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Estate of McGuire

California Court of Appeals, Second District, Third Division
Mar 25, 2008
No. B201434 (Cal. Ct. App. Mar. 25, 2008)

Opinion


Estate of MARY ANN McGUIRE, Deceased. MONROE F. MARSH, as Executor, etc., et al., Plaintiffs and Appellants, v. HAYAT JALALA, Defendant and Respondent. B201434 California Court of Appeal, Second District, Third Division March 25, 2008

NOT TO BE PUBLISHED

APPEAL from a judgment and an order of the Superior Court of Los Angeles County Super. Ct. No. BP032655, Thomas W. Stoever, Judge (retired judge of the L.A. S.Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) and Aviva Bobb, Judge.

Michael A. Weiss for Plaintiffs and Appellants.

Leonard D. Nasatir for Defendant and Respondent.

KLEIN, P. J.

Monroe F. Marsh (Executor Marsh), executor of the estate of Mary Ann McGuire (McGuire) appeals a judgment in favor of Hayat Jalala (Jalala) following a court trial. The judgment determined a lease and option granted to Jalala are valid and enforceable. In addition, four devisees under McGuire’s will, Kathleen Furstman, Karen Milne, Kimberly Milne and Kristine Milne (devisees), appeal a postjudgment order denying their motion to prohibit Executor Marsh from consummating the lease and option.

For the reasons discussed below, the judgment and order are affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

1. Facts.

This action concerns a commercial retail center located at 8233 and 8235 White Oak Avenue and 17700, 17710 and 17724 Roscoe Boulevard (hereafter, the Property) in Reseda. The Property was owned jointly by Frances Hommes and the Estate of Mary Ann McGuire, deceased, each as to an undivided 50 percent interest.

In September 1997, Jalala and his nephew, Farid Jalala, became tenants under a written lease of the portion of the property located at 8233 White Oak Avenue. The lease was signed for the lessors by Frances Hommes and by Executor Marsh, and for the lessee by the Jalalas.

Shortly before the expiration in September 1999 of the lease, Jalala began negotiations with Suzanne Millar (Millar), the property manager, for a new lease as well as an option to purchase the Property. The purchase price of $1.275 million was set by Millar. After Jalala and Millar verbally agreed upon the terms of a new 10-year lease (the Lease) and purchase option (the Option), Jalala, at Millar’s suggestion, prepared a new lease by copying substantially the previous lease. Jalala also prepared a one-page option agreement.

The Option indicated the Property was currently in litigation, that lessee/buyer agreed to proceed with the contract to purchase the Property for $1.275 million “as soon as the litigation was complete” and that lessor/seller “must conform to the governmental requirements to resolve the current environmental problems before execution of a purchase contract by buyer.”

Jalala attached the Option to the new Lease, signed the Lease and Option on April 3, 2000, and delivered the Lease and Option, and a copy thereof, to Millar to obtain their execution by the owners of the Property.

Within two weeks after Jalala delivered the documents to Millar, the Lease and Option were signed by Executor Marsh and by Frances Hommes. The signature of Frances Hommes was affixed to the documents by her attorney, Richard Arnold, at her direction.

In April 2000, Millar delivered to Jalala the Lease and Option, fully signed by the owners of the Property. Millar was not instructed not to deliver the signed documents to Jalala.

Frances Hommes died on December 10, 2000.

In June 2004, Millar advised Jalala that the removal of contaminated soil on and beneath the Property was substantially complete.

On November 5, 2004, Jalala, through his attorney, notified Executor Marsh and the personal representative of Frances Hommes that he was exercising the Option to purchase the Property for $1.275 million. On November 17, 2004, having received no response, Jalala sent a letter to Millar, as the property manager, reiterating his desire to exercise the Option.

In response, the owners repudiated the option. On May 4, 2005, the owners’ attorney sent a letter to Jalala’s attorney stating “It is apparent . . . that Mr. Jalala does not have any option to acquire the Property for a variety of legal and factual reasons. It also appears that there is not a valid lease agreement with respect to the Property, which, in all probability, means your client is at best a month-to-month tenant with respect to the Property.”

This litigation followed.

2. Proceedings.

The co-trustees of the Frances Hommes Trust (the Hommes trustees), Executor Marsh, and Jalala and his alleged wife, Kamela Kator (Kator), all filed petitions pursuant to Probate Code section 850 regarding the validity and enforceability of the Lease and Option. The three petitions were tried together.

Probate Code section 850 states in relevant part: “(a) The following persons may file a petition requesting that the court make an order under this part: [¶] . . . [¶] (2) The personal representative or any interested person in any of the following cases: [¶] . . . [¶] (C) Where the decedent died in possession of, or holding title to, real or personal property, and the property or some interest therein is claimed to belong to another.”

The petition of Jalala and Kator alleged Kator became a lessee under the Lease when her husband, Jalala, signed it on behalf of both of them. The trial court ultimately determined Jalala and Kator were not legally married pursuant to the laws of the State of California and therefore the Lease and Option were binding as to Jalala but not as to Kator. Kator has not appealed to challenge that ruling.

The petitions came on for trial on March 26, 2007 and were tried over a period of six days. Oral testimony and documentary evidence were presented by the parties and the matter was argued and taken under submission.

On June 20, 2007, the trial court issued a 14-page statement of decision. In essence, the trial court held the Lease and Option executed in April 2000 were valid and enforceable as among Jalala, as lessee, and Frances Hommes and Executor Marsh, as lessors. Further, upon timely exercise of the Option by Jalala in November 2004, the Option agreement became a bilateral contract among Jalala, as buyer, and the Hommes trustees and Executor Marsh as sellers of the Property.

The judgment entered June 20, 2007 directed the sellers to convey the Property to Jalala through escrow upon payment by Jalala of the purchase price of $1.275 million. The judgment requires escrow to open within 10 days of receipt of a certificate from the applicable governmental authority that the remediation of environmental contamination under, and emanating from, the Property has been completed in conformity with the requirements of the governmental authority which required the remediation.

3. Postjudgment proceedings.

On July 30, 2007, the trial court denied a motion by the four devisees under McGuire’s will. The devisees’ motion sought to reopen the matter, requested an order prohibiting Executor Marsh from consummating the Option and an order instructing Executor Marsh to eject Jalala from the leased premises unless Jalala enters into a proper lease.

4. The appeal.

On August 14, 2007, Executor Marsh and the four devisees (collectively, appellants) filed a timely notice of appeal from the final judgment entered on June 20, 2007, and the postjudgment order of July 30, 2007.

CONTENTIONS

The appellants’ opening brief lists 19 contentions. Appellants contend, inter alia, the probate court lacked subject matter jurisdiction to hear this matter, the statement of decision is defective, and the terms of the option were not reasonably certain. Rather than reciting them all here, appellants’ contentions will be set forth in greater detail in the Discussion section and will be addressed seriatim.

This court is compelled to comment that in addition to not being in proper form, appellants’ briefs, although authored by a licensed attorney, are largely incoherent. For example, the contention relating to the subject matter jurisdiction of the probate court also asserts, without any elaboration, that the trial court should have granted a motion in limine and a motion for judgment on the pleadings. Rule 8.204(a)(1)(B) requires each brief to “[s]tate each point under a separate heading or subheading summarizing the point, and support each point by argument and, if possible, by citation of authority . . . .” Any contentions buried within the 19 chief contentions will not be considered.

We note that although the notice of appeal specifies both the judgment entered June 20, 2007 and the postjudgment order of July 30, 2007, none of the contentions is directed at the postjudgment order. Therefore, the postjudgment order will be summarily affirmed.

Any contentions which first appear in the appellants’ reply brief will not be addressed. (Tisher v. California Horse Racing Bd. (1991) 231 Cal.App.3d 349, 361.)

DISCUSSION

1. Subject matter jurisdiction.

We reject appellants’ contention the probate court lacked jurisdiction to hear the petitions filed pursuant to section 850.

Section 800 (added by Stats.1994, ch. 806, § 4) is dispositive. It states in relevant part: “The court in proceedings under this code is a court of general jurisdiction and the court, or a judge of the court, has the same power and authority with respect to the proceedings as otherwise provided by law for a superior court, or a judge of the superior court[.]”

2. Adequacy of the statement of decision.

Code of Civil Procedure section 632 provides that upon the request of a party appearing at trial, the trial court shall “issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial . . . .”

Even if the trial court fails to make a finding on a material issue, if the “ ‘judgment is otherwise supported, the omission to make such findings is harmless error unless the evidence is sufficient to sustain a finding in the complaining party’s favor which would have the effect of countervailing or destroying other findings.’ ” (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1531.)

The appellants’ opening brief, at pages 8 through 10, argues in a conclusionary manner that the statement of decision “fails to make findings and conclusions of law necessary to a judgment.” This contention does not merit any discussion. In any event, this court has reviewed the 14-page statement of decision authored by the trial court herein. We conclude the trial court adequately set forth the factual and legal basis for its decision on the principal controverted issues at trial.

Incorporation in an appellate brief of arguments made in the trial court is inappropriate. (Banning v. Newdow (2004) 119 Cal.App.4th 438, 455.) Therefore, appellants’ wholesale reliance on their objections to Jalala’s proposed statement of decision is improper. An argument in an appellate brief that purports to incorporate by reference arguments made in the trial court does not comply with the requirement that an appellate brief must support each point by argument and, if possible, by citation to authority. (Rule 8.204(a)(1)(B); Parker v. Wolters Kluwer United States, Inc. (2007) 149 Cal.App.4th 285, 290.)

In attacking the sufficiency of statement of decision, the opening brief asserts, without any elaboration, that the failure to make findings and conclusions of law necessary to a judgment amounts to a violation of the Due Process Clause of the Constitution, and that the judgment enforcing the Lease/Option amounts to a taking without just compensation in violation of the Due Process Clause. (U.S. Const., 5th Amend.) These unsupported arguments are patently without merit and unworthy of any discussion.

3. No merit to appellants’ contentions the Option was not supported by consideration and that the Option properly was revoked before exercise.

Appellants contend the Option was not supported by consideration, and therefore the Option could be revoked before it was exercised by Jalala. Appellants seem to rely on the rule that if an option is not supported by consideration it may be revoked prior to its exercise. (Spielberg v. Granz (1960) 185 Cal.App.2d 283, 289.) The contention fails for a number of reasons.

The Option was supported by consideration, so as to make it irrevocable. The trial court found “The Lease and Option were, in fact, a single, integrated document and transaction.” That finding was proper. Therefore, there was valuable consideration moving from Jalala to the owners – the payment of rent by Jalala under the Lease was the consideration for his irrevocable right to purchase the Property at the specified price if he should elect to do so.

Not only was there consideration for the Option, but also, the Option was not revoked. In this regard, the trial court found: “The issue of consideration for the Option is moot because [Jalala] exercised his option rights prior to any revocation or repudiation thereof, thus giving rise to a bilateral contract with adequate consideration.” That finding was proper. The evidence established the Option was not revoked by the owners prior to its exercise by Jalala.

4. Timely exercise of option.

Appellants contend Jalala’s exercise of the option 4.7 years after it was granted was untimely as a matter of law.

In this regard, the trial court found “The time of performance is sufficiently certain in that it is specified in the Option to be ‘as soon as (pending) litigation is complete,’ when the Property ‘conforms to the governmental requirements to resolve the current environmental problems’ and ‘with all the necessary inspections.’ The litigation referred to in the Option has been completed and [Jalala] has waived the condition, inserted for his benefit, regarding necessary inspections except an inspection to determine if the environmental problems have been completely remediated.” (Italics added.)

Under these circumstances, the trial court properly found Jalala exercised his option in a timely manner in 2004, upon being advised by Millar that the removal of contaminated soil on and beneath the Property was substantially complete.

5. The 1997 lease.

Appellants contend the statement of decision fails to set forth the factual and legal basis for the determination that Jalala and his nephew became tenants in September 1997. The contention is unavailing. The issues at trial were the validity and enforceability of the 2000 Lease and Option, not the previous lease agreement. Therefore, for purposes of the statement of decision, the 1997 tenancy was an irrelevancy.

As stated in Hellman v. La Cumbre Golf & Country Club (1992) 6 Cal.App.4th 1224, “[a] failure to find on an immaterial issue is not error. [Citations.] The trial court need not discuss each question listed in a party’s request; all that is required is an explanation of the factual and legal basis for the court’s decision regarding the principal controverted issues at trial as are listed in the request. [Citation.]” (Id. at p. 1230.)

6. The 2000 Lease/Option.

Appellants contend that with respect to the 2000 Lease and Option, the statement of decision failed to set forth, inter alia, the factual basis for the finding that Jalala “substantially” copied the previous lease, the terms of the “verbal Lease/Option” and why Millar had authority to agree to them.

These issues are immaterial. Moreover, it was Executor Marsh and Frances Hommes who signed the written Lease and Option and agreed to its terms, not Millar.

7. Section 10591; failure of Executor Marsh to notify devisees of proposed action to enter into Lease/Option does not affect Jalala’s rights thereunder.

a. Statutory scheme.

Section 10580 et seq. require a personal representative, such as Executor Marsh, who has been granted authority to administer an estate, to give notice of proposed action to heirs and devisees prior to taking such action.

Section 10591 states: “(a) The failure of the personal representative to comply with subdivision (a) of Section 10580 and with Sections 10581, 10585, 10586, and 10589, and the taking of the action by the personal representative without such compliance, does not affect the validity of the action so taken or the title to any property conveyed or transferred to bona fide purchasers or the rights of third persons who, dealing in good faith with the personal representative, changed their position in reliance upon the action, conveyance, or transfer without actual notice of the failure of the personal representative to comply with those provisions. [¶] (b) No person dealing with the personal representative has any duty to inquire or investigate whether or not the personal representative has complied with the provisions listed in subdivision (a).” (Italics added.)

b. Trial court’s ruling.

In this regard, the trial court found: “The Executor’s failure to give notice of intended action to the beneficiaries of the Estate, of executing the Lease and Option do not negate the binding effect of the Lease and Option as to [Jalala] who was a bona fide purchaser and had no notice nor knowledge of said failure to give notice of intended action. Furthermore, [Jalala] had no duty to determine whether or not the Executor had given such notice to the beneficiaries. (Probate Code §10591(b).) The Executor’s failure to give such notice is a matter between the Executor and the estate beneficiaries, and has no effect upon [Jalala] or on [Jalala’s] rights under the Lease and Option. (Probate Code §10591(a).)”

c. No merit to appellants’ contention section 10591 is inapplicable.

Appellants contend section 10591 does not apply because Jalala had actual notice that Executor Marsh did not give the devisees 15 days notice of the proposed action as required by section 10586. Appellants seem to rely on the fact that Jalala delivered the Lease/Option to Millar on April 3, 2000 and Executor Marsh signed the documents 14 days later, on April 17, 2000. The contention is meritless. Merely because Executor Marsh signed the documents less than 15 days after receiving them did not put Jalala on notice that Executor Marsh had failed to notify the devisees. One could just as soon infer Executor Marsh had duly notified the devisees and had obtained their consent by April 17, 2000.

Therefore, the trial court properly concluded Jalala lacked knowledge of Executor Marsh’s failure to give notice of intended action to the devisees, that Executor Marsh’s failure to give such notice was a matter between Executor Marsh and the devisees and that Executor Marsh’s omission had no effect on Jalala’s rights under the Lease and Option.

8. Signature of Frances Hommes was properly affixed to the Lease/Option.

a. Trial court’s ruling.

In this regard, the trial court found: “Within two weeks after the Lease and Option were delivered by [Jalala] to Suzanne Millar the name of Frances Hommes was signed on the Lease and Option by Richard Arnold, her attorney. Immediately prior to affixing her signature and initials to the Lease and Option Richard Arnold spoke with Frances Hommes by telephone and during that telephone conversation Frances Hommes instructed Richard Arnold to sign her name and initials to the Lease and Option. Immediately thereafter, Richard Arnold as the amanuensis of Frances Hommes without exercising discretion, signed the name and initials of Frances Hommes to the Lease and Option in compliance with her said instructions. Richard Arnold signed the name of Frances Hommes to the Lease and Option with full power and authority to bind Frances Hommes. There was no evidence presented to the contrary. Where an agent signs the principal’s name to an instrument at the direction of the principal given the agent by telephone, the act of signing is a mechanical act and is regarded as the principal’s signature, the agent being a mere amanuensis. (Estate of Stephens (2002) 28 Cal.4th 665, 675; Ellis v. Mihelis (1963) 60 Cal.2d 206.)”

b. No merit to appellants’ contentions in this regard.

Appellants do not present any coherent argument as to why the trial court’s ruling in this regard was erroneous.

Further, the Hommes trustees, successors to Frances Hommes, now deceased, have not appealed the judgment and the determination by the trial court that the Lease and Option are valid and specifically enforceable as to the Hommes trustees. Therefore, as against the Hommes trustees, the judgment is final. Consequently, irrespective of whether the Lease and Option are valid and specifically enforceable as to Executor Marsh, they are valid and enforceable as against the Hommes trustees. The validity of the signature of Frances Hommes is not a matter of relevance to Executor Marsh, who is the executor of McGuire’s estate.

9. Millar’s delivery of the signed Lease/Option to Jalala.

Appellants take issue with the trial court’s finding that “during April, 2000 Suzanne Millar delivered to [Jalala] the Lease and Option fully signed by the owners of the Property. Suzanne Millar had not been given any instructions by the Executor not to deliver the signed Lease and Option to [Jalala].” (Italics added.) Appellants contend the trial court used the wrong legal standard because “Millar must rather affirmatively be instructed to deliver” the documents to Jalala. The argument is unpersuasive.

The record reflects Executor Marsh signed the Lease and Option and gave them to Millar with no statement or instruction to her that the documents were not to be delivered to Jalala. Executor Marsh should have foreseen that without an instruction not to do so, Millar would deliver the fully executed Lease and Option to Jalala, just as Millar had done previously with the 1997 lease. Given these circumstances, the only reasonable inference to be drawn is that Executor Marsh gave the signed documents to Millar with the intent that they be delivered to Jalala.

Executor Marsh’s claim that he signed the Lease and Option without any intent to enter into a binding transaction with Jalala was rejected by the trial court as incredible. In this regard, the trial court stated: “The Executor is a person of many years experience as a highly skilled, educated, sophisticated, professional businessman, accountant, and tax attorney. He has earned academic degrees from university and law school. The Executor has acted as the personal representative of the McGuire Estate for many years and has often consulted in that capacity during his career with lawyers of the highest reputation. The testimony of Executor that he signed, dated and initialed the Lease and Option simply to signify his receipt thereof is lacking in credibility and is rejected by the court. The Executor never communicated to [Jalala] that he signed, initialed and dated the Lease and Option only to indicate his receipt thereof. The Executor’s dated signature and initials would lead a reasonable person to believe that the Executor intended to be bound thereby, and [Jalala] was so led to believe. The Executor’s undisclosed, uncommunicated, secret, subjective intent is not binding on [Jalala].” (Italics added.)

We fully concur in these findings by the trial court. We reject the contention Executor Marsh signed and dated the Lease and Option only to indicate his receipt thereof, and that Executor Marsh did not authorize Millar to deliver the Lease and Option to Jalala.

10. Executor’s statutory authority to enter into Lease and Option.

Appellants contend the statement of decision is erroneous because it fails to state Executor Marsh exercised his authority in compliance with the Probate Code. The contention fails because the trial court addressed the issue of Executor Marsh’s authority and resolved the issue correctly.

In this regard, the trial court found “The Executor had been given full powers by the Court which appointed him as Executor, under the Independent Administration Of Estates Act and, thus, the Executor was not required to obtain authority of the Court before executing the Lease and Option. (Probate Code [§] 10515, 10536)”

Under the statutory scheme, the personal representative “has the power to enter as lessor into a lease of property of the estate for any purpose . . . for such period, within or beyond the period of administration[.]” (§ 10536, subd. (a), italics added.) Further, the personal representative “who has full authority has the power to grant an option to purchase real property of the estate for a period within or beyond the period of administration.” (§ 10515.) Therefore, Executor Marsh had the authority to enter into both the Lease and the Option with Jalala and appellants have not presented any persuasive argument to the contrary.

11. Millar’s status as ostensible agent.

“Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.” (Civ. Code, § 2317.)

On this issue, the trial court found: “At all times pertinent and relevant hereto, the property manager, Suzanne Millar was the ostensible agent of the owners of the Property in-so-far as [Jalala] was concerned. At all times relevant hereto [Jalala] dealt only with Suzanne Millar and never dealt directly with the Executor, Frances Hommes, Richard Arnold or Henry Jordan. The acts and conduct of Suzanne Millar in dealings with [Jalala] are binding on the owners of the Property.”

Notwithstanding appellants’ contentions, the record fully supports the trial court’s finding Millar was the ostensible agent of the owners, insofar as Jalala was concerned.

Moreover, this case does not turn on Millar’s status as an ostensible agent because Millar did not purport to bind the owners of the Property to the Lease and Option – the Lease and Option were executed by the owners. Millar merely acted as an intermediary between Jalala and the owners.

12. Forgery, fraud, conspiracy and unfair dealing.

As a preliminary matter, the issue of Frances Hommes’s signature on the Lease/Option, affixed by her attorney, already has been discussed above.

At trial, Jalala testified he signed the Lease/Option. This was controverted by appellants, who presented expert testimony from Michael Gryzik, a handwriting expert, that the signature of Jalala on exhibit K, a copy of the agreement, was not actually that of Jalala. The trial court resolved this conflict in favor of Jalala, finding Jalala “signed the Lease and Option on April 3, 2000.”

With respect to any alleged wrongdoing by Jalala, the trial court found: “There is no credible evidence, direct or circumstantial, of any wrongdoing by [Jalala] or by Kamela Kator. Allegations, accusations, and innuendos of forgery, fraud, conspiracy or unfair dealing on the part of [Jalala] or Kamela Kator are without merit and are rejected by the court.” The trial court further found “[t]he assent of the Executor or of Frances Hommes to the Lease and Option was not procured by any misrepresentation, concealment, unfair practice, or circumvention of any party to whom performance would become due under the Lease or Option nor by any promise of such party which has not been substantially fulfilled.”

Merely because appellants disagree with the trial court’s resolution of these factual issues does not render the trial court’s ruling erroneous.

13. Alleged mistake of fact/law and lack of meeting of the minds.

Appellants contend the statement of decision is defective because it fails to set forth any factual and legal basis for the finding “[t]he assent of the Executor or of Frances Hommes was not given under the influence of mistake, misapprehension or surprise.”

To reiterate, the assent of Frances Hommes is not a matter of concern to the appellants herein.

Further, appellants’ argument fails to discuss any evidence in support of the contention that the owners’ assent to the Lease/Option was the product of mistake, misapprehension or surprise. Therefore, the contention fails.

14. Terms of option were reasonably certain.

Appellants contend the terms of the option were not reasonably certain. The trial court properly found to the contrary. We adopt the trial court’s ruling in this regard and reiterate it as follows:

“20. The terms and provisions of the Option are complete and sufficiently certain to be specifically enforced by the court. The real property which is the subject of the Option is sufficiently identified in the Option. The parties to the Option, namely [Jalala] as optionee and Frances Hommes and the Executor as optioner are sufficiently identified in the Option. The purchase price of $1,275,000 is certain and is set forth in the Option. The undisputed evidence is that the purchase price was set by Suzanne Millar. The manner of performance is cash payable on the closing of escrow. (Vezaldenos v. Keller (1967) 254 Cal.App.2d 816[, 825].) The time of performance is sufficiently certain in that it is specified in the Option to be ‘as soon as (pending) litigation is complete’, when the Property ‘conforms to the governmental requirements to resolve the current environmental problems’ and ‘with all the necessary inspections.’ The litigation referred to in the Option has been completed and [Jalala] has waived the condition, inserted for his benefit, regarding necessary inspections except an inspection to determine if the environmental problems have been completely remediated. [¶] 21. Additional terms and conditions of the purchase/sale of the Property are determined and governed by usual and customary practices in the local real estate business. (O’Donnell v. Lutter (1945) 68 Cal.App.2d 376[, 383]; King v. Stanley (1948) 32 Cal.2d 584[, 589].) Some but not all of the usual and customary practices in real property sales in the Los Angeles area are: opening of an escrow to consummate the purchase/sale; pro-ration of rents and property taxes; delivery by the seller of marketable title by grant deed to the Property free and clear of encumbrances; furnishing by the seller of a standard policy of title insurance; and equal division by Buyer and Seller of escrow fees and expenses. [¶] 22. The existence of a lease to a third party of a portion of the Property is not an impediment to the purchase of the Property by [Jalala] who will take title subject to the existing lease. [¶] 23. Reference in the Option to a ‘purchase contract’ does not indicate that there are matters left open for future negotiation. The term ‘purchase contract’ as used in the Option refers to escrow instructions to be executed by the parties upon opening of an escrow to consummate the purchase/sale. There was no evidence presented as to any issue or matter that had been left open for future negotiation and, in fact, there were no other or further items to be negotiated. [¶] 24. The trend of the law is to interpret contracts as valid rather than as unenforceable due to uncertainty if it is possible to reach a fair and just result even though it requires a choice among conflicting meanings and the filling of some gaps that the parties have left. (Cal. Lettuce Growers v. Union Sugar Co. (1955) 45 Cal.2d 474[, 481]; Okun v. Morton (1988) 203 Cal.App.3d 805[, 817].) The Court has followed that precept in this case.”

15. Lease and Option were a single integrated transaction and were supported by consideration.

Appellants challenge the trial court’s finding the Lease and Option constituted a single transaction and that the Lease and Option were supported by consideration. The contention is meritless. Here again, we adopt the trial court’s ruling, to wit:

The Lease and Option were, in fact, a single, integrated document and transaction. [Jalala] delivered the Lease and Option, attached together, to Suzanne Millar for signature of the Property owners. Suzanne Millar delivered the fully signed Lease and Option, attached together, to [Jalala]. The different signing dates were merely logistical in obtaining the signatures. The mutual promises, duties, responsibilities and obligations contained in the Lease and Option constitute consideration therefor. (Spaulding v. Yovino-Young (1947) 30 Cal.2d 138.)” (Italics added.)

It is “uniformly held that the general consideration of the lease, such as the covenant to pay rent or do other acts, supports the option to purchase as well as the right to occupy the premises. [Citations.]” (Spaulding v. Yovino-Young, supra, 30 Cal.2d at p. 141.)

16. Jalala’s financial ability to pay the purchase price.

a. General principles.

A buyer seeking specific performance of a contract for the sale of realty has the burden of proving he was able to perform his obligations under the contract. (Henry v. Sharma (1984) 154 Cal.App.3d 665, 669.) The buyer’s financial ability may be proved by showing the purchaser had liquid assets, property which could be sold and the proceeds used as collateral for a loan, or an actual loan commitment. (Id. at p. 671.) The question whether the purchaser of real property had the ability to perform, i.e., pay the purchase price, is a question of fact for the trial court, which we review for substantial evidence. (Id. at pp. 669-670.)

b. Trial court’s finding concerning Jalala’s ability to pay is supported by substantial evidence.

Appellants challenge the trial court’s finding that “[a]t all times ever since the Option was exercised by [Jalala], [he] has had the financial ability to pay the purchase price of $1,275,000 for the Property.” The contention is meritless because the trial court’s finding is supported by abundant evidence in the record.

Jalala testified that as of November 2004, when he exercised the Option, he and his wife owned real property with equity of $1.75 million, as well as a uniform warehouse and a security company worth about $3 million. He also testified he had $300,000 in cash in the bank as of November 2004, that Bank of America had agreed to lend him the money to purchase the property, and that he owned property of sufficient value to ensure his receiving a bank loan.

In view of the above, we conclude the trial court’s determination with respect to Jalala’s ability to perform is supported by substantial evidence.

17. No merit to appellants’ contention the transaction was not fair, just and reasonable.

In this regard, the trial court found: “The $1,275,000 was adequate consideration at the time the Option was executed for the purchase of the Property. The transaction was fair, just, and reasonable.” (Italics added.) We perceive no error in the trial court’s ruling.

This was an arm’s length transaction between Jalala and the owners. Frances Hommes discussed the Lease and Option with her attorney, Richard Arnold. McGuire’s estate was represented by Executor Marsh. The owners and Jalala agreed to a 10-year lease coupled with an option in Jalala to purchase the property for $1.275 million “as soon as the litigation was complete” and that lessor/seller “must conform to the governmental requirements to resolve the current environmental problems before execution of a purchase contract by buyer.”

Merely because the property may have appreciated in value since 2000 does not render the agreement unfair, unjust or unreasonable. Further, the record reflects that at the time the Option was exercised in 2004, $1.275 million was a fair price for the property. Exhibit U is a copy of an inventory and appraisal filed in the Estate of Frances Hommes in June 2004. That filing showed the Hommes estate’s one-half interest in the commercial retail center at 8233 and 8235 White Oak Avenue and 17700, 17710 and 17724 Roscoe Boulevard had an appraised value of $637,500, which is exactly one-half of the purchase price of $1.275 million.

We conclude the owners failed to show any cognizable reason for invalidating the Option. “It is widely recognized that the courts are not at liberty to revise an agreement under the guise of construing it. Neither abstract justice nor the rule of liberal interpretation justifies the creation of a contract for the parties which they did not make themselves.” (Hinckley v. Bechtel Corp. (1974) 41 Cal.App.3d 206, 211.) Courts cannot make for the parties better agreements than they themselves made or rewrite contracts merely because they may operate harshly or inequitably as to one of the parties. (Ibid.)

18. Specific performance as remedy.

Appellants contend the trial court erred in awarding the remedy of specific performance. The contention is devoid of merit. Because this was a contract for the purchase of real property, the trial court properly determined that pecuniary compensation would be inadequate. (Civ. Code, § 3387.) Therefore, the trial court properly ordered specific performance.

19. Denial of petitions of Executor Marsh and the Hommes trustees.

Finally, appellants contend the trial court failed to set forth the factual and legal basis for the denial of the petitions of Executor Marsh and the trustees of the Frances Hommes Trust. The contention is meritless.

As a preliminary matter, the denial of the petition filed by the Hommes trustees is not a matter of concern to Executor Marsh and the devisees of McGuire’s estate.

As for the denial of the petition of Executor Marsh, the basis of the trial court’s ruling is self-evident. The petitions of Executor Marsh and Jalala were diametrically opposed. The trial court’s grant of Jalala’s petition, on the ground that the Lease and Option were valid and enforceable, was necessarily a denial of Executor Marsh’s petition on the same grounds.

DISPOSITION

The judgment and the July 30, 2007 order are affirmed. Jalala shall recover his costs on appeal.

We concur: CROSKEY, J. ALDRICH, J.

All further statutory references are to the Probate Code, unless otherwise specified. Also, all rule references are to the California Rules of Court.


Summaries of

Estate of McGuire

California Court of Appeals, Second District, Third Division
Mar 25, 2008
No. B201434 (Cal. Ct. App. Mar. 25, 2008)
Case details for

Estate of McGuire

Case Details

Full title:MONROE F. MARSH, as Executor, etc., et al., Plaintiffs and Appellants, v…

Court:California Court of Appeals, Second District, Third Division

Date published: Mar 25, 2008

Citations

No. B201434 (Cal. Ct. App. Mar. 25, 2008)