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Clymer v. Pickford Realty, Ltd.

California Court of Appeals, Fourth District, First Division
Oct 24, 2008
No. D051032 (Cal. Ct. App. Oct. 24, 2008)

Opinion


DANA CLYMER et al., Plaintiffs and Appellants, v. PICKFORD REALTY, LTD. et al., Defendants and Respondents. D051032 California Court of Appeal, Fourth District, First Division October 24, 2008

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

APPEAL from a judgment of the Superior Court of San Diego County No. GIN44219, Thomas P. Nugent, Judge. Affirmed.

McDONALD, J.

Plaintiff Dana Clymer wished to purchase a residence (Property) from a husband and wife (the Champagnes) then embroiled in a divorce. After Clymer was unsuccessful in acquiring the Property, she (along with her real estate broker, plaintiff Home Plus Realty, hereafter HPR) filed a lawsuit against the Champagnes alleging breach of contract. Clymer and HPR (together Buyers) also pleaded causes of action against the Champagnes' realtors, defendant Pickford Realty (the realtor with whom the Champagnes listed the Property for sale) and defendant Janet Lawless (the real estate agent associated with Pickford Realty), alleging a cause of action for tortious interference with contractual relations and a series of claims sounding in fraud.

Pickford Realty and Lawless (together Realtors) moved for summary judgment. Realtors asserted that summary judgment on the claim for tortious interference with contractual relations was proper because (1) there was no valid and enforceable contract between Clymer and the Champagnes to sell the Property to Clymer, and (2) there was no evidence any intentional conduct by Realtors caused the Champagnes to breach the contract. Realtors also asserted summary judgment was proper on the various fraud claims because, among other reasons, there was no evidence the misrepresentations pleaded by Buyers were made, or were false representations of fact, or were relied on by Buyers to alter their position.

The trial court found no triable issue of material fact existed as to Buyers' claims against Realtors, and entered summary judgment in favor of Realtors. On appeal, Buyers assert the court erred in finding no triable issues of fact.

I

RELEVANT UNDISPUTED FACTS

A. The Property

In August 2004 the Champagnes acquired title to the Property. The husband (Richard) purchased the Property without informing his wife (Ann) or obtaining her consent to the purchase. By November 2004 Ann had filed for divorce. Her lawyer described the marital dissolution proceedings as "extremely contentious."

Richard was apparently able to sign Ann's name on the documents necessary to acquire the Property because Ann had given him a general Power of Attorney, authorizing Richard to sign legal or loan documents on her behalf, some time before she left on an extended vacation in Europe. Whether that power of attorney remained effective through March of 2005, notwithstanding the marital dissolution proceedings (see Prob. Code, § 4154), is not revealed in this record.

B. The Listing and Initial Offer

In January 2005 as part of the marital dissolution proceedings, the Champagnes signed a listing agreement with Realtors. The Property was listed for sale with a price between $3 and $3.5 million.

Some time in early March, Clymer saw the Property listed on the Multiple Listing Service (MLS). She contacted Realtors to make an appointment to view the Property and, during the next week or two, visited the Property. Either prior to or during her initial visit, Clymer was told by Realtors that the Champagnes were in the midst of a divorce proceeding.

On March 10, HPR (acting as Clymer's agent) submitted to Realtors an offer by Clymer to purchase the Property. The offer price was $2.4 million. Lawless forwarded the offer to Richard and to Ann's attorney. They did not sign an acceptance or return the offer before it expired.

C. The Initial Counteroffers

Richard directed Lawless to respond to Clymer with a counteroffer (Counteroffer No. 1). On March 11, 2005, Lawless faxed Counteroffer No. 1 (signed only by Richard and accompanied by a fax cover sheet and memorandum) to Clymer's agent, HPR. The fax cover sheet stated, "ATTACHED IS [COUNTEROFFER NO. 1] + ACCOMPANYING MEMO RELATING TO [ANN'S] SIGNATURE REQUIREMENT +/OR THE PRESIDING COURT'S AUTHORIZATION." The accompanying memo stated, in part, that "[t]he purpose of this memo is to inform [Buyer] that [Richard] has instructed me to prepare and submit the following [Counteroffer No. 1] . . . . [¶] The information contained herein is subject to the approval and written authorization of [Ann] and/or the presiding court in the matter of the divorce proceeding between [Richard and Ann]." Later that day, Lawless faxed to HPR "[Counteroffer No.] 1A," which advised Clymer that it "replaces [Counteroffer No.] 1 & Memo." Counteroffer No. 1A (again signed only by Richard) and the accompanying memo were essentially identical to Counteroffer No. 1 except that Counteroffer No. 1A added, as an express term within the body of the counteroffer, that "[f]inal [a]cceptance of this counter offer is subject to written approval of [Ann] or court order." Clymer did not accept either Counteroffer No. 1 or Counteroffer No. 1A.

D. Counteroffer No. 1B

The final counteroffer was transmitted by Lawless to Buyers by fax on March 17. That counteroffer (Counteroffer No. 1B), again signed only by Richard, provided that Richard accepted the original offer price ($2.4 million) subject to certain conditions, but specified it would expire and be deemed revoked unless the offer was signed by Clymer and a copy of the signed Counteroffer No. 1B was personally received by the Realtors not later than March 18, 2005, at 2:00 p.m. Although Clymer signed Counteroffer No. 1B, and denoted that her signature was affixed at 2:00 p.m. on March 18, the fax transmittal line sending the acceptance from HPR's fax machine showed it was sent to Lawless's fax number nearly three hours after the 2:00 p.m. deadline.

Realtors asserted the undisputed evidence showed the acceptance came several hours after the March 18 deadline. Although Buyers "disputed" that assertion, there was no competent evidence raising a triable issue of fact whether there had been an earlier transmission of the acceptance to either Richard or Ann sent prior to the deadline. The signature on the exhibit represented that it was signed at 2:00 p.m., which, if accurate, would have made it physically impossible to have ensured that it was transmitted and received at or before 2:00 p.m. Moreover, the only evidence cited by Buyers to raise a triable issue of fact on timely acceptance was (1) when Clymer's agent (Mr. Murray) was asked in deposition whether he had a specific recollection of what time of day he faxed the acceptance, he testified, "I believe I faxed it in mid-afternoon," and (2) Murray stated he did not believe the information on the exhibit (regarding the time the acceptance was sent) accurately reflected when it was originally sent.

Buyers' complaint alleged Clymer's unconditional acceptance of Counteroffer No. 1B created the contract entitling Clymer to acquire the Property. However, Ann did not sign Counteroffer No. 1B, and Counteroffer No. 1B did not contain any suggestion that Richard signed Ann's name to Counteroffer No. 1B under a power of attorney.

Richard testified in deposition that he believed a power of attorney he obtained from Ann was voided when the divorce was filed.

E. Subsequent Events

Some time on March 18, at HPR's request, Lawless contacted an escrow company, Chicago Title Company (Chicago Title), and asked it to open a file in anticipation that a contract for sale of the Property would be forthcoming. However, by 4:00 p.m. that afternoon, Lawless had advised Chicago Title to take no further action toward opening an escrow because the proposed transaction was "on hold." After Lawless learned Ann would not sign the contract, she notified Chicago Title on March 22 that the deal was "dead" and no escrow would be required, and Chicago Title closed the file without ever issuing escrow instructions.

Also on March 18, Ann's attorney, Mr. Childers, wrote to Lawless stating that "it appears the reasonable and prudent course of conduct is for [Ann] to agree to the offer of $2.4 million" and that "[o]n behalf of my client . . . she agrees to sign the offer as written [and] I will provide to [Ann] the contract documents . . . for signature on Monday, March 21, 2005." Lawless forwarded that letter to Buyers. Although Buyers believed Childers' letter constituted Ann's acceptance of the contract, there was no evidence Childers was authorized to sign contracts on Ann's behalf.

On the afternoon of March 21, Lawless informed Buyers that Ann was unwilling to sell the Property to Clymer at the $2.4 million price, and Buyers informed Lawless that Clymer would not pay more than $2.4 million. That afternoon, the Property's status on the MLS was changed from pending to active, signifying the Property was available for sale. Within two days, Buyers hired attorneys who demanded that the Champagnes sell the Property on the terms contained in the counteroffer Clymer purported to accept on March 18. After additional communications between the parties over the ensuing seven weeks failed to resolve their dispute, Buyers filed the present lawsuit. The Property was ultimately sold to a different buyer in May 2005.

The precise content of the conversation between Lawless and Clymer's agent, Mr. Murray, was disputed. According to Murray, Lawless stated the judge in the divorce proceeding had personally instructed Lawless to obtain a higher price, and Lawless therefore tried to get Clymer to pay $2.5 million, but Murray replied that Clymer already had a contract to buy the Property. Lawless denied stating she had personally spoken with the judge in the divorce proceeding. Instead, Lawless averred Ann's attorney (Childers) asked Lawless to remain available by telephone in case the judge handling the hearing on the divorce wanted information about the sale of the Property, but no telephone contact occurred. After that hearing, Lawless was told by Childers that Ann would not sign the contract, Lawless relayed that information to Murray, and Murray replied that Clymer would be "passing" on the Property and would instead be looking at other properties.

On March 23, 2005, the Property's status on the MLS was changed from active to pending, signifying the Property was subject to a pending sale to a third party, but on March 28, 2005, the Property's status on the MLS was again changed from pending to active.

Among the communications during that period was an April 21, 2005, letter from the attorneys for Ann and Richard that offered to sell the Property for $2.4 million on the same terms and conditions as contained in Counteroffer No. 1B, with an appropriate adjustment of dates (including the closing date) to mirror the time frames contained in Counteroffer No. 1B. That offer specified Clymer must accept the offer by 5:00 p.m. on April 22. The following day, the Champagnes (through their attorneys) agreed to extend the deadline to noon on April 23, but specified the signing date (for purposes of the calculating the dates for closing and other deadlines) would be deemed April 22, 2005. Although Clymer purported to accept this offer by an April 23 letter, her acceptance specified that "the signing date for purposes of calculating the dates [will] be April 25, 2005." The effect of Clymer's April 23 letter is discussed below.

II

PROCEDURAL BACKGROUND

A. The Lawsuit

Buyers' complaint pleaded claims against the Champagnes for breach of contract, alleging Richard signed Counteroffer No. 1B for himself and also signed for Ann under the authority of a July 22, 2004, Power of Attorney. Buyers alleged Clymer's timely and unconditional March 18, 2005, acceptance of Counteroffer No. 1B therefore created an enforceable contract to acquire the Property or, alternatively, that a contract was formed when she accepted the Champagnes' April 21 offer. The complaint sought damages from the Champagnes for breach of that contract.

Buyers' complaint alleged one claim focused solely on Realtors. That cause of action, styled as a claim for tortious interference with contractual relations, alleged Clymer and the Champagnes had entered into a contract for the purchase and sale of the Property, Realtors were aware of the contract, and Realtors' actions interfered with Clymer's ability to purchase the Property.

Buyers also pleaded claims against all parties, including Realtors, for intentional misrepresentation, negligent misrepresentation, and concealment. Insofar as the complaint alleged Realtors engaged in misrepresentations or concealments, the complaint alleged (1) on March 21 Lawless made verbal misrepresentations that she had personally been instructed by the judge in the divorce proceeding to obtain a higher price for the Property; (2) on March 21 Lawless had personally instructed Chicago Title to cancel the escrow; and (3) on March 21, March 23, March 28, and May 2, Realtors made entries on the MLS that misrepresented the sales status of the Property.

Although the complaint alleged other misrepresentations, it attributed those misrepresentations to defendants other than Realtors.

B. The Summary Judgment Motion

Realtors' motion for summary judgment asserted there was no triable issue of fact on Buyers' claim for tortious interference with contractual relations. Realtors argued the pleaded claim required proof that a valid contract existed between Clymer and the Champagnes, Realtors were aware of the contract and intended to induce its breach, and Realtors' wrongful conduct caused the Champagnes to breach the contract. Realtors asserted that no valid or enforceable contract was created and therefore an essential element of the claim could not be established. Realtors also asserted there was no triable issue of fact on whether Realtors' wrongful acts caused the Champagnes to breach the contract, because the only alleged wrongful conduct was that Realtors contacted Chicago Title to cancel the escrow and thereafter restored the Property to active status in the MLS. Realtors asserted the undisputed evidence showed their conduct followed Ann's decision not to sign Counteroffer No. 1B, and did not cause a breach of a valid contract.

Realtors asserted that summary judgment was proper on the fraud-based claims because the representations attributed to Realtors were either true or, alternatively, did not induce detrimental reliance by Buyers. Realtors asserted Lawless's March 18 call to Chicago Title advising that the proposed transaction was "on hold," and Lawless's subsequent March 22 call advising Chicago Title that the deal was "dead" and no escrow would be required were (1) true statements at the time they were made, and (2) were not intended to induce reliance by Buyers and did not induce reliance by Buyers. Realtors similarly asserted the March 21, March 23, March 28, and May 2 entries on the MLS were also (1) true statements at the time they were made, and (2) were not intended to induce reliance by Buyers and did not induce reliance by Buyers. Realtors finally asserted the last alleged misrepresentation regarding the purported directions by the judge in the divorce proceedings could not as a matter of law have induced justifiable or detrimental reliance by Buyers. On the concealment cause of action, Realtors argued each of the above elements was fatal to the concealment claim, and in addition asserted Buyers had no evidence Realtors owed fiduciary obligations to Buyers that gave rise to a duty of disclosure.

C. The Ruling

The court entered summary judgment in favor of Realtors. The court, addressing the fraud-based claims, found summary judgment was proper. The court concluded the March 21 representation regarding the purported directions by the judge in the divorce proceedings, even if false, could not as a matter of law have induced justifiable or detrimental reliance by Buyers because the alleged contract to purchase the Property had been formed, if at all, prior to Buyers' learning of the March 21 representation. On the second set of alleged misrepresentations, involving Lawless's calls to Chicago Title advising it to hold off proceeding with escrow and subsequently terminating further action by Chicago Title to consummate the transaction, the court concluded (1) these were not misrepresentations that induced reliance by Buyers, and (2) the conduct was instead actionable, if at all, as breach of contract or interference with contractual relations. On the final set of misrepresentations attributed to Realtors, involving the March 21, March 23, March 28, and May 2 entries on the MLS, the court concluded there was no evidence these were untrue statements at the time they were made, and there was no evidence Buyers justifiably relied on any representations contained in MLS designations occurring after the date the alleged contract was formed.

The court also concluded summary judgment for Realtors was proper on Buyers' claim for negligent interference with contractual relations because the only negligent conduct identified by Buyers were the representations previously identified and Buyers had not shown a triable issue of fact existed as to those representations.

III

LEGAL STANDARDS

The summary judgment procedure is directed at revealing whether there is evidence that require the fact-weighing procedure of a trial. " '[T]he trial court in ruling on a motion for summary judgment is merely to determine whether such issues of fact exist, and not to decide the merits of the issues themselves.' [Citation.] The trial judge determines whether triable issues of fact exist by reviewing the affidavits and evidence before him or her and the reasonable inferences which may be drawn from those facts." (Morgan v. Fuji Country USA, Inc. (1995) 34 Cal.App.4th 127, 131.) However, a material issue of fact may not be resolved based on inferences if contradicted by other inferences or evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 856.)

To prevail on a motion for summary judgment, a defendant must show one or more elements of the plaintiff's cause of action cannot be established or there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (o).) The evidence of the moving party is strictly construed and that of the opponent liberally construed, and any doubts as to the propriety of granting the motion are to be resolved in favor of the party opposing the motion. (Branco v. Kearny Moto Park, Inc. (1995) 37 Cal.App.4th 184, 189.) The trial court does not weigh the evidence and inferences, but instead merely determines whether a reasonable trier of fact could find in favor of the party opposing the motion, and must deny the motion when there is some evidence that, if believed, would support judgment in favor of the nonmoving party. (Alexander v. Codemasters Group, Limited (2002) 104 Cal.App.4th 129, 139.) Consequently, summary judgment should be granted only when a moving party is entitled to judgment as a matter of law. (§ 437c, subd. (c).)

Because a motion for summary judgment raises only questions of law, we independently review the parties' supporting and opposing papers and apply the same standard as the trial court to determine whether there exists a triable issue of material fact. (City of San Diego v. U.S. Gypsum Co. (1994) 30 Cal.App.4th 575, 582; Southern Cal. Rapid Transit Dist. v. Superior Court (1994) 30 Cal.App.4th 713, 723.) In practical effect, we assume the role of a trial court and apply the same rules and standards governing a trial court's determination of a motion for summary judgment. (Lopez v. University Partners (1997) 54 Cal.App.4th 1117, 1121-1122.) We liberally construe the evidence in support of the party opposing summary judgment (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142), and assess whether the evidence would, if credited, permit the trier of fact to find in favor of the party opposing summary judgment under the applicable legal standards. (Cf. Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850.)

IV

ANALYSIS

A. Summary Judgment on the Tortious Interference With Contract Claim

Buyers alleged Clymer entered into a contract with the Champagnes, Realtors knew Realtors' actions would interfere with Clymer's ability to consummate the purchase of the Property, and Realtors' actions were in fact the proximate cause of Buyers' lost contractual benefits. Although the complaint alleged it was Realtors' negligent acts that interfered with the contract, we construe Buyers' complaint as pursuing a claim for intentional interference with contractual relations because Buyers' arguments (both below and on appeal) focused on the theory that Realtors intentionally acted to interfere with the contract. Moreover, California does not recognize a claim for negligent interference with contractual relations, at least absent special circumstances not alleged to be present here (see LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 348-349), and we therefore evaluate the ruling granting summary judgment utilizing the legal principles governing a claim for intentional interference with contractual relations. On appeal, Realtors argue we should affirm the summary judgment ruling because Buyers, by pleading negligent conduct, failed to state a claim and such failure may be raised for the first time on appeal. However, even assuming Realtors may raise the pleading defects at this stage, we would be required to treat the motion as one seeking judgment on the pleadings and to remand to permit Buyers an opportunity to file an amended pleading if it appears there were facts upon which a legally cognizable claim could be stated. (Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663-1664.) We therefore elect to address the ruling on the merits rather than resolving the appeal on the purported insufficiency of the pleadings. (Ibid.)

General Principles

A claim for tortious interference with contractual relations requires proof that (1) a valid contract existed between the plaintiff and another party; (2) the defendant was a third party who had knowledge of the contract and intended to induce a breach of the contract; (3) the contract was breached, (4) the breach was a proximate result of the defendant's wrongful or unjustified conduct, (5) the plaintiff suffered resulting damage. The breach-inducing conduct by the defendant must be intentional and must either have been unlawful conduct or conduct otherwise lawful but lacking sufficient justification for the interference. (Abrams & Fox, Inc. v. Briney (1974) 39 Cal.App.3d 604, 607-608.)

The first element of a cause of action for intentional interference with a contract is that the underlying contract was an enforceable contract because "[w]here there is no existing, enforceable contract, only a claim for interference with prospective advantage may be pleaded." (PMC, Inc. v. Saban Entertainment, Inc. (1996) 45 Cal.App.4th 579, 601 (PMC), disapproved on other grounds by Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1159 fn. 11.) In Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla VillageSquare Venture Partners (1997) 52 Cal.App.4th 867 (Bed, Bath & Beyond), this court concluded a plaintiff could not maintain a cause of action against a third party for intentional interference with a contractual relationship when the underlying contract was unenforceable under the statute of frauds. (Id. at pp. 877-880.) The Bed, Bath & Beyond court, noting the PMC court concluded a voidable or unenforceable contract could not support a cause of action for intentional interference with contractual relations, explained PMC's holding resulted from its recognition of the inherent differences between the two interference torts, based in large part on the analysis of those differences by the Supreme Court in Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376 (Della Penna). The Della Penna court, after noting "the need to draw and enforce a sharpened distinction between claims for the tortious disruption of an existing contract and claims that a prospective contractual or economic relationship has been interfered with by the defendant" (id. at p. 392), emphasized the two torts were analytically different, explaining:

"The courts provide a damage remedy against third party conduct intended to disrupt an existing contract precisely because the exchange of promises resulting in such a formally cemented economic relationship is deemed worthy of protection from interference by a stranger to the agreement. Economic relationships short of contractual, however, should stand on a different legal footing as far as the potential for tort liability is reckoned. Because ours is a culture firmly wedded to the social rewards of commercial contests, the law usually takes care to draw lines of legal liability in a way that maximizes areas of competition free of legal penalties. [¶] A doctrine that blurs the analytical line between interference with an existing business contract and interference with commercial relations less than contractual is one that invites both uncertainty in conduct and unpredictability of its legal effect. The notion that inducing the breach of an existing contract is simply a subevent of the 'more inclusive' class of acts that interfere with economic relations, while perhaps theoretically unobjectionable, has been mischievous as a practical matter. Our courts should, in short, firmly distinguish the two kinds of business contexts, bringing a greater solicitude to those relationships that have ripened into agreements, while recognizing that relationships short of that subsist in a zone where the rewards and risks of competition are dominant." (Ibid.)

PMC also recognized, as have other courts (see Guard-Life Corp. v. S. Parker Hardware Mfg. (1980) 428 N.Y.S.2d 628), that when a contract may be avoided by the other contracting party at his election, the party seeking to impose liability enjoys no legally enforceable right to performance, but instead has a mere hope that a future contractual relationship may arise. (PMC, supra, 45 Cal.App.4th at p. 599.) Accordingly, PMC reasoned "[i]t is logical to force the plaintiff to plead and prove an enforceable contract when stating a cause of action for intentional interference with contract. If a party is not obligated to perform a contract and may refuse to do so at his election without penalty, then the other party to that agreement enjoys nothing more than an expectancy. A stranger intentionally interfering with that relationship quite obviously does not disturb an enforceable contract but only a prospective economic relationship." (Id. at pp. 599-600.)

In Bed, Bath & Beyond, this court "agree[d] with PMC's analysis and conclusion that a cause of action for intentional interference with contractual relations requires an underlying enforceable contract, and where the underlying contract is unenforceable, only a claim for interference with prospective economic advantage lies. We believe this rule is a proper extension of the California Supreme Court's admonition that courts should not blur the analytical line between the two interference torts and its recognition that the 'formally cemented economic relationship' created by an 'existing contract' is entitled to greater solicitude than a relationship falling short of that. [Quoting Della Penna, supra, 11 Cal.4th at p. 392.] [¶] Accordingly, plaintiff in the instant case has not sufficiently pled and cannot maintain a cause of action for intentional interference with a contractual relationship because the alleged lease agreement upon which plaintiff's action is based is unenforceable as a matter of law." (Bed, Bath & Beyond, supra, 52 Cal.App.4th at pp. 879-880, fn. omitted.)

On appeal, Buyers asserts that cases such as Zimmerman v. Bank of America (1961) 191 Cal.App.2d 55 permit a third party to be liable in tort for inducing a party to breach a contract even if the contract is unenforceable as between the contracting parties. However, these cases did not clearly distinguish between tort liability for interference with a contract and tort liability for interference with prospective economic advantage because they were decided before Della Penna when the distinction was still blurred in California case law. The rule articulated in PMC and Bed, Bath & Beyond is not inconsistent with these cases because they do not preclude imposition of tort liability for interference with an unenforceable contract, but instead limit an aggrieved plaintiff to pursuing a claim for interference with prospective economic advantage when the underlying contract is unenforceable.

Buyers also assert that, when considering whether there was a triable issue of material fact on the claim for tortious interference with contractual relations, we must disregard whether the statute of frauds may have rendered the contract unenforceable because the statute of frauds is an affirmative defense that must be raised or be deemed waived, and because it was not raised below it may not be considered on appeal. However, Realtors' answer specifically raised whether the underlying contract was enforceable, and Realtors' motion for summary judgment specifically asserted the alleged underlying contract "does not exist" and cited Civil Code section 1624, subdivision (a)(3) (which codifies the statute of frauds for contracts for the sale of real Property) to support their argument that no enforceable contract existed. We therefore reject Buyers' assertion that Realtors are seeking to raise unenforceability of the contract for the first time on appeal.

Analysis

We conclude the trial court correctly found there was no triable issue of material fact on Buyers' claim for interference with a contract. Ignoring the enforceability issues presented by the statute of frauds, there was no evidence Clymer timely accepted the offer under the terms of Counteroffer No. 1B. (Cf., Simons v. Young (1979) 93 Cal.App.3d 170, 189 [failure to timely accept offer bars relief].) Counteroffer No. 1B specified it would expire and be deemed revoked unless the offer was signed by the buyer and a "a Copy of the Signed [Counteroffer No. 1B] is personally received by [Richard] . . .by 3-18-05 [] at 2 [p.m.]." Although Clymer signed Counteroffer No. 1B and denoted that her signature was affixed at 2:00 p.m. on March 18, the only evidence that a written copy was ever sent was an exhibit containing a fax transmittal line showing it was sent to Lawless nearly three hours after the 2:00 p.m. deadline. Although Buyers "disputed" the acceptance was untimely delivered, there was no competent evidence raising a triable issue of fact whether there had been a transmission of the acceptance sent prior to the deadline. The signature on the exhibit represented that it was signed at 2:00 p.m., which, if accurate, would have made it physically impossible to ensure it was transmitted and received by 2:00 p.m. Moreover, the only evidence submitted by Buyers regarding timely acceptance was Clymer's agent's deposition testimony that he "believe[d] [he] faxed it in mid-afternoon," and the agent's claim that the exhibit showing a late transmission was misleading because he sent a copy earlier in the day to a different fax number. However, the record is devoid of any "Copy of the Signed Counter Offer" showing Richard or his agent "personally received" such copy by 2:00 p.m., and there was no other documentary evidence submitted by Buyers, like a fax transmission report evidencing the earlier transmission or even telephone billing records supporting the agent's implied assertion that he placed a call to Lawless's fax number around the 2:00 p.m. deadline containing the timely transmitted acceptance, which could have raised a triable issue of fact on whether the exhibit showing untimely acceptance was not the "Copy of the Signed Counter Offer" that actually comprised the transmitted acceptance of the counteroffer. We conclude there is no competent evidence suggesting a triable issue of fact on whether Clymer timely accepted the offer to create an enforceable contract. The absence of this element is fatal to Buyers' claim against Realtors for intentional interference with contractual relations under the rationale of Bed, Bath & Beyond because it establishes there was no contract.

Buyers alternatively argue that, even if the acceptance was untimely, a jury could have found the untimeliness was waived by Ann's attorney (Childers), because he wrote a letter on March 18 stating "on behalf of my client, [Ann], she agrees to sign the offer as written . . . . I will provide [Ann] the contract documents you have faxed to me for signature on Monday, March 21, 2005. Thereafter, I will FedEx those documents back to you directly." However, because the evidence is unclear whether this letter was sent by Childers before or after the time deadline had expired, it is uncertain whether the letter could be deemed a waiver of the untimely acceptance. More importantly, however, there is no evidence Childers, as Ann's attorney, was empowered to waive untimeliness on Richard's behalf, nor is there any evidence Richard (personally or through an authorized agent) waived the time deadline.

Additionally, the letter itself stated Childers would give the documents to Ann for her signature, thus contemplating that a further act by Ann (e.g. her signature) was required. This was consonant with the earlier drafts of the Champagnes' counteroffers, all of which were signed solely by Richard with the caveat that final acceptance of the counteroffer "is subject to written approval of [Ann] or court order." When the parties specify that a party's signature on the contract is required, the contract is not created until the signature is affixed to the contract. (See, e.g., Stromer v. Browning (1966) 65 Cal.2d 421, 427, fn. 2; Fugate v. Cook (1965) 236 Cal.App.2d 700, 703.)

On appeal, Buyers asserts that an April 21 letter, signed by both Ann's and Richard's attorneys, raised a triable issue of fact on whether Ann and Richard waived the untimeliness of Clymer's acceptance. We reject Buyers' reliance on this April 21 letter for two reasons. First, the letter on its face constituted an offer to sell the Property, subject to specified conditions, which Clymer was required to accept, rather than a subsequent ratification of her March 18 acceptance. Moreover, even if this letter somehow waived noncompliance with the time deadlines, it would have at best given rise to an enforceable agreement as of April 21, 2005, when Ann and Richard allegedly agreed to be bound by Buyers' untimely acceptance. However, Buyers did not allege in their complaint that Realtors were liable for interfering with this new agreement. (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064-1065 [party cannot avoid summary judgment by raising factual conflicts on issues outside the scope of the complaint].) Additionally, there is no evidence that anything done by Realtors after April 21, 2005, caused Ann or Richard to breach the newly arisen contract, which would be fatal to a claim for intentional interference with contractual relations as to this new agreement.

Additionally, there is no evidence raising a triable issue of fact on whether the failure of Ann and Richard to proceed with the sale after March 18 was caused by anything Realtors did. The only conduct Buyers alleged was committed by Realtors was that Lawless (1) notified Chicago Title on March 22 that the deal was "dead" and no escrow would be required, and (2) the same afternoon Realtors changed the Property's status on the MLS from pending to active, signifying the Property was available for sale. However, the undisputed evidence was that both of these acts by Realtors occurred after Lawless informed Buyers on March 21 that Ann was unwilling to sell the house to Clymer at the $2.4 million price and after Buyers replied that Clymer would not pay more than $2.4 million. Because Realtors' alleged actions followed and reflected Ann's decision not to proceed with the sale, there is no triable issue of fact on an essential element of Buyers' claim that the only intentional conduct allegedly committed by Realtors was a proximate cause of the failure of the sale.

On March 23, 2005, the Property's status on the MLS was again changed, this time from active to pending, signifying the Property was subject to a pending sale to a third party. On March 28, 2005, the Property's status on the MLS was again changed from pending to active, apparently signifying the Property was again available for sale.

We conclude the competent evidence showed Buyers could not raise issues of fact regarding either timely acceptance of the offer or intentional conduct by Realtors that caused Ann and Richard to breach any contractual obligation. Accordingly, it is unnecessary definitively to decide whether the alleged contract was also unenforceable under the statute of frauds, although we have substantial doubts the alleged contract complied with the statute of frauds, which would independently foreclose Buyers' claim for intentional interference with contractual relations under the rationale of Bed, Bath & Beyond. It is undisputed that (1) only Richard signed Counteroffer No. 1B, (2) Ann did not personally sign that document, (3) a contract to convey real property is unenforceable under the statute of frauds if not signed by the party against whom the contract is to be enforced (Civ. Code, § 1624, subd. (a)(3)), and (4) a husband's signature on a contract to sell realty owned by himself and his wife, without more, will not satisfy the statute of frauds. (See, e.g. O'Banion v. Paradiso (1964) 61 Cal.2d 559, 563.) Although Buyers assert Richard's signature alone was sufficient to bind Ann because Richard held a power of attorney for Ann recorded in August 2004, there is substantial doubt that such power of attorney remained valid considering the divorce proceedings (see Prob. Code, § 4154), and whether Richard's signature (by failing to denote he was signing for Ann under power of attorney) would be effective to bind Ann. (See, e.g., Civ. Code, § 1095 ["When an attorney in fact executes an instrument transferring an estate in real property, he must subscribe the name of his principal to it, and his own name as attorney in fact."]; Civ. Code, § 2337 ["An instrument . . . by which an agent intends to bind his principal . . . does bind him if such intent is plainly inferable from the instrument itself."].) We conclude the trial court correctly entered summary judgment against Buyers on their claim for intentional interference with contractual relations.

We have considered the plethora of other arguments raised by Buyers attacking the summary judgment order on the intentional interference with contractual relations claim and conclude the arguments do not warrant reversal. For example, Buyers argue summary judgment was improper because there are triable issues of fact on whether Realtors conspired to interfere with contractual relations. However, this issue was not raised below, and is waived. (DiCola v. White Brothers Performance Products, Inc. (2008) 158 Cal.App.4th 666, 675-676 [on review of order granting summary judgment, appellate court does not consider arguments or theories not advanced by plaintiffs in the trial court.].) Moreover, a conspiracy allegation, even if proven, merely renders the conspirator jointly liable for the torts of others. (See, e.g., Barney v. Aetna Casualty & Surety Co. (1986) 185 Cal.App.3d 966, 983.) Because we have concluded there was no enforceable contract for anyone to interfere with, there is no one with whom Realtors could be jointly liable. Buyers alternatively argue that, if no contract was formed, Realtors can be liable for breach of warranty of authority for expressly or impliedly representing they had the authority to bind Ann. Again, this claim was neither pleaded (AARTS Productions, Inc. v. Crocker National Bank, supra, 179 Cal.App.3d at pp. 1064-1065 [alleged triable issues of fact on unpleaded claims irrelevant to appellate review of trial court's summary judgment ruling]) nor raised in opposition to the motion below, and is therefore waived. (DiCola v. White Brothers Performance Products, Inc., supra.) We decline serially to discuss each of the innumerable arguments raised on appeal, except insofar as to note that most of the arguments apparently were not framed by the pleadings nor raised below, and /or are legally insufficient to obtain reversal.

B. Summary Judgment on the Fraud Claims

Buyers' complaint alleged three sets of misrepresentations attributable to Realtors. First, the complaint alleged that, on March 21, Lawless misrepresented that the judge in the Champagnes' divorce proceedings had directed Lawless to obtain a higher price for the Property. Second, the complaint alleged Lawless's calls to Chicago Title, advising it to hold off proceeding with escrow activities and subsequently terminating further action by Chicago Title to consummate the transaction, constituted actionable misrepresentations. Finally, the complaint alleged Realtors made entries on the MLS (on March 21, March 23, March 28, and May 2) that were actionable misrepresentations.

A fraud claim requires evidence (1) the defendant made a representation of fact, (2) which he knew to be false, (3) he made it with the intent to induce reliance by the plaintiff, (4) the plaintiff actually and justifiably relied on the representation, and (5) there was resulting injury from the reliance. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Although Buyers' complaint purported to plead different claims against Realtors, each claim was premised on the same above-referenced conduct by Realtors.

Buyers' complaint contained causes of action labeled fraud, intentional misrepresentation, negligent misrepresentation, and concealment. There appears to be no difference between the fraud and intentional misrepresentation claims, and indeed, the latter claim mirrors the allegations of the former claim. The negligent misrepresentation claim, although relying on the same statements and conduct as the intentional misrepresentation claim, alters the allegations only insofar as it alleged Realtors knew or should have known the true facts but made the representations without any sufficient basis for believing the facts to be true. Buyers' final claim alleged concealment, which again relied on the same statements and conduct as the intentional misrepresentation claim but alleged Realtors concealed the true facts from Buyers. Because of our conclusions, it is unnecessary to examine the differences between these various forms of misrepresentation, or to evaluate whether Buyers adequately pleaded causes of action for either concealment or negligent misrepresentation. (But see Goodman v. Kennedy (1976) 18 Cal.3d 335, 346-347 [claim for concealment fails absent allegations that defendant was a fiduciary, or actively concealed undisclosed facts, or had sole access to facts and knew those facts were not reasonably available to the plaintiff].)

We agree with the trial court that the March 21 representation regarding the purported directions by the judge in the divorce proceedings, even if false, cannot as a matter of law support a fraud claim because there is no evidence Buyers justifiably or detrimentally relied on Lawless's statements. The alleged contract to purchase the Property had been formed, if at all, prior to Buyers learning of the March 21 representation, but Buyers' theory of detrimental reliance appeared to rest almost exclusively on the fact that Clymer entered into the purported contract to acquire the Property on March 18, three days before the alleged misrepresentation was uttered. In neither the proceedings below, nor in this appeal, have Buyers made any effort to identify the evidence raising a triable issue of material fact on whether they detrimentally relied on Lawless's March 21 representation. Because Clymer's detrimental reliance occurred prior to Lawless's March 21 representation, and Buyers identify no additional acts of reliance predicated on Lawless's March 21 representation, this alleged misrepresentation cannot support a recovery for fraud.

On appeal, Buyers identify other acts of reliance, including preparing a loan application and visiting the Property in the three days after the alleged contract was formed. However, these acts in reliance (like Clymer's act of reliance in entering the purported contract) preceded Lawless's March 21 representation. The sole post-March 21 event identified by Buyers--Murray's April 7, 2005, visit to the Property with a water intrusion expert--is unaccompanied by any averment that this act was in reliance on Lawless's March 21 representation. Indeed, it is difficult to logically understand how Lawless's alleged statement (that Ann would not sign the agreement to sell the Property because the judge in the divorce proceeding had instructed Lawless to obtain a higher price) would be relied on by Buyers to visit the Property three weeks later, and the record appears to be devoid of any effort to draw a connection between the two events.

The second set of alleged misrepresentations--Lawless's calls to Chicago Title advising it to hold off and ultimately terminating further involvement by Chicago Title in the transaction--suffers from the same deficiency, as well as others. Lawless's representation to Chicago Title (that the deal was "dead" and no escrow would be required) occurred on March 22, after all of Buyers' acts in reliance had transpired, thereby barring any recovery in fraud premised on this representation. Additionally, the record is devoid of any evidence Lawless's representation to Chicago Title was ever communicated to Buyers, which necessarily precludes any claimed acts of reliance thereon. Finally, there is no evidence the representation was a false statement of fact. When Lawless told Chicago Title that no escrow would be required because the deal was "dead," she was expressing nothing more than an opinion about the legal consequences of, and the future events that would result from, Ann's (and perhaps Richard's) decision not to go forward with the transaction. Statements of opinion and predictions about the future are not actionable representations of fact. (See, e.g., Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells (2000) 86 Cal.App.4th 303, 307-310 [actionable misrepresentation must be made about past or existing facts; statements regarding future events are merely deemed nonactionable opinions].)

The final misrepresentations attributed to Realtors were the various entries on the MLS on March 21, March 23, March 28, and May 2. These allegations suffer from the same deficiencies discussed above. First, there was no evidence Buyers justifiably or detrimentally relied on any representations contained in MLS designations. All of these entries occurred after the alleged contract was formed (and indeed occurred after Realtors told Buyers that Ann would not be going forward with the transaction) and there was no evidence Buyers did anything in detrimental reliance on the later changes in the MLS listing. Second, there was no evidence Realtors knew the MLS entries were false. These entries did nothing more than signify that the Property was (or was not) available for sale to prospective buyers on the date of the relevant entry. There was no evidence the Property was available for sale to prospective buyers when the MLS represented it was not available, or that the Property was not being offered for sale to prospective buyers when the MLS represented it was being offered for sale, and therefore there was no evidence the statements in the MLS listings were false at the time they were made.

The March 21 entry changed the Property's status from pending to active. The March 23 entry changed the Property's status from active to pending. The March 28 entry changed the Property's status from pending to active. The May 2 entry removed the Property from its active status, which may have reflected the pending sale to the third party.

On appeal, Buyers allege that representing the Property was available was false because Buyer's contractual rights precluded the Champagnes from selling it to a third party. While Buyer's contract may have created a cloud on any title that a third party may have obtained from a subsequent sale, the Champagnes still owned the Property and could make it available for sale (as represented in the MLS listings) subject to such cloud.

On appeal, Buyers raise several contentions to argue it was improper to grant Realtors' summary judgment motion as to Buyers' fraud-based claims. Buyers' primary argument, which in effect ignores whether the pleaded representations by Realtors would support Buyers' fraud-based claims, asserts that other persons (e.g. Ann, Richard, and the attorneys for Ann and Richard) made false representations as part of a scheme to defraud Buyers, Realtors were coconspirators in that scheme, and therefore Realtors are jointly and severally liable for the damages caused when Buyers detrimentally relied on these other parties' misrepresentations. Although Buyers' complaint obliquely alleged that "defendants' course of conduct . . . constitute[d] a fraudulent scheme to sell the Property to a third party at a price higher than the Agreement price but to keep Clymer as a back up," Buyers' opposition to Realtors' summary judgment motion asserted Realtors were liable for their own misrepresentations without any hint Buyers sought to prove Realtors were derivatively liable under civil conspiracy principles for the alleged misrepresentations of the Champagnes or their attorneys. Because this argument was not raised below, it is waived. (DiCola v. White Brothers Performance Products, Inc., supra, 158 Cal.App.4th at pp. 675-676 [appellate court does not consider arguments or theories not advanced by plaintiffs in the trial court when reviewing order granting summary judgment].) Buyers' remaining arguments are subject to similar deficiencies. For example, Buyers assert there are triable issues of fact regarding Realtors' potential liability for "fraudulent breach of contract" or "fraudulent denial of the existence of the contract." Neither theory was pleaded in the complaint, and neither theory was raised in opposition to the summary judgment motion, and therefore such claims are waived. (Ibid.) Moreover, it appears those theories seek to impose derivative liability under conspiracy principles, which subjects those theories to the same defects previously discussed.

Even were the issue preserved for appeal, the evidence was undisputed that Realtors were agents employed by the Champagnes to sell the house and Buyers on appeal cite no evidence that would take Realtors outside of the protections against a conspiracy claim ordinarily afforded under the so-called "agent's immunity" rule. (See, e.g., Doctors' Co. v. Superior Court (1989) 49 Cal.3d 39, 48.) Moreover, even without the agent's immunity rule, conspiracy liability requires more than mere awareness of the active tortfeasor's conduct and instead requires that Realtors knew of the planned tortious conduct and intended to aid its commission. (See, e.g., Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1582-1585.) There was no argument below suggesting Realtors knew the other defendants were planning to mislead Buyers to their detriment or that Realtors intended to aid in such fraud, which would be fatal to Buyers' conspiracy claim even had the issue been preserved below.

Finally, the court in Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85 largely overruled Seaman's Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752 by eliminating the tort of fraudulent or bad faith breach of contract claims in the noninsurance context, "at least in the absence of violation of 'an independent duty arising from principles of tort law' [citation]" (Freeman & Mills, at p. 102), and the present alleged contract is not an insurance contract. We conclude the trial court correctly granted summary judgment in favor of Realtors on Buyers' fraud-based claims.

Buyers assert that Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979 has resurrected Seaman's whenever a plaintiff alleges the defendant engaged in misrepresentations to avoid contractual liability. However, Robinson's holding was narrow. Robinson merely held that when a buyer contracts to purchase specific goods but receives nonconforming goods in breach of the contract, the buyer will not be limited to contract damages if the seller represents that the goods it is supplying to the buyer conform to certain contractual specifications, the seller knows this to be false, and in reliance on the misrepresentation the buyer uses the goods and suffers consequential damages. Under those circumstances, Robinson noted, the tortious conduct is both separate from the breach itself and caused damages independent of the contractual breach. (Id. at pp. 989-991.) Buyers made no effort below to articulate how this matter fell within Robinson, and on appeal they have not proffered a coherent explanation of how Robinson would save their fraud claim against Realtors.

DISPOSITION

The judgment is affirmed. Defendants are entitled to costs on appeal.

WE CONCUR: McCONNELL, P. J., O'ROURKE, J.


Summaries of

Clymer v. Pickford Realty, Ltd.

California Court of Appeals, Fourth District, First Division
Oct 24, 2008
No. D051032 (Cal. Ct. App. Oct. 24, 2008)
Case details for

Clymer v. Pickford Realty, Ltd.

Case Details

Full title:DANA CLYMER et al., Plaintiffs and Appellants, v. PICKFORD REALTY, LTD. et…

Court:California Court of Appeals, Fourth District, First Division

Date published: Oct 24, 2008

Citations

No. D051032 (Cal. Ct. App. Oct. 24, 2008)

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