Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County, Laura A. Matz, Judge, No. EC041889
Georgeson & Belardinelli, C. Russell Georgeson, Richard A. Belardinello; Law Offices of Daniel J. Sweeney and Daniel J. Sweeney for Plaintiff and Appellant.
Law Offices of Torres & Brenner, Anita Susan Brenner, in pro. per.; Romney Law Offices, David T. Romney; Zeutzius & Laban and William J. Zeutzius, Jr., for Defendants and Respondents.
KRIEGLER, J.
Plaintiff and appellant Jotionitilat appeals from a judgment enforcing a stipulated settlement under Code of Civil Procedure section 664.6 in favor of defendants and respondents Leonard E. Torres and Anita Susan Brenner, individually and as trustees of the Torres Family Living Trust, in this quiet title action. The settlement provided for Jotionitilat to make certain payments and the parties to execute documents relinquishing and creating certain easements contingent on the issuance of a building permit. Jotionitilat attempted to obtain performance from Torres and Brenner by sending them a payment without securing a building permit. Torres and Brenner brought a motion to enforce the settlement agreement, which the trial court granted.
All further statutory references are to the Code of Civil Procedure unless otherwise stated.
On appeal, Jotionitilat contends that: (1) the trial court should have interpreted the settlement agreement as allowing an exchange of performances without requiring a building permit; (2) issuance of a building permit was a condition for Jotionitilat’s benefit that it could unilaterally waive; (3) interpreting the settlement to require a building permit imposes a forfeiture of Jotionitilat’s rights under the agreement; (4) Torres and Brenner held Jotionitilat’s check for over a month and therefore are estopped from relying on the requirement to obtain a building permit; and (5) the trial court should have rescinded the agreement based on mutual mistake.
We hold that the agreement unambiguously required Jotionitilat to secure a building permit before Torres and Brenner would be obligated to perform under the agreement. In addition, Jotionitilat failed to raise the forfeiture and estoppel arguments in the trial court, and regardless, the arguments have no merit. Therefore, we affirm.
FACTS AND PROCEDURAL BACKGROUND
In November 2005, Jotionitilat filed an action against Torres and Brenner to extinguish an easement that burdened Jotionitilat’s property. On June 18, 2007, the parties filed a stipulation of settlement under section 664.6. Paragraph 1 provided in pertinent part: “Subject to paragraph 2: [¶] a. Defendants, and each of them, shall relinquish and abandon the existing easement... by delivering a written document to Plaintiff in a form sufficient for filing with the Los Angeles County Recorder. [¶] b. Plaintiff shall pay to Defendants, jointly, the sum of $55,000 by cashier’s check.... [¶] c. Plaintiff shall grant to Defendants, their heirs, successors and assigns, in a legally sufficient writing acceptable for recording by the Los Angeles County Recorder (to be prepared by Defendants’ attorney and recorded by Defendants after execution by Plaintiff), and otherwise assist with the recording of each of the following: [¶] (i) An easement for installation and maintenance of a sewer line and all things reasonably required therewith, 10 feet in width except where reduced to 5 feet in width adjacent to the residential structure described in Plaintiff’s construction plans now on file with the City of La Canada-Flintridge [(the City)].... The parties intend hereby to enable Plaintiff to construct the aforesaid residential structure and to enable Defendants to construct and maintain a sewer line.”
Paragraph 2 of the stipulation provided in pertinent part: “All of the foregoing set forth in paragraph 1 shall be completed no later than 30 calendar days after a building permit has been issued by the City... to Plaintiff to build the aforesaid residential structure (notice of which shall be given by Plaintiff to Defendants in writing within 5 calendar days of issuance of such building permit); provided, however, that: [¶] If such building permit has not issued by October 31, 2007, Plaintiff, in its sole discretion, on or before such October 31, 2007 date, either: [¶] a. Shall dismiss the above-captioned action with prejudice forthwith without further obligation of Plaintiff to Defendants of any kind or nature and without further obligation of Defendants to Plaintiff of any kind or nature (including the aforesaid obligations set forth in paragraph 1 hereof which shall become null, void and without force or effect, and the extinguishment set forth in paragraph 1 neither shall be valid nor recorded, and all copies thereof shall be returned to Defendants); [¶] or, in the alternative: [¶] b. Shall give written notice to Defendants that an extension beyond October 31, 2007 to a time certain specified by Plaintiff up to, but not beyond, January 31, 2008, is required, and on the first day of each consecutive month thereafter for which Plaintiff has given written notice of need for an extension to Defendants, Plaintiff shall pay to Defendants Leonard Torres and Anita Brenner, jointly, the full monthly sum of $5,000 which shall accumulate each consecutive month in addition to Plaintiff’s obligations set forth in paragraph 1 and shall be payable, and paid, therewith in the event a building permit is issued for Plaintiff’s residential structure herein described or, if such building permit does not issue, shall be paid forthwith to Defendants upon expiration of the time specified in the extension, along with Plaintiff’s forthwith dismissal of the entire above-captioned action without further obligation of Plaintiff to Defendants of any kind or nature and without further obligation of Defendants to Plaintiff of any kind or nature (including the aforesaid obligations set forth in paragraph 1 hereof which shall become null, void and without force or effect, and the extinguishment set forth in paragraph 1 neither shall be valid nor recorded, and all copies thereof shall be returned to Defendants).”
Paragraph 2 additionally provided: “ Further, if the aforesaid building permit has not issued on or before January 31, 2008, and Plaintiff has not obtained written consent from Defendants, and each of them, to an extension of such January 31, 2008 deadline (which consent Defendants may withhold at their sole and exclusive discretion arbitrarily, capriciously and without ‘good cause’ or ‘explanation’ of any kind), the terms and conditions of paragraph 1 shall become null, void and without force or effect of any kind or nature whatsoever and Plaintiff forthwith shall (i) pay to Defendants, jointly, the sum of $15,000 (or, if an extension is granted in writing by Defendants, such larger amount as may have accrued), (ii) dismiss with prejudice the above-captioned action in its entirety; and (iii) the extinguishment set forth in paragraph 1 neither shall be valid nor recorded, and all copies thereof shall be returned to Defendants.” In the event of an enforcement action, the prevailing party was entitled to attorney fees.
The trial court held a hearing regarding the terms of the settlement. The trial court asked, “Can you explain to me what is going to happen in the future?” Defendants’ attorney responded, “Hopefully what is going to happen is by October 31st the plaintiff will have obtained a building permit; at which time he will pay to my clients, the defendants, $55,000 and give them a sewer easement described in the settlement agreement; and the defendants, my clients, in turn will give to plaintiff an extinguishment of the ingress and egress easement which presently exists.”
The trial court inquired, “What if he doesn’t have a building permit?” Defendants’ attorney stated, “If he doesn’t have it after October 31st, 2007, the plaintiff at his -- at his sole discretion can decide either to dismiss the case in its entirety and pay nothing; or, alternatively, he can ask for an extension of time, which will be granted up to January 31[], 2008. And he will pay [$]5,000 for each consecutive month from October 31[], 2007 to January 31[], 2008 for the privilege of getting the extension.” “Extension of what?” asked the court. “Extension of the right to continue to pursue the building permit,” answered defendants’ attorney.
The trial court asked, “What if [the building permit] never issues?” Defendants’ attorney responded, “If it never issues, there will be a dismissal by the plaintiff with prejudice and the payment of $15,000 if, in fact, he waits until January 31[], 2008 to do that. [¶] In other words, starting October 31[], 2007, the plaintiff will start paying $5,000 a month for the privilege of having the opportunity to get the building permit up until January 31[], 2008. [¶] After January 31[], 2008, it will be in the defendant[s’] discretion as to whether or not to grant time beyond that.” The trial court stated, “What I’m concerned about is whether this action will ever be revived in the event there is no building permit. If that’s the case, there is no true settlement.” Defendants’ attorney responded, “No. It’s -- the dismissal is with prejudice.” Jotionitilat’s and defendants’ attorneys stated to the court that under the agreement, the case would be dismissed by March 31, 2008, at the latest.
Defendants’ attorney apparently sent an e-mail message to Jotionitilat’s attorney on October 30, 2007, notifying him that defendants would not accept a tender of $55,000 from Jotionitilat in the absence of a building permit having been issued. On October 31, 2007, Jotionitilat’s attorney sent a letter with a cashier’s check to Torres and Brenner in the amount of $55,000. The letter stated that paragraph 1 of the stipulation permitted a payment of $55,000 and an exchange of documents. Jotionitilat’s attorney characterized paragraph 2 of the stipulation as providing Jotionitilat, in its discretion, to elect an alternative to the payment under paragraph 1. “My client has chosen to proceed according to paragraph 1 and pay the settlement amount required by the parties[’] agreement. The issuance of a building permit was a contingency provided for the benefit of my client who now chooses to waive that contingency and proceed pursuant to paragraph 1 of the Stipulation.”
The letter also stated in pertinent part, “In view of [the parties’ different interpretations of the extension request required], and your clients anticipated rejection of the $55,000.00 tender pursuant to paragraph 1 of the Stipulation, hereby requests an extension pursuant to paragraph 2 to November 30, 2007 and preserves its right to request additional monthly extensions up to January 31, 2008 which additional periods are specifically requested and will be used if needed. Although paragraph 2 does not require an immediate payment of the ‘extension fee’ but an ‘accumulation’ of the fee, the check tendered today pursuant to paragraph 1 puts in your clients hands more than the funds described in your email of October 30, 2007.”
Defendants’ attorney sent an e-mail agreeing to accept the check subject to Jotionitilat’s attorney preparing the easements for a sewer line and ingress and egress for Torres and Brenner’s benefit, along with the relinquishment of the existing easement. Defendants’ attorney sent additional e-mails in November repeatedly asking Jotionitilat’s attorney for the documents to review to conclude the settlement, but apparently received no response. On December 11, 2007, defendants’ attorney sent an e-mail message withdrawing the offer to accept the check. If Torres and Brenner did not receive the sewer easement documentation by the end of the week, they would return the check and enforce the settlement. On December 17, 2007, Torres and Brenner mailed the settlement check back to Jotionitilat.
On February 18, 2008, Jotionitilat sent the cashier’s check dated October 31, 2007, back to Torres and Brenner. The check expressly states that it is void after 90 days. Jotionitilat’s attorney stated in the accompanying letter that preparation of the sewer line easement was Torres’s and Brenner’s responsibility under the stipulation. He stated that Jotionitilat remained prepared to execute the easement. He requested that Torres and Brenner accept the tender of the full sum under the agreement and prepare the easement for Jotionitilat to execute in order to close the matter.
On April 1, 2008, Torres and Brenner filed a motion to enforce the settlement stipulation pursuant to section 664.6. Jotionitilat filed a response requesting the stipulation be enforced in its favor, or in the alternative, rescinded due to mutual mistake. Jotionitilat argued that paragraph 2 did not benefit Torres and Brenner, but rather was a condition benefitting only Jotionitilat by giving Jotionitilat the opportunity to elect out of the stipulation in the event that a building permit could not be obtained. Jotionitilat had elected to waive its right to request extensions and elected not to dismiss the case, but rather elected to pay the tender required under paragraph 1. Torres and Brenner filed a reply with a request for attorney fees and costs.
A hearing was held and the trial court took the matter under submission. On May 16, 2008, the trial court entered a judgment enforcing the settlement agreement, dismissing Jotionitilat’s action with prejudice, and ordering Jotionitilat to pay $15,000 in damages for breach of contract, plus interest after January 31, 2008, and $1,540 in legal fees to Torres and Brenner. Jotionitilat filed a timely notice of appeal.
DISCUSSION
Standard of Review
Section 664.6 provides a summary procedure to enforce settlement agreements that were entered into orally before a court or, in the alternative, reduced to writing and signed by the parties. (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810 (Weddington).) In determining whether the parties “reached a binding mutual accord as to the material terms” (In re Marriage of Assemi (1994) 7 Cal.4th 896, 905), the trial court acts as a trier of fact and may resolve disputed issues relating to the binding nature and terms of the settlement. (Ibid.) We presume the judgment to be correct and “must indulge all presumptions in favor of its correctness.” (Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America (2005) 133 Cal.App.4th 1319, 1338.) When the trial court has not made express findings, “we will infer findings in support of the judgment if such findings are supported by substantial evidence.” (Ibid.) We review the trial court’s legal conclusions de novo. (Weddington, supra, at p. 815.)
Building Permit Requirement
Jotionitilat contends the settlement agreement allowed for an election of performance under paragraph 1 without obtaining a building permit. We disagree.
Under the plain language of the settlement agreement, the performances required under paragraph 1 of the agreement are subject to issuance of a building permit within the time line set forth under paragraph 2. Paragraph 2 provides that in the event a building permit has not been issued by October 31, 2007, Jotionitilat may elect between two alternatives: either dismiss the action or request and pay for an extension of time to obtain a building permit. The agreement does not expressly or impliedly state that Jotionitilat may elect performance under paragraph 1 regardless of whether a building permit is issued. In fact, if Torres and Brenner had delivered the real property documents required under paragraph 1 prior to October 31, 2007, and Jotionitilat failed to obtain a building permit by October 31, 2007, the agreement required Jotionitilat to return the documents and dismiss the action, or request and pay for an extension of time to obtain a building permit.
We note that defendants’ attorney explained the settlement to the trial court in accordance with the plain language of the stipulation. Jotionitilat’s attorney did not disagree with the explanation of the agreement or otherwise state that Jotionitilat had an option to pay for performance under paragraph 1 regardless of whether a building permit was issued.
Waiver
Jotionitilat contends that the building permit requirement was a condition that solely benefited Jotionitilat, and therefore, Jotionitilat could waive the condition. We conclude the provision was for the benefit of all parties.
The settlement agreement was tailored to the plans for a residence that were on file with the City and it is clear that Jotionitilat’s ability to construct a residence in accordance with the plans on file with the City was a material factor for all parties. The agreement expressly refers to the plans on file with the City and Jotionitilat’s ability to obtain a building permit, based on those plans, within a reasonable period of several months from the date of the settlement. The agreement provides for Torres and Brenner to relinquish existing easement rights in exchange for $55,000 and a sewer easement that was described based on the plans on file with the City. It is clear from the timing required under paragraph 2 of the agreement that in the event Jotionitilat could not obtain a building permit to pursue construction in accordance to the plans on file with the City, Torres and Brenner were not required to relinquish their easement rights and accept payment of $55,000, and a sewer easement based on the existing plans. Under Jotionitilat’s interpretation of the settlement agreement, Jotionitilat could extinguish the existing easement and confine Torres and Brenner to a particular sewer easement regardless of whether Jotionitilat pursued construction of a residence pursuant to the plans on file. The building permit condition was not solely for Jotionitilat’s benefit, and Jotionitilat could not unilaterally waive the permit requirement.
The agreement allowed Jotionitilat discretion to dismiss the action or continue to pursue a building permit. It did not also provide Jotionitilat discretion to require performance without seeking a building permit.
Forfeiture
Jotionitilat contends the settlement provision requiring Jotionitilat to pay $15,000 and dismiss the action if unable to obtain a building permit by January 31, 2008, was an illegal forfeiture provision. We disagree.
Jotionitilat did not raise any forfeiture argument in the trial court. “[U]nder settled principles of appellate review, questions not raised in the court below may not be raised for the first time on appeal.” (Estate of Cooper (1970) 11 Cal.App.3d 1114, 1123.) However, in the absence of extrinsic evidence, the interpretation of a written document presents a question of law upon which the reviewing court exercises its independent judgment, and therefore issues concerning interpretation of the document may be raised for the first time on appeal, unless extrinsic evidence would have been admissible to resolve the issue had it been raised. (Id. at p. 1126.)
Jotionitilat relies on Timney v. Lin (2003) 106 Cal.App.4th 1121, 1126-1127, which held that a provision in a settlement agreement authorizing the forfeiture of a substantial deposit based on a minor delay in the delivery of a quitclaim deed to cancel the purchase of real property was void as an illegal forfeiture.
The settlement agreement in this case does not contain a forfeiture provision. Under the agreement, Jotionitilat could obtain a building permit or dismiss the action by October 31, 2007. The agreement also allowed Jotionitilat to elect to pay up to $15,000 for an additional three months to pursue its options. The extension of time was consideration for Jotionitilat’s payment. The payment of $15,000 was not a deposit that Jotionitilat forfeited by failing to obtain a building permit. There is no evidence from which to conclude that the payment of $15,000 was a liquidated damages provision. Moreover, Jotionitilat was not entitled to require performance by Torres and Brenner until a building permit was issued. Therefore, Jotionitilat did not forfeit rights under the agreement.
Estoppel
Jotionitilat contends that by holding Jotionitilat’s check for more than a month, Torres and Brenner are estopped from relying on the building permit requirement. Jotionitilat did not raise any estoppel claims in the trial court. In light of the evidentiary issues and factual determinations required to resolve the issue of estoppel, this issue cannot be raised for the first time on appeal.
Mutual Mistake
Jotionitilat contends the trial court should have rescinded the settlement agreement for mutual mistake. However, the trial court’s implied finding that there was no mutual mistake is supported by substantial evidence. The plain language of the agreement provided for Jotionitilat to obtain a building permit before performance would be required under paragraph 1. The explanation of the agreement to the trial court and the communication with Jotionitilat on October 30, 2007, were in accordance with the terms of the agreement. Jotionitilat may have made a unilateral mistake concerning the terms of the agreement or wished to change the terms, but there was no mutual mistake in this case.
DISPOSITION
The judgment is affirmed. Respondents Leonard E. Torres and Anita Susan Brenner, individually and as trustees of the Torres Family Living Trust, are awarded their costs on appeal.
We concur: TURNER, P. J., ARMSTRONG, J.