Opinion
NOT TO BE PUBLISHED
Mendocino County Super. Ct. No. SCUK-CVG-0799288.
Marchiano, P.J.
Neal D. Nelson agreed to sell his interest in the family ranch business and land to his brother Gregory T. Nelson in return for a series of payments over time and other benefits during his retirement.
Plaintiffs Gregory T. Nelson (Gregory) and Nelson and Sons, Inc. (NSI) obtained a summary judgment against Jennifer Gale Nelson (Gale), widow of Gregory’s deceased brother, Neal D. Nelson (Neal), ordering specific performance of an option to purchase real estate that was part of their agreement. The principal issue on appeal is whether entitlement to specific performance was negated by a material breach of contract. We agree with the trial court that no material breach was shown, and affirm the judgment and a related attorney fee order.
I. BACKGROUND
Gregory is the son of Herman W. Nelson (Herman) and Clara M. Nelson (Clara); Neal was Clara’s son from a prior marriage. Herman and Clara owned 1, 360 acres of hill and range land (Hill Land) and, through NSI, owned and operated an adjacent 330-acre farm, near Ukiah. Herman died in 1976, leaving his NSI stock and his interest in the Hill Land in trust to Clara during her lifetime, and then to Gregory and Neal. Gregory and Neal worked on the farm and received shares of NSI stock from Herman and Clara. Gregory lives on the Hill Land; Neal lived on the farm in a 4, 000-square foot house with “three bedrooms, three bathrooms, a pool... overlook[ing] the Nelson Ranch....”
In the “late 1970’s and early 1980’s, ” Neal, who was born in 1932, had a heart attack and was advised by his doctor to retire for the sake of his health. In 1984, the year before his marriage to Gale, Neal told the family that he was taking the doctor’s advice, and wanted to retire and sell his present and future interests in NSI and the Hill Land. Agreements to that effect were negotiated between Gregory and Neal, through counsel, beginning in December 1984. Neal’s attorney, Kenneth Granberg, stated in a December 13, 1984, letter to Gregory’s attorney, Donald Hinkle: “The treatment of the future rights of Neal to stock in [NSI] is an important problem in this transaction, in order to [e]nsure Greg that if he purchases the 774 shares presently held by Neal, he will be able to acquire any future interest of Neal in [NSI] as well.” In a September 1987 letter to Hinkle, Granberg noted that “[t]he overall approach has been to assure to Neal a retirement plan, ” and thus that Neal had to be provided with ongoing payments. The negotiations resulted in two contracts dated as of August 2, 1988: an “Agreement for Purchase and Sale of Stock” (Stock Contract) between Neal and NSI; and an “Option to Purchase Real Property” (Real Estate Option) between Neal, and Gregory and NSI.
The Stock Contract provided that NSI would buy all NSI shares then owned or thereafter acquired by Neal, at specified prices and on specified terms, which included the amounts of the down payments, the interest on the unpaid balances, and the security for the promissory notes Neal would receive. For 12 and one-half years after the closing, NSI had an option to buy any NSI shares Neal acquired; thereafter, NSI was obligated to purchase Neal’s NSI shares. Shares Neal obtained after the 12 and one-half years were to be purchased within 90 days after he acquired them.
Section 4 of the Stock Contract stated: “As a material part of the consideration of this agreement, the parties agree that [NSI] shall provide [Neal] for his use as a consultant a new $15,000 [pickup] and pay him the sum of $2,250 per month as an independent consultant for a period of 12 1/2 years from the closing....” Section 4 provided that Neal would receive an additional consulting fee of $400 per month until he reached age 65, and “be entitled to occupy his present residence free of charge and without payment of expenses relative thereto (consistent with past practices)....” Neal’s surviving spouse was granted the right to remain in the residence on the same terms for two years after Neal’s death.
Section 5 of the Stock Contract provided that NSI and Gregory would receive an option to purchase interests Neal would acquire in the Hill Land. The parties “recognize[d]” in the Stock Contract that this real property was “used by [NSI] in its farming [operations] and also protects the integrity of these operations.” The terms of the option, including the purchase price, method of payment, and security for the buyer’s obligation, were set forth in the Real Estate Option contract attached to and executed together with the Stock Contract. The Real Estate Option was exercisable, provided NSI was not in default under the Stock Contract, for 10 years after Clara’s death.
The Stock Contract gave Neal the right to buy his residence for its fair market value if NSI defaulted and did not cure the default after 60 days’ written notice. The Stock Contract and Real Estate Option were made binding on the parties’ heirs, and the Stock Contract included an attorney fee clause. The Stock Contract provided: “No waiver of any of the provisions of this agreement shall be deemed, or shall constitute, a waiver of any [other] provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.”
On the date the Stock Contract was signed, Gregory and Neal initialed a one-page addendum detailing benefits Neal was to receive from NCI, such as: “1. Irrigation on pasture-help moving the irrigation equipment. 2. Help around the house and yard.... 5. Use of pond for sheep and training dogs.... 9. Free gas, oil, tires, for pick-up, as in the past.... 13. New floor coverings in house....” The words “at own expense” were handwritten next to items 1 and 2; the word “no” was handwritten next to item 9.
NSI paid Neal the $232,200 it owed him for the 774 shares of NSI stock he owned when the Stock Contract was executed with a down payment of $50,000, and monthly payments of $1,467 under an August 2, 1988 promissory note with a variable interest rate (Phase One Note). Neal received a monthly consulting fee for the 12 and one-half years specified in the Stock Contract, which ended in January of 2001. Under the terms of the contract, the $2,650 fee was to have been reduced by $400 when Neal turned 65 in March 1997, but NSI continued to pay him $2,650 per month during the 12 and one-half year period, resulting in overpayments that totaled approximately $18,800.
The Phase One Note was paid off before January 2001, but Neal told Gregory that he wanted to maintain his income of $4,117 per month ($1,467 for the stock purchase, plus the $2,650 consulting fee). Gregory agreed to continue the monthly $4,117 payments, with the understanding that the excess payments would be credited toward the amount NSI would owe Neal for the 310 shares of NSI stock Clara had gifted to Neal during the period from August 2, 1988, and February 15, 2001.
A “Memorandum of Agreement” between Gregory on behalf of NSI and Neal, dated February 15, 2001, set forth terms for the purchase of Neal’s 310 shares, and any additional shares Clara gifted to him during her lifetime. Neal assigned his 310 shares to NSI for $127,875, the price set pursuant to the Stock Contract formula. Excess payments on the Phase One Note in the amount of $17,162 were credited against the amount owed, and the balance was payable under an unsecured promissory note dated March 1, 2001, that provided for monthly payments of $4,117 and variable interest (Phase Two Note). Additional shares gifted by Clara to Neal would be assigned to NSI, and the price of the shares under the Stock Contract formula would be added to the unpaid balance of the Phase Two Note.
On July 12, 2001, Gregory, individually and on behalf of NSI, and Neal executed a “Supplemental Agreement” affirming that the Stock Contract and Real Estate Option were “presently in full force and effect in every respect.” The parties acknowledged that all of Neal’s outstanding NSI shares were purchased on February 15, 2001, and that “the option to purchase” those shares under the Stock Contract “was timely exercised.” The parties agreed that NSI shares received by Neal in the future would be purchased pursuant to the terms of the Stock Contract.
Clara died on April 25, 2002, resulting in conveyance of title to the Hill Land to Gregory and Neal, and Neal’s inheritance of 1, 513 shares of NSI stock in addition to 10 shares Clara had gifted him in January 2002. Gregory obtained appraisals showing that the Hill Land was worth $2,365,000, and NSI was worth $8,500,000, on the date of Clara’s death.
In September 2002, Myrna Oglesby, counsel for Gregory and NSI, wrote to Neal’s new counsel, Kenneth Stone, with terms for the purchase of Neal’s 1, 523 shares under the Stock Contract formula. Stone replied on October 15, 2002, in the first of a series of letters requesting information about NSI and Nelson family trusts, which were answered by Oglesby and Bruce Crook, Jr., the accountant for NSI and the trusts. On December 10, 2002, Oglesby wrote Stone a letter questioning his need for information concerning NSI and the Hill Land given that the prices for the purchase of Neal’s interests in the corporation and the land were fixed under the 1988 contracts. In December 2002, the parties agreed that NSI would pay Neal $704,847 for his NSI stock, with a down payment of $100,000, and the balance in monthly installments of $4,723.44 for 15 years under a variable interest rate promissory note (Phase Three Note). NSI made the $100,000 down payment on December 18, 2002, and began paying the $4,723.44 installments on January 17, 2003.
On January 22, 2003, Stone wrote Oglesby stating that he had not received all of the information he had requested, and that he had instructed Neal to defer cashing the checks he was receiving. Oglesby responded on January 27, 2003, denying any lack of cooperation, and affirming that all books and records of NSI were open for Neal’s inspection. Oglesby wrote: “There was a fixed price for the corporate stock based on the agreements between the parties; that agreement has been followed and the purchase completed, so far as we are concerned.”
Gregory gave Neal a notice dated April 1, 2003, that he was exercising his option to purchase Neal’s interest in the Hill Land, and opening an escrow with a title company in Ukiah for a conveyance to be recorded on May 1, 2003. The purchase price for the property as of that date under the Real Estate Option was $261,926.26. Stone wrote Oglesby a letter dated April 29, 2003, saying that he was “shocked at the gross disparity between the option price and the current fair market value of this property. If one assumes that the recent appraisal for estate tax purposes represents one end of the spectrum of fair value, then the low value of a one-half interest in the property is $1,182,500.” On May 1, 2003, Gregory deposited $54,373.63 with the title company for escrow fees and the 20 percent down payment owed for the Hill Land under the Real Estate Option. Neal did not convey his interest in the Hill Land to Gregory, and the escrow remained open.
In March 2004, NSI made its final $4,117 payment on the Phase Two Note. NSI continued to make payments on the Phase Three Note for the December 2002 stock purchase, and Neal eventually cashed the checks NSI wrote him for that purchase. In January 2005, Neal sent Stone a cashier’s check for $208,639.12 he had received for the purchase, along with a letter stating that he was concerned about NSI’s solvency, and asking that the funds be placed in a trust account for his benefit. Neal told Stone that he would continue to deposit the Phase Three Note payments into the trust account until his dispute with Gregory and NSI was resolved.
On May 26, 2005, Stone wrote Oglesby a letter listing “issues that will require resolution before we can finalize any agreements between our respective clients, ” including “the validity of the 1988 Agreements, and any breaches thereof.” Stone asked first for a response to a memorandum enclosed with the letter, which detailed a long list of problems and concerns involving the residence Neal occupied and the land he used. Under the heading “House Issues and Maintenance, ” for example, Neal asked NSI to pay contractors of his choosing for specified work on the home’s chimney, walls, flooring, tile, countertops, appliances, and sound system.
Gregory’s counsel addressed all of the points in a letter dated July 1, 2005. The tenor of the replies is illustrated in the response to the concerns about tile and countertops: “[G]reg would like to have Neal’s permission to have a tile contractor look at the current conditions and make recommendations. If Neal will get a bid from a contractor for the work he suggests, Greg will review it and if appropriate authorize the work. The agreement does not give Neal the exclusive right to decide what he wants done at whatever price and to send the bill to [NSI]. It is likely, however that once specific proposals or bids for work are obtained that there will be no dispute. Greg shares Neal’s interest in keeping the house in good shape.” The letter concluded in part: “Greg Nelson and [NSI] recognize their obligations to pay all property taxes and insurance and mortgages on the property where Neal lives and to keep it in good repair.... Greg intends to work constructively with Neal to resolve any and all issues relating to privacy and maintenance of Neal’s residence. In so doing, he is willing to go well beyond the express terms of any and all of the agreements he has with Neal. [¶] We trust that your letter was not designed to cloud Neal’s obligation to sign the documents necessary to conclude the option agreement which is an integral part of the 1988 agreement that you are apparently seeking to enforce.”
Gregory and NSI filed suit against Neal on June 4, 2007; the second amended complaint asserted a claim for specific performance of the Real Estate Option, and other causes of action. Neal cross-complained for declaratory relief as to the enforceability of the Stock Contract and the Real Estate Option. Neal died on July 10, 2008, and Gale was substituted as a defendant in the action.
Plaintiffs’ motion for summary judgment was supported by Gregory’s declaration, which detailed $1,431,415 in consideration Neal and Gale had received under the Stock Contract. Neal received $400,650 in consulting fees, Neal and Gale received $842,593 for NSI stock through April 2009, and Gale was receiving ongoing payments of $4,723.44 per month on the Phase Three Note. NSI paid $15,000 for Neal’s pickup truck, and had expended $173,172 on Neal and Gale’s residence, including payments for property taxes, utilities, fixtures, and repairs.
Gregory stated that Neal entered into the Stock Contract and Real Estate option because he wanted to retire. He said that Neal’s consulting services “were used only rarely, and Neal was able to, and frequently did, take trips and vacations with Gale after the Stock Contract was signed. Neal’s income increased a great deal, and his quality of life did also, after he signed the Stock Contract.”
The court sustained plaintiffs’ objections to most of Gale’s declaration in opposition to the motion for summary judgment. In the portions of the declaration that were admitted, Gale identified various breaches of the Stock Contract by NSI, which included: (1) securing the Phase Three note with a deed of trust on the Hill Land, rather than the farm as the agreement provided; (2) making late installment payments for NSI stock; (3) requiring Neal to pay a share of the property taxes owed on the Hill Land in 2005; (4) requiring Neal to pay income tax on the rental value of their residence, and NSI’s costs relating to the residence; and (5) failing to keep the residence in good repair. Gale said that a payment due in August 2000 was not made until December 2002, and that four payments in 2003 were one month late. As for the maintenance issues, Gale identified problems with the foundation, paint and staining, window wood and decking, the pool, and weeds. Gale further argued that NSI breached the Stock Contract because it failed to purchase the shares Neal inherited from Clara in 2002 within 90 days after he received them.
The court granted the summary judgment motion, finding among other things that Neal and Gale received the benefit of Neal’s bargain under the Stock Contract, and that NSI was not in material default under the Stock Contract when Gregory exercised the Real Estate Option. The granting of the motion was conditioned on NSI’s delivery of a deed of trust on the farm to secure the Phase Three Note. The deed of trust was timely delivered, and judgment was entered ordering Gale to convey her and Neal’s interest in the Hill Land for the $261,926.26 option price, less attorney fees awarded to plaintiffs pursuant to the Stock Contract. Gale was subsequently ordered to pay plaintiffs’ attorney fees of $120,801.75. Gale has filed appeals from the judgment and the fee order.
II. DISCUSSION
A. Arguments and Scope of Review
“The rules of review are well established. If no triable issue as to any material fact exists, the defendant is entitled to a judgment as a matter of law. [Citations.] In ruling on the motion, the court must view the evidence in the light most favorable to the opposing party. [Citation.] We review the record and the determination of the trial court de novo. [Citation.]” (Shin v. Ahn (2007) 42 Cal.4th 482, 499.)
Gale contends that summary judgment should not have been granted on the claim for specific performance of the Real Estate Option because there are triable issues as to whether NSI materially breached the Stock Contract. A plaintiff who has not performed its contractual obligations is generally not entitled to specific performance (5 Witkin, Cal. Procedure (5th ed. 2008) Pleading § 785, pp. 203−204 (hereafter Witkin, Procedure) [elements of complaint for specific performance]), and the Real Estate Option by its terms is conditioned on NSI not being in default under the Stock Contract. Whether a breach is material is ordinarily a question of fact. (Superior Motels, Inc. v. Rinn Motor Hotels, Inc. (1987) 195 Cal.App.3d 1032, 1051−1052 (Superior Motels).) Gale also contests the judgment for specific performance on statute of limitations grounds.
Gale further contends that NSI’s material breaches of the Stock Contract entitle her to rescind the obligation to sell the NSI shares Neal inherited in 2002. (4 Witkin, Procedure, supra, Pleading, § 552, p. 680 [rescission may be had for a material breach of contract].) Gale argues that this obligation was severable from the obligations to sell the shares Neal previously acquired. (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 934, pp. 1028−1029 (hereafter Witkin, Summary) [aggrieved party must ordinarily rescind the entire contract, but may obtain rescission of a part that is severable].)
The appeal from the fee order does not challenge the amount of the award; Gale simply notes that the award must be reversed if the judgment is reversed.
B. Material Breach
“[Not] every breach by a plaintiff... will prevent him from obtaining a decree for specific performance. The plaintiff’s non-performance may be comparatively slight and unimportant, so that his breach is merely a partial breach.” (12 Corbin, Contracts (2002 Interim ed.) § 1176, p. 363 (Corbin); see also Rest.2d Contracts, § 369, com. a, p. 198 [“the fact that a party has committed a minor breach, one not serious enough to discharge the other party’s remaining duties, does not preclude specific performance”].) “[W]hat constitutes such a material breach by the plaintiff as operates to discharge the defendant’s duty must always be answered in consideration of the particular facts of each case.” (Corbin, supra, § 1175, p. 358.) “ ‘Where the line is to be drawn between the important and the trivial cannot be settled by a formula.’ ” (Superior Motels, supra, 195 Cal.App.3d at p. 1051.)
Among the considerations for determining whether a breach is material is “the extent to which the injured party will be deprived of the benefit which he reasonably expected.” (Rest.2d Contracts, § 241, p. 237.) A breach is material “ ‘if it is so dominant or pervasive as in any real or substantial measure to frustrate the purpose of the contract.’...” (Superior Motels, supra, 195 Cal.App.3d at p. 1051.) Another relevant consideration is “the extent to which the party failing to perform... will suffer forfeiture.” (Rest.2d Contracts, § 241, p. 237; Superior Motels, supra, 195 Cal.App.3d at p. 1051.) “For this reason a failure is less likely to be regarded as material if it occurs late, after substantial preparation or performance, and more likely to be regarded as material if it occurs early, before such reliance.” (Rest.2d Contracts, § 241, com. d, pp. 239−240; Corbin, supra, § 1175, p. 359 [“[a]fter a large part performance has been rendered by the plaintiff, a nonperformance thereafter is less likely to... deprive the plaintiff of a right to specific performance... [c]ourts are astute to prevent unjust forfeiture and unjust enrichment”]; 1 Witkin, Summary, supra, Contracts, § 852, p. 939.) Other factors relevant to the materiality of a breach include “the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived, ” and “the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.” (Rest.2d Contracts, § 241, p. 237.)
As a matter of law under the foregoing standards, none of the breaches Gale identifies on the part of NSI were sufficiently material to preclude specific enforcement of the Real Estate Option or support partial rescission of the Stock Contract.
Looking first at use of a deed of trust on the Hill Land, rather than the farm, to secure the Phase Three Note, we observe that Gale was not prejudiced by the mistake. NSI never defaulted on the note, and the mistake was rectified in the judgment, which provided Gale with a deed of trust on the farm. This breach was therefore entirely immaterial.
Looking next at late payments under the notes, Gale identified four payments that were one month late, and one that was received approximately two and one-half years after it was due. Gale did not controvert Gregory’s declaration that while some of NSI’s payments may have been a few days late, some payments were also made early at Neal or Gale’s request, to accommodate their travel schedule or for other reasons. Balanced against the one payment that was substantially delayed were many years of otherwise timely payments, and NSI’s $18,800 overpayment of Neal’s consulting fees. Accordingly, the late payments cannot be viewed as material breaches.
We next consider that Neal was required to pay a share of the property taxes owed on the Hill Land in 2005-a breach of the Stock Contract, which required the taxes to be paid by NSI. Gale’s declaration does not disclose the amount of the payment, but indicates that Neal received a distribution of rent from a tenant of the Hill Land to enable him to make the payment. This single payment of an undisclosed amount cannot reasonably be considered a material breach given all of the consideration Neal and Gale received under the Stock Contract, and the fact that damages could have compensated for the loss (Rest.2d Contracts, § 241, p. 237).
As plaintiffs’ brief points out, Gale did not seek damages below.
The failure to purchase Neal’s inherited shares within 90 days of the date he acquired them cannot be deemed a material breach for similar reasons. Gale’s counsel represented at the hearing on the summary judgment motion that Neal “received those shares effectively in April of 2002, ” and the purchase was not consummated until December 2002. However, the interest lost on the amount owed was a minor sum in the scheme of the case, and compensable in damages. Moreover, the Stock Contract did not provide that time was of the essence. (Henck v. Lake Hemet Water Co. (1937) 9 Cal.2d 136, 143 [time is generally not of the essence unless that intent “clearly appears[s] from the terms of the contract, in the light of all the circumstances”]; Baypoint Mortgage Corp. v. Crest Premium Real Estate etc. Trust (1985) 168 Cal.App.3d 818, 826.)
The remaining breaches were failing to maintain Neal and Gale’s residence as required by the Stock Contract’s addendum, and having Neal pay income taxes on the home’s rental value and the cost of NSI’s repairs despite the stipulation that he was to occupy the residence “free of charge... (consistent with past practices).” According to Gale’s declaration, these breaches occurred throughout the entire term of the contract. They were nonetheless immaterial, for numerous reasons.
First, the breaches were, for the most part, waived when Neal reaffirmed the Stock Contract and Real Estate Option in the Supplemental Agreement of July 2001. The July 2001 agreement did not excuse future breaches because the Stock Contract provided against continuing waivers, but the prior willingness to overlook 13 years of continuous breaches undercuts the current claim that the breaches were material. Further, the breaches not waived occurred after many years of performance under the contract, when material breaches are not generally found. (Rest.2d Contracts, § 241, com. d, pp. 239−240; Corbin, supra, § 1175, p. 359, Witkin, Summary, supra, Contracts, § 852, p. 939.)
Second, detriment suffered because of the breaches that occurred after July 2001 was compensable in damages.
Third, that detriment is far outweighed by the $1.4 million in consideration Neal and Gale received under the Stock Agreement. Even where a default is “serious and prolonged, in balancing the equities, the degree of the default must be weighed against the degree of part performance.” (Scarbery v. Bill Patch Land & Water Co. (1960) 184 Cal.App.2d 87, 104.) The breaches cannot be said to have largely “deprived [Neal] of the benefit which he reasonably expected” (Rest.2d Contracts, § 241, p. 237), or “ ‘substantial[ly]... frustrate[d] the purpose of the contract’ ” (Superior Motels, supra, 195 Cal.App.3d at p. 1051). While negotiating the Stock Contract, Neal’s counsel stated that the “overall approach” was “assur[ing] Neal a retirement plan, ” and the evidence shows that this core purpose was effectuated. Neal was able to retire at an early age with a steady income, and live in a 4, 000-square foot home with reduced expenses. He received the essential benefit of his bargain.
Fourth, detriment from the breaches would be far outweighed by the forfeitures plaintiffs will suffer if they cannot purchase the Hill Land and Neal’s inherited shares at the agreed-upon prices. The forfeitures will be substantial, even if the farm and the Hill Land are worth no more now than when they were appraised in April 2002. Gregory will forfeit $920,573.74 if he is unable to purchase a one-half interest in the Hill Land, valued at $1,182,500 in the 2002 appraisal, for the option price of $261,926.26. NSI will forfeit $1,144,753 if it is unable to purchase Neal’s 1, 523 shares (21.76 percent of the outstanding NSI stock), valued at $1,849,600 in the 2002 appraisal (21.76 percent of $8,500,000), for the $704,847 price established in December 2002. “ ‘[T]he significance of the default is grievously out of proportion to the oppression of the forfeiture.’ ” (Superior Motels, supra, 195 Cal.App.3d at p. 1051.)
Fifth, plaintiffs have not been guilty of bad faith or unfair dealing. (Rest.2d Contracts, § 241, p. 237.) To the contrary, they agreed to maintain Neal’s level of income when they were not contractually bound to do so, and showed themselves willing to go beyond the requirements of the Stock Contract addendum in their July 1, 2005 letter setting forth what they were prepared to do to satisfy Neal’s demands relating to the residence. We note in this regard that aspersions cast on Gregory in Gale’s declaration were excluded from evidence.
Gale contends that breach of the obligation to provide a residence “free of charge” must be deemed a material breach because the Stock Contract so provides. However, the only consideration described in the agreement as “material” was provision of consulting fees and a pickup truck.
Therefore, the court correctly ruled that NSI was not in material breach of the Stock Contract.
In view of this conclusion, which is dispositive of Gale’s attempt to rescind her obligation to sell Neal’s inherited shares, we need not address her argument that this stock sale was severable from the others required under the Stock Contract.
C. Statute of Limitations
Gale contends that summary judgment should not have been granted for specific performance of the Real Estate Option because there are triable issues as to whether the breach of contract cause of action was barred by the four-year statute of limitations. (Code Civ. Proc., § 337; 5 Witkin, Procedure, supra, Pleading § 784, p. 203 [specific performance is a remedy; the cause of action is for breach of contract].) However, Gale forfeited this argument by failing to raise it below in opposition to the summary judgment motion. (Poster v. Southern Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 273, fn. 3 [statute of limitation defense must be raised in a timely fashion at the trial level]; Crouse v. Brobeck, Phleger & Harrison (1998) 67 Cal.App.4th 1509, 1526−1527, fn. 3 [party barred from raising new statute of limitation theory on appeal “when that newly raised theory involve[d] facts open to controversy”].)
Neal failed to convey the Hill Land when Gregory sought to exercise the Real Estate Option on May 1, 2003, and the suit was not filed until more than four years later, on June 4, 2007. However, Neal’s counsel sent Gregory’s counsel a letter on May 26, 2005, which apparently sought to enforce the Stock Contract. Under these circumstances, Gale concedes that “[i]t may be open to question... whether representations by Neal and his attorneys would serve to toll the statute of limitations longer than four years from May 1, 2003.” (Cf. Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 489 [a plaintiff should not be penalized for giving the defendant an opportunity to retract a wrongful repudiation].) Under the circumstances, the statute of limitation argument does not present a pure issue of law that can appropriately be addressed for the first time on appeal.
III. DISPOSITION
The judgment and the attorney fee order are affirmed. Plaintiffs shall recover their costs in the appeals.
We concur: Margulies, J., Dondero, J.