Opinion
H046990
12-16-2020
SU HUNG, Plaintiff and Appellant, v. MOHAMAD CHOUKEIR, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 14-1-CV-27185)
Plaintiff challenges the trial court's judgment enforcing a written agreement settling litigation concerning a real property boundary dispute. Plaintiff argues the agreement is unenforceable under Code of Civil Procedure section 664.6 because of uncertainty regarding settlement terms. The challenge to defendant's adjusted property boundaries fails because we reject plaintiff's contention that a referenced map was not incorporated into the settlement agreement. But we are persuaded that a referenced road easement suffers from material uncertainty because its location is not specified in the settlement agreement. We will therefore reverse the judgment.
I. BACKGROUND
A. PRE-SETTLEMENT ACTIVITY
Defendant purchased a rectangular tract of land in Morgan Hill in 2006. The property included a house and other improvements. The property was bounded on three sides by a larger tract of land owned by plaintiff. The two properties had shared the same owner who, in 1985, surveyed and divided the acreage, and recorded a deed gifting the smaller parcel to a relative. The relative later purchased from the grantor easements for vehicle access, a septic tank and leach field under the grantor's property, and "a waterline and water tank, power line, and phone line across the [grantor's] property." She had a roadway graded to the lot, installed utilities, and built a barn which was converted into a residence. The grantor sold the larger parcel in 1994, and plaintiff became the successor in interest to that property in 2005.
A 2013 land survey revealed that defendant's residence and several improvements were located outside the legal description of his property and on plaintiff's property. Plaintiff would not agree to a lot line adjustment to correct what defendant viewed as an error between the recorded description of his property and the boundary lines agreed upon in 1985. She sued defendant for ejectment, trespass, and nuisance. Defendant counterclaimed for declaratory relief, quiet title, deed reformation, and adverse possession.
The parties reached a settlement in June 2017, which was memorialized in an 11-page written agreement. Among other settlement terms, the parties agreed to a lot line adjustment "in substantial compliance with the map attached hereto as Exhibit A." Exhibit A, a preliminary survey plat prepared on May 1, 2017, shows the recorded lot lines for defendant's property (a 550- by 200-foot parcel abutting plaintiff's property to the north, west, and south), and a proposed new lot (400 by 275 feet), with the northern boundary moved about 65 feet south of the recorded northern boundary, the eastern boundary moved about 175 feet west of the recorded boundary, and the western line moved about 50 feet west of the recorded line. The revised lot, landlocked by plaintiff's property, included the area on which defendant's residence was located. The settlement agreement required plaintiff to provide defendant with the necessary authorization to apply for the lot line adjustment, and to cooperate with defendant to obtain approval of the entitlements necessary for the adjustment.
The parties also agreed to a road easement benefiting plaintiff, "that will connect to the existing driveway and be located in the northwest corner of [defendant's] property adjacent to the common boundary lines thereof, the location and dimensions of which shall be subject to mutual agreement of the Parties and included in the survey." Neither the existing driveway nor the new road easement is shown in exhibit A. The agreement provided that each party "has the right to enforce this Settlement Agreement, or any provision thereof, by filing any appropriate motion or proceeding, including, without limitation, a motion pursuant to California Code of Civil Procedure § 664.6" in the superior court. The parties further agreed to the superior court's jurisdiction to determine any motion brought under that code section. The agreement was signed by the parties and their counsel in counterparts.
B. POST-SETTLEMENT ACTIVITY
Defendant prepared a lot line adjustment application for county approval in January 2018. The application included a new map with property lines different from those shown in exhibit A to the settlement agreement. The January 2018 map differed from exhibit A in that it maintained the original (recorded) north property line, and measured 339.5 by 324 feet instead of 400 by 275 feet. The map shows the existing driveway but not the new road easement. The driveway enters defendant's property near the northwest corner of the lot, and runs east along the lot line for roughly 60 feet before turning north onto plaintiff's property and reentering defendant's property at a location consistent with the single entry point conforming to exhibit A. Defendant provided plaintiff with another map showing the easement he was willing to give plaintiff, and the easement plaintiff sought from defendant. That map is not included in appellant's appendix. According to defendant's attorney, plaintiff's proposed easement, which traversed the central part of defendant's property and the leach field, was unfeasible and impractical. Plaintiff's attorney held the view that the parties had an understanding regarding "the only appropriate spot" according to surveyors, which was the easement proposed by his client. Plaintiff did not sign the lot line adjustment application because defendant's proposed placement of the road easement deviated from what had been agreed to during settlement negotiations.
According to defendant's attorney, the easement was not included on the application map because it was not required by the county, but it would be included on the plat map, after the county accepted the proposed property lines.
We will not consider as expository material exhibit A to plaintiff's opening brief, which plaintiff argues provides an objective overview of the parties' dispute. According to the legend, the illustration superimposes over a Google Earth image the boundaries of plaintiff's recorded title, defendant's recorded title, defendant's title as allegedly understood by the 1985 grantor and grantee, the existing driveway, and each party's proposed easement. The illustration does not include the adjusted lot lines proposed in exhibit A to the settlement agreement, and the proposed easement locations shown on the diagram were not provided to the trial court or included in appellant's appendix.
Defendant moved the trial court to enforce the settlement agreement under Code of Civil Procedure section 664.6. (Further code references are to this section.) He argued plaintiff had violated the agreement by failing to sign the lot adjustment application. He asked the court to order plaintiff to sign the application, and he sought attorney's fees under the settlement agreement. The settlement agreement (including exhibit A), the lot line adjustment application, the January 2018 map, and correspondence exchanged by counsel were attached to counsel's supporting declaration.
Plaintiff countered that the settlement agreement was unenforceable (and thus not reducible to a judgment under section 664.6) because mutual assent was lacking on two material points—the adjusted lot boundaries and the road easement location. Plaintiff asserted that exhibit A was not part of the executed settlement agreement, and the January 2018 map showing adjusted lot lines and easement location proposed by defendant in support of the application demonstrated the absence of mutual assent. Plaintiff asked the court to either deny the motion or "hold off on ruling and conduct a site visit to determine what is an objective, reasonable lot line adjustment and location of the easement."
The court granted defendant's motion, finding that "the parties clearly and unequivocally agreed to and understood the Settlement Agreement and Mutual Release, and that its material terms are clearly set forth in detail in the writing." It viewed the parties' agreement that the court "shall have jurisdiction to determine any motion brought pursuant to California Code of Civil Procedure § 664.6" merely "as a confirmation that the court may consider under the statute whether to enter judgment pursuant to the terms of the settlement." The court did not order the specific relief requested by defendant; it entered judgment on the agreement, including exhibit A, and reserved defendant's request for attorney's fees and "[a]ny other specific proceedings to enforce the judgment, once entered, or any of its terms."
II. DISCUSSION
A. STANDARD OF REVIEW
Section 664.6 provides a summary procedure for the trial court to enter a judgment incorporating the settlement reached by parties to a lawsuit: "If parties to pending litigation stipulate, in writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement." (Ibid.) The trial court may also retain jurisdiction over the parties to enforce the settlement. (Ibid.)
The validity of a settlement agreement is "judged by the same legal principles applicable to contracts generally." (Timney v. Lin (2003) 106 Cal.App.4th 1121, 1128.) " ' "[W]hether a certain or undisputed state of facts establishes a contract is one of law for the court." ' " (Alexander v. Codemasters Group Limited (2002) 104 Cal.App.4th 129, 141.) Thus, questions of law regarding settlement enforcement, including whether a settlement agreement is " 'sufficiently certain to make the precise act which is to be done clearly ascertainable,' " are subject to our independent review. (Provost v. Regents of University of California (2011) 201 Cal.App.4th 1289, 1301; Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 208-209 [whether a contract is sufficiently definite to be enforced]; People ex rel. Lockyer v. R.J. Reynolds Tobacco Co. (2003) 107 Cal.App.4th 516, 520 [contract interpretation that does not turn on the credibility of extrinsic evidence]; Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 35-36 [existence of mutuality of obligation]; Williams v. Saunders (1997) 55 Cal.App.4th 1158, 1162 [whether signature of spouse and codefendant satisfies § 664.6's signature requirement]; Winet v. Price (1992) 4 Cal.App.4th 1159, 1165-1166 [contract construction absent conflicting parol evidence]; Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 770, fn. 2 [whether a contract term is sufficiently definite to be enforceable]; Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 623 [same].)
To the extent the validity of a settlement agreement rests on a trial court's factual findings, we review those findings for substantial evidence. (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911 (Assemi) [oral settlement placed on the record]; accord Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 818-819 (Weddington Productions) [factual finding of mutual agreement to material terms reviewed for substantial evidence]; Kohn v. Jaymar-Ruby, Inc. (1994) 23 Cal.App.4th 1530, 1533-1534 [minutes of hearing supplied substantial evidence of binding oral agreement as to material terms of settlement]; Fiore v. Alvord (1985) 182 Cal.App.3d 561, 565 [substantial evidence is standard of review against claim that material facts were disputed]; Casa de Valley View Owner's Assn. v. Stevenson (1985) 167 Cal.App.3d 1182, 1189-1190 [substantial evidence that homeowners had agreed to release association as part of stipulated oral settlement before judicially supervised settlement conference]; Alexander v. Codemasters Group Limited, supra, 104 Cal.App.4th at p. 141 [" ' "where the existence and not the validity or construction of a contract or the terms thereof is the point in issue, and the evidence is conflicting or admits of more than one inference, it is for the jury or other trier of the facts to determine whether the contract did in fact exist" ' "].)
Defendant cites Assemi and Chan v. Lund for the proposition that substantial evidence is the proper standard of review regarding the binding effect of a settlement agreement. But those cases do not alter the rule that legal questions challenging a trial court's entry of judgment under section 664.6 are reviewed de novo. Assemi addressed as a legal question whether a marital dissolution settlement, orally presented to a retired judge empowered to act in a quasi-judicial capacity, was made "before the court" within the meaning of section 664.6. (Assemi, supra, 7 Cal.4th at pp. 900, 909.) After deciding that question as a matter of law (id. at p. 910), the Supreme Court applied the substantial evidence standard to review whether the parties had entered into a binding settlement. (Id. at pp. 911-912.) The Supreme Court noted factual issues implicated under former section 664.6 which provided for enforcement of oral agreements before the court: whether the material terms of the oral settlement were explicitly defined; whether the parties were questioned regarding their understanding of the settlement terms; and whether the parties expressly acknowledged they understood and agreed to be bound by the agreement. (Assemi, at p. 911.) Those questions do not present legal issues relating to the formation of a written out-of-court settlement agreement.
Former section 664.6 provided: "If parties to pending litigation stipulate, in writing or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement." (Stats. 1981, ch. 904, § 2, p. 3437.) Section 664.6 was amended in 1993 through the addition of the italicized words: "If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally on the record before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement." (Stats. 1993, ch. 768, § 1, italics added.)
This court in Chan v. Lund (2010) 188 Cal.App.4th 1159 confirmed that factual findings on a motion to enforce settlement under section 664.6 " 'are subject to limited appellate review and will not be disturbed if supported by substantial evidence,' "and also recognized that legal questions arising from settlement judgments are subject to independent review. (Chan, at p. 1166.) The court applied principally a de novo standard of review in deciding whether the plaintiff was entitled to rescind or avoid a signed settlement memorandum, assuming facts detailed in the plaintiff's declaration that his attorney had threatened to withdraw as counsel and offered to discount his fee. (Id. at pp. 1169-1181.)
B. EXHIBIT A WAS INCORPORATED INTO THE SETTLEMENT AGREEMENT
Plaintiff argues that the settlement agreement must be rejected for uncertainty because the specifics regarding the new lot lines were contained in exhibit A, which was not attached to the agreement when she signed it. We understand plaintiff's argument to be that exhibit A was necessary to the agreement but not incorporated.
"A contract may validly include the provisions of a document not physically a part of the basic contract." (Williams Const. v. Standard-Pacific Corp. (1967) 254 Cal.App.2d 442, 454.) " 'It is, of course, the law that the parties may incorporate by reference into their contract the terms of some other document. [Citations.] But each case must turn on its facts. [Citation.] For the terms of another document to be incorporated into the document executed by the parties the reference must be clear and unequivocal, the reference must be called to the attention of the other party and he must consent thereto, and the terms of the incorporated document must be known or easily available to the contracting parties.' " (Ibid.)
There is no factual dispute regarding the agreement's reference to exhibit A or the signatures of plaintiff and her attorney on the agreement. Counsel for defendant declared that the agreement, including exhibit A, was a true and correct copy of the settlement agreement. The reference to "the map attached hereto as Exhibit A" was clearly set forth in the written agreement, which was signed by the parties and their attorneys after engaging in settlement negotiations to settle the boundary dispute. We thus find, as a matter of law, that the reference to exhibit A is clear and unequivocal, called to plaintiff's attention, and consented to by plaintiff.
To the extent the evidence is conflicting regarding plaintiff's knowledge or access to exhibit A, substantial evidence in the record supports the implicit finding that exhibit A was known or easily available to plaintiff. Plaintiff stated in her declaration that she had "no idea" when she signed the agreement that defendant "inten[ded] to create an Island on my property"; and "[a]t the time of signing, no map or diagram was attached to the document, just a blank page." But she also stated that she had "relied on [the caretaker of my property] as my representative in meetings with counsel and regarding the property." The caretaker stated in his declaration that plaintiff had limited English skills, and that she had tasked him to work with her and her attorney in this lawsuit. The caretaker did not claim to be unfamiliar with exhibit A. To the contrary, he stated he had advised plaintiff that it "was worth giving up a little on the [eastern] boundary [] in order to obtain the easement." He also explained that he walked the property with defendant's surveyor in February 2018 after receiving a new proposed survey which included the new road easement, and the new proposed boundary adjustments were not the same as those discussed in the signed agreement. Hence, he evinces knowledge of the proposed boundaries shown in exhibit A.
Plaintiff attested to signing two agreements, one in July and another in September 2017. Her signature is undated in the agreement incorporated into the court's judgment.
Plaintiff's attorney declared that it "was not until October 11, 2017, that this office received a proposed boundary map indicating, among other things, the [defendant's] property in an 'island' formation and in an area in which it could not be accomplished." (We understand "it" to be a reference to the road easement.) But he did not include the map received on October 11 as an exhibit or state that it was the May 2017 map shown in exhibit A. Nor does he attest to being unaware of exhibit A during settlement negotiations, signing the agreement without knowledge of exhibit A, understanding the boundary line adjustment to be something other than that proposed in exhibit A, or failing to advise plaintiff regarding exhibit A. Indeed, he argued in the trial court that his client's "position to date is consistent with her understanding of the Settlement Agreement. [Defendant] cannot receive the 'island' without giving the easement."
Plaintiff's arguments concerning exhibit A do not render the settlement agreement unenforceable.
C. THE DETAILS OF THE ROAD EASEMENT ARE BOTH MATERIAL AND UNCERTAIN
Plaintiff argues that the settlement agreement is uncertain and therefore unenforceable because the location and dimensions of the road easement over defendant's property are material contractual terms left to future agreement. Defendant does not dispute that creation of the easement is material to the agreement. But in his view, the easement is sufficiently described, and the details left to the parties' further agreement are nonessential.
The parties to a litigation settlement must "agree to the material terms of a settlement contract before a judgment can be entered" under section 664.6. (Weddington Productions, supra, 60 Cal.App.4th at p. 797.) "Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable." (Cal. Lettuce Growers v. Union Sugar Co. (1955) 45 Cal.2d 474, 481.) If "a supposed 'contract' does not provide a basis for determining what obligations the parties have agreed to, and hence does not make possible a determination of whether those agreed obligations have been breached, there is no contract." (Weddington Productions, at p. 811.)
"A contract that leaves an essential element for future agreement of the parties is usually held fatally uncertain and unenforceable." (1 Wilkin, Summary of Calif. Law (11th ed. 2018) Contracts, § 147.) " '[A]s a general rule the promise can give rise to no legal obligation until such future agreement. Since either party in such a case may, by the very terms of the promise, refuse to agree to anything to which the other party will agree, it is impossible for the law to affix any obligation to such a promise.' " (Weddington Productions, supra, 60 Cal.App.4th at p. 812.) But "[a]n agreement definite in its essential elements is not rendered unenforceable by reason of uncertainty in some minor, nonessential detail. Hence, it is common practice to provide that the nonessential details are to be left to further agreement of the parties." (1 Witkin, Summary of Calif. Law (11th ed. 2018) Contracts, § 146.)
Here the road easement was material to the settlement. It is one of five terms listed as consideration. According to defendant's cross-complaint, on several occasions plaintiff had asked him for an easement over his property. Plaintiff stated she would not have agreed to a lot line adjustment without receiving the easement, and her agreement to share maintenance and improvement costs for the existing driveway set forth in the settlement contemplates using the driveway to access the new road easement. Material to the agreement, the easement must be described with sufficient certainty " 'to make the precise act which is to be done clearly ascertainable.' " (Weddington Productions, supra, 60 Cal.App.4th at pp. 811-812.) Whether the description of the easement is sufficiently definite to be enforceable is a legal question. (Ladas v. California State Auto. Assn. supra, 19 Cal.App.4th at p. 770, fn. 2; Ersa Grae Corp. v. Fluor Corp., supra, 1 Cal.App.4th at p. 623.)
The agreement provides that the easement "will connect to the existing driveway and be located in the northwest corner of [defendant's property] adjacent to the common boundary lines thereof, the location and dimensions of which shall be subject to mutual agreement of the Parties and included in the survey." The easement's point of origin ("connect[ing] to the existing driveway") may be sufficiently definite (connecting to the driveway within lot lines "in substantial compliance" with exhibit A). But the agreement does not identify a terminus for the easement. The easement is broadly described as running adjacent to the boundary lines in the northwest corner, which means under the agreement it could terminate anywhere along the western boundary north of the midline shown in exhibit A. There is no road or structure on plaintiff's property intended to be reached by the easement. The caretaker described the purpose of the easement as being to "connect to the rear of [plaintiff's] property," but there is no obvious superior access from any particular point on defendant's western property line.
Defendant cites City of Los Angeles v. Superior Court (1959) 51 Cal.2d 423, an action by the City of Los Angeles to clear impediments to its authority to execute a contract with a major league baseball franchise. Against third-party challenges to a multimillion-dollar contract whereby the city would acquire and sell to the franchise several hundred acres for the construction of a major league baseball stadium and recreational facilities (id. at pp. 430-431), the Supreme Court held that the city's reservation of an oil drilling site not to exceed five acres at a location to be mutually agreed upon did not render the contract void for uncertainty. (Id. at p. 433.) The Supreme Court explained: "The enforceability of a contract containing a promise to agree depends upon the relative importance and the severability of the matter left to the future; it is a question of degree and may be settled by determining whether the indefinite promise is so essential to the bargain that inability to enforce that promise strictly according to its terms would make unfair the enforcement of the remainder of the agreement." (Id. at p. 433.) In the context of the development project contemplated by that contract, the location of an arguably de minimus area for an oil drilling site was not essential to the bargain. In contrast, here the road easement was essential to the settlement.
The agreement here is analogous to the residential real estate contract in Brudvig v. Renner (1959) 172 Cal.App.2d 522, cited by plaintiff. There the appellate court reversed an order specifically enforcing a contract to sell "2-acres more or less, with [n]ew [h]ome" of an irregularly shaped 3-acre tract of land because "[t]here are many possible means of carving from it 2 acres which would include the home described in the contract." (Id. at pp. 523-524.) Similarly, without a defined terminus, there are many possible ways to locate an easement within the northwest corner of defendant's property.
Defendant argues that the parties contemplated flexibility with the size, shape, and location of the easement, but agreed to its placement in the northwest corner of defendant's adjusted property boundary and that the easement would ultimately have to "meet the minimum County road standards." Those standards surely influence the easement's dimensions and feasible alignment. But the actual location of the easement was essential to the bargain, yet expressly left to the parties' future agreement. In light of this material uncertainty, it was error for the trial court to grant defendant's motion under section 664.6 over plaintiff's objection.
III. DISPOSITION
The judgment is reversed. Appellant shall recover her costs on appeal.
/s/_________
Grover, J.
WE CONCUR:
/s/_________ Greenwood, P. J. /s/_________ Bamattre-Manoukian, J.