Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Stanislaus County Super. Ct. No. 370389. William A. Mayhew, Judge.
Musacchio, Montanari & Lucia, R. Ernest Montanari for Defendant and Appellant.
No appearance for Plaintiffs and Respondents.
OPINION
Gomes, J.
Defendant Leticia Alvizo (Alvizo) appeals from a judgment entered ordering specific performance of a real property sales contract she entered into with plaintiffs Lazaro G. Jimenez (Jimenez) and Monica Barocio (Barocio) (collectively, the buyers). Alvizo contends the trial court committed reversible error by granting specific performance because the buyers failed to perform or tender performance, Alvizo did not repudiate the contract, and the trial court erroneously excluded a defense witness’s testimony. As we shall explain, we will affirm.
The judgment also found in the buyers’ favor on a cross-complaint Alvizo brought against them for ejectment and damages.
The buyers have not filed a respondent’s brief. We, however, do not treat that failure as “as a ‘default’ (i.e., an admission of error),” but instead we examine the record and the appellant’s brief to see if they support any claims of error asserted by the appellant. (Riddle v. Riddle (2005) 125 Cal.App.4th 1075, 1078, fn. 1; Cal. Rules of Court, rule 8.220(a)(2).)
FACTUAL AND PROCEDURAL BACKGROUND
Trial Testimony and Evidence
Jimenez, a swimming pool plasterer, worked with Alvizo’s husband, with whom he was “very good friends.” Jimenez found out from Alvizo’s husband that Alvizo was selling a house. On August 5, 2003, Alvizo and the buyers entered into a written agreement for the sale of a single family home located on Sharon Way in Modesto (the property), which Alvizo had owned since August 1999. The agreement consists of a single paragraph, which reads as follows: “I Leticia Alvizo agree to sell my property at 2176 Sharon Way Modesto CA, 95358 To Lazaro G. Jimenez & Monica Barocio for the amount of $170,000.00[.] Lazaro and Monica agree to give me $5000.00 for the down payment. The First Mortgage is with Washington Mutual in the amount of $62,000.00 with a payment of $630.00. The Second Mortgage is with Leticia Alvizo for the amount of $103,000 with a payment of $686.66 this amount will only be interest. Insurance on this property will be separate. The property will be sold, “As Is”. I will give them one year to Pay Off the First and Second. Payment received after the 10th will result in late payment & a charge of 10% of the Loan balance.”
A certified general residential appraiser who the buyers retained testified the home was typical of other homes in the neighborhood and had three bedrooms, two and one-half bathrooms, a utility room, kitchen, dining room, living room, sheetrock interior and tile floors. In the appraiser’s opinion, the home’s value as of August 5, 2003, was $160,000, and as of October 19, 2004, was $230,000. The appraiser also opined the fair market rental value for those same time periods was $850 per month.
There were actually two deeds of trust recorded against the property. The first was a November 2000 deed of trust with Washington Mutual in the amount of $70,000, and the second a February 2003 deed of trust with Alliance Bancorp. Alvizo did not identify Alliance Bancorp in the agreement because she charged the buyers ten percent interest, which was less than the ten and a half percent interest charged by Alliance Bancorp, and she did not think she needed to disclose the second deed of trust to the buyers.
The agreement was signed during a meeting held at Alvizo’s house. During the meeting, the parties discussed the property. According to Jimenez, Alvizo told them she was in real estate and “she would try to get the loan for us, … but that we didn’t qualify yet.” This was Jimenez’s first attempt to buy a home – he had never financed property before. Alvizo told Jimenez there wouldn’t be too much of a problem getting a loan because they would have a co-signer, but if they did not qualify for a loan within one year, she would give them an extension.
The buyers paid Alvizo the $5,000 down payment on September 2, 2003. A few weeks after signing the agreement, they moved into the property, where they continued to live at the time of trial. The buyers paid Alvizo the monthly payments required by the agreement, and also purchased insurance on the property. Jimenez had worked for the same employer for five to six years, and his income had not lessened in the year or so before April 2006. Jimenez’s wife, Barocio, was a homemaker.
Insurance policies admitted as evidence at trial show that they purchased homeowners insurance on the property effective from August 12, 2003 to August 12, 2004, October 11, 2004 to October 11, 2005 (which was amended effective November 8, 2004 to reflect vesting of title to the property to the buyers, husband and wife, as joint tenants), and October 11, 2005 to October 11, 2006.
Alvizo, who is a mortgage loan officer and licensed real estate agent, drafted the agreement. According to Alvizo, by the term which stated she would give the buyers one year to pay off the first and second, she meant to give the buyers one year from the date the agreement was signed to “continue to get a loan for this property,” and she included the term because she knew Jimenez had no legal documentation and he would need a “whole year to fix what he needed to do in order to get a loan.” Alvizo’s husband, who was involved in the negotiation of the agreement, explained the one year provision was to permit Jimenez enough time to “have his papers so he could arrange all his things.” According to Alvizo’s husband, Jimenez discussed his residency status with him and admitted he “did not have papers,” although Alvizo’s husband did not know whether Jimenez ultimately obtained his papers. According to Barocio, they did the agreement “this way” because Alvizo told them when they entered into the agreement that she had checked their credit report and they didn’t qualify then.
The buyers both understood they were required to complete the transaction within one year from August 5, 2003. Alvizo told them, however, that she would help them get the loan. Since the buyers knew Alvizo was a loan officer and real estate agent, they trusted her. In January 2004, Jimenez spoke with Alvizo and asked her what was happening with the loan. Alvizo said she would call him later. When she didn’t call back, Jimenez called Alvizo, who told him they still weren’t ready for a loan. In May 2004, Barocio spoke with Alvizo and asked her if they “qualified by then so she could check the credit and she told me no, not until we get – we had two years with the credit.” In July 2004, Barocio spoke again with Alvizo and told her they knew the agreement “was going to expire” on August 5 and they were waiting for her to help them get the loan. According to Barocio, Alvizo told her she was getting ready to go on a vacation to Miami, but she would call them when she returned, and it was while Alvizo was on vacation that the agreement expired. Alvizo never contacted Jimenez in July or August of 2004 about qualifying for a loan, and never contacted the buyers after she got back from Miami. While Alvizo never asked Jimenez to complete a loan application or credit authorization, the buyers did give her information so she could get the loan.
Alvizo’s husband claimed he told Jimenez in May 2004 to be careful not to let the agreement expire because the date was approaching, and Jimenez told him he was working on it.
Alvizo denied having any further contact with either Jimenez or Barocio after the agreement was signed. Alvizo also testified that her Orlando, Florida vacation was from August 27, 2004 through September 7, 2004, and a rental car receipt from a Florida rental car agency for those dates was admitted at trial.
When Alvizo did not contact the buyers, they tried to qualify for a loan on their own through Mortgage Tree Lending. Jimenez believed they spoke with someone about procuring a loan a few days after the agreement expired. The buyers executed loan documents on November 5, 2004, and an escrow was opened at Chicago Title Company to complete the purchase of the property. The buyers both testified they qualified for a $170,000 loan through Mortgage Tree. Barocio paid Chicago Title around $1,400, by a cashier’s check, to close escrow, which was still on deposit.
A buyer estimated closing statement, which is part of the loan documents, shows an estimated balance due escrow of $1,441.64. A copy of the cashier’s check was not introduced into evidence.
Patricia Barchi, who the buyers retained to testify as to their qualifications to obtain a loan, is a licensed mortgage broker with 30 years experience in the financial industry and a branch manager working under the corporate umbrella of Mortgage Tree Lending. Barchi accompanied Israel Avalos, the loan officer employed with Mortgage Tree who represented the buyers on the loan, to the title company the day the escrow documents were signed.
Barchi reviewed the loan documents processed through her office in November 2004 and opined the buyers were solid borrowers and the loan was approved. She further explained loan documents were issued and sent to the title company. In order to fund the loan and complete the transaction, the buyers were required to deposit a cashier’s check for funds due and the title company had to obtain the seller’s signed documents. According to Barchi, the loan did not go forward because the title company “could never get the seller’s documents signed.” The buyers were approved for a $170,000 loan and the title office was calling Barchi because they were ready to request funds. Barchi recalled that a credit report was run on Jimenez based on a social security number received from him, which they would have verified and as long as nothing came up that waved a red flag, they would get a copy of the social security card or driver’s license, if required. No red flags were raised on this file and Jimenez never told Barchi there was a problem with the social security numbers.
Alvizo refused to proceed with the sale of the property and sign documents to complete escrow. Alvizo, however, denied that anyone asked her to go to Chicago Title to sign loan documents and claimed she was unaware of the loan. Alvizo continued to accept monthly payments from the buyers, which she viewed as rent. As of October 19, 2004, Alvizo was not interested in completing the sale to the buyers at the original price. Alvizo consulted an attorney, who advised her to evict the buyers. On November 5, 2004, Alvizo served a 60-day notice to quit on the buyers, which purported to terminate their month-to-month tenancy and gave them 60 days to vacate the premises. On February 1, 2005, Alvizo filed an unlawful detainer complaint naming the buyers as defendants, which alleged the buyers had a written agreement to rent the premises on a month-to-month tenancy for $1,316.66 per month, payable the 10th of each month. Alvizo admitted at the trial of the instant action that she did not have a rental agreement with the buyers.
One month before trial, Melinda Farmer, Barchi’s partner, issued the buyers a pre-approval letter. The letter states that based on information received and a review of the buyers’ credit report, they were pre-approved for a $170,000 mortgage, and the final loan determination would depend upon lender approval of the buyers’ completed loan package, including verification of their income, assets, liabilities, property condition, appraisal value and clear title. Barchi testified the letter was not a commitment to make a loan from a particular funding source, but it does say that the buyers are “creditworthy” to obtain a loan for that amount of money. Barchi concluded that assuming Jimenez’s employment situation had not changed, he should “more than qualify” for a loan in the amount of $170,000 and the loan could be funded within three to three and a half weeks “based on getting all the proper documentation.”
Avalos worked at Mortgage Tree Lending and assisted the buyers in completing the loan application. Avalos claimed he never saw a California “ID” from Jimenez and did not recall seeing a social security card from either Jimenez or Barocio. According to Avalos, this was “not normal” and caused him some “concern.” He conveyed the information to Barchi, who told him it was possible to continue with the loan. Avalos testified that if a borrower cannot provide documentation of his or her legal status, he cannot continue with the loan, and he could not complete the buyers’ loan due to “certain conditions that the lending companies require prior to the loan being processed and I never saw them.” Avalos also testified that when he saw the August 5, 2003 purchase agreement, he was concerned because the date of their ability to provide a loan for the purchase was over. Avalos told the buyers that because of this, he could not complete the application.
Avalos faxed Alvizo a copy of an addendum to the agreement, which he claimed was prepared by Barchi. The addendum was dated August 4, 2004, and stated that Alvizo was giving the buyers until October 31, 2004, to complete the purchase of the property. The buyers signed the addendum on September 27, 2004. The addendum also contains a signature for Alvizo, but she denied the signature was hers. Alvizo testified that sometime after she returned from Florida, Avalos called her and said he was going to fax her something, which he asked her to sign and return. Alvizo admitted receiving the addendum by fax, but testified she never signed the document and did not agree to sign it. Alvizo testified she never agreed to extend the time to perform the agreement.
Avalos testified that after he faxed the addendum to Alvizo, he called once and spoke to Alvizo’s husband, who told him she had not signed it. Avalos later saw the addendum at the Mortgage Tree office, which was signed by all three parties. According to Avalos, Barchi told him that Alvizo had signed it. Avalos claimed he told Barchi he was concerned because he was told she didn’t sign it, and Barchi responded that people like him “won’t make it far in this business.” Avalos was terminated from Mortgage Tree after this, which he believed was due to the buyers’ application. Avalos denied being terminated for incompetence and also denied forging Alvizo’s signature. Avalos testified Jimenez’s social security number listed on a request for a transcript of his tax return, which was part of the loan application package, was not a real social security number and Jimenez never provided him with a social security card or proof that he was a legal, permanent resident. In Avalos’s experience, someone without a social security number cannot obtain financing. Avalos claimed he did not meet with Alvizo’s counsel before giving testimony and did not know if the buyers ultimately obtained an approved loan.
The Re-Opening of Testimony
At the close of the trial, the trial court ordered the attorneys to submit final written arguments on May 16, 2006, after which the matter would be taken under submission. The court asked them to argue any issues they deemed important, including several specific issues.
On May 16, the buyers’ counsel filed a motion to allow them to re-open their case-in-chief so Avalos could give further testimony. In a declaration, the buyers’ counsel explained that Avalos voluntarily came into his office on May 12 and revealed matters to him that were set forth in Avalos’s accompanying declaration. In his declaration, Avalos explained he became aware in December 2005 that Alvizo’s attorneys were trying to contact him and he spoke with one of them in January 2006. The attorney asked him to testify on Alvizo’s behalf and to speak with her directly. Between February 2006 and the trial date, Avalos met with Alvizo and her husband on several different occasions. During the first meeting, they offered to give Avalos $10,000 to testify on their behalf at trial and told him their attorneys would tell him what to say. Avalos was desperate for money, so he agreed to the offer. Over the next two months, Alvizo and her husband gave Avalos cash when he needed it in amounts ranging from $200 to $700, and allowed him to use their car. Avalos met with Alvizo’s attorneys, who showed him different documents and told him what to say. Avalos was told that if he was asked about his attempts to contact Alvizo when he was trying to get the buyers a loan, he should avoid the question by answering he did not recall, but the truth was he made “many attempts” to contact Alvizo to get her to sign necessary papers and cooperate with the escrow at Chicago Title. Avalos explained the first time he spoke with Alvizo, he told her he was working with the buyers to obtain a loan, but she said she was too busy to talk to him at the time and to call back later. Avalos made many attempts to call her after that, but she would never take his call. Avalos said his trial testimony was not truthful and he testified the way did because he needed the money.
The court granted the motion and set a further hearing on the matter. At that hearing, Avalos admitted his prior testimony was not truthful and testified he came into the buyers’ attorney’s office on his own volition so he could “clarify, to speak the truth on this matter.” Avalos explained that when he was employed at Mortgage Tree, the buyers engaged his services to obtain refinancing for a home loan. Avalos opened an escrow to facilitate the closing of the loan at Chicago Title. Avalos thought he saw the purchase agreement, and went ahead with the loan because he understood Alvizo had agreed to it. During the course of the application process, he and the buyers attempted to contact Alvizo “numerous times” so she could sign the paperwork to close the loan by calling her from the Mortgage Tree office in Stockton, the buyers’ home, his cell phone, and an office supply store. On those occasions, Avalos never spoke with Alvizo, but he did speak with her husband, who told him he would relay the message to his wife to call them, but she never did. Avalos believed he spoke with Alvizo at one point, when she told him she was busy and would get back to him, but he didn’t recall her doing so. Avalos did not recall the dates he tried to contact Alvizo. Avalos stated that his prior testimony that he made little or no effort to contact Alvizo was false. Avalos did not know if the loan through Chicago Title ever closed.
Sometime between December 2005 and February 2006, Avalos’s ex-wife told him Alvizo or her attorney was trying to reach him and he should contact the attorney. Avalos spoke with Alvizo’s attorney, who asked him to contact Alvizo about the case. Avalos called Alvizo, and he met with her and her husband at her office. At that meeting, they asked him to testify on their behalf in exchange for $10,000 cash. Avalos believed he was given cash at that meeting, but he didn’t recall how much. Avalos said Alvizo and her husband instructed him to say that he didn’t try to contact her, when the truth was that he was trying to contact her to close the loan, and the buyers were trying very hard to get the loan. Avalos had a few meetings with the Alvizos after this, and he also had two or three meetings at their attorney’s office. Avalos said the Alvizos gave him cash four or five times, in amounts ranging from $100 to 700. The Alvizos also gave him a cell phone, as well as the money to pay for the cell phone service, so they could get a hold of him if needed. Avalos was also offered a job with Alvizo’s company, and believed he would be getting paid to get applications for her to process. Alvizo paid for business cards that had Avalos’s name printed on them. The Alvizos told Avalos the job was offered in exchange for his testimony in the case.
The day before he was to testify at trial, Avalos met with the Alvizos and their attorneys, where they discussed preparing his testimony for trial. Avalos testified one of the attorneys told him to say they never tried to contact Alvizo about the loan, and to bring up identification issues. Avalos understood that testimony would be a lie. Avalos later testified, however, that Alvizo’s attorneys only told him what questions to expect and what not to say, but they never told him to lie. He wanted to come to court to testify to the truth as part of the recovery process in his 12-step program, which he had been regularly attending. Avalos was aware he could be subject to criminal consequences as a result of his testimony, but he was willing to take that chance. Avalos denied receiving any compensation or reward for his testimony that day, other than the statutory witness fee. After Avalos testified, the court took the matter under submission.
The Statement of Decision
The court issued a written decision, which stated it found the Alvizos had engaged in misconduct by assuring Avalos’s testimony was favorable to them, but their attorneys did not. The court also found the purchase agreement to be vague and ambiguous as to the time for exercising the option to purchase, and since Alvizo drafted the agreement, it interpreted the agreement against her. The court ordered that judgment be entered in the buyers’ favor, with the buyers’ counsel to prepare a draft statement of decision.
The proposed statement of decision, which the court adopted as its own, states that the court finds the allegations of the buyers’ cause of action for specific performance of the August 5, 2003, real estate contract to be true except that the contract was “vague and ambiguous with respect to the time for performance” by the buyers. The court reasoned that since Alvizo, a license real estate salesperson, drafted the contract, it must interpret the agreement against her as a matter of law. The court further found that when the contract was entered into, Alvizo failed to disclose to the buyers the existence of a second deed of trust against the property in favor of Alliance Bancorp and, as a matter of equity, the amount necessary to satisfy the obligation secured by that trust deed must be deducted from any proceeds due Alvizo upon completion of the sale. The court also found Alvizo engaged in misconduct in assuring Avalos’s testimony was favorable to her, but her attorneys committed no misconduct.
The decision further stated that a conditional judgment would be entered in favor of the buyers as follows: (1) Alvizo was ordered to specifically perform the August 5, 2003 contract for the sale of the property; (2) Alvizo was further ordered to promptly deliver into the pending escrow with Chicago Title a recordable grant deed conveying title to the buyers and execute any other documents required to complete the escrow; (3) the buyers were ordered to deposit into escrow sufficient funds to complete the purchase within 45 days of entry of judgment; (4) from those funds, the escrow will pay (a) the obligation secured by the first trust deed in favor of Washington Mutual, (b) $103,000 to Alvizo, with interest at 8 percent per annum computed from the date of the buyers’ last interest payment, less any amount necessary to pay the obligation secured by the second deed of trust in favor of Alliance Bancorp; and (c) any outstanding property taxes or assessments. The decision further ordered that the buyers receive a homeowner’s policy of title insurance at the close of escrow, and the parties would pay their customary title, escrow and other closing costs. In the event the buyers failed to perform their obligation to deposit funds into escrow to complete the purchase in a timely manner, the court reserved jurisdiction to make further orders as may be proper. The decision also stated that Alvizo would recover nothing on her cross-complaint and judgment should be entered in favor of the buyers on the cross-complaint, conditioned on performance of their obligation to deposit funds into escrow. Judgment was entered in accordance with the statement of decision.
The Post-Trial Motions
After judgment was entered, Alvizo substituted new counsel into the case, who filed post-trial motions for a new trial, to set aside and vacate the judgment, and for judgment notwithstanding the verdict. The buyers did not file a written opposition to the motions. At the hearing on the motions, Alvizo’s attorney argued the motions’ essence was that the buyers failed to establish they were ready, willing and able to purchase the property during the time frame permitted in the contract, from August 5, 2003 to August 5, 2004, and the contract was not uncertain because it clearly stated they had one year to pay of the first and second, but they failed to do so. The buyers’ attorney responded the court correctly recognized in its tentative ruling that Alvizo waived whatever strict time performance deadlines there were by continuing to accept payments under the contract and evading the buyers, thereby wrongfully preventing them from performing by any particular date. Alvizo’s attorney asserted the statement of decision did not address any evidence of waiver or wrongful prevention, and the buyers testified they knew they had one year to pay off the loan, but failed to do so.
The court responded that it was very clear that the Alvizos were involved in presenting perjured testimony to the court and they clearly did everything in their power to preclude the buyers from performing after they had made many promises to the buyers. The court stated that if a fraud cause of action had been alleged, it “would have made findings along those lines” against Alvizo, and although it found Alvizo’s attorneys were not involved in the fraud on the court, it came “very close to referring this back to the District Attorney’s Office for possible prosecution.” The court further explained it was clear from Avalos’s testimony that they kept trying to reach Alvizo, but she wouldn’t cooperate and was delaying the “whole time,” and once the market went up, Alvizo did not want to go through with the sale and went into “this disappearing act” on them and basically lied to them. The court set the appellate bond at $10,000, and denied all of the post-trial motions.
DISCUSSION
Specific Performance
Alvizo contends the trial court erred when it determined the purchase agreement was ambiguous with respect to the time of performance. Specifically, Alvizo argues the term which states that “I will give them one year to Pay Off the First and Second” is susceptible to only one meaning, i.e. that the buyers had one year from the date of the agreement – August 5, 2003 – to pay off the first mortgage with Washington Mutual and the second mortgage with herself, and therefore the term cannot be ambiguous in that respect. Alvizo asserts that since the term is not ambiguous, there is insufficient evidence to show either that (1) the buyers were ready, willing and able to perform on or before August 5, 2004, or (2) Alvizo did something which could be construed as an anticipatory repudiation of the purchase agreement excusing the buyers’ performance. We need not decide whether the term was ambiguous, because even if it was not and the buyers were to perform by August 5, 2004, there was sufficient evidence to support the trial court’s implied finding that Alvizo prevented the buyers from performing by that date and its finding the buyers were ready, willing and able to obtain financing to complete the purchase.
“‘When considering a claim of insufficient evidence on appeal, we do not reweigh the evidence, but rather determine whether, after resolving all conflicts favorably to the prevailing party, and according the prevailing party the benefit of all reasonable inferences, there is substantial evidence to support the judgment.’ [Citation.] ... When two or more inferences can be reasonably deduced from the facts, the reviewing court is without power to substitute its deductions for those of the trial court.” (Quintanilla v. Dunkelman (2005) 133 Cal.App.4th 95, 113-114.) “The appellate court cannot reweigh the credibility of witnesses or resolve conflicts in the evidence.” (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 622.)
A buyer seeking to obtain specific performance of a real estate contract must establish his or her own performance or excuse for nonperformance. (Ninety Nine Investments, Ltd. v. Overseas Courier Service (Singapore) Private Ltd. (2003) 113 Cal.App.4th 1118, 1127 (Ninety Nine Investments).) The buyer also must prove “‘that he was ready, willing and able to perform at the time the contract was entered into,’” and “‘that he continued ready, willing and able to perform at the time suit was filed and during the prosecution of the specific performance action.’” (Behniwal v. Mix (2005) 133 Cal.App.4th 1027, 1044 (Behniwal); see also Cockrill v. Boas (1931) 213 Cal. 490, 492 [“an essential basis for the equitable remedy must be a showing by the plaintiff of performance, or tender of performance, or ability and willingness to perform”].) This rule applies “[w]here the action is based on the seller’s anticipatory breach” because “even if seller is guilty of a breach of contract, in order to obtain specific performance, buyers must prove they had the ability to pay the purchase price within a reasonable time.” (Henry v. Sharma (1984) 154 Cal.App.3d 665, 669-670 (Henry).)
We first address Alvizo’s contention that there was insufficient evidence that she repudiated the contract before August 5, 2004. A seller’s refusal to do what is necessary to complete a real estate transaction is effectively a repudiation of the contract and permits the buyer to enforce the contract without tendering the purchase price. (Am-Cal Investment Co. v. Sharlyn Estates, Inc. (1967) 255 Cal.App.2d 526, 539 (Am-Cal); Singh v. Burkhart (1963) 218 Cal.App.2d 285, 292-293 (Singh).) “Repudiation is a question of fact to be determined from the evidence.” (Id. at p. 293.) Moreover, where the seller’s cooperation “‘is necessary for successful performance of an obligation, a promise to give that cooperation, and not to do anything which prevents realization of the fruits of performance, will often be implied. This is sometimes referred to as an implied covenant of good faith and fair dealing.’” (Ninety Nine Investments, supra, 113 Cal.App.4th at p. 1131.) When the seller’s failure to cooperate prevents the buyer’s performance, that performance is excused and the buyer is entitled to specific performance by the seller. (Id. at pp. 1135-1136.)
Here, there was evidence that Alvizo told the buyers that she would help them get the loan they needed to pay off the first and second mortgages. The buyers, who were purchasing their first home, trusted Alvizo because they knew she was a loan officer and real estate agent. Alvizo also assured them she would give them an extension if there were difficulties in getting a loan. The buyers then paid Alvizo the down payment, moved into the home, made the payments required under the purchase agreement and bought homeowners’ insurance. They also gave Alvizo information necessary to apply for a loan. Although the buyers knew they had one year to obtain financing, there was evidence that in January 2004, Alvizo told them they were not ready for a loan; in May 2004, she told them they still didn’t qualify for a loan; and in July 2004, when Barocio told her they were waiting for her help to get a loan, she told them she was getting ready to go on a vacation, but she would call them when she returned. Alvizo, however, never called them back. From this evidence, the trial court reasonably could conclude that Alvizo had obligated herself to help the buyers obtain financing, and it was her failure to assist them, and her representation in July 2004 that she would help them once she returned from her vacation, that prevented them from obtaining a loan before the one-year deadline.
Although Alvizo testified she did not talk to the buyers after they entered into the purchase agreement, the trial court obviously rejected this testimony. The trial court’s credibility determinations are of course binding on us. (Kruger v. Department of Motor Vehicles (1993) 13 Cal.App.4th 541, 547.)
Alvizo argues essentially that she did not prevent the buyers’ performance because the buyers should have contacted a different person to assist in obtaining financing after she told them several times they did not qualify for a loan. While they certainly could have attempted to find financing elsewhere, the evidence supports the inference that given Jimenez’s relationship with Alvizo’s husband and the buyers’ knowledge that she was a loan officer and real estate agent, as well as their lack of experience in purchasing real estate, the buyers reasonably relied on Alvizo’s representations that she would help them obtain a loan. Significantly, when Barocio spoke with Alvizo in July 2004, Alvizo did not advise the buyers to obtain financing elsewhere, but instead assured them she would discuss the matter with them after she returned from her vacation. Based on Alvizo’s statements to the buyers, the evidence supports a finding that the buyers’ failure to obtain financing by August 2004 was excusable. (See, e.g. McCown v. Spencer (1970) 8 Cal.App.3d 216, 223-224 [seller estopped to assert buyer’s failure to timely perform where buyer relied on seller’s statements that escrow would close and he would sign escrow papers].)
The evidence also supports a finding that Alvizo waived the August 5, 2004 deadline to pay off the loans by continuing to accept mortgage payments after the deadline. (See Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1339-1340 [the seller may waive timeliness provisions in real estate sales contracts].)
Since the buyers’ obligation to pay off the first and second mortgages by August 5, 2004 was excused by Alvizo’s failure to cooperate, the issue remains whether there is sufficient evidence to support the finding that the buyers were ready, willing and able to perform, i.e. whether they were able to obtain financing to pay off the first and second mortgages. We review the trial court’s factual finding that the buyers had shown an ability to perform their contractual obligations for substantial evidence. (Ninety Nine Investments, supra, 113 Cal.App.4th at p. 1127.)
In Am-Cal, a case Alvizo relies on, the court explained that the buyer need not have his own funds to establish ability to perform. The court stated: “A purchaser without funds of his own may show that he was ready and able to pay the purchase price because he had made arrangements to borrow the required funds from a lending institution or from a third party, but if he relies upon the negotiation of a loan from a third party, the buyer must prove: (1) That the third party was legally bound by contract to advance the funds … and (2) ‘… that the party offering to advance the [purchase price] has the financial ability so to do.…’” (Am-Cal, supra, 255 Cal.App.2d at pp. 539-540.) From this case, Alvizo argues there was no evidence the buyers were ready, willing and able to perform before August 5, 2004, and no evidence that any lender was bound legally to advance funds.
The notion that Am-Cal stands for the proposition that proof of an existing legally enforceable loan contract is necessary to establish that a buyer is ready, willing and able to perform under a real estate purchase agreement was rejected in Henry. (Henry, supra, 154 Cal.App.3d at p. 672 [“we find no support for the iron-clad rule suggested by seller that plaintiffs could only establish ability to perform by proving they had obtained a legally enforceable loan contract”].) As explained in Henry: “Neither Am-Cal Investment nor the case it relies on, Merzoian v. Kludjian [(1920) 183 Cal.422, 429-430], held that evidence of a binding loan commitment is the exclusive means of proving ability to perform. To the contrary, Am-Cal Investment states, ‘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.…’” (Henry, supra, 154 Cal.App.3d at p. 671.) In other words, the “proof needed to show ability [to perform] depends [not on the enforcement of a legally enforceable agreement, but] on all the surrounding circumstances.” (Id. at p. 672; accord, WYDA Associates v. Merner (1996) 42 Cal.App.4th 1702, 1716 [“A buyer is not necessarily unable to obtain a loan merely because he does not have a legally enforceable loan contract.”].)
Relying on Henry, the court in Behniwal, supra, 133 Cal.App.4th 1027, held that pre-approval of a loan constituted substantial evidence of ability to perform. Expressly rejecting the argument that evidence of loan pre-approval was insufficient to show the prospective buyers were ready, willing and able to perform, the court found the ability to qualify for a loan satisfied the prerequisite to an order for specific performance. (Id. at pp. 1044-1045.) In so finding, the court noted the Henry court had “addressed the structural problem of mandating that buyers must show a legally binding contract with a lender while the buyers are still in litigation. As the Henry court pointed out, there is ‘no purpose in requiring the buyers to bind themselves to a loan for which they have no immediate need. Moreover, we question whether a lender would make a firm commitment to loan money for the purchase of property the present owner refuses to sell.’ (Henry v. Sharma, supra, 154 Cal.App.3d at p. 672.)” (Behniwal, supra, 133 Cal.App.4th at p. 1045.)
Here, the evidence showed that the buyers had obtained an approved loan by November 2004 in an amount necessary to pay off the first and second mortgages. The evidence also showed the ability to perform at time of trial, as the buyers had been pre-approved for a loan one month before trial. Under Henry and Behniwal, this was sufficient to show ability to perform.
Alvizo also complains there is no evidence the buyers were able to perform before August 5, 2004. Although the buyers did not sign the loan documents until November 5, 2004, according to Jimenez, they contacted a lender soon after the August 5, 2004 deadline to obtain a loan. The evidence also showed that Jimenez remained employed from the time the buyers entered into the purchase agreement through trial, and his income had not lessened in the year or so before trial. From the evidence, the trial court reasonably could conclude the buyers also would have qualified for the loan had they applied for it before the August 5, 2004 deadline.
In addition, since it was Alvizo’s conduct that caused the buyers to delay in procuring a loan and the purchase agreement did not specify that time was of the essence, the buyers were excused from performing by August 5, 2004, and therefore had a reasonable time period to obtain a loan. (See Stratton v. Tejani (1982) 139 Cal.App.3d 204, 211 [when time is not essential, buyer should be given reasonable time to perform]; Weneda Corp. v. Dispalatro (1964) 225 Cal.App.2d 187, 191.) Substantial evidence shows that within three months of the August 5, 2004 deadline, the buyers were ready, willing and able to pay off the first and second mortgages. Under the facts of this case, this was not an unreasonable amount of time. (See Thein v. Sticha (1949) 93 Cal.App.2d 295, 297 [escrow scheduled to close March 5, but because seller allowed date to pass without demanding payment of balance of purchase price, buyer had reasonable time to pay balance and was not in default on June 19].)
We also note that, as the court explained in Behniwal, “the ability-to-perform problem is ultimately self-correcting. If the trial court orders specific performance, it is hardly going to hold the [sellers] in contempt for not selling to the [buyers] if the [buyers] ultimately can’t come up with the money. And if the [buyers] really can’t come up with the money ... then the [sellers] will get their wish and the property simply will not be sold to the [buyers].” (Behniwal, supra, 133 Cal.App.4th at p. 1045.) In the present action, the trial court reserved jurisdiction to make further orders in the event buyers fail to deposit the funds necessary to complete the purchase into escrow in a timely manner.
In conclusion, the record shows that the buyers were ready, willing and able to perform before August 5, 2004 and at the time of trial. Moreover, because of Alvizo’s conduct, the buyers were excused from paying off the first and second mortgages by August 5, 2004. Based on these findings, the trial court acted within its discretion in granting specific performance of the purchase agreement.
Evidentiary Issue
Alvizo contends the trial court erred when it excluded the testimony of Jose Daniel Virgen. After Alvizo and Avalos testified in Alvizo’s case-in-chief, Alvizo’s attorney advised the court he would be calling two other witnesses – Alvizo’s husband and Virgen. The buyers’ attorney responded that while Alvizo’s husband was disclosed in discovery, Virgen never was. Alvizo’s attorney asserted Virgen was a rebuttal witness who would testify to “investigation regarding social security numbers” which was “relevant to the fact that they can’t get a loan without a social security number.”
The court expressed its concern that Virgen was not disclosed in discovery. Alvizo’s attorney asserted there was no opportunity to conduct further discovery on the matter and no obligation to disclose under the Code of Civil Procedure because the tax documents which contained the social security number were not provided until after the discovery cutoff date. The buyers’ attorney stated he had served timely discovery responses “before discovery cutoff on their due date” and the court pointed out that Alvizo’s attorney filed discovery responses after the cutoff date, but Virgen did not appear in them. The buyers’ attorney explained he produced documents to Alvizo at the March 20 settlement conference, but he did not receive Alvizo’s responses until March 22, after he scheduled an ex parte hearing for an order shortening time to bring a motion to compel. Those responses, however, were missing answers to interrogatories, which he received a day or so later, but they weren’t verified. The court noted the verification to the form interrogatories and the supplemental responses were both dated March 23, and one of the responses stated that Alvizo’s attorneys had interviewed Avalos in February 2005. From this response, the court assumed the attorneys had learned things about social security numbers, and therefore it would not allow the witness to testify.
We review the trial court’s decision to exclude proffered evidence for abuse of discretion, the standard that generally applies to appellate review of a trial court’s evidentiary rulings. “The trial court is ‘vested with broad discretion in ruling on the admissibility of evidence.’ [Citation.] ‘[T]he court’s ruling will be upset only if there is a clear showing of an abuse of discretion.’ [Citation.] ‘“The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason.”’” (Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1431 (Tudor Ranches); see also People v. Brown (2003) 31 Cal.4th 518, 534; Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 972.) Where evidence is found to be erroneously excluded, the ultimate question on appeal is whether absent that error it is reasonably probable a result more favorable to the appellants would have been reached. (Tudor Ranches, at pp. 1431-1432.)
Alvizo has not shown the trial court clearly abused its discretion in ruling that Virgen’s testimony was inadmissible because his identity was not disclosed during discovery. Alvizo argues the ruling was erroneous under Code of Civil Procedure section 2034.310, subdivision (b), which permits a party to call an undisclosed expert if “[t]hat expert is called as a witness to impeach the testimony of an expert witness offered by any other party at the trial. This impeachment may include testimony to the falsity or nonexistence of any fact used as the foundation for any opinion by any other party’s expert witness, but may not include testimony that contradicts the opinion.” Based on this provision, Alvizo asserts Virgen’s testimony was admissible even if his identity was not previously disclosed because he was to testify to a foundational fact upon which Barchi based her opinion, i.e. that “an individual, such as Mr. Jimenez, could obtain a loan without a social security number.”
Section 2034.310 continues former section 2034, subdivision (m) without substantive change. (Cal. Law Revision Com. Com., 33 West’s Ann. Code Civ. Proc. (2004 ed.) foll. § 2034.310, p. 953.)
Alvizo’s claim fails for the simple reason that Virgen was never represented to be an expert witness. Accordingly, it is not clear that Code of Civil Procedure section 2034.310 would even apply to him. Even if Virgen would have testified as an expert, however, his testimony would have been not to a foundational fact, but to express an opinion. As explained in Mizel v. City of Santa Monica (2001) 93 Cal.App.4th 1059, 1067-1068: “‘Under Code of Civil Procedure section 2034, subdivision (m), an undisclosed expert witness called for impeachment purposes is permitted to testify that a foundational fact relied upon by a prior expert is either incorrect or nonexistent. [Citation.]’ [Citation.] ‘This can be done either by cross-examination of the expert or by calling other witnesses to offer evidence showing the nonexistence or error in the data upon which the first expert based his opinion. [Citations.]’ [Citation.] Thus, a nondesignated expert may testify as to the facts underlying the expert’s opinion. [Citation.] ‘However, under section 2034, subdivision (m), “‘calling an expert witness to express an opinion contrary to that expressed by another expert witness is not the “impeachment” contemplated by section [2034, subdivision (m) ].’ “[Citation.]’ [Citation.] [Footnote omitted.] Although the distinction between a ‘fact’ and ‘opinion’ may be thin, it has to be made. In doing so, trial courts are to strictly construe the term ‘foundational fact’ so as to ‘prevent a party from offering a contrary opinion of his expert under the guise of impeachment.’”
Barchi’s opinion in this case was that the buyers qualified for a loan with Mortgage Tree. Her opinion was based on the information provided in the loan application packet, which included the buyers’ social security numbers. Barchi testified that a credit check was run, at least on Jimenez, which did not raise any red flags. Alvizo asserts Virgen was called to testify to a foundational fact upon which Barchi’s opinion was based, namely that an individual could obtain a loan without a social security number. Barchi, however, never offered an opinion that an individual could obtain a loan without a social security number – instead, she testified the buyers qualified for a loan based on the social security numbers they provided. Therefore, if Virgen testified that Jimenez could not obtain a loan because he did not have a valid social security number, then Virgen would be offering a new opinion, not impeachment. The trial court did not err in excluding Virgen’s testimony.
DISPOSITION
The judgment is affirmed. Respondents are awarded their costs on appeal.
WE CONCUR: Harris, Acting P.J., Wiseman, J.