Opinion
B324052
09-17-2024
"PROTECTION OF THE HOLY VIRGIN," THE RUSSIAN OTHODOX CHURCH, Plaintiff and Respondent, v. OUR CHURCH BUILDING, INC., Defendant and Appellant.
Alston & Bird, Daniel G. Seabolt; Snell and Wilmer, Keith M. Gregory, Jing Hua, Aliya L. Astaphan, for Defendant and Appellant. Tyler Law, Nathan R. Klein, for Plaintiff and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. 18STCV09423 Daniel S. Murphy, Judge. Affirmed.
Alston & Bird, Daniel G. Seabolt; Snell and Wilmer, Keith M. Gregory, Jing Hua, Aliya L. Astaphan, for Defendant and Appellant.
Tyler Law, Nathan R. Klein, for Plaintiff and Respondent.
MORI, J.
Defendant Our Church Building, Inc. (OCB) appeals from a judgment following a bench trial in favor of plaintiff and respondent "Protection of the Holy Virgin," the Russian Orthodox Church (the Church) on its claim for specific performance. The judgment enforces provisions in OCB's 1983 bylaws granting the Church purchase rights to three parcels of property. OCB raises five contentions challenging the enforceability of these bylaws and the adjudicated value of each property. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The Church is part of a hierarchical organization of churches known as the Russian Orthodox Church Outside of Russia (ROCOR). In the 1960s, parishioners who left another ROCOR church formed the Church and OCB.
A. OCB's Incorporation and Original Bylaws
OCB is a general nonprofit corporation created to "conduct, operate and maintain a Russian Orthodox Church." Its original bylaws (the 1964 bylaws) declare OCB's establishment for "the purchase of a more spacious building for the Holy Protection church [(the Church)] in Los Angeles, . . . and for the purchase of other needed property for the Parish." (1964 Bylaws § 1.01.) Membership of OCB was comprised of Church pastors and donors. (Id. § 2.01.) OCB is managed by a Board of Directors that was initially comprised of parishioners and priests of the Church. (Id. §§ 2.02, 4.01.)
The 1964 bylaws declared the initial rights and obligations for purchasing property and paying debts. Upon its acquisition of "property which the Church indicates, [OCB] is the full owner of that property" responsible for making necessary changes and repairs "with full agreement of the Church Council [and] by order of the Board of Directors." (1964 Bylaws §§ 5.01, 5.07.) For property purchased via mortgage, payment would be subject to separate agreement between OCB and the Church with individual guarantees by OCB members and, if necessary, nonmembers. (Id. §§ 5.03-5.04.) Upon full payment of any mortgage, the Church, "if it wishes to become the owner of the property," was required to simultaneously purchase "all contributions" by OCB members. (Id. §§ 6.01-6.02.)
B. OCB's Property Acquisitions
The same year it was incorporated, OCB purchased real property located at 2041 Argyle Avenue (the Church Building) for $102,000. OCB purchased the property using a mortgage and contributions. By separate agreement (the 1964 Agreement), the Church agreed to pay OCB $539.50 per month "for necessary payment of the first mortgage." (1964 Agreement §§ 1-2.) In exchange for its monthly payments, the Church obtained a proportionate share of votes on the OCB Board. (Id. § 10.) Any mortgage payment left unpaid by the Church would be covered by OCB-member contributions subject to separate guarantee. (Id. § 5.)
OCB acquired the second and third properties-the Apartment Building located at 2062 Vine Street and the Russian Hall located at 2031 Argyle Avenue-in 1965 and 1970. As before, OCB used mortgages and contributions to purchase the Apartment Building ($87,500) and Russian Hall ($74,000).
C. Amendments to OCB's Bylaws
OCB amended its bylaws in 1967, 1983, and 1990. We address relevant portions of each in turn.
1. The 1967 Bylaws
Following its acquisition of the Apartment Building and before its purchase of the Russian Hall, OCB amended its bylaws in 1967. These bylaws (the 1967 bylaws) restated OCB's purpose and the Church's conditional purchase rights. (See 1967 Bylaws §§ 1.01, 6.01-6.03.)
The 1967 bylaws also provided new provisions addressing "newly acquired" property. (See 1967 Bylaws § 9.) Among them was a provision covering the payment of debt on the Apartment Building: "Paying off the first mortgage, as well as returning the money borrowed from individuals and from the parish and its departments shall be made from the income . . . from the rental of the apartments." (Id. § 9.05.) The Church and one of its departments (the Sisterhood) could contribute "loan-like money" to OCB to help pay off the first mortgage and other debts. These contributions would increase their rights in managing the Apartment Building. (Id. § 9.07.) Upon the full discharge of debt, OCB could retain ownership in the Apartment Building or transfer it to the Church or Diocesan Authority. (Id. § 9.09.)
The parties do not define the Sisterhood in their briefs. At trial, the parties referred to it as the "Protection of the Holy Virgin Lady's Committee," which was responsible for charitable ventures and providing post-service meals.
2. The 1983 Bylaws
Several years after it acquired the Russian Hall, OCB amended its bylaws again in 1983 (the 1983 bylaws). The 1983 bylaws reconfirmed OCB's objective as acquiring more spacious premises for the Church. (1983 Bylaws § 1.01.) They also verified OCB acquired the Russian Hall "so that in the future it, as well as the Church [Building] and [Apartment Building] would be repurchased by the [Church] and its departments." (Id. § 10.06.)
As before, the 1983 bylaws addressed OCB's ownership rights, sources of money used to purchase the properties, liability for associated debts, and responsibility for repairing and altering the properties to be carried out with Church Council. (1983 Bylaws § 6 Prefatory Note &§§ 6.01, 6.02.) All three properties were acquired using mortgages and contributions from OCB members, the Church, and the Sisterhood. (Id. § 6.01; see id. §§ 9.01, 10.01.) The bylaws stated payment of mortgages and "money borrowed from individuals and from the [Church] shall be made from the income" generated by the properties. (Id. §§ 9.05, 10.05.) The Church could "contribute [ ] money to [OCB] that will help pay the[se] first mortgage and other debts," which would increase its management rights in the properties (id. § 9.07) and "accelerate the transfer of property to the full ownership of the [Church] in the future...." (Id. § 10.07.) Upon full discharge of debts, OCB would retain full ownership rights subject to the Church's purchase rights as provided in sections 6.02 through 6.04. (Id. §§ 9.09, 10.08.)
The 1983 bylaws declared "it necessary to make the corresponding changes in [s]ection 6 so that in the future, the individuals who will lead [OCB] and the Parish authorities will comply with our understanding of . . . the objectives of [OCB]. The changes made are fully consistent with those basic ideas on the protection of the property of the [Church] that the individuals who established [OCB] in 1965 were guided by." (1983 Bylaws § 6 Prefatory Note.)
Section 6.01 provided for the reimbursement of OCB-member contributions. "The contributions made by members of [OCB] shall be returned in full with respect to [the Apartment Building], and in the amount of 80% of the loaned amount with respect to the [Church Building]. These loan-like amounts shall be returned mainly from the income from the [Apartment Building] and the contributions of the [Church]. The third asset ([the Russian Hall]), acquired using the [same source of contributions] does not entail the obligation to return the donations made by [OCB] members."
Section 6.02 of the 1983 bylaws, the focal point of this dispute, updated the Church's purchase rights as follows:
"The legal owner of all the property . . . is [OCB]. The [Church] can buy out all this property from [OCB], but it must comply with the following [four] conditions for this purpose:
"a) All three parts of the property . . . must be bought out SIMULTANEOUSLY. In no case may the [Church] become the lawful owner of any part of this property, since [OCB] considers it INDIVISIBLE.
"b) Prior to buying out the property, all loans granted by banks under the first mortgage must be repaid to the banks.
"c) Prior to buying out the property, all contributions of the members of [OCB] shall be returned, namely: 80% of the loaned amounts contributed by [them] to purchase the Church Building, and 100% of the loaned amounts contributed by [them] to purchase the [Apartment Building].
"d) The value of all the property on the day of the buy-out shall be evaluated by either banks or other official agencies, and the [Church] shall contribute to [OCB] the amounts corresponding to the percentage share of participation of the [OCB members] in the acquisition of the property, which corresponds to 37% for the purchase of the Church Building, 82% for the purchase of the [Apartment Building] and 43% for the purchase of . . . the Russian Hall." (1983 Bylaws § 6.02.)
Section 6.03 provided for the distribution of funds upon the Church's purchase as follows:
"Being a non-profit entity, having received the amounts of money specified in § 6.02-d from the [Church], [OCB] may not distribute them among [its own members], since the loans made by them have already been returned, but shall donate these amounts as a whole to one of the following church organizations or split them between several church organizations." (1983 Bylaws § 6.03.)
If the Church's buyout was "not expected in the near future," the bylaws authorized the preparation of a "'Will' for the period of time until the next General Meeting, which will specify how much [OCB] intends to donate and to which church organization." (1983 Bylaws § 6.04.)
3. The 1990 Bylaws
OCB amended its bylaws again in 1990 (the 1990 Bylaws) to restrict the Church's voting rights. Notwithstanding this change, the 1990 bylaws did not affect the Church's purchase rights. (See, e.g., 1990 Bylaws §§ 6.01-6.04.)
A prefatory note in the 1990 bylaws provided: "It is suggested that members of Church Council and Sisterhood cannot vote despite possessing votes ...." (1990 Bylaws § 4 Prefatory Note.)
D. Exercise of the Church's Purchase Rights
Around February 2018, the president of OCB sent the Church proposed revisions of OCB bylaws revoking the Church's purchase rights. OCB completed the amendment process in September 2019.
The 2019 bylaws conditioned any sale of real property on 90 percent vote of OCB members. (2019 Bylaws § 5.02.)
On November 6, 2018, the Church sent OCB a letter exercising its rights to purchase the properties under section 6.02 of the 1983 bylaws. In its letter, the Church provided appraised values for the Church and Apartment Buildings ($1,430,000 and $2,645,000, respectively). The Church did not have records covering the Russian Hall. It requested those documents to ascertain a value. Recognizing OCB had "no obligation to accept these appraisals," the Church offered to work with OCB "to do an appraisal so there are no disputes as to the current value." The Church stated it had obtained a loan commitment and was "ready, willing, and able to close the transactions" at the appraised values or "more if a bank or other mutually agreeable appraisal" provided a different value.
OCB did not respond to the November 2018 letter, submit a counter appraisal, or hold a vote to approve or reject the Church's tender. In December 2018, OCB initiated an unlawful detainer action against the Church.
E. Underlying Pleadings and Bench Trial
The Church commenced this action and filed the operative first amended complaint in February 2019 alleging a cause of action to specifically enforce its rights to purchase the properties under the 1983 bylaws. The matter proceeded to a bench trial.
The operative complaint also alleged two claims for declaratory relief that were subsequently dismissed.
At the commencement of trial, the parties submitted stipulations establishing certain facts. Between 1972 and 1988, OCB fully discharged mortgages on each property and reimbursed OCB-member contributions from an unknown source of funds. The parties did not know the circumstances under which the 1983 bylaws were amended, and since that time, OCB expended $2.5 million to maintain the properties.
Several witnesses testified at trial. The current treasurer of the Church, Alexey Sorokin, testified the Church made a $10,434.31 down payment for the Church Building. Between 1965 and 1972, the Church made over $48,000 in monthly mortgage payments and several large payments to "speed up mortgage payments" on the Church Building. Due to the Church's loss of documents, Sorokin could not fully determine whether OCB previously indicated it "was not willing to sell the properties." The only documents he reviewed evincing OCB's revocation of the Church's purchase rights were in the 2019 bylaws. On cross-examination, Sorokin acknowledged the Church's own bylaws required member approval before finalizing purchases of real property. Sorkin did not expect any issue with an approval.
Section 40 of the Church's own bylaws provided: "Church real estate may be purchased or otherwise acquired out of church funds with the permission of the Diocesan Authorities, by decision adopted either by the Annual Parish meeting or by a specially-convened Extraordinary Parish Meeting." General Meetings are held annually, whereas Extraordinary Parish Meetings require three weeks' notice of the convening thereof.
Doctor Alexander Miller, a member of the Church community since the 1960s, Church Council member during the 1990s, and current OCB Board member since the 2000s, also testified. As "many of the members of the Church Council were also members of OCB," Miller testified "there was sort of a cross duties, and consequently people communicated freely and shared their opinions" amongst both entities. Both parties remained in close communication and were in a "smooth flowing" relationship until the arrival of a new priest around 2014. From that point forward, the Church disputed its limited managerial authority on the OCB Board.
Miller could not recall OCB sending the Church a notice of revocation of the Church's purchase rights under the 1983 bylaws. He "never conceived" the bylaws constituted an offer to sell, though he admitted Church Council members did construe them as such.
Romy Taylor, a former president of OCB, acknowledged various documents from the parties identifying monthly payments from the Church to reimburse OCB-member contributions. Taylor admitted "OCB never sent any revocation" of its prior offer to sell the properties to the Church under the 1983 bylaws. "Instead of doing that," Taylor testified, OCB "took away the Church's votes" in the 1990 bylaws. Like Sorokin, Taylor could not "definitely know" whether OCB sent a notice of revocation because OCB had also lost many of its own documents. Taylor did not see any written revocation in the documents she did review.
Expert appraisers also testified. The Church's expert submitted appraisals under an "as is" methodology reflecting property values "as it stands" on the date of evaluation. OCB's expert submitted appraisals under two methodologies: a "fair market value" reflecting highest and best use, and "value in use" reflecting specific and unchanged use. The valuations under each methodology and the Church's total purchase price from the percentages listed in the 1983 bylaws are as follows:
Appraisal Method
Church Building
Apartment Building
Russian Hall
Total Purchase Price
“As Is”
$1,430,000
$1,925,000
$2,645,000
$3,244,950
Church % (Total)
37% ($529,100)
82% ($1,578,500)
43% ($1,137,350)
$1,393,000
$1,400,000
$1,585,000
$2,344,960
Church % (Total)
37% ($515,410)
82% ($1,148,000)
43% ($681,550)
“Fair Market Value”
$3,927,000
$1,400,000
$2,946,000
$3,867,770
Church % (Total)
37% ($1,452,990)
82% ($1,148,000)
43% ($1,266,780)
OCB's expert did not use a "value in use" appraisal on the apartment Building, and instead used "a lease to value" appraisal reflected above.
According to a general manager of a private money lender, in May 2018 the Church prequalified for a mortgage loan covering the purchase prices of all three properties under any valuation scenario above.
Following trial, the court issued a statement of decision and subsequent judgment enforcing the Church's right to purchase the properties under the 1983 bylaws. The court adopted the "as is" methodology, entering judgment upholding the Church's rights to purchase the properties for a total of $3,244,950. Despite finding the 1983 bylaws did not require the Church to reimburse OCB for any mortgage or OCB-member contribution to support an irrevocable option agreement, the court found the Church did so by making partial payments to OCB. In the alternative, the court found the Church exercised its rights in a reasonable time and before OCB revoked its ongoing proposal to sell through the 2019 bylaws. Finally, the court found the Church ready, willing, and able to pay the total purchase price. OCB timely appealed.
DISCUSSION
OBC raises various contentions challenging the trial court's reasoning and subsequent judgment. Each pertains to the enforceability of the Church's purchase rights under the 1983 bylaws or the court's adjudication of value of each property.
A. Standards of Review
"We begin our analysis with the fundamental principle that a trial court's order 'is presumed to be correct, and all intendments and presumptions are indulged to support it on matters as to which the record is silent. [Citation.] It is the appellant's burden to affirmatively demonstrate error. [Citations.]' [Citation.]" (Petrolink, Inc. v. Lantel Enterprises (2022) 81 Cal.App.5th 156, 165.)
Orders granting specific performance under a contract are generally reviewed for abuse of discretion. (Petersen v. Hartell (1985) 40 Cal.3d 102, 110.) This "is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review. The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious." (Haraguchi v. Superior Ct. (2008) 43 Cal.4th 706, 711-712, fns. omitted (Haraguchi); accord, Greif v. Sanin (2022) 74 Cal.App.5th 412, 443.) The trial court's "discretion to grant or deny equitable relief is broad, and we must indulge all inferences in favor of its decision." (Abers v. Rohrs (2013) 217 Cal.App.4th 1199, 1208.)
OCB contends we must apply an independent standard of review because the dispositive facts in this case are "undisputed." Facts are "undisputed" if they are "settled" or "not open to dispute or question." (Adoption of Arthur M. (2007) 149 Cal.App.4th 704, 717.) As our factual summary indicates, the facts in this case were not undisputed. Both parties presented conflicting evidence to support their own construction of the 1983 bylaws.
We review the 1983 bylaw language de novo, review any extrinsic fact adopted by the trial court for substantial evidence, and uphold any reasonable conclusion drawn by the trial court from the evidence. (See Concord Christian Center v. Open Bible Standard Churches (2005) 132 Cal.App.4th 1396, 1408-1409; Fischer v. First Internat. Bank (2003) 109 Cal.App.4th 1433, 1443; Kelley v. Upshaw (1952) 39 Cal.2d 179, 190.) Ultimately, we must determine whether "the trial court's interpretation is erroneous before [we] may properly reverse [its] judgment." (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 866.)
B. Governing Law: Specific Performance and Contract Interpretation
"Settled principles of contract law govern this case. The equitable remedy of specific performance cannot be granted if the terms of a contract are not certain enough for the court to know what to enforce. [Citations.] However, '"'[t]he law does not favor but leans against the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties if [they] can be ascertained.'"' [Citations.]" (Patel v. Liebermensch (2008) 45 Cal.4th 344, 349.) "'The material factors to be ascertained from the written contract are the seller, the buyer, the price to be paid, the time and manner of payment, and the property to be transferred, describing it so it may be identified. [Citations.]' [Citation.]" (Ibid.)
Our determination of these factors is guided by principles of contract interpretation, which are designed to give effect to "'the mutual intention of the parties at the time the contract is formed.... (Civ.Code, § 1636.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. (Id., § 1639.) The "clear and explicit" meaning of these provisions, interpreted in their "ordinary and popular sense," unless "used by the parties in a technical sense or a special meaning is given to them by usage" (id., § 1644), controls judicial interpretation. (Id., § 1638.)' [Citations.]" (Waller v. Truck Ins. Exch., Inc. (1995) 11 Cal.4th 1, 18-19.) A "provision will be considered ambiguous when it is capable of two or more constructions, both of which are reasonable. [Citation.] But language in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract. [Citation.]" (Ibid.)
C. Analysis
OCB raises five contentions. We address each in turn.
1. Conditions on the Church's Ability to Exercise Purchase Rights
OCB first contends the trial court erred in finding the Church met every condition imposed on its purchase rights under the 1983 bylaws. As it argued below, OCB avers the bylaws required the Church "to repay the OCB member-loans and [p]roperty mortgages."
It is undisputed section 6.02 of the 1983 bylaws sets forth conditions on the Church's ability to exercise its purchase rights. (See Wachovia Bank v. Lifetime Industries, Inc. (2006) 145 Cal.App.4th 1039, 1049 [purchase contracts and option agreements may condition acceptance "upon the existence of specified facts or the occurrence of specified events"]; see Civ. Code, §§ 1434-1436, 1439.) Conditions may be based upon an act to be performed by a particular party or the happening of an external event. (Spade v. Cossett (1952) 110 Cal.App.2d 782, 783-784; Clyde Building Ass'n, Inc. v. Walsh (1967) 248 Cal.App.2d 513, 515; 1 Witkin, Summary of Cal. Law (11th ed. 2024) Contracts, § 136 [describing "'external condition precedent'" to effectiveness of contract].)
In accordance with applicable contract interpretation principles, we conclude the 1983 bylaws did not condition the Church's purchase rights on the Church itself repaying mortgages or OCB-member contributions. The relevant 1983 bylaw provisions, section 6.02, subdivisions (b) and (c), state that "all loans granted by banks . . . must be repaid to the banks" and "all contributions of the members of [OCB] shall be returned." Phrased in passive voice, these conditions require fully discharging any debt owed on sources of funds used to purchase the properties-bank mortgages or OCB-member contributions. They do not specify that all money used to discharge those debts must come from Church coffers and no other source, such as income generated by the properties.
OCB relies on two bylaw provisions in support of its interpretation. The first provision appears in the preamble to section 6.02, which provides the Church "can buy out all this property . . ., but it must comply with the following [ ] conditions for this purpose." (1983 Bylaws § 6.02.) The preamble to section 6.02 simply limits the Church's ability to purchase the buildings until each listed condition is met. To comply with the plain language in subsections (b) and (c) of this provision, the Church could confirm all debts owing on mortgages and OCB-member contributions were discharged. The parties' trial stipulations that the mortgages on the properties were discharged and the member's contributions repaid meet these requirements.
The second provision upon which OCB relies governs its own disbursement of funds following the Church's purchase: "Being a non-profit entity, having received the amounts of money specified in § 6.02-d from the [Church], [OCB] may not distribute them among [its] members...." (1983 Bylaws § 6.03, italics added.) This section specifically governs funds OCB receives from the Church pursuant to section 6.02, subdivision (d), which dictates the "value of all the property on the day of buy-out [as] evaluated by either banks or other official agencies." (1983 Bylaws § 6.02, subd. (d).) Section 6.03 does not pertain to debts from mortgages or OCB-member contributions.
We agree with the Church that OCB's interpretation is inconsistent with other provisions of the 1983 bylaws. "The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other." (Civ. Code, § 1641.) The 1983 bylaws are replete with declarations confirming debts from mortgages and OCB-member contributions would be paid from both the Church and income generated on the properties. (See 1983 Bylaws §§ 6.01, 9.05, 10.5.) Sections 6.01 and 6.02, subdivision (c), also contain the same percentage-based reimbursement provisions on OCB-member contributions for the Church Building (100%) and Apartment Building (80%). Viewed together, these provisions confirm the Church's purchase rights were conditioned in part on the return of a certain percentage of OCB-member contributions "mainly from" income generated on the properties. OCB's construction, which would require the Church's full reimbursement on these contributions, would render section 6.01 and other provisions ineffective and surplusage, a result this court must avoid. (See Boghos v. Certain Underwriters at Lloyd's of London (2005) 36 Cal.4th 495, 503.)
2. The Lower Court's Option Agreement Finding is Immaterial
OCB next contends the trial court misconstrued the 1983 bylaws as constituting an option agreement. In support, OCB notes the absence of independent, bargained-for consideration for the option.
"An option, as a matter of legal theory, is considered to have a dual nature: on the one hand it is an irrevocable offer [supported by sufficient consideration], which upon acceptance ripens into a bilateral contract, and on the other hand, it is a unilateral contract which binds the optionor to perform an underlying agreement upon the optionee's performance of a condition precedent." (Palo Alto Town &Country Village, Inc. v. BBTC Co. (1974) 11 Cal.3d 494, 502 (BBCT Co.).) The revocability of an option depends on the presence of bargained-for consideration. (Steiner v. Thexton (2010) 48 Cal.4th 411, 420 (Steiner).) If supported by independent consideration, the option is irrevocable. (Ibid.) "Conversely, an option without consideration is not binding on either party until exercised [citation]; until then, the option '''is simply a continuing offer which may be revoked at any time." [Citation.]' [Citation.]" (Ibid.)
We need not decide whether independent consideration supported an option agreement. The trial court alternatively found the Church timely exercised its purchase rights before any revocation. Once the Church exercised its rights, the terms of the option became part of a bilateral agreement that properly served as a basis for the Church's suit to compel specific performance. (Steiner, supra, 48 Cal.4th at p. 418.)
Sufficient evidence supports the finding OCB never revoked its continuing proposal to sell before the Church's exercise of rights. The only affirmative evidence of a written revocation was the 2019 amendment, which occurred after the Church communicated its exercise of rights under the 1983 bylaws. (See Civ. Code, § 1587, subd. (a).) That OCB deemed it necessary to revoke these rights in 2019 is probative on the lack of a prior revocation. (See Hersh v. Garau (1933) 218 Cal. 460, 466-467.) Former members of OCB also testified they were unaware of any notice of revocation covering a period of 18 years. Thus, it is "immaterial" whether the option agreement was supported by sufficient, bargained for consideration. (McCowen v. Pew (1912) 18 Cal.App. 302, 323.)
3. The Church Exercised its Rights Within a Reasonable Time
Next, OCB contends the Church was divested of its purchase rights by waiting to exercise them 35 years after the 1983 bylaws. We disagree.
Where a contract, proposal, or option agreement fails to prescribe a time for acceptance, the offer or proposal is revoked by operation of law by "the lapse of a reasonable time without communication of the acceptance." (Civ. Code, § 1587, subd. (a); see BBTC Co., supra, 11 Cal.3d at p. 502; Fowler v. Ross (1983) 142 Cal.App.3d 472, 479-480; see also Civ. Code, §§ 1583, 1584, 1657.) "What constitutes reasonable time depends on the situations of the parties, the nature of the transaction and the facts of the particular case." (Henry v. Sharma (1984) 154 Cal.App.3d 665, 672.) Determining whether the Church exercised its rights within a reasonable time is a question of fact. (See Sawday v. Vista Irrigation Dist. (1966) 64 Cal.2d 833, 836; Haraguchi, supra, 43 Cal.4th at pp. 711-712.)
Substantial evidence supports the Church's exercise of rights within a reasonable time under the circumstances, which are many.
We begin with the purpose of OCB, which was formed to conduct and maintain a church, "other needed property," and "that property which the Church indicates" it needs. To this end, the 1983 bylaws cautioned future OCB leaders to protect "the property of the [Church]" and to act in a manner consistent with the ideas "that the individuals who established [OCB] in 1965 were guided by." The interdependence between the parties is manifest, and it conveys an understanding that the Church's purchase rights remained open for an indefinite period.
The parties' ongoing relationship and understanding is also borne out by their conduct. The Church made its own contributions to assist OCB in acquiring the properties, monthly mortgage payments, and other payments to OCB covering debts on the properties. The bylaws contemplated OCB reimbursing the Church's own contributions (see 1967 Bylaws § 9.05) while clarifying OCB-member contributions would be largely reimbursed from income generated on the properties. The parties shared many of the same members and maintained ongoing communication during OCB's management of the properties.
The manifest intention to hold the Church's purchase rights open is also evidenced by the progression of OCB's bylaws. "Where any doubt exists as to the purport of the parties' dealings as expressed in the wording of their contract, the court may look to the circumstances surrounding its execution --including the object, nature and subject matter of the agreement, [citation] -- as well as to subsequent acts or declarations of the parties 'shedding light upon the question of their mutual intention at the time of contracting' [citation]" (Barham v. Barham (1949) 33 Cal.2d 416, 423.)
The 1964 and 1967 bylaws provided the Church with purchase rights. (1964 Bylaws §§ 6.01-6.02; 1967 Bylaws § 6.01.) These rights were restated in modified form in 1983 and 1990 bylaws with the inclusion of a "Will" provision in the event the Church did not exercise its purchase rights "in the near future." The manner in which OCB reinvoked the Church's purchase rights establish ongoing intent to uphold those rights. (See Wilson v. Corrugated Kraft Containers, Inc. (1953) 117 Cal.App.2d 691, 695 ["The practical construction placed upon an instrument by the conduct of the parties is entitled to great weight by the trier of facts in resolving a possible uncertainty of meaning"].)
The parties' intent to prolong the consummation of a purchase is also established by the conditions placed on the Church's purchase rights. As discussed, the 1983 bylaws conditioned the Church's exercise of rights in part on (a) the full repayment to banks holding any mortgage on the properties, and (b) the proportionate repayment of OCB-member contributions. (1983 Bylaws § 6.0, subds. (b)-(c).) These debts would largely be repaid from income generated by the properties. (Id., §§ 9.05, 10.05.) Under this method, OCB does not seriously dispute it would take significant time for these debts to be fully discharged. The bylaws prove this point by permitting the Church to "accelerate the transfer of property" by repaying these debts itself. (Id., §§ 9.07, 10.07.)
Under these circumstances, we conclude the bylaws and conduct of the parties manifest an intent to prolong the Church's purchase rights for at least 35 years from the date it substantially modified its 1983 bylaws. (Accord, Hughes v. Heffner (1938) 29 Cal.App.2d 382, 386 (Hughes) [option to purchase property exercised within reasonable time despite 16-year lapse].) OCB's arguments to the contrary are unpersuasive.
OCB avers the "outer limit" of reasonableness for claims arising from contract are prescribed by the four-year statute of limitations. This may generally be true, but "there are exceptions to the rule. 'Where it appears that the parties contemplated a delay in making the demand to some indefinite time in the future, the statutory period for bringing the action is not controlling as to the question of reasonable time.' [Citations.]" (Hughes, supra, 29 Cal.App.2d at p. 386; accord, Vickrey v. Maier (1912) 164 Cal. 384, 391.)
Similarly, OCB avers laches limited the Church's ability to enforce its rights. Laches "'"is a question of fact, on the evidence, and must be determined by a consideration of all the circumstances of each particular case. [Citation.] It is a question to be determined primarily and very largely by the trial court, and an appellate court will not interfere with its discretion [absent] manifest injustice . . . or unless its conclusion cannot reasonably be held to find support in the evidence."' [Citation.]" (Lundgren v. Lundgren (1966) 245 Cal.App.2d 582, 592.) As discussed, the facts in this case support upholding the lower court's finding of reasonable delay.
Beyond the absence of unreasonable delay, we also agree with the trial court's finding OCB failed to adequately establish prejudice. (See Beverage v. Canton Placer Min. Co. (1955) 43 Cal.2d 769, 777-778 ["mere lapse of time does not constitute laches unless accompanied by circumstances showing prejudice to the opposing party"].) Time was not of the essence in the bylaws, nor was it made so by any demand for payment of money by OCB while the Church possessed the properties.
Contrary to OCB's suggestion, the parties did not stipulate to facts evidencing prejudice to OCB. OCB blithely asserts the parties stipulated that "all relevant witnesses, and significant documents were lost due to the passing of time." In fact, the parties stipulated only that there were no witnesses available to testify to the adoption of or circumstances surrounding the 1983 bylaws; they made no such stipulation concerning the 1990 bylaws or the years that followed. Witnesses at trial testified they were unaware of any notice of revocation, though they identified one person (a "Mrs. Evelyn Sirch") who possessed information on the possibility of one. Regardless, the possibility of a prior written revocation is belied by OCB's own bylaws, which maintained the Church's purchase rights in 1964, 1967, 1983, and 1990. (See Porter v. Van Denburgh (1940) 15 Cal.2d 173, 177 [no prejudice from written records concerning nature of the transaction and activities of deceased parties].)
OCB cites two stipulations providing: (1) "There is no person alive today that either party is aware of that was involved in the drafting and adoption of the 1983 bylaws;" and (2) "No party knows the circumstances under which the 1983 bylaws were amended." OCB adduces no evidence on its inability to locate witnesses with knowledge of the 1990 amendments, which restated the Church's purchase rights.
4. The Church Was Able to Perform
OCB contends the trial court could not specifically enforce the 1983 bylaws because the Church was not ready, willing, and able to perform. In support, OCB identifies the Church's own bylaws requiring approval by its annual Parish meeting or a specially convened meeting to purchase any real property. (Normal Parish By-Laws § 47.) Absent evidence of the type of authorization required under this bylaw, OCB contends the Church was not able to perform.
OCB furnishes no legal authority supporting this specific legal proposition. It is axiomatic that every point made be supported by legal argument with citation of authorities. (People v. Stanley (1995) 10 Cal.4th 764, 793 [if none is furnished "'on a particular point, the court may treat it as waived, and pass it without consideration'"].) Absent a legal basis, we decline to impose on the Church a duty to hold a meeting for parishioners to approve a theoretical purchase of properties from an unwilling seller.
Even on the merits, we find OCB's argument contrary to well-established law. Where an action is based on the seller's anticipatory breach, the buyer must still show he was ready and able to perform his side of the bargain at the time his performance came due and during the pendency of its action. (Henry v. Sharma (1984) 154 Cal.App.3d 665, 669 (Henry); see Gaggero v. Yura (2003) 108 Cal.App.4th 884, 890 [principle applied to realty purchase agreement].) To prove its ability to perform, the buyer must adduce "proof either that he had the funds in hand, in whole or in part, or that he commanded resources upon which he could obtain the requisite credit." (Merzoian v. Kludjian (1920) 183 Cal. 422, 430.) In other words, proof of an ability to perform depends on the plaintiff's ability to pay the purchase price, which "depends on all the surrounding circumstances." (Henry, supra, 154 Cal.App.3d at p. 672.) Like other factual determinations, "the question of the buyer's ability to perform" is a question of fact. (Id. at p. 670.)
Substantial evidence supports the trial court's finding on the Church's ability to pay. Through a hard money lender, the Church "'commanded resources upon which [it] could obtain the requisite credit.'" [Citations.]" (Henry, supra, 154 Cal.App.3d at p. 672.) The lender verified the Church's authorization for a loan covering purchase prices under any valuation method used at trial.
5. Certainty and Determination of Purchase Price
Finally, OCB contends the trial court erred in finding the 1983 bylaws provided a certain or definite means for ascertaining a purchase price. In so arguing, OCB questions the court's adjudication of purchase prices based on the Church's "as is" valuation adduced at trial.
"Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable." (California Lettuce Growers v. Union Sugar Co. (1955) 45 Cal.2d 474, 481.) "However, '[t]he law does not favor, but leans against, the destruction of contracts because of uncertainty; and it will, if feasible, so construe agreements as to carry into effect the reasonable intentions of the parties ....' [Citations.]" (Ibid.) "Thus it is well settled that a contract need not specify price if it can be objectively determined." (Id. at p. 482.)
Consistent with these principles, contracts may provide for executory consideration "left to the decision of a third person, or regulated by any specified standard." (Civ. Code, § 1610; see Bewick v. Mecham (1945) 26 Cal.2d 92, 98 (Bewick) [determination left to "disinterested" third party]; Peebler v. Seawell (1954) 122 Cal.App.2d 503, 504 [determination "shall be fixed by board of arbitrators"].) Indeed, "[t]he failure to specify the amount or a formula for determining the amount of [a contract] does not render the agreement too indefinite for enforcement." (Sabatini v. Hensley (1958) 161 Cal.App.2d 172, 175 (Sabatini).)
The 1983 bylaws provide executory consideration to be determined by a third person. Section 6.02, subdivision (d) provides: "The value of all the property on the day of the buy-out shall be evaluated by either banks or other official agencies, ...."
Contrary to OCB's suggestion, the absence of a valuation method in this provision does not render the contract invalid. "When a contract does not determine . . . the method by which it is to be ascertained, . . . the consideration must be so much money as the object of the contract is reasonably worth." (Civ. Code, § 1611; accord, Sabatini, supra, 161 Cal.App.2d at p. 175 ["Where no standard is specified, the consideration shall be the reasonable worth"].) In such case, "it is the function of the trier of the facts to ascertain and declare the reasonable value of the property involved." (O'Keefe v. Aptos Land &Water Co. (1955) 134 Cal.App.2d 772, 779.) That is precisely what was done in this case.
When determining the reasonable value of the properties in this case, the trial court considered the relevant bylaws and the parties' conduct. Considering OCB's failure to cooperate with the Church, the court found OCB "disingenuous" in asserting its uncertainty defense below. OCB's conduct is probative on the issue. (See Bewick, supra, 26 Cal.2d at pp. 94-95, 99-100 ["By making the appraisal impossible, defendant prevented the determination of the purchase price by the method contemplated by the contract"].)
OCB contends Bewick is inapplicable to this case because the agreement at issue in that case provided a different method of appraisal. (See Bewick, supra, 26 Cal.2d at p. 94 [option to purchase land provided for valuation "'to be agreed on between the parties hereto, and if not agreed on then to be fixed by arbitration, each of the parties hereto selecting one arbitrator, and the two selected [sic] a third, which said arbitrators shall fix such purchase price'"].) The Court's analysis in Bewick was not so limited. Many of the equitable considerations applied were not dependent upon the defendant's contractual obligation. (See id. at pp. 98-99.)
Under the circumstances, the trial court adopted the values listed under the "as is" methodology and entered judgment specifically enforcing its purchase rights for $3,244,950. The values under this methodology match the values listed in the Church's November 2018 letter and reflect an intention to maintain the properties under their current use. OCB offers this court no persuasive reason to depart from this finding.
OCB contends the adoption of "as is" values was inconsistent with the trial court's own "finding that the term 'value' means 'fair market value.'" The court's decision was not so limited. In construing the bylaws, the court found: "Whereas the terms 'fair market value' or 'purchase price' were not used, . . . the term 'the value of the entire property' means fair market value, appraised value, or its equivalent." The "as is" values were appraised values by the Church's expert. They are thus consistent within the court's own interpretation.
The remaining argument OCB makes questions the "as is" methodology, which resulted in lower values than its own expert's "fair market" values. "'It is obvious that a contract to pay a reasonable price . . . leaves plenty of opportunity for difference of opinion and dispute. It cannot properly be assumed that only one price . . . is reasonable under the particular circumstances of any case.'" (Forde v. Vernbro Corp. (1963) 218 Cal.App.2d 405, 408.) The circumstances in this case are indeed particular. They involve two religious non-profit entities, a property used to generate income (the Apartment Building), another used for religious worship (the Church Building), and yet another used for religious and community activities (the Russian Hall). Any methodology used to evaluate them might be subject to criticism, but OCB has not shown it was unreasonable to employ the "as is" methodology. On these facts, the evidence amply supports the trial court's determinations of value.
DISPOSITION
The judgment is affirmed. Respondent shall recover its costs on appeal.
We concur: CURREY, P. J. ZUKIN, J.