Opinion
C041625.
7-25-2003
ROBERT HENKENS et al., Plaintiffs and Appellants, v. FRANCISCO TORRES, Defendant and Appellant.
Plaintiffs, Robert and Margaret Henkens, and defendant, Francisco Torres, appeal from the trial courts judgment granting the Henkens specific performance of a real estate contract with Torres.
Torres contends that the trial court lacked subject matter jurisdiction to grant specific performance because the property was within the jurisdiction of the family law court that was presiding over the dissolution of his marriage and, in any event, it erred in granting the Henkens motion for summary judgment because there were triable issues of material fact. The Henkens claim that the court erred in failing to award them any incidental damages.
We agree that the Henkens are entitled to an award of incidental damages. In all other respects, we shall affirm the judgment.
FACTS
In December 2000, the Henkens and Torres entered into a written contract in which Torres agreed to sell real property to the Henkens. When Torres failed to perform in accordance with the terms of the contract, the Henkens sued for specific performance.
The Henkens moved for summary judgment. Their separate statement sets forth the following as undisputed material facts:
The Henkens tendered a purchase offer of $ 150,000 to Torres on November 26, 2000, which offer expired on November 28, 2000. On December 18, 2000, they submitted an identical offer to Torres. In response, his real estate agent, Scott Williamson, conveyed a verbal counteroffer of $ 158,000 to Rick Fritz, the Henkens agent. Fritz told Williamson the Henkens would accept the counteroffer; and on December 22, 2000, Williamson faxed a written confirmation to Fritz, stating he had verbal approval from Torres and would be submitting a signed counteroffer.
On December 26, 2000, Torres signed a counteroffer with a sales price of $ 158,000 and conveyed it to the Henkens, who accepted and signed the counteroffer the same day.
Meanwhile, on December 18, 2000, Fritz had opened escrow on the property based on his verbal understanding with Williamson that the sale was going forward. Escrow was set to close 30 days after the Henkens written acceptance of the counteroffer on December 26, 2000.
On January 22, 2001, the Henkens received a loan commitment letter from Washington Mutual Bank and deposited it in escrow. According to the Henkens, this was an adequate tender of the purchase price within the requisite 30-day period.
Fritz made numerous unsuccessful efforts to arrange with Torres for an appraiser to gain access to the property to complete the appraisal necessary for bank financing. Torres failed or refused to provide the access. Eventually, Fritz contacted the tenants of the property in order to gain access for the appraiser, in contravention of written instructions not to contact the tenants.
On February 7, 2001, Fritz advised Williamson that the Henkens were ready to close escrow. The same day, Torres told Williamson that he wished to withdraw from the contract. Williamson apprised Fritz that Torres was withdrawing from the contract because he would not receive enough net proceeds from the sale.
The purchase of Torress property was intended to satisfy the necessary requirements for an Internal Revenue Service Code section 1031 tax-free exchange (1031 exchange) arising out of an earlier sales transaction by the Henkens. This fact was disclosed to Torres in the offer they made to him. To qualify for the 1031 exchange, the transaction with Torres had to be completed by June 2001, or the Henkens would lose the right to defer the taxes on the earlier sales transaction.
The Henkens asserted that they had tendered their performance, and any delay in closing escrow beyond the 30-day period expiring on January 25, 2001, was due to Torress failure to provide access to the property for the appraisal necessary to complete the loan process. They also asserted that the property was a four-unit rental property, generating rents of $ 350 a month for each unit, for a total of $ 1,400 a month.
Torres opposed the summary judgment motion. His separate statement of undisputed facts asserted that (1) he signed the counteroffer on December 6, 2000, (2) he directed Williamson that the sale had to be completed by December 31, and (3) Williamson placed the December 26 date on the counteroffer. But the record does not include any evidence supporting the first two factual assertions. As for the third factual assertion, Williamsons deposition testimony discloses he placed the date of December 26, 2000, on the counteroffer but that he would not have done so if it was not the date that Torres signed the document.
The trial court granted the summary judgment motion. It found that (1) Torress separate statement of material facts was unresponsive to the Henkens statement of facts and, thus, their facts remained undisputed, (2) it was impossible for Torres to have signed the counteroffer on December 6, 2000, because the counteroffer was made in response to the Henkens offer, which the undisputed evidence disclosed was made on December 18, (3) there was no evidence to support Torress contention that the sale had to be completed by December 31, and (4) Torress refusal to cooperate caused the delay in closing escrow.
The courts formal order granting summary judgment directs that judgment be entered compelling Torres to convey the property to the Henkens, and awards to the Henkens their reasonable attorney fees and costs, as well as "damages according to proof."
Torres moved for reconsideration or to vacate the summary judgment order. In conjunction with their motion for attorney fees and costs, the Henkens moved to obtain incidental damages, namely, the rents and profits of which they were deprived by Torress failure to timely perform the contract. These motions will be discussed more fully in connection with the parties appellate contentions.
After denying the parties motions, the trial court entered a judgment directing Torres to convey the property to the Henkens in accordance with the terms of the contract.
DISCUSSION
I
Torres contends the trial court did not have subject matter jurisdiction to hear the specific performance action because the property was involved in a pending dissolution action and, thus, was within the exclusive jurisdiction of the family law department of the superior court. He concedes that his motion to set aside the summary judgment order did not frame the issue in this matter, but he contends that a lack of subject matter jurisdiction can be raised at any time, even for the first time on appeal.
In the trial court, Torres moved to set aside the summary judgment order on the ground that he was involved in a dissolution action and that a summons issued by the family law court contained a temporary restraining order precluding him from transferring any real property—regardless of whether it was community or separate property—without the written consent of the other party or an order of the family law court. He argued that a court of equity could not enter a decree of specific performance of a contract if he lacked the present ability to perform, and that he could not perform the contract because his wife refused to consent to his request to be relieved from the restraining order.
The record contains an interspousal grant deed, signed by Torress wife in 1991, conveying the property in question to Torres, as his sole and separate property.
Torres sought relief from the summary judgment order pursuant to the mandatory relief provisions of Code of Civil Procedure section 473, subdivision (b), claiming his failure to raise the impediment earlier was due to his former attorneys excusable neglect.
Code of Civil Procedure section 473, subdivision (b), states in pertinent part: "The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. . . . Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorneys sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorneys mistake, inadvertence, surprise, or neglect. . . ."
The trial court denied the motion to set aside the summary judgment, explaining that a judgment had not yet been entered, that the mandatory relief provisions of Code of Civil Procedure section 473, subdivision (b), did not apply to an order granting summary judgment, and that Torress attorney had not submitted the requisite affidavit of fault. The court stated its ruling was without prejudice to Torress seeking relief in the family law department from the entry or enforcement of the judgment for specific performance.
Torres does not reiterate on appeal the arguments he presented in the trial court. Instead, he contends that the judgment is void because the trial court lacked subject matter jurisdiction over his contract dispute with the Henkens due to the family law proceeding, which involved property which was the subject of the contract dispute. According to Torres, because the dissolution action was filed and the jurisdiction of the family law court was invoked prior to the Henkens initiation of their lawsuit, the family law court had exclusive jurisdiction over the property, which could not be interfered with by any other department of the superior court.
Torres relies on Williams v. Superior Court (1939) 14 Cal.2d 656, 96 P.2d 334 (hereafter Williams) and Glade v. Glade (1995) 38 Cal.App.4th 1441 (hereafter Glade) to support his position.
In Williams, the judge of department 34 of the Superior Court of Los Angeles County ordered one of the court reporters to appear to show cause why he should not be adjudged guilty of contempt for failing to comply with a previous order directing him to prepare a reporters transcript in accordance with a written agreement between the court reporter and the petitioner, Edna Williams. Pending the contempt hearing, the judge of department 12 of the same superior court issued an order that purported to declare void, for want of jurisdiction, the order made by the judge of department 34 upon which the citation for contempt was based. (Williams, supra, 14 Cal.2d at p. 658.)
Williams found that in doing so, the judge of department 12 exceeded his jurisdiction. (Williams, supra, 14 Cal.2d at p. 662.) Williams stated: "Where a proceeding has been duly assigned for hearing and determination to one department of the superior court by the presiding judge of said court in conformity with the rules thereof, and the proceeding so assigned has not been finally disposed of therein or legally removed therefrom, it is beyond the jurisdictional authority of another department of the same court to interfere with the exercise of the power of the department to which the proceeding has been so assigned. [Citation.] In other words, while one department is exercising the jurisdiction vested by the Constitution in the superior court of that county, the other departments thereof are as distinct therefrom as other superior courts. [Citation.] If such were not the law, conflicting adjudications of the same subject-matter by different departments of the one court would bring about an anomalous situation and doubtless lead to much confusion. [Citation.]" (Ibid.)
When the judge of department 12 made the order under review, the proceeding in department 34 had not been finally disposed of since the contempt proceeding was still pending. The obvious purpose of the order issued by the judge of department 12 was to nullify the proceedings taking place in department 34. "This the judge of department 12 was without jurisdiction to do. . . . "The judge presiding in one department has the power to make and enforce all orders necessary for the disposition of the proceeding that has been assigned to his department, and no judge sitting in any other department can interfere with him in the exercise of such power." (Williams, supra, 14 Cal.2d at p. 663.)
In Glade, supra, 38 Cal.App.4th 1441, the other case upon which Torres relies, the trustee of a revocable family trust filed a complaint to foreclose on a community property residence pursuant to a note and trust deed used to secure a loan from the trust to the Glades, who were husband and wife. Prior to the initiation of the foreclosure action, the wife had filed a petition to dissolve her marriage. She brought a motion in the family law court to consolidate the foreclosure action with the marital dissolution action because of overlapping issues concerning the right and title to the house. She also filed a motion in the family law court to join the trust as a party to the marital dissolution action. (Id. at pp. 1445-1446.)
After the trust filed a motion for summary judgment in the foreclosure action, the wife filed an application in the family law court seeking an order to stay further prosecution of the foreclosure action. (Glade, supra, 38 Cal.App.4th at p. 1446.) The family law court joined the trust in the marital dissolution action, denied without prejudice the wifes motion to consolidate the foreclosure action with the dissolution action due to the absence of a jury waiver form, and issued an order staying the foreclosure action. (Id. at p. 1447.) Following the issuance of the stay, the judge in the foreclosure action—who did not have knowledge of the stay—granted the trusts motion for summary judgment. (Id. at pp. 1447-1448.) When the judge learned of the stay, he denied the wifes motion for reconsideration, stating the family law court had no authority to enjoin the foreclosure action. (Id. at pp. 1448-1449.)
Glade held the family law court, which was the first to assume jurisdiction over the matter, had the authority to join the trust in the dissolution proceeding and had priority of jurisdiction. (Glade, supra, 38 Cal.App.4th at pp. 1450-1451.) Hence, the family law court had authority to stay the prosecution of the foreclosure action, and the judge in the foreclosure action lacked jurisdiction to award summary judgment. (Id. at p. 1455; see also Franklin & Franklin v. 7-Eleven Owners for Fair Franchising (2000) 85 Cal.App.4th 1168, 1176 ["the first court to assert subject matter jurisdiction possesses the power and authority to grant equitable relief restraining proceedings in another court that threaten to impair the judgment"].) Under the circumstances, the judge in the foreclosure action abused its discretion in refusing to recognize the validity of the family law courts order. (Glade, supra, 38 Cal.App.4th at p. 1458.)
Here, the trial court did not purport to expressly overrule an order issued by another judge and concerning the same parties, as the court did in Williams. Nor did it refuse to recognize a stay of the specific performance action issued by the family law court as the court did in Glade, and there is no evidence that such a stay was ever issued by the family law court. The trial court simply denied Torress Code of Civil Procedure section 473 motion on procedural grounds, which Torres does not challenge on appeal, and provided that the denial of the motion was without prejudice to Torress seeking relief in the family law court from the entry or enforcement of the judgment.
There is no evidence that Torres ever moved to abate the specific performance action on jurisdictional grounds, or that he sought to join the Henkens in the dissolution proceeding, or that he sought a stay of the specific performance action from the family law court as suggested by the trial court. Instead, Torres waited until the judgment was entered and then raised the jurisdictional issue for the first time on appeal, claiming that a lack of subject matter jurisdiction may be raised at any time and is not waived by a failure to object.
However, Torres has not shown that the problem concerns a lack of subject matter jurisdiction, as opposed to an act in excess of jurisdiction.
"Just as `jurisdiction has different meanings [citation], a `lack of jurisdiction can take different forms and have different consequences. Lack of jurisdiction in its most fundamental or strict sense means an entire absence of power to hear or determine the case, an absence of authority over the subject matter or the parties. [Citation.] [P] `But in its ordinary usage the phrase "lack of jurisdiction" is not limited to these fundamental situations. [Citation.] It is also applied more broadly to a case where, though the court has jurisdiction over the subject matter and the parties in the fundamental sense, it has no "jurisdiction" (or power) to act except in a particular manner, or to give certain kinds of relief, or to act without the occurrence of certain procedural prerequisites. [Citation.] Speaking generally, any acts which exceed the defined power of a court in any instance, whether that power be defined by constitutional provision, express statutory declaration, or rules developed by the courts and followed under the doctrine of stare decisis, are in excess of jurisdiction . . . . [Citations.]" (People v. National Automobile & Casualty Ins. Co . (2000) 82 Cal.App.4th 120, 125.)
"The distinction between a lack of jurisdiction over the cause and an act in excess of jurisdiction has significant consequences. For instance, subject matter jurisdiction cannot be conferred by consent, waiver, or estoppel. [Citation.] By contrast, when the court has jurisdiction of the subject, a party who seeks or consents to action beyond the courts power as defined by statute or decisional rule may be estopped to complain of the ensuing action in excess of jurisdiction. [Citation.] A litigant who has stipulated to a procedure in excess of jurisdiction may be estopped to question it when "To hold otherwise would permit the parties to trifle with the courts." [Citation.]" (People v. National Automobile & Casualty Ins. Co., supra, 82 Cal.App.4th at pp. 125-126.)
Torres provides no analysis concerning whether the trial court lacked subject matter jurisdiction, or whether it merely acted in excess of jurisdiction. In particular, he provides no argument or authority that a court in a third-party action necessarily is without subject matter jurisdiction in a case, such as this one, where (1) a dissolution proceeding is initiated in the family law court, (2) the third party files a separate action against one of the spouses concerning that spouses property in a trial court which has subject matter jurisdiction to try such actions, and (3) the third partys action is not consolidated with, or the third party is not joined as a party in, the dissolution proceeding. (In re Marriage of Ananeh-Firempong (1990) 219 Cal. App. 3d 272, 278, 268 Cal. Rptr. 83 [it is appellants burden to present argument and authority on each point made]; Estate of Hoffman (1963) 213 Cal. App. 2d 635, 639, 29 Cal. Rptr. 60 [appellant has the responsibility to support claims of error with citation and authority; this court is not obligated to perform that function on the appellants behalf].)
Torres simply assumes the jurisdictional deficiencies in the cases upon which he relies concerned subject matter jurisdiction. But Williams v. Superior Court, supra, 14 Cal.2d 656, stated that "jurisdiction is vested by the Constitution in the court and not in any particular judge or department thereof; and . . . whether sitting separately or together, the judges hold but one and the same court. . . . [P] . . . [P] If one department of a court exercises authority in a matter which might properly be heard in another, the action constitutes at most an irregularity and does not affect the jurisdiction." (Id. at pp. 662-663.)
Thus, where there is a conflict between judges of different departments of the same court, as in Williams, supra, and Glade, supra, "it would seem that subject matter jurisdiction is not affected and that the objection is one of excess of jurisdiction on the part of the interfering judge." (2 Witkin, Cal. Procedure (4th ed. 1996) Courts, § 232, p. 302.) And, as we have noted, a party may be estopped from complaining for the first time on appeal that the court acted in excess of its jurisdiction. (People v. National Automobile & Casualty Ins. Co., supra, 82 Cal.App.4th at pp. 125-126.)
Although the trial court expressly advised Torres that its decision to order specific performance was without prejudice to his seeking relief in the family law court in the form of a stay of the entry or enforcement of the specific performance judgment (see Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2002) P 3:286, pp. 3-95; Code Civ. Proc., § 1048), he failed to do so. The only evidence in the record that Torres ever sought any relief in the family law court is a motion for relief from the temporary restraining order, which Torres filed approximately one year earlier in December 2000. Torres averred that he needed to sell some property for money for living expenses, but did not mention to the family law court that he had already placed the apartment building on the market and entered a contract of sale with the Henkens. His wife opposed the motion for relief, and apparently the family law court denied the motion in January 2001. There is no evidence of a further attempt by Torres to obtain relief from the restraining order or any attempt to obtain a stay of the specific performance action filed in March 2001, or a stay of the entry of judgment in May 2002.
Because (1) the trial court ordered the entry or enforcement of the judgment was subject to being stayed by the family law court if Torres chose to seek such relief, (2) Torres has not shown that he attempted to obtain relief from the family law courts restraining order on the basis of the Henkens specific performance lawsuit or that he attempted to obtain a stay of the specific performance proceedings from the family law court, and (3) he failed to make his jurisdictional argument in his procedurally defective Code of Civil Procedure section 473 motion, we conclude that Torres is estopped from raising the alleged jurisdictional defect on appeal.
In any event, "unless the action of one judge is necessarily incompatible with the prior action of another judge [citation], the action of the former cannot be attacked for the first time on appeal." (Bret Harte Inn, Inc. v. City and County of San Francisco (1976) 16 Cal.3d 14, 29, 127 Cal. Rptr. 154, 544 P.2d 1354.)
From the record presented on appeal, we cannot say that the trial courts judgment was necessarily incompatible with any action of the family law court. There is no evidence that, at the time the specific performance judgment was entered in May 2002, the family law courts temporary restraining order remained in effect with respect to the subject property. In fact, there is no evidence that the dissolution action remained unresolved at that time, or that the family law court had characterized and disposed of the property in a manner that conflicts with the specific performance judgment. The only evidence in the record regarding the character of the property in question is that it was Torress sole and separate property by virtue of an interspousal grant deed signed by Torress wife in 1991.
In other words, Torres has failed to make a factual showing establishing that the trial courts judgment was necessarily incompatible with an existing order from the family law court. Indeed, under the circumstances of this case, it would not be appropriate to allow Torres—who could have sought to abate the specific performance action or sought relief in the family court—to violate the restraining order by contracting to sell the property to the Henkens and yet rely on the restraining order to bar the Henkens recourse for his breach of contract.
For the reasons stated above, Torres has failed to establish that the trial courts judgment necessarily is in excess of its jurisdiction and void.
II
Next, Torres contends the trial court erred in granting the Henkens summary judgment motion because there is a triable issue of material fact regarding the date upon which Torres signed the counteroffer. Torres claims that he signed it on December 6, 2000, and, according to its terms, the counteroffer expired three days later on December 9; thus, the Henkens acceptance on December 26 was ineffective and did not result in the formation of a contract.
The problem with Torress contention is that he failed to meet his burden of proof in the trial court. And he has failed to meet his burden of establishing error on appeal.
When a motion for summary judgment is supported by affidavits sufficient to sustain the motion, the burden of showing triable issues exist shifts to the party opposing the motion to produce admissible evidence raising a triable issue of fact. (Crouse v. Brobeck, Phleger & Harrison (1998) 67 Cal.App.4th 1509, 1524.) An issue of fact can be created only by demonstrating a conflict in the evidence, not by cryptic, broadly phrased, and conclusory assertions or by mere speculation and conjecture. (Myricks v. Lynwood Unified School Dist. (1999) 74 Cal.App.4th 231, 237.)
Without a separate statement of undisputed facts supported by evidence in the form of affidavits or declarations, it is impossible for the party opposing the motion to demonstrate the existence of disputed facts. (Lyons v. Security Pacific Nat. Bank (1995) 40 Cal.App.4th 1001, 1006-1007.) "Possible theories not fully developed or factually presented to the trial court cannot create a "triable issue" on appeal." (North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 31, italics and citation omitted; Sacks v. FSR Brokerage, Inc. (1992) 7 Cal.App.4th 950, 962.)
"On appeal, we review the record de novo to determine whether the moving party met its burden of proof. [Citations.] But this de novo review does not obligate us to cull the record for the benefit of the appellant in order to attempt to uncover the requisite triable issues. As with an appeal from any judgment, it is the appellants responsibility to affirmatively demonstrate error and, therefore, to point out the triable issues the appellant claims are present by citation to the record and any supporting authority. In other words, review is limited to issues which have been adequately raised and briefed. [Citations.]" (Lewis v. County of Sacramento (2001) 93 Cal.App.4th 107, 116, italics added.)
The Henkens presented evidence that they made an offer to Torres on December 18, 2000, Torres presented them with a signed counteroffer on December 26, and they accepted on the same day; thus, they had until January 25, 2001, to perform, and their tender of the purchase money in the form of a commitment letter from the bank on January 22 was timely. The Henkens also presented evidence that the delay in closing escrow prior to January 25 was occasioned by Torress failure to provide access to the property to the banks appraiser.
On appeal, Torres does not point to any evidence in the record that, contrary to the Henkens showing in support of their summary judgment motion, he signed the counteroffer on December 6, 2000. More importantly, our review of the evidence discloses that, although Torres claimed in the trial that he signed the counteroffer on December 6, he did not present any evidence to this effect. Moreover, as the trial court pointed out, because the Henkens did not make their offer to Torres until December 18, it was impossible for Torres to have made a counteroffer prior to that date.
Williamsons deposition testimony that he assumed the date of December 26 on the counteroffer was correct because he would not have placed that date on the document "if that wasnt the date that [Torres] signed it" certainly is of no help to Torres.
In his reply brief, Torres claims he presented evidence that Williamson represented to him that the sale should be closed by December 31. It is not clear what Torres hopes to accomplish with this assertion, as he does not explain how this creates a triable issue of material fact. His moving papers in the trial court disclose that Torres claimed he told Williamson, whom Torres incorrectly refers to as the Henkens agent, that the sale must be completed by December 31, 2000, "or the sale was off." Although not explicitly spelled out, presumably Torres believed that this demonstrated the Henkens tender of the commitment letter from the bank on January 22, 2001 was untimely. Such a contention is unavailing for two independent reasons.
First, the manner in which Torres presents his argument violates established rules of appellate procedure. For example, an argument raised for the first time in a reply brief without a showing of good cause may be deemed waived. (Garcia v. McCutchen (1997) 16 Cal.4th 469, 482, fn. 10, 940 P.2d 906; Neighbours v. Buzz Oates Enterprises (1990) 217 Cal. App. 3d 325, 335, fn. 8, 265 Cal. Rptr. 788.) And an appellant may not simply incorporate by reference arguments made in papers filed in the trial court rather than brief the arguments on appeal. Such deficient arguments are not considered on appeal. (Garrick Development Co. v. Hayward Unified School Dist. (1992) 3 Cal.App.4th 320, 334.)
Second, even if we were to consider his argument, Torress evidence fails to establish a triable issue of material fact. During his deposition testimony, Williamson was asked if he ever represented to Torres that the sale offered by Henkens was to be completed by December 31. Williamson replied: "I did tell him that that was the request on there." But Williamson did not recall Torres ever indicating he no longer wanted to sell the property because the sale had not closed by the end of the year. This evidence does not establish that the counteroffer Torres made to the Henkens, and accepted by them, required the sale of the property to be completed by December 31. At most, it indicates Williamson told Torres the Henkens offer requested that the sale be completed by December 31; however, this representation is contradicted by the written offer. Torress written counteroffer contains no mention of it being contingent upon the sale being completed by the end of December. Whatever misunderstanding that may have existed between Torres and his agent regarding the terms of the counteroffer, it was not part of Torress contract with the Henkens because there is no evidence that his agent made them aware of Torress alleged desire for an expedited closing date, or that they agreed to this as a term of the contract.
The Henkens offer was contingent on the close of escrow by the end of December on an investment property held by them, but nothing in their offer indicates that the close of escrow on their purchase of Torress property had to be completed by the end of December. Rather, escrow was to be completed within 30 days of acceptance of the Henkens offer. This term was incorporated into Torress counteroffer.
In sum, Torres has failed to establish that there was a triable issue of material fact regarding whether he signed the counteroffer on December 6 and, thus, he has failed to establish that the trial court erred in granting the summary judgment motion.
III
The Henkens assert that the trial court erred in refusing to award them incidental damages, such as the rents and profits they would have received if their purchase of the rental property had occurred within 30 days of the opening of escrow, in accordance with the terms of the contract.
As stated previously, the court ordered that a judgment be entered compelling Torres to convey the property to the Henkens, and awarding the Henkens their reasonable attorney fees and costs, as well as "damages according to proof." Thereafter, the Henkens filed a motion for costs and attorney fees and, at the same time, moved for an award of incidental damages pursuant to Ellis v. Mihelis (1963) 60 Cal.2d 206, 32 Cal. Rptr. 415, 384 P.2d 7 (hereafter Ellis).
In Ellis, the California Supreme Court explained that, when a contract for the purchase of land is specifically enforced, the purchaser is entitled to a judgment for the net rents and profits from the time that he was entitled to a conveyance of the property, and the seller is entitled to an offset for the interest on the purchase money that he would have received had the contract been performed. (Ellis, supra, 60 Cal.2d at p. 219; Bravo v. Buelow (1985) 168 Cal. App. 3d 208, 214-215, 214 Cal. Rptr. 65; D-K Investment Corp. v. Sutter (1971) 19 Cal. App. 3d 537, 549, 96 Cal. Rptr. 830; 12 Miller & Starr, Cal. Real Estate (3d ed. 2001) Remedies, § 34.26, p. 94.)
These incidental damages are not designed to give the buyer damages for the sellers breach of contract; they are intended to relate the performance back to the contract date of performance and to adjust the equities between the parties because of the delay in the sellers performance. (Ellis, supra, 60 Cal.2d at pp. 219-220.) "The result is more like an accounting between the parties than like an assessment of damages." (Id. at p. 220.)
Torres opposed the request for an award of incidental damages, contending that his costs of maintaining the property offset the revenues he received and, thus, there were no net rentals and profits to be paid to the Henkens.
The trial court denied the Henkens request for the calculation of incidental damages. Although Torres had not raised the issue, the court determined that a motion to tax costs was not the appropriate method to establish incidental damages on a cause of action for specific performance. In the courts view, if the Henkens sought such damages, they were required to establish this element of their cause of action in their motion for summary judgment. According to the court, the Henkens separate statement of undisputed facts was silent as to incidental damages, and it was apparent from Torress opposition to the motion for the calculation of incidental damages that there were triable issues of fact as to the amount of incidental damages.
The Henkens filed a motion for reconsideration, asserting that they had not sought incidental damages as an element of costs, but pursuant to a separate motion for an accounting. They argued the rents and profits from the sale property were not really damages—they were merely designed to place the Henkens in a position as nearly as possible to that they would have been in had the contract been performed timely according to its terms. Therefore, once the court determined that they were entitled to specific performance of the contract, they also were entitled to an award of incidental damages. Furthermore, they argued, incidental damages are not an element of a specific performance action that must be pleaded; all that was necessary to allow the award of such damages was a general prayer for specific performance and for such other relief as the court may deem just, which they had done.
Torres opposed the motion for reconsideration on the ground that it did not raise any new facts or law.
The trial court agreed with Torres and denied the Henkens motion. It reiterated that they had not requested incidental damages in connection with their summary judgment motion and, thus, such damages could not be awarded as part of the judgment. The court also determined that its formal order incorrectly reflected it had awarded the Henkens "damages according to proof," when its minute order did not provide for such an award. Rather, the Henkens had inserted the unauthorized language in the formal order, which the court had signed inadvertently. Therefore, the court struck that language from the minute order.
On appeal, the Henkens contend, as they did in the trial court, that they are entitled to an award of incidental damages pursuant to Ellis, supra, 60 Cal.2d 206. They assert they were not required to plead such damages as an element of their specific performance cause of action, and the court committed error in ruling otherwise.
In Greenstone v. Claretian Theo. Seminary (1959) 173 Cal. App. 2d 21, 343 P.2d 161 (hereafter Greenstone), the defendant claimed that the trial court erred in awarding the plaintiff incidental damages because a request for such damages had not been pleaded. Greenstone held that the lack of pleading was not fatal because the contract the plaintiff sought to specifically enforce expressly provided that interest, taxes, rents, and fire insurance were to be prorated to the date the deed was recorded. (Id. at pp. 30-32, disapproved on another point in Ellis, supra, 60 Cal.2d at p. 221.) Consequently, the request for specific performance of the contract encompassed a request that all of the contracts terms be specifically enforced, including the proration of the aforementioned items in accordance with the terms of contract. (Greenstone, supra, 173 Cal. App. 2d at p. 32; see also 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 742, p. 199.)
Here, the parties contract contains a similar provision for the proration of rents and taxes. It states: "Unless otherwise agreed in writing, real property taxes and assessments, interest, rents, other revenue, utilities, Owners Association ("OA") regular, special, and emergency dues and assessments imposed prior to Close of Escrow, premiums on insurance assumed by Buyer, payments on bonds and assessments assumed by Buyer, and payments on Mello-Roos and other Special Assessment District bonds and assessments which are now a lien shall be PAID CURRENT and prorated between Buyer and Seller as of Close of Escrow."
Accordingly, the Henkens pleading requesting specific performance of the contract necessarily included a request that this term of the contract be specifically enforced. (Greenstone, supra, 173 Cal. App. 2d at. p. 32.)
But the Henkens misinterpret the trial courts ruling, which did not state they had neglected to plead a request for incidental damages in their complaint. Rather, the court found the Henkens could not recover such damages because they did not establish their entitlement to them in their summary judgment motion. According to the court, they did not raise the issue in their summary judgment motion, and Torress opposition to their subsequent request for incidental damages demonstrated that there were triable issues of material fact concerning their entitlement to incidental damages; hence, it would be inappropriate to award them such damages.
Our review of the moving papers in support of the Henkens summary judgment motion reveals that they asked for incidental damages in their points and authorities as follows: "Seller is entitled to additional damages, including but not limited to . . . the loss of income on the property for the period from the date the escrow should have closed until escrow does close." Their separate statement of undisputed facts asserted that (1) escrow should have closed on January 25, 2001, and (2) Torres received rentals of $ 1,400 a month from the property, which statements were supported by the contract, the listing agreement, and declarations from Fritz and Mr. Henkens.
Thus, the record discloses that the Henkens raised the issue in their motion for summary judgment. In addition, their complaint for specific performance of the contract necessarily included a request that all of the contract terms be enforced, including the requirement that the rents and taxes be prorated. When the court determined that the Henkens were entitled to specific performance of the contract, this necessarily included the right to receive the prorated net rents and profits they would have received had the contract been performed timely by Torres. (Ellis, supra, 60 Cal.2d at pp. 219-220; Bravo v. Buelow, supra, 168 Cal. App. 3d at pp. 214-215; Greenstone, supra, 173 Cal. App. 2d at p. 32.)
Because the Henkens are entitled to the net rents and profits between the date of performance provided for in the contract and the date of the execution of the judgment (Stratton v. Tejani (1982) 139 Cal. App. 3d 204, 213, 187 Cal. Rptr. 231), they could not be expected to establish in their summary judgment motion the exact amount of their incidental damages. All they needed to demonstrate was the fact of their entitlement to such damages. Once the trial court determined that the Henkens were entitled to specific performance of the contract, which included the right to incidental damages, it should have retained jurisdiction to perform the requisite equitable accounting.
Accordingly, we shall remand the matter for the trial court to conduct an equitable accounting of the Henkens incidental damages. (Stratton v. Tejani, supra, 139 Cal. App. 3d at p. 213.)
DISPOSITION
The matter is remanded to the trial court to perform an equitable accounting of the incidental damages to which the Henkens are entitled in conjunction with the specific performance of the contract. In all other respects, the judgment is affirmed. Torres shall reimburse the Henkens for their costs on appeal. (Cal. Rules of Court, rule 27(a).)
We concur: RAYE, J., KOLKEY, J.