Opinion
2d Civil B315851
07-21-2022
ANDREW DONEN, et al., Plaintiffs and Appellants, v. GARY OPPENHEIMER et al., Defendants and Appellants.
Kleinberg & Lerner and Michael Hurey, for Plaintiffs and Appellants. Anaya Law Group, Alana B. Anaya and Jonathan Malek, for Defendants and Appellants.
NOT TO BE PUBLISHED
Superior Court County of Ventura No. 56-2018-00507024-CU-NP-VTA Benjamin F. Coats, Judge
Kleinberg & Lerner and Michael Hurey, for Plaintiffs and Appellants.
Anaya Law Group, Alana B. Anaya and Jonathan Malek, for Defendants and Appellants.
YEGAN, J.
Defendants Gary and Fran Oppenheimer (the Oppenheimers) leased a residence (the property) to Elizabeth Donen (Elizabeth), a licensed real estate agent. The lease granted Elizabeth an option to purchase the property for $2,850,000. Elizabeth exercised the option, but the Oppenheimers refused to sell the property. Elizabeth and her husband, plaintiff Andrew Donen, hereafter collectively referred to as "the Donens," filed an action against the Oppenheimers for breach of contract, promissory estoppel, and specific performance.
We refer to the parties by their names to ease the reader's task.
A court trial ensued. It found that the Oppenheimers had breached the option clause, but it did not award the Donens damages under the cause of action for breach of contract. Instead, under the promissory estoppel cause of action, the court awarded them damages of $56,762.16 for improvements they had made to the property in reliance on the Oppenheimers promise to sell it.
The Donens appeal from the judgment to the extent it denied them damages under the cause of action for breach of contract. In addition, they contend that the court failed to grant them prejudgment interest on the $56,762.16 awarded under the promissory estoppel cause of action.
The Oppenheimers cross-appeal from the judgment. They claim that the Donens are not entitled to recover any damages because the Donens failed to show that Elizabeth would have been able to purchase the property had the Oppenheimers not breached the option clause. We affirm.
Trial Court's Statement of Decision
In their opening brief the Donens state: "There is no serious dispute about the relevant facts. [We] summarize the facts from the trial court's Statement of Decision ...." ~
Elizabeth and the Oppenheimers signed the lease in March 2015. The lease provided: "To exercise the Option to Purchase, the Tenant must deliver to the Landlord, a written notice of Tenant[']s intent to purchase, not less than ninety days prior to the expiration of the Lease Term." The lease was due to expire on September 31, 2016.
In its statement of decision, the trial court found that in June 2016 Elizabeth had given timely notice to the Oppenheimers of her intent to exercise the option to purchase the property. The court also found that Elizabeth "had the ability to complete the sale and would have done so in a timely manner" had the Oppenheimers been willing to sell the property.
The Donens vacated the property in December 2016 after the Oppenheimers had refused to sell it. The court concluded that the Oppenheimers had "breached the contract by refusing to sell the property to Elizabeth . . . for $2,850,000 in December of 2016."
The trial court determined that, at the time of the Oppenheimers' breach of the option clause, the fair market value of the property was $3,200,000. It noted, "Gary Oppenheimer conceded that the value of the property was $3,200,000, testifying that the $2,850,000 figure was reached by deducting the amount he believed would be paid as a commission to a real estate agent from the $3,200,000 value of the property, because Elizabeth Donen was an agent.... [¶] . . . [T]he testimony of Gary
Oppenheimer and Elizabeth Donen . . . established that the sales price was negotiated in recognition that a commission would have been paid to a real estate broker on the sale." Gary Oppenheimer testified: "The house was marketable and valued at about $3,200,000. And because Elizabeth was an agent, we kind of deducted the commission that would have been paid to a third party and we came up with [$]2,850,000."
The court continued: "In other words, the $3,200,000 'fair market value' of the property included a second component of $350,000 in commissions that were waived by [Elizabeth]. Because the consideration for the discount was [Elizabeth's] work as a real estate agent, the value of these services must be included to calculate the true contract price. Because the value of the services was agreed to be $350,000, the true contract price is $3,200,000. Stated another way, the parties have agreed that in a scenario where a willing buyer may have paid $3,200,000 (including real estate commissions) in a sale, [the Oppenheimers] would have realized only $2,850,000 from the sale, which was the agreed price here."
The trial court observed that, where there is a breach of a contract to sell real property, the plaintiff is entitled to "[t]he difference between the fair market value of the property on the date of the breach and the contract price." The Donens were entitled to recover "zero dollars because the fair market value of the property [$3,200,000] is the same as the true contract price [$2,850,000 plus Elizabeth's commission of $350,000]."
As to the cause of action for promissory estoppel, the trial court concluded: "The option to purchase . . . was a promise to sell the property if the option was exercised .... In reliance on the option to purchase, [the Donens] undertook construction and improvements on the property." Since the Oppenheimers did not fulfill their promise to sell, the Donens were entitled to recover expenses of $56,762.16 they had incurred in making improvements to the property.
THE DONENS' APPEAL
Damages for Breach of the Option Clause
For breach of the option clause, the Donens contend that the trial court should have awarded damages of $350,000, i.e., the difference between the fair market value of the property ($3,200,000) and the option price ($2,850,000). The only authority they cite is Civil Code section 3306, which provides in relevant part, "The detriment caused by the breach of an agreement to convey an estate in real property, is deemed to be . . . the difference between the price agreed to be paid and the value of the estate agreed to be conveyed at the time of the breach ...."
All statutory references are to the Civil Code.
In their opening brief the Donens argue: "Section 3306 does not include any mention of a 'true contract price.' The only numbers which are relevant are the 'amount agreed to be paid' and the 'value of the estate.' . . . [¶] . . . The 'words of the contract' do not mention commissions or a corresponding increase in the price. It was wrong for the court to try and insert this issue into the agreement when the parties were silent on the issue [in the contract]. The court instead used parol evidence [the testimony of Elizabeth and Gary Oppenheimer] to vary the terms of the written agreement, which is generally not permitted under California law." The Donens' argument ends at this point with no further explanation or citation to authority. The Donens' reply brief adds nothing to the argument; it does not mention the parol evidence rule.
The Donens' argument is forfeited because it is not supported by meaningful legal and factual analysis with citations to authority and facts in the record. Except for a citation to the court's statement of decision, which is against the Donens, and a citation to the option clause, there are no citations to facts in the record. The Donens do not discuss the parol evidence rule or explain why its application should have resulted in the exclusion of Elizabeth's and Gary Oppenheimer's testimony as to how the $2,850,000 option price had been calculated. Nor do the Donens set forth the witnesses' testimony on this issue. In addition, the Donens do not show that they objected to the witnesses' testimony based on the parol evidence rule. (See City etc. of San Francisco v. City Inv. Corp. (1971) 15 Cal.App.3d 1031, 1038 ["the technical general objection here made without any specific objection on the basis of the parol evidence rule deprived the court below of the opportunity to rule on the matter at that time, and the question of [the] parol evidence is improperly raised for the first time on appeal"].) We electronically searched both the reporter's and clerk's transcripts for the word "parol." Our search did not turn up a single use of the word.
"The . . . court's judgment is presumed to be correct, and it is appellant's burden to affirmatively show error. [Citation.] To demonstrate error, appellant must present meaningful legal analysis supported by citations to authority and citations to facts in the record that support the claim of error. [Citations.] When a point is asserted without argument and authority for the proposition, 'it is deemed to be without foundation and requires no discussion by the reviewing court.'" (In re S.C. (2006) 138 Cal.App.4th 396, 408; see also Fernandes v. Singh (2017) 16 Cal.App.5th 932, 942-943 ["a brief must contain '"meaningful legal analysis supported by citations to authority and citations to facts in the record that support the claim of error"' . . . or else we will deem all points 'to be forfeited as unsupported by "adequate factual or legal analysis"'"].) "[C]onclusory claims of error[, such as the claim asserted here by the Donens,] will fail." (In re S.C., supra, at p. 408.)
Prejudgment Interest
The Donens maintain that the trial court erroneously failed to grant prejudgment interest on the damages awarded for their promissory estoppel claim. The Oppenheimers assert that the Donens were not entitled to prejudgment interest because they failed to make a timely claim for such interest.
The Donens made a timely claim. "[P]rejudgment interest should be awarded in the judgment on the basis of a specific request therefor made before entry of judgment." (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 830.) In the complaint's prayer for relief, the Donens requested "[p]re-judgment interest on any recovery." Before the court filed its statement of decision, the Donens filed a brief in which they requested "interest at the legal rate of 10% from the date of the filing of the original complaint."
The Donens argue that they are entitled to prejudgment interest pursuant to section 3306, which provides in part, "The detriment caused by the breach of an agreement to convey an estate in real property" shall include "consequential damages according to proof, and interest." (Italics added.) In Rifkin v. Achermann (1996) 43 Cal.App.4th 391, 397, the court concluded that "the phrase 'and interest' should . . . be read as referring to the generally applicable provisions of section 3287 regarding prejudgment interest."
Section 3287, subdivision (a) provides that a plaintiff is entitled to recover prejudgment interest if he "is entitled to recover damages certain, or capable of being made certain by calculation." "Under section 3287(a), 'the court has no discretion, but must award prejudgment interest upon request, from the first day there exists both a breach and a liquidated claim.'" (Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4th 498, 535.) "The test for determining certainty under section 3287(a) is whether the defendant knew the amount of damages owed to the claimant or could have computed that amount from reasonably available information. [Citation.] Uncertainty as to liability is irrelevant." (Ibid.)
"'[T]he cases indicate that where there is a large discrepancy between the amount of damages demanded in the complaint and the size of the eventual award, that fact militates against a finding of the certainty mandated by [section 3287, subdivision (a)].' . . . The greater the disparity between the complaint and the damages, . . . the less likely prejudgment interest is appropriate." (Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 961.)
Here, there is a great disparity between the amount of damages claimed in the cause of action for promissory estoppel -"no less than $200,000" - and the amount awarded by the court -$56,762.16. The trial court disallowed the Donens' claimed labor expenses of $35,100 because they "had no record of these expenses." It also disallowed the Donens' claimed expenses of $47,097.30 "for furnishings purchased to outfit the property." The court reasoned, "The testimony was uncontroverted that nothing prevented [the Donens] from removing these items when they vacated the property."
"'"[Civil Code section 3287] does not authorize prejudgment interest where the amount of damage . . . 'depends upon a judicial determination based upon conflicting evidence and it is not ascertainable from truthful data supplied by the claimant to his debtor.' [Citations.]" [Citation.] Thus, where the amount of damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate. [Citation.]'" (Children's Hosp. and Medical Center v. Bonta (2002) 97 Cal.App.4th 740, 774 (Bonta).) "The usual prohibition against such interest is based upon the rationale that it is unreasonable to expect a defendant to pay a debt before he or she becomes aware of it or is able to compute its amount." (Lewis C. Nelson &Sons, Inc. v. Clovis Unified School Dist. (2001) 90 Cal.App.4th 64, 69.)
The amount of the Donens' damages under a promissory estoppel theory was "'"'not ascertainable from truthful data supplied by the [the Donens] to [the Oppenheimers].' . . ."'" (Bonta, supra, 97 Cal.App.4th at p. 774.) The amount of damages could be resolved only by the trial court after a court trial. Accordingly, the trial court properly did not award prejudgment interest.
THE OPPENHEIMERS' CROSS-APPEAL
Substantial Evidence Supports Trial Court's Finding that Elizabeth Had the Ability to Purchase the Property
The Oppenheimers state that they "appeal [from the judgment awarding the Donens damages under a promissory estoppel theory] on the basis that there was no substantial evidence demonstrating that Elizabeth Donen could have purchased the property and therefore any award of damages was improper." The Donens concede that Elizabeth "was required to show she had the financial ability to purchase the . . . [p]roperty."
The apparent rationale underlying the Oppenheimers' cross-appeal is that, because Elizabeth did not have the ability to purchase the property, the Donens had unreasonably relied on the Oppenheimers' promise to sell the property. "'"'The elements of a promissory estoppel claim are "(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance."'"'" (Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411, 416, italics added; see Aceves v. U.S. Bank, N.A. (2011) 192 Cal.App.4th 218, 227 ["A mere 'hopeful expectation[ ] cannot be equated with the necessary justifiable reliance'"].)
The trial court found that Elizabeth "had the ability to complete the sale and would have done so in a timely manner" had the Oppenheimers not breached the option clause. The court did not explain the reasons underlying its finding.
The parties agree that the court's finding is subject to the substantial evidence standard of review. "[O]ur review begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the trial court's factual determinations. [Citations.] Substantial evidence is evidence of ponderable legal significance, reasonable in nature, credible, and of solid value. [Citation.]" (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 501.) "[W]e examine the evidence in the light most favorable to the prevailing party and give that party the benefit of every reasonable inference. We accept all evidence favorable to the prevailing party as true and discard contrary evidence. We do not reweigh the evidence or reconsider credibility determinations." (Katsura v. City of San Buenaventura (2007) 155 Cal.App.4th 104, 107.)
In arguing that substantial evidence supports the finding that Elizabeth had the ability to purchase the property, the Donens rely on the testimony of Richard Ardi, a licensed real estate broker. Ardi testified as follows: He is the sole proprietor of a business named "Mortgages Unlimited." He "arrange[s] financing for people to purchase homes." On four or five occasions he has loaned money to the Donens to enable them to purchase or finance real estate. In 2018 he made an unsecured $1.5 million loan to Elizabeth. At the time of Ardi's testimony in May 2021, the Donens "owe[d] [him] $1,900,000 unsecured."
Ardi was "ready, willing, and able to fund a loan for Drew Donen to purchase the property." The Donens "wouldn't have needed a penny down." Ardi explained, "[W]hen a loan of that size comes around, I have investors that would be interested in participating. So I would go to my lines of credit -- family, friends, other mortgage brokers -- and pool it." The loan would have been secured by a deed of trust on the property. To fund the loan, the Donens would need to make a ten percent down payment. But if "Mr. Donen didn't have the 10 percent down, I would have been able to loan him that additional 10 percent as collateralized against his business."
In May 2016 Ardi wrote a letter to the Donens in which he said: "Congratulations you have been preapproved for a loan amount up to $2,565,000 for the purchase of the property .... [¶] The program is an interest only loan with a ten-year balloon at 3.875%." "This pre-approval is contingent upon a full complete interior exterior appraisal, Complete RPA [real estate purchase] agreement with all addendums, Complete escrow and title reports." With a 10 percent down payment of $285,000, the loan would have covered the option price of $2,850,000. Ardi "had spoken to investors and had lined up the availability for funding that loan."
The Oppenheimers contend that Ardi's testimony and his May 2016 letter are insufficient to show Elizabeth's ability to purchase the property because they "fail[] to demonstrate that [Ardi] was legally obligated to loan the Donen[]s the money . . . ." "[W]e find no support for the iron-clad rule suggested by [the Oppenheimers] that [the Donens] could only establish ability to perform by proving they had obtained a legally enforceable loan contract. Rather, the proof needed to show ability depends on all the surrounding circumstances." (Henry v. Sharma (1984) 154 Cal.App.3d 665, 672 (Henry).)
In arguing that the Donens were required to show that Ardi was legally obligated to loan the funds, the Oppenheimers rely on the following passage from Am-Cal Investment Co. v. Sharlyn Estates, Inc. (1967) 255 Cal.App.2d 526, 539-540: "'A purchaser without funds of his own may show that he was ready and able to pay the purchase price because he had made arrangements to borrow the required funds from a lending institution or from a third party, but if he relies upon the negotiation of a loan from a third party, the buyer must prove . . . [t]hat the third party was legally bound by contract to advance the funds . . . .'" However, "[n]either Am-Cal Investment nor the case it relies on, Merzoian v. Kludjian [(1920) 183 Cal. 422], held that evidence of a binding loan commitment is the exclusive means of proving ability to perform." (Henry, supra, 154 Cal.App.3d at p. 671.)
The Oppenheimers maintain that the evidence is insufficient to show Elizabeth's ability to purchase the property because Ardi "failed to provide any corroborating evidence that he had the ability to loan Elizabeth Donen the money to purchase the Property. Richard Ardi's testimony . . . made it clear that he was relying on investors to fund the loan." But the trial court was entitled to credit Ardi's testimony that he "had spoken to investors and had lined up the availability for funding that loan." (See Nielsen v. Frank (1931) 117 Cal.App. 117, 121 ["The credibility of the witnesses and the weight to be given to their testimony are questions for the trial court"].)
Considering all of the surrounding circumstances and viewing the evidence in the light most favorable to the Donens, we conclude that substantial evidence supports the trial court's finding that Elizabeth "had the ability to complete the sale and would have done so in a timely manner" had the Oppenheimers not breached the option clause.
Claim that Elizabeth Did Not Properly Exercise the Option
The Oppenheimers claim that the evidence "demonstrates that the option was not properly exercised" by Elizabeth because she did not personally sign the letter purporting to exercise the option. The trial court found that, although Elizabeth did not personally sign the letter, "she intended to exercise the option and the preponderance of the evidence suggests she authorized the signing of her name by Mr. Donen." The court therefore concluded that Elizabeth had properly exercised the option.
The Oppenheimers have not cited facts or authority refuting the trial court's ruling on this issue. Thus, they have not overcome the presumption that the trial court's ruling is correct. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)
Claim that No Injustice Would Occur If Donens Were Not Awarded Damages
"[U]nder the doctrine of promissory estoppel, 'A promise . . . is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.'" (Kajima/Ray Wilson v. Los Angeles County Metropolitan Transp. Authority (2000) 23 Cal.4th 305, 310, italics added.) The Oppenheimers argue that "there is no substantial evidence to support the claim of injustice" because the Donens did not pull permits for any of the improvements and some "were of poor quality." The Donens have not responded to this argument in their briefs.
The trial court noted that, "in reliance on the option to purchase, [the Donens] undertook multiple projects to remodel, repair and furnish the property. These projects included landscaping, construction of a new breezeway, repairing and replacing windows, removing a urinal from a bathroom, replacing and installing lighting and security, plumbing work, painting, [and] carpeting ...." The court allowed the Donens to recover their costs "for materials, such as stone, mortar, windows, carpet, lighting etc. total[ing] $56,762.16."
Where a promissory estoppel claim has been made, "the determination of whether '"'injustice can be avoided only by enforcement of the promise,'"' or whether 'justice requires' that the remedy granted for breach must be limited, is a determination peculiarly within the court's discretion." (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 904-905.) "[I]t is generally accepted that the appropriate test of abuse of discretion is whether or not the trial court exceeded the bounds of reason, all of the circumstances before it being considered." (In re Marriage of Connolly (1979) 23 Cal.3d 590, 598.) "'"The burden is on the party complaining to establish an abuse of discretion . . . ."'" (Blank v. Kirwan (1985) 39 Cal.3d 311, 331.)
The Oppenheimers failed to carry their burden of showing that the trial court had exceeded the bounds of reason in reimbursing the Donens for their cost of materials. The trial court observed, "[The Oppenheimers], who owned a house nearby, visited the property on several occasions during [the Donens'] tenancy, complemented the improvements and did not object to the work that was being performed." Thus, the Oppenheimers led the Donens to reasonably believe that they approved of and consented to the improvements. In these circumstances, the trial court acted within its discretion in concluding that an injustice would occur if the Donens were not reimbursed for their cost of materials.
Disposition The judgment is affirmed. The parties shall bear their own costs on appeal.
We concur: GILBERT, P. J. PERREN, J.