Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County No. SCVSS110363, Christopher J. Warner, Judge.
Pillsbury Winthrop Shaw Pittman, Richard S. Ruben, Darren K. Cottriel and John M. Grenfell, for Plaintiff, Cross-defendant and Appellant.
Lewis Brisbois Bisgaard & Smith, Karen A. Feld, Jeffry A. Miller and Judith M. Tishkoff, for Defendants, Cross-complainants and Respondents.
OPINION
HOLLENHORST, Acting P. J.
The underlying lawsuit in this appeal arises out of a failed purchase of 36.5 acres of commercial property (Property) located in San Bernardino County. The Property was owned by Redlands Town Center, Ltd. (RTC). RTC is a limited partnership composed of the general partner, West Coast Land, LLC (WCL) and various European investors who were limited partners (Limiteds). Charles House (House) was the manager and sole member of WCL. In May 2003, Thomas Tooma (Tooma) entered into the purchase agreement and sale agreement (Agreement) with RTC. The sale never happened. Instead, House’s entity, Redland’s Crossing, Inc. (RC) purchased the Property from the Limiteds in November 2003.
Tooma initiated this action against RTC, WCL, and House (collectively referred to as Defendants) on November 26, 2003, alleging (1) breach of contract; (2) specific performance; (3) accounting; (4) injunctive relief; (5) fraud; (6) negligent misrepresentation; (7) intentional interference with contractual and economic relations; and (8) negligent interference with contractual and economic relations. Defendants answered the complaint, and RTC and House filed a cross-complaint against Tooma dated December 30, 2003. The cross-complaint alleged the following causes of action: (1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) rescission; (4) fraud; (5) interference with contractual relationship; (6) interference with economic relationships; (7) slander per se; (8) unfair business practice; and (9) declaratory relief. Following a court trial, judgment was entered in favor of Defendants on Tooma’s complaint and in favor of RTC on the cross-complaint as to the claims of breach of contract and breach of covenant of good faith and fair dealing. The court ordered Tooma to pay Defendants $100,000 under the liquidated damages provision of the Agreement. The court further awarded to Defendants their costs of $33,936, which was later reduced to $33,584.43 plus attorney fees in the amount of $750,052. Tooma appeals.
The last two causes of action were added at the close of trial upon motion.
I. PROCEDURAL BACKGROUND AND FACTS
RTC was a limited partnership with WCL as general partner and the Limiteds as limited partners. The Limiteds were primarily from Belgium. House was the manager and sole member of WCL. RTC owned the Property, which is located in an area of San Bernardino County commonly referred to as the “Doughnut Hole.”
The Property was first purchased by RTC in 1997. By October 2002, some of the Limiteds asked House to find a buyer for their interest in the Property. They wanted to sell primarily because, (1) there was a $2 million note (Kimura Note) on the Property with a due date (that had been extended) set for spring 2003; (2) the value of the dollar was declining; and (3) one of the majority holders had died.
Tooma is an ophthalmologist who also participates in real estate investments. In January 2003, Tooma and House began discussing a possible purchase of the Property. House told Tooma that the Limiteds were anxious to sell and that other potential purchasers were willing only to enter into long-term joint ventures or purchases contingent on the issuance of regulatory entitlements which the Limiteds would not accept.
From January to April 2003, Tooma and House negotiated the purchase of the Property as well as the purchase of the interest of the Limiteds. Included in the discussions was the requirement that Tooma would have to pay the Kimura Note as part of any purchase of the Property. House initially indicated that the purchase price would be $7 million. During subsequent negotiations, the price was reduced to $6.8 million. House and Tooma discussed forming a partnership to own and manage RTC.
From February through early April 2003, various draft forms of a purchase agreement were prepared by House. The agreements provided that House would receive a real estate commission, even though he was not a licensed real estate broker or agent. None of the draft proposals was acceptable to Tooma; however, House presented each of them to the Limiteds as offers.
In February 2003, House asked Tooma to write a check for $100,000 to demonstrate his commitment to acquire the Property. Tooma testified that without his consent or knowledge, House deposited the check into an escrow account, along with a form agreement signed by House on behalf of the “Buyer” but no signature from the Seller. House represented to the Limiteds that the check was a deposit pursuant to a purchase agreement between Tooma and RTC. In fact, no such agreement existed.
At the same time, Tooma and House discussed the possible formation of a limited partnership between themselves to develop the Property after Tooma’s purchase. At Tooma’s direction, his attorneys registered the name “Redlands Alabama L.P.” with the California Secretary of State. House expected that the acquisition of the Property would occur by way of Redlands Alabama L.P., wherein he would be the general partner and Tooma would be the limited partner. Tooma, however, testified at trial that by March he was not interested in being a partner with House for the purchase of the Property. Instead, Tooma wanted control over important decisions that would affect his investment, as opposed to being a limited partner. This was reiterated by Tooma’s attorney, John Garrett (Garrett) in a telephone conversation with House on April 15, 2003. Nonetheless, Tooma and his attorneys continued to perpetuate the partnership concept.
On April 15, 2003, House delivered to Tooma another California Association of Realtors form for the sale of the Property (CAR Form). House’s friend Carl Brandstetter, a real estate broker with whom RTC had listed the Property, completed the CAR Form and House approved it on behalf of RTC. Garrett reviewed the CAR Form, made some changes by hand, and added some typewritten provisions, including Addendum II, paragraph 2. Addendum II, at paragraph 2, in relevant part, provides: “Buyer’s obligations under the Agreement are expressly conditioned on Buyer entering into a partnership or limited liability company agreement with Mr. Charles House on terms and conditions acceptable to Buyer in his sole and absolute discretion within the first thirty (30) days of the Feasibility Period. If Buyer does not notify Seller and Escrow by the end of the thirtieth (30th) day of the Feasibility Period that this condition has been satisfied, this condition shall be conclusively deemed not to have been satisfied and the Agreement shall automatically terminate without further notice from either Buyer or Seller being required, whereupon Escrow shall immediately return the Deposit to Buyer without further instructions being necessary and despite contrary instructions Escrow may receive from Seller.” Garrett, who drafted this provision, testified that its purpose was to give Tooma the option either to work out a partnership agreement with House or, if there was no agreement, to waive the condition and proceed with the purchase. In contrast, House testified that he believed that Addendum II, paragraph 2, was for his benefit and that the Agreement automatically terminated if he and Tooma had not formed a partnership.
Tooma signed the new counteroffer on May 1, 2003, and it was sent to House. House made two minor changes by hand and then signed the document on behalf of RTC on May 11, 2003. Tooma later initialed House’s changes to demonstrate his acceptance. Thus, in its final form, the Agreement was authored partially by RTC and its broker and partially by Garrett.
The Agreement provided that Tooma was to pay a total of $6.8 million, including the payment on the Kimura Note, for the Property. The Agreement included express warranties and representations by RTC that House had authority to sign for RTC and that it was valid, binding, and enforceable against RTC. Tooma had 30 days to enter into a partnership with House and to notify escrow and RTC. Further, under Addendum II, paragraph 7, RTC was to provide to Tooma a current certified copy of a partnership authorization, duly adopted and signed by RTC or its authorized representative, within 15 days after commencement of the feasibility period.
On May 15, 2003, House left a voicemail with Garrett confirming that “[t]he Europeans have agreed to take your offer.” RTC’s discovery responses confirmed that its “limited partners have stated that they accepted the [A]greement as negotiated and entered into by House on behalf of [RTC].” House testified in deposition that in mid-May 2003, he had verbal approval of the Agreement from the Limiteds.
After the Agreement was signed, an escrow was opened at First American Title Co. (FATCO) on May 14, 2003, and Tooma’s $100,000 was credited to the escrow. Escrow was set to close six months and five days later, in mid-November. Tooma made arrangements to pay off the Kimura Note. The payoff would work as an interim loan by Tooma to RTC, during the escrow period while RTC still owned the Property. At Tooma’s instruction, Garrett’s office prepared notes and trust deeds to secure this loan, and delivered the documents to House to be executed on behalf of RTC.
RTC failed to deposit a certified copy of its partnership agreement in escrow within 15 days as required by Addendum II, paragraph 7. Instead, House proposed and signed an amendment (which was not signed by Tooma) to extend that time period to June 13. Also, RTC failed to deposit executed notes, trust deeds, and other documents in escrow within 30 days to allow the payoff of the Kimura Note. House failed to sign any of the refinancing documents he received from Garrett. RTC ignored requests from FATCO for these and other documents. As a result, the Kimura Note was not refinanced by Tooma. On the other hand, Tooma failed to fulfill his obligations pursuant to Addendum II, paragraph 2. Namely, he failed to enter into any partnership agreement with House and notify both RTC and escrow by June 13, 2003. During this time, the Property remained on the market.
On June 19, 2003, House asked a paralegal at Garrett’s firm to send to him in Texas the loan documents relating to the Kimura Note. However, House failed to mention that the Agreement had terminated six days prior to that date. The documents were sent to House on June 23. On June 27 or 28, House told a commercial broker that he could not respond to any offer to purchase the Property until after he spoke with Tooma. House testified that in July 2003, he prepared a written cancellation instruction for Tooma to sign but Tooma never returned it with his signature. Escrow was not cancelled and Tooma’s $100,000 remained in escrow.
On August 18, 2003, Brandstetter asked FATCO to prepare another cancellation instruction, which was never signed. That same month, House told Belgian Investor Carl Van Biervliet that RTC could not go forward with another buyer because Tooma was the “legal buyer” of the Property. On August 27, October 6, and November 7, 2003, Tooma, through Garrett, expressly waived the buyer conditions in the Agreement.
In September 2003, House had written to the Belgian investors that “Dr. Tooma is in default” and that “I made sure to keep a loop hole for us” in that eventuality. At trial, House testified that the “loop hole” was Addendum II, paragraph 2. In contrast, at his deposition, House said that he was “not that kind of person,” and “I can’t plan that good. . . . I don’t think that kind of stuff. I wasn’t trying to keep a loophole. That’s ridiculous.”
Since January 2003, House was interested in acquiring the Property himself. In May or June, shortly after signing the Agreement on behalf of RTC, House wrote to Joe Santy, one of the Belgian Investors, and said, “Please be very careful who sees this letter . . . we are under contract with Dr. Tooma and he will sue in a minute. If Hiram [Hershey] gets this we are finished. I will find a way to legally break the contract with Dr. Tooma, when we can count on this new buyer and have a deal with him in writing.” In late June and early July, House was seeking his own financing. Later in September, House obtained a loan commitment. Around the same time, House told Tooma that he wanted to purchase and develop the Property for himself.
Pursuant to the Agreement, escrow was supposed to close on November 19, 2003. In a letter dated November 14, 2003, Tooma tendered his performance to deposit the remaining purchase price into escrow.
On November 26, 2003, Tooma initiated this action. The matter proceeded to a bench trial beginning April 26, 2005. During the course of the trial, the court heard the testimonies of several witnesses and received approximately 170 documents into evidence. Testimony in the form of submitted portions of depositions of three of the Limiteds was also taken and made part of the record.
On June 23, 2005, the court issued its intended decision, finding in favor of defendants on the complaint and in favor of RTC on its cross-complaint for breach of contract and breach of implied covenant of good faith. Tooma filed a request for a statement of decision and a proposal as to the content thereof.
On August 10, 2005, the court issued its statement of decision finding that defendants did not breach the Agreement. Rather, the Agreement terminated because Tooma did nothing to satisfy the condition that he “pursue or complete an agreement with House pursuant to Addendum II, Paragraph 2.” The court held that this provision could not be severed as it went “to the heart of the [Agreement].” Regarding the interference claims, the court held that House, by virtue of his position with WCL and RTC was not an “outsider” to the Agreement, and therefore owed no duty to Tooma not to interfere, and that House’s conduct was not shown to have caused the Agreement to fail. Finally, the court held that there was no fraud or negligent misrepresentation or negligent or intentional inducement on the part of House.
As to the cross action, the trial court found that Tooma had breached the Agreement. The court found that it was House’s expectation that he would form a partnership with Tooma with respect to the Property. Yet, although Tooma decided that he did not want to be partners with House in March 2003, Tooma and Garrett continued to “perpetuate the concept,” even writing into the subsequent contract in May 2003 in the form of Addendum II, paragraph 2. Likewise, Tooma breached the covenant of good faith and fair dealing, thereby breaching the Agreement.
Judgment was entered on October 5, 2005. Following Defendants’ motion for attorney fees, the judgment was amended to include an award of attorney fees and costs to Defendants. The amended judgment was filed on January 23, 2006, and Tooma appealed.
II. CONTRACT INTERPRETATION
A. Language in Condition Precedent.
Tooma challenges the trial court’s ruling that he breached the Agreement and that the Agreement terminated on June 13, 2003. The foundation for the trial court’s decision is found in the language in paragraph 2 of Addendum II to the Agreement, which provides: “Buyer’s [i.e., Tooma’s] obligations under the Agreement are expressly conditioned on Buyer [Tooma] entering into a partnership or limited liability company agreement with Mr. Charles House on terms and conditions acceptable to Buyer [Tooma] in his sole and absolute discretion within the first thirty (30) days of the Feasibility Period. If Buyer [Tooma] does not notify Seller and Escrow by the end of the thirtieth (30th) day of the Feasibility Period that this condition has been satisfied, this condition shall be conclusively deemed not to have been satisfied and the Agreement shall automatically terminate without further notice from either Buyer [Tooma] or Seller [RTC] being required, whereupon Escrow shall immediately return the Deposit to Buyer [Tooma] without further instructions being necessary and despite contrary instructions Escrow may receive from Seller [RTC]. Buyer [Tooma] shall have no duty to reach agreement with Charles House unless (i) all the terms and conditions of any such agreement are approved by and acceptable to Buyer [Tooma] in his sole and absolute discretion, and (ii) such agreement is fully executed by both Buyer [Tooma] (or nominee of Buyer) and Charles House (and his spouse, if any). In no event shall Charles House be construed as being within the definition of ‘Buyer’ under this Agreement.”
The feasibility period commenced upon the opening of escrow.
Based on this paragraph, the trial court found that Tooma had “breached the contract to enter into a relationship [with House] within 30 days” and that this “caus[ed] the contract to terminate at the end of the thirtieth day,” so that RTC could not be liable for breach. Tooma faults the trial court’s finding, contending that Addendum II, paragraph 2, was a benefit only for himself, that he could waive it, and that it did not make the contract illusory. He further claims that RTC breached the Agreement and thus cannot complain about his (Tooma’s) breach. Finally, Tooma contends that the parties treated the Agreement as remaining open, thereby waiving the automatic termination. For the following reasons, we reject Tooma’s contentions.
Civil Code section 1638 provides: “The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.” (Appalachian Ins. Co. v. McDonnell Douglas Corp. (1989) 214 Cal.App.3d 1, 11.) Civil Code section 1639 provides: “When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible . . . .”
The obligations set forth in paragraph 2, Addendum II of exhibit 119 are clear: Tooma’s obligations under the Agreement are “expressly conditioned” on Tooma entering into a partnership or limited liability company agreement with House within 30 days of the commencement of the feasibility period, which began on May 14, 2003, the day escrow opened. Moreover, Tooma was required to notify both RTC and escrow that this condition was satisfied. He never did so. “In contract law, ‘a condition precedent is either an act of a party that must be performed or an uncertain event that must happen before the contractual right accrues or the contractual duty arises.’ [Citation.] The existence of a condition precedent normally depends upon the intent of the parties as determined from the words they have employed in the contract. [Citation.]” (Realmuto v. Gagnard (2003) 110 Cal.App.4th 193, 199.)
Tooma’s attorney, John Garrett, knew of the impact of this condition as evidenced by his letter dated May 12, 2003 which, in relevant part, provides: “Note in particular paragraph 2 of Addendum II: it conditions Buyer’s obligations on Dr. Tooma and Mr. House reaching an agreement within 30 days; Dr. Tooma’s obligation to purchase the property automatically terminates [sic] unless he and House have a signed agreement within 30 days after opening of escrow.” At trial, Garrett testified as follows: “I inserted Paragraph No. 2 to Addendum II, to make it clear that [Tooma’s] obligation to go forward to purchase the property under the terms of the agreement was conditioned on [Tooma] either working out . . . the terms of the partnership agreement, if there were to be any partnership agreement, with Mr. House or in the alternative, if there were not any such agreement between [Tooma] and Mr. House, that [Tooma] would be comfortable enough proceeding with the purchase without such an agreement. And at such time as [Tooma] would determine that, [he], because it was expressly stated to be a condition for [his] obligation, would permanently waive that as a condition to his obligation to go forward and close the deal.”
Acknowledging the automatic termination provision, Garrett claimed that the provision was added solely for Tooma’s benefit, i.e., if Tooma did not partner with House, Tooma could proceed with the purchase of the Property at his sole discretion. However, that is not what the language states. Code of Civil Procedure section 1856, subdivision (a), states: “Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.” (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 343, fn. 5; Bionghi v. Metropolitan Water Dist. (1999) 70 Cal.App.4th 1358, 1364.) Thus, regardless of Garrett’s explanation of what the terms of paragraph 2 to Addendum II meant, the fact remains that the language does not support such explanation. The words speak for themselves.
Notwithstanding the above, Tooma claims that he had the “sole and absolute discretion” as to whether to partner with House. We disagree. The terms of paragraph 2 of Addendum II provide that “Buyer [Tooma] shall have no duty to reach agreement with Charles House unless (i) all the terms and conditions of any such agreement are approved by and acceptable to Buyer [Tooma] in his sole and absolute discretion, and (ii) such agreement is fully executed by both Buyer [Tooma] (or nominee of Buyer) and Charles House (and his spouse, if any).” (Ex. 119, Addendum II, [¶] 2, italics added.) The “sole and absolute discretion” afforded to Tooma was in the formation of the terms and conditions of the partnership between Tooma and House. We agree with RTC: “Tooma was under an obligation to make an effort to arrive at acceptable terms and to work in good faith towards the establishment of a partnership with House.”
“In every contract there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract, which means that in every contract there exists an implied covenant of good faith and fair dealing. [Citation.]” (Universal Sales Corp. v. Cal. Press Mfg. Co. (1942) 20 Cal.2d 751, 771; see also, Bleecher v. Conte (1981) 29 Cal.3d 345, 350.) Thus, “where a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing. [Citations.]” (Cal. Lettuce Growers v. Union Sugar Co. (1955) 45 Cal.2d 474, 484.) Likewise, when a condition in a contract involves the performance of an act within the control or discretion of a party, the party has a duty to make a good faith effort to satisfy the condition. (Bleecher v. Conte, supra, 29 Cal.3d at p. 352.) The party who fails to use reasonable, good faith diligence to satisfy the condition breaches the contract. (Abrams v. Motter (1970) 3 Cal.App.3d 828, 837-838.)
Here, from the first time Tooma spoke with House regarding the Property, it was with the understanding that the two would form some type of partnership which would purchase or develop the Property. According to House, the partnership agreement was the cornerstone for the whole Agreement. Tooma’s counsel filed an LP-1 form in February 2003. However, in mid-March, Tooma decided that he did not want to be partners with House. On April 15, Garrett told House that Tooma would never be partners with him. Nonetheless, Tooma and Garrett continued to let House believe that there would be a partnership as evidenced by the addition of paragraph 2 of Addendum II. During the Feasibility Period, neither Tooma nor his attorney did anything to prepare any type of partnership agreement, and no agreement, let alone its terms, was ever reached. However, Tooma knew that House was expecting to have a partnership, and Tooma knew that a waiver of the condition found in paragraph 2 of Addendum II would deprive House of any interest in the Property.
Tooma’s reliance on Third Story Music, Inc. v. Waits (1995) 41 Cal.App.4th 798 (Waits) and PMC, Inc v. Porthole Yachts, Ltd. (1998) 65 Cal.App.4th 882 (PMC) is misplaced. In Waits, Third Story Music, Inc. transferred the rights to Tom Waits’s music to Warner Communications in return for a percentage of the its earnings from its exploitation of the music, including a guaranteed minimum payment regardless of any marketing efforts. However, the agreement further provided that Warner “‘may at our election refrain from any or all of the foregoing.’” (Waits, supra, 41 Cal.App.4th at p. 801.) Alleging breach of the implied covenant of good faith and fair dealing, plaintiff claimed that Warner had impeded the plaintiff from receiving the benefits of the contract. The trial court sustained Warner’s demurrer. On appeal, the appellate court affirmed, holding that under the terms of the agreement the marketing clause was not subject to the implied covenant of good faith and fair dealing. (Id. at pp. 806, 808-809.)
In PMC, the buyer and seller of a boat agreed that the purchase was contingent upon the completion of a trial run and marine survey on the vessel to the satisfaction of the buyer by a date certain, August 6, 1993. The buyer provided a deposit of $200,000. (PMC, supra, 65 Cal.App.4th at p. 885.) The buyer accepted the trial run but requested a $100,000 price reduction based on the survey. The parties agreed to a $50,000 price reduction and the buyer requested an extension of the final date for acceptance of the vessel from August 6 to August 18. (Id. at pp. 885-886.) The seller did not sign the document regarding the extension. On August 16, the buyer advised the seller it would not complete the contract and demanded return of its deposit. (Id. at p. 886.) An action was initiated and the trial court entered judgment for the buyer, finding that its document did not constitute an unconditional acceptance of the $50,000 cost reduction and the purchase agreement expired August 6. (Id. at pp. 886-887.) The appellate court affirmed. Regarding the covenant of good faith and fair dealing, the court found that because the agreement gave the buyer the right to terminate the purchase for any reason by simply failing to accept the trial run or the survey, the seller could not rely on the implied covenant of good faith to find a breach of the agreement. (Id. at p. 891.) The court explained that its analysis did not render the parties’ contract illusory because the “purchase agreement required [the buyer] to deposit $200,000 with [a third party] and to incur costs in order to conduct a trial run and marine survey of the [boat].” (Ibid.)
Unlike Waits and PMC, in this case, there was no consideration to support paragraph 2 of Addendum II. As such, there was a need to imply the covenant of good faith and fair dealing to create mutuality. We disagree with Tooma’s claim that both the deposit of $100,000 and the agreement to refinance the Kimura Note were the consideration. As Defendants point out, both of these were provided before paragraph 2 of Addendum II was made part of the Agreement.
B. Waiver of Condition Precedent.
Notwithstanding the above, Tooma contends that because paragraph 2 of Addendum II provided a condition for his benefit, he could waive its failure to occur. However, Tooma’s premise that the condition that was solely for his benefit is flawed.
“Under the law of contracts, parties may expressly agree that a right or duty is conditional upon the occurrence or nonoccurrence of an act or event. [Citations.] Thus, a condition precedent is either an act of a party that must be performed or an uncertain event that must happen before the contractual right accrues or the contractual duty arises. [Citations.]” (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) Moreover, “[i]t is well settled a contracting party may waive conditions placed in a contract solely for that party’s benefit. [Citation.]” (Sabo v. Fasano (1984) 154 Cal.App.3d 502, 505.) However, where a condition is for the benefit of both the buyer and the seller, its failure to occur cannot be waived by the buyer alone. (Britschgi v. McCall (1953) 41 Cal.2d 138, 143-145 [condition that optionor’s interest be removed was “in vital part for the benefit of the sellers,” to protect them from personal liability].) Whether a condition is for the benefit of both parties is a factual issue. (Crescenta Valley Moose Lodge v. Bunt (1970) 8 Cal.App.3d 682, 685-687.) Likewise, waiver is ordinarily a question of fact. (Loughan v. Harger-Haldeman (1960) 184 Cal.App.2d 495, 503.)
Here, the trial court found, “the provision, a condition, was beneficial to both parties to the contract and is unambiguous. This partnership provision goes to the heart of the contract and cannot be severed. The evidence, direct (testimony of House) and indirect, is that House would not have signed the contract without a provision protecting his claimed interest in the property. Whether a condition is solely for the benefit of the buyer is for the trial court to determine as a fact from all of the evidence. The benefit to Defendants (not limited to House) included an ‘end date’ for an otherwise lengthy (six months plus five days) escrow period (see exhibit 120), during which foreclosure was a distinct risk. Additionally, with respect to House and WCL, it provided preservation of the claimed interest in the RTC partnership. Were it otherwise, the contract is illusory as to the interests of WCL and House as its manager. In essence, WCL (wholly owned by House), the general partner of RTC, would be giving away its’ [sic] interest in the property, absent the creation of an agreement with [Tooma].” We agree with the trial court’s finding.
As Defendants point out, pursuant to Corporations Code section 16301, subdivision (1), the general partner, WCL, was a beneficiary of any agreement entered into on behalf of the partnership. (Corp. Code, § 15509, subd. (1); Keller Construction Co. v. Kashani (1990) 220 Cal.App.3d 222, 228 [general partner of a limited partnership is a beneficiary of any agreement entered into on behalf of the partnership].) Even Tooma admitted in closing that an argument could be made that House was a third party beneficiary to the partnership provision. Thus, given the fact that the provision benefited both parties, even if we assume for the sake of argument that Tooma waived the provision, Defendants never did.
Notwithstanding the above, the language of paragraph 2 of Addendum II is clear: “If Buyer [Tooma] does not notify Seller and Escrow by the end of the thirtieth (30th) day of the Feasibility Period that this condition has been satisfied, this condition shall be conclusively deemed not to have been satisfied and the Agreement shall automatically terminate without further notice from either Buyer [Tooma] or Seller [RTC] being required, whereupon Escrow shall immediately return the Deposit to Buyer [Tooma] without further instructions being necessary and despite contrary instructions Escrow may receive from Seller [RTC].” Tooma admitted that he never notified FATCO that the terms of this condition were satisfied. Tooma also admitted that he did not notify House or FATCO that he was extending this 30-day provision because he and House had not reached agreement. Thus, Tooma’s failure to take any action resulted in an automatic termination.
Nonetheless, Tooma contends that before Defendants could put Tooma in default, they had to give him a reasonable time to perform. Tooma refers to paragraph 17(C)(1) of the CAR form, which provides: “Seller, after first giving Buyer a Notice to Buyer to Perform (as specified [in paragraph 17(C)(4)]) may cancel this Agreement in writing . . . if, by the time specified in the Agreement, Buyer does not remove in writing the applicable contingency or cancel this Agreement.” Thus, Tooma argues that until Defendants exercised their right to cancel, he retained the right to remove the applicable contingency. We disagree.
The trial court correctly found, “The specific language of Addendum II, paragraph 2 controls over general language (e.g. Paragraph 17) of the basic [CAR] form and provides for automatic termination without notice.” It is axiomatic that specific provisions of a contract control over general provisions. (Code Civ. Proc., § 1859 [“in the construction of the instrument the intention of the parties, is to be pursued, if possible; and when a general and particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it”]; Continental Casualty Co. v. Phoenix Const. Co. (1956) 46 Cal.2d 423, 431.) Moreover, Civil Code section 1651, in relevant part, provides: “Where a contract is partly written and partly printed, or where part of it is written or printed under the special directions of the parties, and with a special view to their intention, and the remainder is copied from a form originally prepared without special reference to the particular parties and the particular contract in question, the written parts control the printed parts, and the parts which are purely original control those which are copied from a form.” Again, paragraph 2 of Addendum II which was drafted by Tooma’s attorney did not require any notice for the automatic termination of the Agreement. Thus, Defendants were not required to give notice to Tooma of his failure to perform and of the subsequent termination of escrow.
III. SUFFICIENCY OF EVIDENCE
Tooma contends Defendants failed to meet their burden of proving that (1) RTC was a limited partnership, and (2) the limited partners did not approve the Agreement.
A. RTC’s Status as a Limited Partnership.
Tooma argues that RTC failed to show that it was a valid, bona fide limited partnership when it entered into the Agreement. According to Tooma, Defendants should have produced a certificate of limited partnership filed with the Secretary of State; however, they did not. Tooma notes the FATCO escrow officer testified that she made written requests for a copy of RTC’s certificate of partnership but Defendants never supplied it. Tooma also argues that Defendants failed to present any evidence that a limited partnership agreement for RTC had been executed as of May 2003.
In response, Defendants argue that the “more than substantial amount of evidence submitted in the case establishes that RTC was a limited partnership.” The trial court relied upon two documents in support of its finding that RTC was a limited partnership, namely, the grant deed and the deed of trust. The grant deed evidences the transfer of the Property from Kimura Enterprises to RTC, which is identified as a California limited partnership. The deed of trust also identifies RTC as a limited partnership. House provided a copy of the partnership agreement, along with subscription agreements.
Notwithstanding the above, we note that Tooma sued RTC as a California limited partnership. Moreover, witnesses testified about RTC as a limited partnership. If the trier of fact believes a witness, the testimony is sufficient to sustain the true finding. (Evid. Code, § 411.) Clearly, the trial court believed the testimony of many witnesses, and so do we. Thus, we find sufficient evidence to support the trial court’s finding that RTC was a limited partnership.
B. RTC’s Approval of Agreement.
Tooma contends that “[t]he failure of the alleged limited partners to approve the Purchase Agreement was an affirmative defense” which Defendants failed to establish. Defendants disagree. They claim they “submitted overwhelming evidence that a majority of the Limiteds did not approve the May counter-proposal submitted by Tooma.” We find the issue moot.
According to the trial court, “House sought to obtain approval of the limited partners, but had not done so as of the time the contract terminated.” Given the argument of the parties and the discussion of this issue, it appears that approval by the Limiteds was another condition required by the Agreement. However, regardless of whether or not the Limiteds approved the Agreement, the fact remains that Tooma failed to satisfy the condition that required him to enter into an agreement with House by June 13, 2003, and notify escrow. Thus, even if we accept Tooma’s contention that the Limiteds approved the Agreement, we still find that the Agreement terminated on June 13, 2003, by virtue of the language in Addendum II, paragraph 2.
IV. TOOMA’S INTERFERENCE CLAIMS
Tooma alleged claims for interference with contractual and economic relations. The trial court rejected them, stating, “[C]onsistent with its underlying policy of protecting the expectations of contracting parties against frustration by outsiders who have no legitimate social or economic interest in the contractual relationship, the tort cause of action for interference with contract does not lie against a party to the contract. One contracting party owes no general tort duty to another not to interfere with performance of the contract; its duty is simply to perform the contract according to its terms. The tort duty not to interfere with the contract falls only on strangers — interlopers who have no legitimate interest in the scope or course of the contract’s performance. House, wearing multiple hats, was a party to the contract, as evidenced by multiple signatures thereon and his 100% ownership of WCL. Even if it were otherwise, as urged by Tooma, based upon the holding in Woods v. Fox Broadcasting[ Sub., Inc.] (2005) 129 Cal.App.4th 344 (which this court finds distinguishable), an essential element of a contractual interference claim is proof that the Defendants [sic] conduct actually disrupted or breached the Plaintiff’s contract (Woods [v. Fox Broadcasting Sub., Inc.], supra, [at p.] 356). House’s nefarious conduct . . . was not shown to have caused the contract to fail.”
On appeal, Tooma contends that the trial court erred in rejecting his claims for interference with contractual and economic relations. He argues that “[w]hile House certainly was ‘wearing multiple hats,’ he was not a party to the purchase agreement (except in his capacity as ‘Selling Agent’), and his ‘multiple signatures’ were on behalf of RTC (or WCL on behalf of RTC).” Thus, he maintains that “House was not immune from liability for interference.” We disagree.
As Defendants point out, House was the owner and manager of WCL, and WCL was the general partner for RTC. The general partner controls the business of the limited partnership and is an agent of the limited partnership. (Corp. Code, §§ 15507, subd. (a), 16301, subd. (1).) The general partner is the beneficiary of any agreement entered into on behalf of the partnership. (Keller Construction Co .v. Kashani, supra, 220 Cal.App.3d at p. 228.) Thus, as an agent, House was a party to the Agreement. As a party to the Agreement, House was outside the reach of Tooma’s claims for interference with contractual and economic relations.
Moreover, as the trial court properly noted, House’s conduct was not shown to be the cause of the Agreement’s failure. The trial court rejected Tooma’s reliance on Woods v. Fox Broadcasting Sub., Inc., supra, 129 Cal.App.4th 344. In that case, corporate officers sued the major shareholder of the corporation for interference with contractual and economic relations, in connection with the sale of the corporation. According to plaintiffs, the decreased sales price of the corporation resulted in a reduction in value of the officers’ contractual stock options. (Id. at pp. 347-348.) The trial court rejected the plaintiffs’ claims based on Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503 (Applied Equipment), stating: “California recognizes a cause of action against noncontracting parties who interfere with the performance of a contract. ‘It has long been held that a stranger to a contract may be liable in tort for intentionally interfering with the performance of the contract.’ [Citation.] However, consistent with its underlying policy of protecting the expectations of contracting parties against frustration by outsiders who have no legitimate social or economic interest in the contractual relationship, the tort cause of action for interference with contract does not lie against a party to the contract. [Citations.]” (Id. at pp. 513-514, fn. omitted.) The trial court found that “not only were contracting parties immune from interference claims, so too were another class of defendants who, although not parties to a contract, were not true ‘strangers’ to the contract because they had some general interest in the contractual relationship.” (Woods v. Fox Broadcasting Sub., Inc., supra, 129 Cal.App.4th at p. 352.)
On appeal, our colleagues in the second district disagreed with the trial court and found that “neither Applied Equipment nor any of the authorities it relied upon when discussing the liability of third parties arose from factual settings like the one here−where a powerful shareholder allegedly interferes in a contract between the corporation whose shares it owns and some other person or entity. As a consequence, the Applied Equipment court had no occasion to discuss the line of cases . . . which held that the owners or officers of a business entity could be held liable for interfering with that entity’s contracts, subject to the defense of certain privileges. Given this, we find it highly unlikely that Applied Equipment intended to hold, or should be construed as holding, that persons or entities with an ownership interest in a corporation are automatically immune from liability for interfering with their corporation’s contractual obligations. [Citations.]” (Woods v. Fox Broadcasting Sub., Inc., supra, 129 Cal.App.4th at p. 353, fn. omitted, italics added.)
Here, unlike the facts in Woods v. Fox Broadcasting Sub., Inc., House was not in the same position as the powerful shareholder. Instead, House wore many hats. As such, we agree with the trial court and find that he cannot be liable pursuant to Applied Equipment, supra, 7 Cal.4th 503, for interference with contractual or economic relations.
Notwithstanding the above, we further note that Tooma may recover for such tort claims only if he shows a valid and existing contract or relationship, House’s knowledge of such contract, House’s intent to induce its breach, breach of the contract, and damages. (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153-1154.) As we previously noted, the Agreement between Tooma and Defendants terminated on June 13, 2003, as a result of Addendum II, paragraph 2. There is no evidence that House did anything that caused the automatic termination of June 13. Instead, as Defendants point out, the evidence shows that Tooma had no intention of entering into any partnership with House. Once the Agreement terminated, House was free to pursue other buyers for the Property. While Tooma faults House for pursuing his own self-interests following the termination of the Agreement, the fact remains that in order for House’s interference, if any, to be actionable, his conduct must be prescribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard. (Korea Supply Co. v. Lockheed Martin Corp., supra, at p. 1159.) Moreover, as Defendants point out, the allegation that the conduct is “unethical” is insufficient (Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249, 1259) and conduct that is distinct from or only remotely connected to the actual interference will not give rise to recovery under these claims. (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 342.)
For the above reasons, we find that the trial court correctly rejected Tooma’s claims of interference with contractual and economic relations.
V. DISPOSITION
The judgment is affirmed. Defendants are awarded their costs on appeal.
During oral argument, counsel for Tooma argued that this court should address the issue of the award of attorney fees and costs, given the number of claims that were eliminated via motion prior to trial. Counsel for defendants countered that the issue was not raised in Tooma’s briefs and therefore it is waived. Looking at the opening and reply briefs, we note that the only issue raised regarding attorney fees and costs was the necessity of reversing such award if any part of the judgment is reversed. To the extent that Tooma now challenges the size of the award, he has waived such challenge for failing to raise it in his opening brief.
We concur: RICHLI, J. GAUT, J.