Opinion
B317164
05-01-2023
ELUSIVE 8307, LLC, Plaintiff and Appellant, v. MAREK CANTERMAN, Defendant and Respondent.
Hennelly & Grossfeld and Ronald K. Geller, for Plaintiff and Appellant. Christensen Law and Robert J. Christensen, for Defendant and Respondent.
NOT TO BE PUBLISHED.
APPEAL from orders of the Superior Court of Los Angeles County Super. Ct. No. BC719944, Lia R. Martin, Judge.
Hennelly & Grossfeld and Ronald K. Geller, for Plaintiff and Appellant.
Christensen Law and Robert J. Christensen, for Defendant and Respondent.
DAUM, J. [*]
INTRODUCTION
Respondent Merek Canterman owns real property in Los Angeles (the Canterman Property). Appellant Elusive 8307, LLC owns two contiguous pieces of real property directly to the east of the Canterman Property (8307 Elusive Drive and 8333 Elusive Drive; collectively, the Elusive Properties). From a public street, Elusive accesses the Elusive Properties by car by driving on a paved road that is part of the Canterman Property (the Paved Road), and then turning into a dirt driveway that is also part of the Canterman Property (the Dirt Driveway). According to Elusive, this is the only means of accessing its property by car. Currently, Elusive has Canterman's permission to access the Elusive Properties in this manner.
In 2003, a prior owner of the Elusive Properties sued a prior owner of the Canterman Property for an access easement. In 2004, the parties settled the lawsuit by entering into a Settlement and Release Agreement (the 2004 Agreement), which effectively granted the owner of the Elusive Properties an access easement over the Dirt Driveway- but not the Paved Road-in exchange for the owner of the Elusive Properties agreeing to seek no other easements from the Canterman Property.
In 2018, Elusive sued Canterman. Elusive alleged two causes of action: first, for a declaration that it possessed a prescriptive easement; second, and alternatively, for a declaration that it held an equitable easement. It sought either a prescriptive or an equitable easement over the portions of the Paved Road and Dirt Driveway needed to access its properties. After a bench trial, Canterman moved for judgment under Code of Civil Procedure section 631.8. The trial court granted the motion. The trial court found that the covenant not to seek further easements in the 2004 Agreement "ran with the land" and that Elusive was bound by it as the current owner of the Elusive Properties. The court also found that Elusive had failed to prove the elements necessary for a prescriptive easement.
On appeal, the parties debate whether, as a matter of law, the 2004 Agreement and its release of further claims to easements runs with the land and binds Elusive. Both sides offer well-argued interpretations of Civil Code section 1468 in support of their positions. But we need not and do not resolve that issue. Regardless of whether the 2004 Agreement runs with the land, substantial evidence supports the trial court's express finding that Elusive failed to prove an entitlement to a prescriptive easement and its implied finding that Elusive failed to prove an entitlement to an equitable easement. We therefore affirm.
Because we so hold, we need not address Elusive's argument that the trial court erred in declining to rule on Elusive's claims that it was a bona fide purchaser for value. Elusive also purports to appeal from the court's denial of its motion for new trial. However, since Elusive proffers no argument about how the court erred in its denial of the new trial motion, we deem this issue forfeited. (Sviridov v. City of San Diego (2017) 14 Cal.App.5th 514, 521.)
FACTUAL AND PROCEDURAL BACKGROUND
On review following a trial on the merits, "[w]e recite the facts in the manner most favorable to the judgment and resolve all conflicts and draw all inferences in favor of respondent[].... Conflicts in the evidence are noted only where pertinent to the issues on appeal." (Meister v. Mensinger (2014) 230 Cal.App.4th 381, 387.)
A. The 2004 Agreement
In September 2003, Walter Alba Altmann (who owned the Elusive Properties at the time) sued Marian Afurong (who owned the Canterman Property at the time). The complaint sought an easement over "a dirt road which connects Rugby Place, a future street and Plaintiff's home." A legal description of the easement was included.
Rugby Place is the public street that can be accessed from the Paved Road (which, at the time of the Altmann lawsuit, was unpaved). The Paved Road is part of a future street easement, benefiting the city of Los Angeles.
Altmann and Afurong settled this lawsuit by entering into a "Settlement Agreement and Release." The agreement recited that Altmann had been "using a dirt road to access his property" and now sought an access easement for ingress and egress "only along the currently existing dirt driveway on" the Canterman Property. The agreement provided that Afurong was granting Altmann an easement for ingress and egress "only to the following portion of the [Canterman] Property," and then listed the same legal description contained in Altmann's complaint. In exchange, Altmann would pay Afurong $1,000, would "be solely responsible for the maintenance of the Easement Area at his sole cost and expense," and would "not claim, bring any claim or pursue any claim for adverse possession or for any easement to or over [Afurong's] Property."
The parties agree that the Easement Area does not include the Paved Road.
The agreement also contained an integration clause stating that it "constitutes the entire agreement between [Afurong] and [Altmann] relating to the above easement." The parties agreed that, as between them, "no property damage claims, acts, demands, damages, debts, liabilities, accountings, reckonings, obligations, costs, expenses, claims for relief, rights of action, causes of action and chooses in action, in law or in equity" were "reserved" or "remain[ed]." The Agreement proclaimed itself "binding on both parties hereto and for their respective benefit and shall also be binding on the heirs, executors, administrators, representatives, attorneys, counsel, successors, and the assigns of either respective party hereto."
B. Subsequent Owners of the Properties
1. The Canterman Property
On April 30, 2004, a Grant Deed was recorded transferring the Canterman Property from Afurong to Anita and Azadeh Famili. The Grant Deed was accompanied by a notary acknowledgment attesting that Afurong appeared before a notary on April 8, 2004, and acknowledged she signed the Grant Deed. In June 2010, a Grant Deed was recorded transferring the Canterman Property from the Familis to Canterman.
2. The Elusive Properties
Beginning in 2012, Altmann sought a buyer for the Elusive Properties. He enlisted Shawn Kormondy, a real estate salesperson who specialized in properties in the Hollywood Hills, as well as land sales. (Kormondy also represented Afurong in a number of transactions and discussed the Canterman Property with her.)
At the time Kormondy represented him, Altmann told Kormondy that Altmann had a "legal easement" over the Canterman Property from Rugby Place to Altmann's property. Kormondy did nothing to verify the claim at the time.
Kormondy's listing with Altmann eventually expired and Kormondy did not renew it. He disparagingly referred to Altmann as a "crazy old man" to explain why he did not renew the listing. Instead, changing sides in the transaction, Kormondy represented Verono LLC, in a purchase of the Elusive Properties from Altmann, a purchase in which Kormondy would ultimately participate as an investor.
In October 2014, a deed recorded the transfer of the Elusive Properties from Altmann to Verono. The total purchase price for the property was approximately $1.2 million. Seventeen days later, a Grant Deed was recorded transferring 8307 Elusive and 8333 Elusive from Verono to Elusive, a limited liability company composed of the same parties as Verono. Kormondy invested about $550,000 into the transaction at this time, but Kormondy was not a managing member of Verono or Elusive. Before, and during, the sale from Altmann to Verono and the transfer to Elusive, there was no evidence to suggest that Kormondy or anyone else at Verono or Elusive did any due diligence to confirm the existence of the easement or to ensure that there was legal access to the Elusive Properties.
The Grant Deed states that "The Grantors and the Grantees in this conveyance are comprised of the same parties who continue to hold the same proportionate interests in the property, R & T 11923(d)."
The original intent of Elusive was to develop at least part of the Elusive Properties with new construction, using permits originally obtained from Altmann. However, the then-managing members, Andrew Raitt and Robert Berry, according to Kormondy, "sat on their hands" and allowed the relevant permits to expire. In 2016 and 2017, Kormondy became the managing member of Elusive and controlled its operations. Kormondy made a further financial investment as part of this transaction. In April 2016, a Grant Deed was recorded transferring 8333 Elusive to Shawn Kormondy, as trustee of his living trust. In December 2017, a Grant Deed was recorded transferring 8333 Elusive back to Elusive 8307, LLC.
In 2016 or 2017, when searching court records for the easement Altmann had claimed existed, Kormondy discovered the 2004 Agreement. At that time, he had a title company plot the legal description contained in the agreement and learned that it encompassed only the Dirt Driveway but not the Paved Road.
C. Elusive's Lawsuit
1. Complaints
In August 2018, Elusive filed a lawsuit with two causes of action: a request for a prescriptive easement, and in the alternative for an equitable easement. Elusive alleged that it owned 8307 Elusive and also owned the easement set forth in the 2004 Agreement, that the intent of the agreement was to grant "complete easement access" to the owner of 8307 Elusive over the Canterman Property, and that the easement was to "benefit and burden the successor owners of both Plaintiff's Property and Defendant's Property in perpetuity." Elusive filed a first amended complaint in December 2018, this time clarifying that the 2004 Agreement granted an easement from the eastern property line of 8307 Elusive to the "northern boundary of the existing paved community driveway," and that Altmann had believed "a recorded future street easement would serve as the easement from where the existing community driveway ends to where the 2004 easement leads to [8307 Elusive's] property line."
In March 2019, Elusive filed its operative complaint, the second amended complaint (SAC). The SAC added an allegation that Elusive owned 8333 Elusive. It also alleged that the previous owners' intent was "to record an easement from [the] Eastern property line of 8307 Elusive Drive to the northern boundary of the existing paved community driveway," but that the "2004 attempted easement is void."
2. Witness Testimony
The trial court conducted a thirteen-day bench trial in the matter. We summarize only the witness testimony relevant to our analysis.
(a) Alba Maximilian F. W. Altmann
Alba Maximilian Altmann, the son of Walter Altmann, testified that he lived at 8307 Elusive from his birth in 1989 to 2008, then visited from 2008 to 2012, then lived there part time from 2012 to 2014. He and his parents accessed the property by using the Paved Road (which was not originally paved) and the Dirt Driveway. Neither he nor his parents hid the fact they were using the Paved Road, and he had no knowledge of asking anyone for permission to use it. However, he did not believe he was trespassing when he used the Paved Road, and his parents never remarked that they were trespassing. He testified that at some point between 2009 and 2012, a locked gate was erected at the entrance to the Paved Road, which could only be opened with a remote control device, or by entering a code on a keypad.
(b) Shawn Kormondy
Kormondy testified to his involvement in representing Altmann, representing Verono, making the investment in the Elusive Properties, and ultimately becoming the managing member of Elusive, as we describe above. In addition, he noted that in early 2015, Robert Berry asked Canterman for permission to use the Paved Road to access the Elusive Properties. Berry also had a "clicker" that could open the gate Canterman installed where the Paved Road met Rugby Place.
(c) Merek Canterman
Canterman testified that he had the gate separating Rugby Place and the Paved Road installed after he purchased the Canterman Property in 2010 or 2011. Canterman is responsible for maintaining the gate. The gate can be opened with a "clicker" or with a code; it also has an intercom system that can be used to "buzz" people in. When the gate was initially installed, Canterman gave Altmann three "clickers," provided him with a code to open the gate, and entered his name into the intercom system.
When Elusive initially purchased the Elusive Properties, it asked Canterman to program a code for them. Another time, Kormondy sent out the code on real estate flyers and Canterman informed him he would no longer provide codes for Kormondy because Kormondy had "violated the code of conduct." Canterman is the only individual with the "permission" to change the directory on the intercom.
In early 2015, Robert Berry, representing Elusive, asked Canterman for permission to use the Paved Road. Elusive also had a "clicker" to open the gate.
(d) Mohsen Saeedy
Saeedy was the husband of Azadeh Famili, who owned the Canterman Property along with her sister Anita Famili. He considered himself a co-owner of the property and, when Altmann used the Paved Road, Saeedy's understanding, and that of his wife and sister-in-law, was that Altmann had their permission to do so. Saeedy also spoke with Canterman about Altmann's use of the road and advised Canterman to permit the use.
D. Judgment
Canterman moved for judgment under Code of Civil Procedure section 631.8 at the close of Elusive's case. The trial court effectively denied the motion without prejudice, stating it "decline[d] to render any judgment until the close of all the evidence." Canterman renewed the motion after both parties rested.
In July 2021, in a written order captioned "Order on Defendant's Motion for Judgment," the trial court granted Canterman's motion for judgment. It found that the 2004 Agreement provided that, in exchange for an easement to use the Dirt Driveway, Altmann agreed not to seek any other easement on the Canterman Property. The court found that Elusive failed to prove that the parties to the agreement intended for the easement to include the Paved Road. The court also drew a negative inference from Elusive's failure to call Afurong as a witness. The court rejected Elusive's argument that the Elusive Properties were not particularly described in the 2004 Agreement, pointing to the reference to the Altmann-Afurong lawsuit, and noting that the complaint in the lawsuit identified 8307 Elusive Drive. Finally, the court found that Elusive continued to benefit from the 2004 Agreement because it used the easement granted therein and thus, even if the 2004 Agreement was not a covenant that ran with the land, Elusive was still bound by it.
The trial court, in its written order, additionally found that Elusive was not entitled to a prescriptive easement because it failed to prove its use of the Paved Road was hostile. Kormondy's negotiations with Canterman for an access easement, and a previous Elusive manager's request for permission to cross Canterman's land, demonstrated Elusive's use was permissive. Moreover, Elusive had only owned the properties for four years when it filed suit, so it could not show the requisite five years of hostile use.
Neither party requested a statement of decision. Nor did either party contend that the trial court's written order constituted a statement of decision, or file any written objections to the trial court's order.
E. Motion for New Trial
In September 2021, Elusive moved for a new trial. In November 2021, the court denied the motion. Elusive timely appealed both the judgment and the denial of its motion for new trial.
DISCUSSION
A. Standard of Review and General Discussion
"'"The standard of review after a trial court issues judgment pursuant to Code of Civil Procedure section 631.8 is the same as if the court had rendered judgment after a completed trial-that is, in reviewing the questions of fact decided by the trial court, the substantial evidence rule applies."' [Citation.] . . . '"We review legal issues . . . under a de novo or independent standard."'" (Orange County Water Dist. v. MAG Aerospace Industries, Inc. (2017) 12 Cal.App.5th 229, 239-240.)
Under the substantial evidence standard, "'all of the evidence must be examined, but it is not weighed. All of the evidence most favorable to the respondent must be accepted as true, and that unfavorable discarded as not having sufficient verity to be accepted by the trier of fact. If the evidence so viewed is sufficient as a matter of law, the judgment must be affirmed.' [Citation.]" (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 866.)
Importantly here-as we discuss further below-where no statement of decision was requested or rendered, we "will infer the trial court made implied factual findings favorable to the prevailing party on all issues necessary to support the judgment, including the omitted or ambiguously resolved issues." (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 60 (Fladeboe)). We "then review[] the implied factual findings under the substantial evidence standard." (Ibid.)
Finally, in reviewing the judgment, we review the trial court's decision, not its reasoning, and "[i]f the decision of a lower court is correct on any theory of law applicable to the case, the judgment or order will be affirmed regardless of the correctness of the grounds upon which the lower court reached its conclusion." (Estate of Beard (1999) 71 Cal.App.4th 753, 776.)
Applying those standards, we conclude that substantial evidence supports the trial court's express finding that Elusive did not meet its burden to demonstrate an entitlement to a prescriptive easement, and its implied finding that Elusive did not meet its burden to demonstrate an entitlement to an equitable easement.
B. Substantial Evidence Supports the Trial Court's Finding That Elusive Was Not Entitled to a Prescriptive Easement
To obtain a prescriptive easement, Elusive was required to show that its use of the area over which it sought an easement (and the use of its predecessor, Altmann) was hostile. (King v. Wu (2013) 218 Cal.App.4th 1211, 1214.) The court found that Elusive had failed to meet its burden to prove hostile use. Substantial evidence supports this finding.
On appeal, Elusive's primary argument is that, prior to Altmann and Afurong entering the 2004 Agreement, Altmann's use of the Paved Road and the Dirt Driveway had ripened into a prescriptive easement, which is still valid in the present day. But, as a factual matter, the trial court found to the contrary, and there is no basis for disturbing that conclusion on appeal.
There was scant evidence regarding whether Altmann's use of the Paved Road and Dirt Driveway was permissive or hostile prior to the 2004 Agreement. In fact, the only evidence proffered was the testimony of Altmann's son, who testified that he had no knowledge of anyone ever asking permission to use the road or driveway, but also that he did not believe he and his family were "trespassing" when they did so. Elusive contends, however, that Altmann's continued use of the road and driveway constituted "presumptive evidence" of a prescriptive easement that Canterman failed to rebut. Elusive cites Warsaw v. Chicago Metallic Ceilings, Inc. (1984) 35 Cal.3d 564, for the proposition that "continuous use of an easement over a long period of time without the landowner's interference is presumptive evidence of its existence and in the absence of evidence of mere permissive use it will be sufficient to sustain a judgment." (Id. at pp. 571-572.) However, as our colleagues in Division Six noted in Grant v. Ratliff (2008) 164 Cal.App.4th 1304, "Warsaw stands for nothing more than that the open, notorious and continuous use of another's land is sufficient evidence to support a finding that the use was adverse." (Grant, supra, 164 Cal.App.4th at p. 1309.) Whether Altmann's continual use would support a finding of hostile use is a different question than whether his continual use compels such a finding by this court in the face of the trial court's conclusion to the contrary. Here, we do not find that the evidence compels the conclusion that Altmann's use was hostile.
Grant noted that Warsaw failed to discuss our Supreme Court's previous opinion in O'Banion v. Borba (1948) 32 Cal.2d 145, which declined to find that a presumption of adverse use arises from open, notorious, and continuous use. (Grant, supra, 164 Cal.App.4th at p. 1309.) Grant held that "Warsaw did not overrule O'Banion." (Grant, supra, 164 Cal.App.4th at p. 1309.)
But, in any event, regardless of whether Altmann's use before 2004 created a prescriptive easement, we find that such a prescriptive easement did not survive Altmann's actions in entering into the 2004 Agreement. Elusive protests that an easement cannot be extinguished unless the possessor of the easement acts in a manner "'so decisive and conclusive as to indicate a clear intent to abandon the easement.'" The record supports the conclusion that Altmann did just that. In the 2004 Agreement, Altmann agreed that he would be granted an easement "only to the following portion of the [Canterman] Property," which was followed by a legal description that did not include the Paved Road. Altmann then agreed that he would not otherwise "claim, bring any claim or pursue any claim for adverse possession or for any easement to or over [Afurong's] Property." And Altmann agreed that no "claims for relief, rights of action, causes of action and chooses in action, in law or in equity" were "reserved" or "remain[ed]." Such statements, taken together, are impossible to reconcile with anything other than a clear intent by Altmann to abandon a claim to any other portion of the Canterman Property. Altmann accepted a limited, granted easement as his only easement, foreswore any claim to any additional easement, and foreswore any further legal action-even though he could not obtain marketable title to any easement acquired by adverse possession without further judicial proceeding. (See Sumner Hill Homeowners' Assn., Inc. v. Rio Mesa Holdings, LLC (2012) 205 Cal.App.4th 999, 1029 ['"A title acquired by adverse possession is not a marketable title until the title is established by judicial proceedings against the record owner'"].) Thus, we conclude that even if Altmann held a prescriptive easement prior to 2004, the 2004 Agreement extinguished it.
Elusive contends that the 2004 Agreement was void ab initio because Afurong no longer owned the Canterman Property when she entered into it. Canterman disagrees. We need not resolve this dispute. Whether or not the 2004 Agreement was valid, there is no dispute that Altmann signed it, and there is no evidence that he ever repudiated it or believed it to be void. Thus, whether the agreement actually took effect does not affect our analysis as to whether Altmann's actions indicated an intent to extinguish any prior easements, or to refrain from seeking new ones.
Elusive contends that if the 2004 Agreement extinguished the easement that ripened before 2004, it did so only as to 8307 Elusive, but not as to 8333 Elusive, because Altmann alleged in his lawsuit only that he was the owner of 8307 Elusive. Regardless of the allegation in Altmann's lawsuit, "WALTER ALBA ALTMANN" was the party listed in the 2004 Agreement. Therefore, the 2004 Agreement was directed to Altmann personally and, by its express terms, the agreement concerns all of Altmann's property, not only 8307 Elusive. Thus, for the reasons we explain herein, any prescriptive easement that Altmann may have had prior to 2004-as the owner of both 8307 Elusive and 8333 Elusive-was extinguished by the 2004 Agreement.
As to the period after 2004, there is substantial evidence that Altmann's further use of the Paved Road was permissive. Around the time the 2004 Agreement was entered into, Afurong sold the Canterman Property to the Familis. Mohsen Saeedy, the husband of Anita Famili, testified that when Altmann used the Paved Road, Saeedy's understanding, and that of the Familis, was that Altmann did so with permission. Saeedy also spoke with Canterman about Altmann's use of the road and advised Canterman to permit Altmann's continued use. Similarly, Canterman testified that after he installed the gate separating Rugby Place from the Paved Road, he gave Altmann three "clickers" that could open the gate, provided him with a code to open the gate, and entered his name into the intercom system. Finally, Altmann agreed in the 2004 Agreement that he would seek no other easements on the Canterman Property.
Taken together, over all relevant periods, such evidence is sufficient, under review for substantial evidence, to support a finding that Altmann's use of the Paved Road was not hostile, and thus that Altmann's use of the Paved Road did not create a prescriptive easement.
There was also substantial evidence that Elusive's own use of the Paved Road was not hostile. Canterman testified that he controlled the gate that separated Rugby Place from the Paved Road, and that Elusive's prior managing member, Robert Berry, had requested his permission to use the Paved Road. Beyond that, it is undisputed that Elusive had used the Paved Road for fewer than five years when it filed its complaint-Elusive had owned the properties for fewer than five years. As such, as a matter of law, Elusive could not demonstrate the requisite five years of hostile use based on its own actions.
In short, substantial evidence supports the trial court's determination that Elusive failed to demonstrate one of the elements- hostile use-necessary to establish a right to a prescriptive easement. Accordingly, we affirm the trial court's judgment as to that cause of action.
C. Substantial Evidence Supports the Trial Court's Conclusion That Elusive Is Not Entitled to an Equitable Easement
"To create an equitable easement, 'three factors must be present. First, the defendant must be innocent. That is, his or her encroachment must not be willful or negligent. The court should consider the parties' conduct to determine who is responsible for the dispute. Second, unless the rights of the public would be harmed, the court should grant the injunction if the plaintiff "will suffer irreparable injury . . . regardless of the injury to defendant." Third, the hardship to the defendant from granting the injunction "must be greatly disproportionate to the hardship caused plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant...." [Citation.]'" (Tashakori v. Lakis (2011) 196 Cal.App.4th 1003, 1009 (Tashakori).)
"While all three elements of an equitable easement are necessary, [the requirement that the encroachment not be willful or negligent] is the most important." (Hansen v. Sandridge Partners, L.P. (2018) 22 Cal.App.5th 1020, 1028.) "If the party is willful, deliberate, or even negligent in his or her trespass, the court will enjoin the encroachment." (Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 769.)
The trial court, in its written order, did not expressly address whether Elusive had met its burden, for purposes of obtaining an equitable easement, of showing that its encroachment was neither willful nor negligent. Nonetheless, in this appeal, the doctrine of implied findings requires us to assess the case as if the trial court had found that Elusive had not met that burden. That doctrine applies where-as here-no party requests a written statement of decision or files objections to it. (SFPP v. Burlington Northern &Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 462 ["doctrine of implied findings . . . (1) directs the appellate court to presume that the trial court made all factual findings necessary to support the judgment so long as substantial evidence supports those findings and (2) applies unless the omissions and ambiguities in the statement of decision are brought to the attention of the superior court in a timely manner"].) In order to avoid the doctrine of implied findings, a party must engage in a "two-step process." (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1134.) First, a party must request "a statement of decision as to specific issues to obtain an explanation of the trial court's tentative decision." (Ibid.) Second, "if the court issues such a statement, a party claiming deficiencies therein must bring such defects to the trial court's attention to avoid implied findings on appeal." (Ibid.)
Below, Elusive failed to take either step of the two-step process. Accordingly, the doctrine of implied findings applies, and "under Code of Civil Procedure section 634, the appellate court will infer the trial court made implied factual findings favorable to the prevailing party on all issues necessary to support the judgment, including the omitted or ambiguously resolved issues. [Citations.] The appellate court then reviews the implied factual findings under the substantial evidence standard." (Fladeboe, supra, 150 Cal.App.4th at pp. 59-60, italics added.) The doctrine requires us, as the reviewing court, to imply findings in favor of the judgment even when an order from the trial court entirely fails to address a factual issue. (Id. at p. 61 [absent request for statement of decision, when trial court failed to expressly rule on whether a party had "unreasonably withheld consent," appellate court was required to imply factual finding on that issue and review it for substantial evidence].)
Applying the doctrine of implied findings, we therefore must address whether substantial evidence supports an implied finding that Elusive's encroachment on the Canterman Property was willful or negligent. We conclude it does.
Negligence or willfulness for these purposes is generally assessed at the time the party seeking the easement commences the interference-such as when a property is purchased. (See Tashakori, supra, 196 Cal.App.4th at p. 1007 [trial court finding that interference was innocent where party seeking easement "made a diligent and good faith effort" to determine whether property had easement access and reasonably believed that they had "dedicated recorded easement access when they purchased their property"].) Accordingly, we look at evidence concerning Elusive's intent or negligence at the time it obtained the Elusive Properties.
Before his involvement with the Elusive Properties, Kormondy was an experienced real estate professional, and we may infer that he was reasonably familiar with issues concerning easements and obtaining legal title. Kormondy represented Altmann as Altmann's real estate agent. He was told by Altmann that access to the Elusive Properties depended on the existence of a legal easement to the public streets, meaning that Kormondy knew that a legal easement was at issue. Kormondy also believed that Altmann was unreliable (referring to him disparagingly as a "crazy old man"). There is substantial evidence that before Elusive's purchase, Kormondy should have been aware that there might well be legal issues concerning access to the Elusive Properties.
Yet the record supports a finding that Kormondy negligently failed to take reasonable steps to ascertain Elusive's rights prior to the purchase. Even though Kormondy knew that access depended on a vaguely described easement, even though his only reason for believing such an easement existed was Altmann's oral statement, even though Kormondy testified he believed Altmann was unreliable, and even though Kormondy was a real estate professional, neither Kormondy nor anyone else at Verono or Elusive investigated the status of the easement before Elusive obtained the Elusive Properties in 2014. When Verono purchased the Elusive Properties, Kormondy was Verono's agent-and thus Verono had Kormondy's knowledge imputed to it. (Civ. Code, § 2332 ["As against a principal, both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other"]; see Powell v. Goldsmith (1984) 152 Cal.App.3d 746, 750.) Similarly, Elusive in 2014 consisted of the same parties in the same interests as Verono, and we thus may also impute Kormondy's knowledge in 2014 to Elusive. In any event, no one at either Verono or Elusive conducted due diligence prior to the purchase.
Eventually, in 2016 or 2017, Kormondy became the managing member of Elusive and made an additional investment in the property. Assuming without deciding that Kormondy's takeover provides a new moment to assess Elusive's negligence, we conclude that substantial evidence supports a finding that Elusive was negligent at this moment, as well. The record is unclear as to whether Kormondy became Elusive's managing member before or after he became aware of the 2004 Agreement. But, either way, the result does not help Elusive. Either Kormondy did not know of the 2004 Agreement, meaning that he invested further in Elusive and became managing member without, once again, reasonably inquiring as to the status of the easement, which would support a finding of negligence. Or he became managing member after having reviewed the 2004 Agreement-but after that point, Kormondy had specific knowledge that continued use of the Paved Road was a trespass onto Canterman's property, supporting a finding of negligent or willful encroachment. From either angle, substantial evidence supports a finding that Elusive's encroachment was not innocent.
We recognize that at trial Elusive offered contrary evidence concerning its intent. Elusive also suggested contributory negligence by Canterman. But, on substantial evidence review we are required to construe all evidence and inferences in favor of Canterman and disregard the evidence in favor of Elusive. Doing so, substantial evidence supports a finding that Elusive's encroachment was negligent, and therefore that Elusive was not entitled to an equitable easement.
We resolve the appeal before us in Canterman's favor. Since the case involves ongoing interests in real property, we emphasize that our opinion resolves only the trial court's orders on appeal for the reasons stated herein. We do not address whether the 2004 Agreement created an equitable servitude or covenant that runs with the land. Nor do we address whether an owner of the Elusive Properties might be able to obtain reliefin equity concerning access to the Elusive Properties on facts not present here, such as a total denial of a right to access the properties over the Paved Road.
DISPOSITION
The trial court's orders are affirmed for the reasons stated herein. Respondent is awarded his costs on appeal.
WE CONCUR: CURREY, Acting P. J. COLLINS, J.
[*] Judge of the Los Angeles County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.