that the parties would continue with the terms of the lease that expired on December 31, 2005, and the parties would “incorporate everything into a new lease” when the Segals complete the building of their website.
From 2006 through 2008, the parties continued the lease of the premises under the terms of the lease that had expired on December 31, 2005. In the fall of 2007, through the spring of 2008, Barmas was late on its lease payments, and several of the checks it issued for the lease payments were returned because of insufficient funds. On February 27, 2008, Michael handed Baruch a three-day notice to pay or quit and said that he “wanted to part ways.”
On March 5, 2008, Michael told Baruch that he was willing to give Barmas another chance and said he would provide Barmas with a new lease extending the leasehold until the end of 2008 to allow Barmas the opportunity to get “back on track.” On March 10, 2008, Michael provided Baruch with a Real Property Sublease (proposed lease). At the top of the proposed lease, in Michael’s handwriting, were the words, “No changes will be allowed to this sublease.” The proposed lease also stated in Michael’s handwriting that Baruch would have three days to review and execute the proposed lease. Michael granted Baruch’s request to have until March 17, 2008, at 3:00 p.m. within which to do so. On March 17, 2008, at 4:19 p.m., Baruch sent Michael an e-mail providing his proposed changes to, and points of discussion regarding, the proposed lease. Barmas did not sign or return the proposed lease by the deadline imposed by Michael.
On March 18, 2008, Baruch received from the Segal’s lawyers a 30-day notice to terminate the lease. A few days thereafter, Baruch advised Michael that he could not vacate the premises within 30 days. Michael therefore asked Baruch how long it would take for Barmas to leave, and Baruch responded that it would take a minimum of six months.
On September 8, 2008, Barmas was served with a three-day notice to pay or quit. In October 2008, Barmas vacated the premises.
B. Beauty Product Line License
In June 1998, Barmas made a written and oral presentation to the Segals proposing Barmas’s development of the Fred Segal brand. Barmas proposed the creation of businesses representing “beauty and fashion related talent” for events and productions (agency), conducting “beauty and fashion” educational workshops offered to consumers and professionals (workshop), and developing, selling and distributing a line of beauty products (beauty product line).
In August 1998, Baruch sent the Segals a license proposal for the agency, workshop, and beauty product line businesses. With regard to the beauty product line business, Baruch proposed that Barmas be provided with an exclusive license, in perpetuity. Michael crossed out the language on the written proposal that the license was to be exclusive to Barmas and that it was to be in perpetuity. Michael then asked Barmas to prepare a proposed agreement.
From 1998 to 2008, Barmas operated businesses under the agency and workshop arrangements without written agreements, and those arrangements are not issues in this appeal.
In October 1998, Baruch submitted a draft license agreement regarding, inter alia, the beauty product line, and it designated the Segals as the licensor and Barmas as the licensee. The draft license agreement provided that its duration was to be in perpetuity unless it was terminated either by mutual agreement of the parties or by Barmas upon providing the Segals with 30 days written notice. The Segals did not respond to the draft license agreement.
In January 1999, Michael advised Baruch that he needed to speak to Fred about the proposed license for the beauty product line. In February 1999, Fred asked Baruch to identify the outstanding issues concerning the license agreement. Baruch responded that the issues the parties needed to address were the “type of exclusivity on the product line” that Barmas was requesting and the duration of the license agreement. Baruch testified that he and Fred discussed and “solved those two issues.” Baruch also testified that in February or March 1999, a meeting occurred between Baruch and Fred during which Fred told Baruch that Fred would have his lawyers send him a draft of the license agreement.
In April 1999, the Segals sent Baruch a draft of the license agreement, and it designated Michael and United World of the Universe Foundation as the licensors and Barmas as the licensee. Baruch testified that in January 2000, Fred requested that Baruch provide an executive summary setting forth the products proposed by Barmas that would comprise the beauty product line business. In March 2000, Baruch sent Fred the executive summary describing the planned products, the concept, the distribution means, and the timing of the launch of the proposed beauty product line business. In April 2000, Baruch met with Fred to discuss Barmas’s exclusive rights under a proposed license agreement and the duration of the agreement.
United World of the Universe Foundation is not a party to the lawsuit.
On July 14, 2000, Baruch and the Segals discussed the draft agreement that the Segals had sent Baruch. They discussed “percentages, ” and they “all agreed to move forward” with the beauty product line business. Baruch sent the Segals a letter confirming the July 14, 2000, meeting, and the letter was admitted into evidence, but not for the truth of the matter asserted. It stated in part that, “Fred Segal Products: We all agreed to move forward. In my last meeting with Fred, we discussed the problems I had with the counter agreement you submitted, for which he agreed to our changes. The only outstanding issue was the allocations. After a discussion, we agreed to provide you with the percentage you requested in your response to our agreement (no one could recount at that time) but Michael believes it to be 7-8 %. I will review the document and confirm the amount.... At this time, I will re-submit the agreement using these allocations. As stated, this agreement will include the licensing for all of our propositions for which you agreed.” Baruch did not receive a letter from the Segals that specifically disputed anything Baruch said in the letter.
On July 19, 2000, Baruch sent the Segals a letter that enclosed a license agreement that he executed on behalf of Barmas. The letter and the enclosed license agreement were admitted into evidence, but not for the truth of the matter asserted. The license agreement designated Michael and United World of the Universe Foundation as the licensors and Barmas as the licensee.
Baruch testified he executed the agreement that he sent to the Segals, “Because we already agreed to all of the other language except for those one or two things that they asked me to change. And so when we agreed to those changes, I made the corrections. [¶] As far as I was concerned, the form was ready to go so I signed it and sent it to them to sign.” Baruch’s counsel asked him, “When you sent off on July 19, 2000, the signed trademark license agreements, [sic] did you think that those agreements [sic] contained all of the terms that you and [the] Segals had agreed upon?” Baruch responded, “Yes.”
The letter enclosing the license agreement stated that, “As promised, enclosed please [sic] two (2) executed “Trademark License Agreements reflecting the deal as we have agreed. Note, I looked up the licensing fee for the products on your version of the agreement, submitted to me by your attorneys’ Latham and Watkins, and Michael was mistaken—the amount is the same amount we submitted and agreed to: five percent (5%). I have attached a copy of the section which indicates this amount. Being that we agreed at lunch that it would be the amount you requested in your agreement, which is the amount I believe it to be, I have included that amount in the agreement. [¶] At this time, please execute the agreement and forward one copy to my office. The other copy is for your records.” The proposed licensors did not sign and return the proposed license agreement.
On October 17, 2000, Baruch sent the Segals a letter that enclosed another license agreement that he executed on behalf of Barmas. Baruch testified that when he sent the license agreement to the Segals he believed it contained all of the terms that he and the Segals had agreed upon. The letter enclosing the license agreement stated that, “At this time, everything that you have asked for has either been changed to reflect your requests or has been addressed. I, therefore, will appreciate you reviewing the changes and, thereafter, execute the Agreement where indicated. Please note, time is of the essence.... For your information, I have everyone in place to move forward, we simply just need to finalize this agreement.”
The license agreement sent by Baruch to the Segals on October 17, 2000, designated Michael and United World of the Universe Foundation as the licensors and Barmas as the licensee. The agreement modified the proposed license agreement that Baruch sent the Segals on July 19, 2000, by inter alia, changing the payment provision and the fee, the scope of the beauty products to be licensed, and the duration of the agreement [“for as long as either party continues to provide any of the Licensee Business Activities” not in “perpetuity”].
On October 31, 2000, Michael sent a letter to Baruch that advised that Michael met with Fred to discuss the license agreement. The letter enclosed the license agreement Baruch sent to the Segals on October 17, 2000, and the letter stated that agreement had been “marked... with our input and changes, ” and that Michael had forwarded it to the Segals’ attorney “for his input.” The license agreement contained handwritten notations commenting on, inter alia, the provisions that provided Barmas would (1) have an exclusive license, (2) not be obligated to pay royalties for use of trademarks, (3) have the right to use the licensed trademarks in combination with Barmas’s trademarks or tradenames, and (4) have the right to assign the license. The handwritten notes also commented on the definition of gross revenues used to calculate the license fee. These comments consisted of circled words or phrases, stricken language, and abbreviated notations and question marks concerning various provisions in the draft agreement. The comments thus indicated that there were several unresolved issues.
In January or February 2002, Baruch spoke with Fred and expressed his frustration over the slow process of documenting the changes to the license agreement. Baruch told Fred that, “[I]n every instance that we met with him we’ve gone back and forth and bent over backwards to agree to all the changes even though we agreed to the changes over and over again.” Fred responded by telling Baruch not to be frustrated and that, “You’ve moved forward with the agency and the workshop. We have the deal terms in place, just do it.”
From 2002 through 2008, Barmas developed the beauty product line business, including retaining companies to manufacture the products, the packaging and the component parts. Barmas also tested the products and redesigned its website.
In August 2006, Baruch showed the Segals samples of the beauty product packaging and the Segal’s were “super excited. They thought it looked great, Fred loved it.” Fred told Baruch and DeArmes, “[W]hat you should do... is focus on the product line. That’s the brass ring, that’s the gold jewel or the diamond.”
In February 2008, Michael advised Baruch that Michael “wanted to part ways.” In February 2009, Barmas ceased conducting the beauty product line business.
C. The Exclusive Agreement
At the time the Segals and Barmas executed a lease agreement in February 1992, they also executed an exclusive agreement pursuant to which Barmas was granted the exclusive and irrevocable right to provide hair styling services in the shopping centers. The exclusive agreement stated that the parties intended to enter into the lease, and the exclusive rights granted to Barmas were for as long as Barmas was a tenant in any of the shopping centers.
In July 1997, the Segals and Barmas entered into a First Addendum to the Exclusive Agreement to include Barmas’s exclusive rights to include not only a hair salon, but also services for skin, nail, body, hand, and foot services. In December 2001, the Segals and Barmas entered into a Second Addendum to the Exclusive Agreement pursuant to which the scope of the exclusive rights were expanded to include a “Full Service Salon, Spa and Wellness Center providing services and selling products related thereto....” It also provided that the exclusive rights granted to Barmas were “for three years after the termination of the Lease except in the event the lease is terminated due to [Barmas’s] default.” Shortly after Barmas vacated the premises in October 2008, the Segals leased one of the premises to other individuals who opened a hair salon.
PROCEDURAL BACKGROUND
Barmas filed a first amended complaint against defendants Fred Segal, Michael Segal, 420 Broadway, Fred Segal Family LLC, and 500 Broadway based upon causes of action for intentional misrepresentation, negligent misrepresentation, breach of oral contract, breach of written contract, promissory estoppel, specific performance, and injunctive relief. Barmas’s third cause of action for breach of oral contract alleged breaches of three alleged oral contracts but as noted post in footnote 6, only two of the alleged oral contracts in that cause of action are the subject of this appeal.
The captions of the notice of entry of judgment and of the judgment do not state that Fred Segal Family LLC and 500 Broadway are defendants. The text of the judgment does not state that Fred Segal Family LLC is a defendant.
Barmas’s third cause of action for breach of oral contract alleged, inter alia, that Barmas and defendants “entered into an oral contract whereby Defendants agreed to provide BARMAS with a lease extension....” Barmas further alleged that, “[I]n or about March of 2008, Defendants breached the oral contract with BARMAS when they informed BARMAS that BARMAS would not be provided with a lease extension....” Barmas’s third cause of action for breach of oral contract also alleged that Barmas and defendants “entered into an oral contract whereby Defendants agreed to provide BARMAS with a license to develop and establish the Beauty Product Line.” Barmas further alleged that, “[I]n or about March of 2008, Defendants breached the oral contract with BARMAS when they informed BARMAS that BARMAS would not be provided a license for the development and establishment of the Beauty Product Line.”
Barmas’s fourth cause of action for breach of written contract states, inter alia, that Barmas and defendants “entered into a Second Addendum to Exclusive Agreement” which “granted BARMAS the exclusive and irrevocable right to a Full Service Salon, Spa and Wellness Center providing services and selling products related thereto at any Fred Segal shopping centers for as long as BARMAS remained a tenant at any location, ” and that “Defendants were restricted from leasing space in either Fred Segal shopping center[s] for any such purpose for up to three years after BARMAS’ lease was terminated....” Barmas alleged on information and belief that defendants breached the written agreement because “other retail businesses located within the Fred Segal shopping centers are selling beauty, hair, skin, cosmetic and nail products, ” and that defendants have leased Barmas’s former premises “for the purposes of establishing another salon and spa....”
Following the trial, and before the matter was submitted to the jury, defendants moved for directed verdicts as to all causes of action in Barmas’s first amended complaint. The trial court granted defendants’ motion regarding several of Barmas’s claims, including the third cause of action for breach of the oral contracts regarding the lease extension and the beauty product line and the fourth cause of action for breach of written contract. The jury decided in favor of the Segals as to the causes of action submitted to it. And the court found no promissory estoppel.
Plaintiff only claims on appeal that the trial court erred in granting defendants’ motion for directed verdict on these claims asserted in the third and fourth causes of action.
At the hearing on defendants’ motion for directed verdict regarding the third cause of action for breach of the oral contract to provide a lease extension, Barmas’s counsel argued that the oral agreement was confirmed in the April 21, 2003, letter sent from Baruch to Michael that stated, “you were agreeable to a lease extension.” The trial court granted defendants’ motion because it found that defendants offered a new lease and therefore they were not in breach of the agreement.
Barmas’s third cause of action alleged that there was an oral contract whereby defendants agreed to provide Barmas with a license to develop and establish the beauty product line business. Barmas’s counsel argued at the hearing on defendants’ motion for directed verdict that there was a contract to license the beauty product line, and the terms were not vague. Barmas took the position that commencing in 1998, the parties exchanged “a series of proposals... which led to counterproposals in the form of trademark license agreements, ... [and] in January of 2002, out of frustration over the inability to get the deal documented [Baruch] called Fred... and Fred... said to him we have a deal, you have been running the agency and the workshop for years with no written agreement, move forward.” Barmas also contended that Baruch testified that Barmas was to pay five percent of the gross receipts, and 50 percent of the gross receipts if the beauty product line was sold to a third party. In addition, Barmas argued that Baruch and Fred would review the product line every five years. The trial court granted defendants’ motion because it found that the terms of the proposed contract were vague and lacked the specificity required for the formation of a contract, and the proposed contract violated the statute of frauds.
Barmas contended at the hearing on defendants’ motion for directed verdict regarding Barmas’s fourth cause of action for breach of the written exclusive agreement that Barmas was not in default of the underlying lease and, therefore, the exclusive agreement did not expire. Barmas also contended that the agreement did not violate Business and Professions Code section 16600 because Barmas relied on it by expending substantial funds and the exclusive agreement was limited—it only barred the operation of a salon for three years. The trial court granted defendants’ motion because it found that the agreement violated Business and Professions Code section 16600 and therefore was illegal.
DISCUSSION
A. Applicable Law and Standard of Review
Code of Civil Procedure section 630, subdivision (a), provides that, “Unless the court specified an earlier time for making a motion for directed verdict, after all parties have completed the presentation of all of their evidence in a trial by jury, any party may, without waiving his or her right to trial by jury in the event the motion is not granted, move for an order directing entry of a verdict in its favor.” A motion for directed verdict operates, in effect, as “a demurrer” to the evidence. (Hilliard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 394.) It “tests the sufficiency” of the opposing party’s evidence. (County of Kern v. Sparks (2007) 149 Cal.App.4th 11, 16.)
“It has become the established law of this state that the power of the court to direct a verdict is absolutely the same as the power of the court to grant a nonsuit. A nonsuit or a directed verdict may be granted ‘only when, disregarding conflicting evidence and giving to [the] plaintiff’s evidence all the value to which it is legally entitled, herein indulging in every legitimate inference which may be drawn from that evidence, the result is a determination that there is no evidence of sufficient substantiality to support a verdict in favor of the plaintiff if such a verdict were given.’ [Citations.] Unless it can be said as a matter of law, that, when so considered, no other reasonable conclusion is legally deducible from the evidence, and that any other holding would be so lacking in evidentiary support that a reviewing court would be impelled to reverse it upon appeal, or the trial court to set it aside as a matter of law, the trial court is not justified in taking the case from the jury. [Citation.]” (Estate of Lances (1932) 216 Cal. 397, 400; Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892, 906-907.) In reviewing an order directing a verdict, “we view the evidence in the light most favorable to plaintiffs. Conflicts in the evidence are resolved, and inferences from the evidence are drawn, in their favor. If there is substantial evidence to support plaintiffs’ claim, and if the state of the law also supports that claim, we must reverse the judgment. [Citation.]” (Margolin v. Shemaria (2000) 85 Cal.App.4th 891, 895.) “[T]he judgment will be reversed if there was substantial evidence... tending to prove all elements of appellant’s case. [Citation.]” (Colbaugh v. Hartline (1994) 29 Cal.App.4th 1516, 1521.)
B. Lease Extension
Barmas contends that the trial court erred in granting defendants’ motion for directed verdict on the third cause of action for breach of an oral agreement to provide Barmas with a lease extension. We disagree.
1. Good Faith Negotiations
Barmas argues for the first time on appeal that the trial court erred in granting defendants’ motion because there was sufficient evidence that the parties agreed to use good faith efforts to negotiate the lease extension. Defendants contend that we should not consider Barmas’s new argument. Defendants argue, and Barmas does not dispute, that Barmas did not assert this argument as a theory of recovery and it did not make the argument before the trial court. Barmas contends that it is entitled to make this argument for the first time on appeal because its argument on appeal involves a question of law that is determinable from the facts presented in the record. (Fields v. Blue Shield of California (1985) 163 Cal.App.3d 570, 585; Panopulos v. Maderis (1956) 47 Cal.2d 337, 340; Marsango v. Automobile Club of So. Cal. (1969) 1 Cal.App.3d 688, 694.) Barmas reasons that its contention is one of law because a directed verdict can “be sustained only when it can be said as a matter of law that no other reasonable conclusion is legally deducible from the evidence....” (Trammell v. Western Union Tel. Co. (1976) 57 Cal.App.3d 538, 556-557.)
The focus of whether “as a matter of law” there is another “reasonable conclusion... legally deducible from the evidence” (Trammell v. Western Union Tel. Co., supra, 57 Cal.App.3d at pp. 556-557) is whether “there was substantial evidence... tending to prove all elements of appellant’s case. [Citation.]” (Colbaugh v. Hartline, supra, 29 Cal.App.4th at p. 1521.) Barmas did not claim at trial that defendants were liable to it because the parties agreed to use good faith efforts to negotiate the lease.
“‘“[I]t is fundamental that a reviewing court will ordinarily not consider claims made for the first time on appeal which could have been but were not presented to the trial court.” “[W]e ignore arguments, authority, and facts not presented and litigated in the trial court. Generally, issues raised for the first time on appeal which were not litigated in the trial court are waived....”’ [Citation.]” (Gonzalez v. County of Los Angeles (2004) 122 Cal.App.4th 1124, 1131.)
“It is the general rule that a party to an action may not, for the first time on appeal, change the theory of the cause of action. [Citations.] There are exceptions but the general rule is especially true when the theory newly presented involves controverted questions of fact or mixed questions of law and fact. If a question of law only is presented on the facts appearing in the record the change in theory may be permitted. [Citation.] But if the new theory contemplates a factual situation the consequences of which are open to controversy and were not put in issue or presented at the trial the opposing party should not be required to defend against it on appeal. [Citations.]” (Panopulos v. Maderi, supra, 47 Cal.2d at pp. 340-341.)
Whether defendants negotiated in good faith is a not a question of law—it is a question of fact for the jury. (Copeland v. Baskin Robbins U.S.A. (2002) 96 Cal.App.4th 1251, 1261; also Lipow v. Regents of University of California (1975) 54 Cal.App.3d 215, 227.) Barmas’s “new theory contemplates a factual situation the consequences of which are open to controversy, ” and it was not put in issue or presented before the trial court. We therefore do not consider it. Barmas has not set forth any other contentions in support of its allegations in its third cause of action.
2. New Lease
In the third cause of action Barmas contends there was a breach of an oral agreement to provide a lease extension. In its reply brief, Barmas raises for the first time the contention that the trial court erred in granting defendants’ motion because defendants did not perform the oral agreement to provide a lease extension, and, instead, offered “a brand new lease.” “Points raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument.” (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453.) “‘“Obvious considerations of fairness in argument demand that the appellant present all of his points in the opening brief. To withhold a point until the closing brief would deprive the respondent of his opportunity to answer it or require the effort and delay of an additional brief by permission. Hence the rule is that points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before.”” [Citation.]” (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764.)
Barmas contended at oral argument that it argued in its opening brief that defendants did not perform the oral agreement because they instead offered a new lease instead of a lease extension. Barmas argued in its opening brief, however, was that, “Barmas is not claiming that under its agreement Fred... simply was required to offer a lease extension on whatever grounds it selected. Rather, Barmas’ [sic] claim is that Fred... had to act in good faith in attempting to negotiate a lease extension.”
Thus, Barmas failed to present, prior to its reply brief, its contention that defendants did not perform the oral agreement to provide a lease extension because they offered an entirely new lease instead of an extension of the existing lease.
Even if Barmas presented its contention in a timely matter, Barmas introduced evidence that defendants could perform the oral agreement by providing a new lease. Baruch testified that in 2006, after the parties had purportedly agreed that the Segals would provide Barmas with a “lease extension, ” Michael told Baruch that the parties would continue with the terms of the lease that expired on December 31, 2005, and the Segals would “incorporate everything into a new lease” when the Segals completed the building of their website. The record does not disclose that Barmas objected to this or otherwise advised defendants that they would be in breach of the agreement if they provided Barmas with a “new lease” instead of a “lease extension.” Accordingly, the trial court was justified in granting a nonsuit as to the lease extension claim.
C. Beauty Product Line License
Barmas contends that the trial court erred in granting defendants’ motion for directed verdict on its third cause of action for breach of an alleged oral license agreement. We disagree.
1. Reasonably Certain
Barmas contends that trial court erred in court granting defendants’ motion for directed verdict because it found that the terms of the proposed oral license agreement were vague and lacked the specificity required for the formation of a contract. Barmas has not established that the trial court erred.
In order for a contract to be enforceable the terms of the contract must be sufficiently certain so as to provide a basis for determining to what obligations the parties have agreed. (Weddington Productions., Inc. v. Flick (1998) 60 Cal.App.4th 793, 811.) Whether a proposed contract is sufficiently definite to form an enforceable contract is a question of law for the court. (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 770, fn. 2; Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 623.)
Barmas states in his opening brief that “Baruch testified (with corroboration by numerous written communications including letter, memos and draft agreements) that all the essential terms of the agreement had been consented to by the Segals over the course of several years, ” and Barmas outlined a chronology of events between the parties. Barmas however fails to identify the terms of the alleged oral license contract with citations to the record. Barmas cites Weddington v. Productions, Inc. v. Flick, supra, Cal.App.4th at page 815 in support of the proposition that a license agreement “could include” matters such as “the scope and term of the license, permitted uses, compensation to the licensor, and grounds and procedures for termination, ” but Barmas does not identify the material terms that it claims were agreed upon here—i.e., the terms of the agreement sought to be enforced.
“‘A fundamental principle of appellate practice is that an appellant ‘“must affirmatively show error by an adequate record.... Error is never presumed.... “A judgment or order of the lower court is presumed correct.” [Citations.]’”’” (Bianco v. California Highway Patrol (1994) 24 Cal.App.4th 1113, 1125-1126.) “Where any error is relied on for a reversal it is not sufficient for appellant to point to the error and rest there.” (Santina v. General Petroleum Corp. (1940) 41 Cal.App.2d 74, 77.) “It is not our responsibility to develop an appellant’s argument. [Citation.]” (Alvarez v. Jacmar Pacific Pizza Corp. (2002) 100 Cal.App.4th 1190, 1206, fn. 11.) “The reviewing court is not required to make an independent, unassisted study of the record in search of error or grounds to support the judgment. It is entitled to the assistance of counsel.” (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 701, p. 769.) “An appellate court is not required to examine undeveloped claims, nor to make arguments for parties.” (Paterno v. State of California (1999) 74 Cal.App.4th 68, 106.)
To the extent Barmas relies on the last draft license agreement that Baruch sent to the Segals, Michael made notations on it indicating that there were unresolved issues. The unresolved issues included whether Barmas would have an exclusive license, and whether it would be obligated to pay royalties for use of trademarks. The unresolved issues also included whether Barmas would have the right to use the licensed trademarks in combination with its own trademarks or tradenames, and whether Barmas could assign the license. The notations also indicated that the definition of gross revenues, used to calculate the license fee, needed to be resolved.
In addition, although all of the draft agreements exchanged by the parties designated Michael as a party to the agreement, none of the draft agreements designated 420 Broadway, Fred Segal Family LLC, or 500 Broadway as parties, and only the first draft agreement designated Fred as a party. We therefore cannot determine the terms of any agreement, and, as noted, Barmas has not specified what it considers to be the terms of the agreement. Accordingly, the agreement Barmas seeks to enforce is not sufficiently definite.
Barmas has not established that the trial court erred in granting defendants’ motion for directed verdict by finding that the terms of the proposed oral license agreement were vague and lacked the specificity required for the formation of a contract. We therefore do not reach Barmas’s contention that the trial court erred because the proposed contract did not violate the statute of frauds.
2. Good Faith Negotiations
Barmas contends that assuming that material terms were missing in the oral licensing agreement, there is substantial evidence that parties agreed to negotiate in good faith the missing terms. Barmas did not assert as a theory of recovery against defendants that the parties agreed to negotiate in good faith the missing terms in the oral licensing agreement, nor did it make that argument before the trial court. Therefore, we do not consider it for the reasons stated ante regarding the lease extension.
D. The Exclusive Agreement
Barmas contends that the trial court erred in granting defendants’ motion for directed verdict on its fourth cause of action. Barmas’s fourth cause of action alleged that defendants breached the Second Addendum to Exclusive Agreement because shortly after Barmas vacated the premises in October 2008, the defendants leased the premises to other individuals who opened a hair salon. Barmas contends that the trial court erred because the Second Addendum to Exclusive Agreement restricts the use of real property, not the conduct of individuals, and therefore Business and Professions Code section 16600 does not bar the agreement.
The original exclusive agreement stated that the parties intended to enter into the lease, and the lease agreement was executed on the same day as the exclusive agreement. The Second Addendum to Exclusive Agreement restricts the use of real property, not the conduct of individuals, and there is no restriction on the transfer of property.
“If alienation is not restricted, and the condition is simply that the property not be used for certain purposes, e.g., the sale of liquor, or business purposes in a residential tract, the restraint is valid. [Citations.]” (12 Witkin, Summary of Cal. Law (10th ed. 2005) Real Property, § 199, p. 255.) “Commercial leases often include an express covenant that the landlord will not lease to a competitor. An express covenant by the landlord not to engage in competing business or to lease other portions of the same premises or adjoining premises owned by the landlord for a competing purpose is valid and enforceable. The covenant by the landlord is not an unreasonable restraint of trade....” (7 Miller & Starr, Cal. Real Estate (3d ed. 2001) Landlord and Tenant, § 19:52, com., p. 139, fns. omitted; Medico-Dental Bldg. Co. v. Horton & Converse (1942) 21 Cal.2d 411, 428-429 [upholding lease provision prohibiting lessor from leasing other portions of lessor’s premises to another entity which operated a drug store]; Hildebrand v. Stonecrest Corp. (1959) 174 Cal.App.2d 158, 164 [same].)
Defendants contend that the court in Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937 (Edwards) expressly disapproved of one of the authorities relied upon by Barmas, Boughton v. Socony Mobil Oil Co. (1964) 231 Cal.App.2d 188 (Boughton). Edwards v. Arthur Andersen LLP, supra, 44 Cal.4th 937 however only disapproved of part of the rationale expressed in Boughton.
The court in Boughton, supra, 231 Cal.App.2d 188 concluded that a restriction in a deed in that case did not fall within the purview of the statute. The court in Boughton based its holding on two reasons. First, the court stated that, “The single restriction is imposed, not personally on plaintiffs restraining them from engaging or carrying on any profession, trade or business but, on the use of the land upon which they as grantees are barred merely from selling petroleum products....” (Id. at p. 190.) Second, the court stated that, “Moreover, under this restriction the grantees are not prevented from dispensing petroleum products and operating a service station at any time at any other place and there directly competing with defendant.” (Id. at pp. 190-191.) The court in Edwards, supra, 44 Cal.4th 937, however, only disapproved of the second rationale—the so called narrow-restraint exception. (Id. at 949.) The court did not express disapproval of the rationale stated in Boughton, supra, 231 Cal.App.2d 188 that Business and Professions Code section 16600 does not generally apply to bar a restriction imposed on the use of real property. The trial court incorrectly determined that Business and Professions Code section 16600 barred Barmas’s enforcement of the Second Addendum to Exclusive Agreement, but we can affirm on a ground not relied upon by the trial court. (United Air Services, Ltd. v. Sampson (1938) 30 Cal.App.2d 135, 138; 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 346, pp. 397-398.)
The Second Addendum to the Exclusive Agreement provided that the exclusive rights granted to Barmas were “for three years after the termination of the Lease except in the event the lease is terminated due to [Barmas’s] default.” The trial court directed verdict in favor of defendants on their cross-complaint that Barmas was liable to them for breach of lease by failing to pay rent, and the jury awarded damages to defendants for that claim. We asked the parties to brief whether that is relevant with regard to Barmas’s claimed right to enforce the Second Addendum To Exclusive Agreement against defendants.
Defendants contend that they terminated the lease due to Barmas’s default and therefore Barmas could not thereafter enforce the Second Addendum to the Exclusive Agreement. Barmas contends that “[t]he terms of the lease expired under their terms.... The parties then negotiated that [Barmas] could remain in the premises until September 30, 2008, which is precisely when [Barmas] left. [Citation.] Therefore, the lease was not terminated due to a default, but rather pursuant to a negotiated settlement.” We agree with defendants.
Although the written lease was to expire on December 31, 2005, from 2006 through 2008, the parties continued to operate under the terms of the lease. Commencing in the fall of 2007, Barmas was late in making several lease payments, and it issued several payment checks that were returned because of insufficient funds. In the spring of 2008, Baruch was served with a 30-day notice to terminate the lease. A few days thereafter Baruch advised Michael that Barmas could not vacate the premises within the required 30 day period. Michael therefore asked Baruch how long it would take for Barmas to leave, and Baruch responded that it would take six months. On September 8, 2008, Barmas was served with a three-day notice to pay or quit, and in October 2008, Barmas vacated the premises. And, as noted ante, the trial court directed verdict in favor of defendants on their cross-complaint that Barmas was liable for breach of lease by failing to pay rent.
The lease was terminated due to Barmas’s default. Barmas was served with a 30-day notice to terminate the lease. After Baruch advised Michael that Barmas would not be able to vacate the premises pursuant to the 30-day notice to terminate for six months, Michael merely consented to allow Baruch to remain on the premises until then. The Second Addendum to the Exclusive Agreement therefore expired and Barmas could not prevail on a claim for breach of that agreement based upon events that occurred after the agreement expired.
We also asked the parties to brief whether there was any evidence of damage to Barmas for breach of the Second Amendment to Exclusive Agreement, and if not, what are the consequences. We do not reach this issue, however, because we conclude that Barmas may not prevail on the claims for breach of the agreement.
DISPOSITION
The judgment is affirmed. Defendants shall recover their costs on appeal.
We concur: TURNER, P. J., ARMSTRONG, J.