Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County Super. Ct. No. GIS21889, William S. Cannon, Judge.
McDONALD, J.
Defendants Chesley Manock and Jean Manock (the Manocks) appeal a judgment entered against them after the trial court granted the motion for summary judgment filed by plaintiffs Rory Trup and Regina Trup (the Trups) in their action against the Manocks for specific performance of an option to purchase real property from the Manocks. On appeal, the Manocks contend the trial court erred by concluding there were no triable issues of material fact regarding: (1) the amount of the purchase price; and (2) whether the purchase price was just and reasonable at the time the option agreement was executed.
FACTUAL AND PROCEDURAL BACKGROUND
On December 23, 1992, the Manocks and the Trups entered into an option agreement (Agreement) pursuant to which the Manocks granted the Trups the option to purchase real property the Manocks owned in Bonita (Property). The Agreement consists of a two-page printed form (with various blanks completed in handwriting) and a one-page typed (except for one handwritten sentence) addendum. The Agreement provides:
"In consideration of the payment by [the Trups] to [the Manocks] of the sum of Three Thousand Three [H]undred Fifty[-]Three [and] 45/100 ($3,353.45) Dollars, . . ., receipt of which is hereby acknowledged by [the Manocks], [the Manocks] hereby give[] to [the Trups] the EXCLUSIVE RIGHT AND OPTION for a period commencing on the date hereof . . . to purchase the [Property], and [the Manocks] agree[] to sell and convey to [the Trups] all of [the Property,] upon the following terms and conditions:
"(1) The purchase price thereof shall be the sum of Two Hundred Fifteen Thousand ($215,000.-) Dollars, which shall be payable as follows: [¶] (a) The sum of Thirty-Three Hundred Fifty[-]Three [and] 45/100 ($3,353.45) Dollars shall be paid in cash. If the option to purchase said real property is exercised by [the Trups] in accordance with the terms and provisions herein contained, the sum of $3,353.45 paid as consideration for this option shall be considered as payment on account of the cash portion of the purchase price. [¶] (b) The balance, in the sum of 0 ($0) Dollars shall consist of a promissory note secured by a deed of trust with assignment of rents on the hereinabove described real property . . . in the principal sum of N/A ($N/A) Dollars, with interest from N/A, 19__ on the unpaid principal at the rate of N/A percent per annum, principal and interest payable in installments of N/A ($N/A) Dollars or more on the __ day of each month, beginning on the N/A day of N/A, 19__ and continuing until said principal and all accrued interest thereon has been paid in full. [¶] . . . [¶]
"(4) Simultaneously with the opening of said escrow and the execution of the escrow instructions by both of the parties hereto, [the Manocks] shall deposit in said escrow a grant deed whereby [they grant] the hereinabove described real property to [the Trups as] Joint Tenants[,] SUBJECT TO: See Addendum to R.E. Purchase Option, attached. . . ." (Italics added to indicate handwritten inserts on printed form.)
Attached to the above two-page printed form is the following one-page typewritten addendum:
"ADDENDUM TO REAL ESTATE PURCHASE OPTION DATED DECEMBER 23, 1992.
"SUBJECT TO: [The Trups] will take possession Jan. 1, 1993 and will maintain the [P]roperty at their expense, pay the taxes as they come due which have accrued after Jan. 1, 1993, pay the annual insurance premiums, and pay the monthly Great Western Bank (GWB) loan # 09462054 until close of escrow. Tax write-offs are to be taken by [the Trups] including depreciation, property tax and mortgage interest. This contract is subject to and contingent upon the existence of no liens, as of Jan. 1, 1993, other than the GWB first TD on said property.
"[The Manocks] to pay the January 1993 GWB TD payment and warranty the roof and ceilings for two years from Jan. 1993. [The Manocks] agree[] to repair the items listed below by Jan. 31, 1993.
"Water [damage] at wall next to pantry.
"Replace carpet on stairs[.]
"Paint hand rail around deck.
"Normal escrow costs to be paid by each party when [the Trups] open[] the escrow. The balance due GWB will be $211,646.55 on Jan. 1, 1993. All reduction of [principal] amount as paid by the [Trups] will be so credited at escrow close.
"Option payments are nonrefundable if 2nd party does not exercise same." (Italics added to indicate handwritten insert on typed addendum.)
On March 15, 2004, the Agreement (including the addendum) was recorded in the County of San Diego.
The Manocks and the Trups thereafter executed extensions of the Agreement, extending the option period through January 1, 2005. Apparently after the parties could not agree on a further extension, in December 2004 the Trups exercised their option to purchase the Property pursuant to the Agreement. Although the Trups opened escrow to complete the purchase, the Manocks refused to cooperate with the sale of the Property.
On August 24, 2005, the Trups filed a complaint against the Manocks, alleging a cause of action for specific performance of the Agreement. The complaint alleged that: "8. The consideration set forth in the Agreement was the fair and reasonable value of the Property[,] namely $215,000[,] which at the time the Agreement was entered into was just and reasonable to [the Manocks]."
The Manocks filed an answer to the complaint that, pursuant to Code of Civil Procedure section 431.30, denied "generally and specifically each and every allegation and cause of action contained in the complaint, and the whole thereof . . . ." Their answer also alleged 18 affirmative defenses. The Manocks also filed a cross-complaint against the Trups, alleging causes of action for breach of contract and unjust enrichment.
All statutory references are to the Code of Civil Procedure unless otherwise specified.
On June 9, 2006, the Trups filed a motion for summary judgment and/or summary adjudication on both their complaint against the Manocks and the Manocks' cross-complaint against them. In support of their motion, the Trups filed a memorandum of points and authorities, a separate statement of undisputed facts, and a declaration from each of them. They also lodged six exhibits with the trial court.
In opposition, the Manocks filed a memorandum of points and authorities, a separate statement of disputed facts, and a declaration of Chesley Manock. They also lodged three exhibits with the trial court. The Trups filed a memorandum replying to the Manocks' opposition to their motion. On August 28, after previously hearing arguments of counsel, the trial court issued its order granting the Trups' motion for summary judgment. On October 20, the court entered judgment for the Trups and appointed the court clerk as elisor to execute all documents necessary to effectuate the transfer of the Property from the Manocks to the Trups.
The Trups subsequently objected to admission of the declaration as irrelevant to the extent it set forth "the subjective thoughts of Chesley Manock as to why he entered [into] the [A]greement and attempts to supplement and/or vary the written [Agreement] despite [its] clear terms . . . ."
The Manocks timely filed a notice of appeal.
DISCUSSION
I
Summary Judgment Standard of Review
"On appeal after a motion for summary judgment has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained. [Citations.]" (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334; Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) "The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citation.]" (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).)
Aguilar clarified the standards that apply to summary judgment motions under Code of Civil Procedure section 437c. (Aguilar, supra, 25 Cal.4th at pp. 843-857.) Generally, if all the papers submitted by the parties show there is no triable issue of material fact and the " 'moving party is entitled to a judgment as a matter of law' " (Code Civ. Proc., § 437c, subd. (c)), the court must grant the motion for summary judgment. (Aguilar, supra, at p. 843.) Code of Civil Procedure section 437c, subdivision (p)(1) states:
"A plaintiff . . . has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on that cause of action. Once the plaintiff . . . has met that burden, the burden shifts to the defendant . . . to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The defendant . . . may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto."
Aguilar made the following observations:
"First, and generally, from commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. . . . There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. . . .
"Second, and generally, the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . A prima facie showing is one that is sufficient to support the position of the party in question. . . .
"Third, and generally, how the parties moving for, and opposing, summary judgment may each carry their burden of persuasion and/or production depends on which would bear what burden of proof at trial. . . . [I]f a defendant moves for summary judgment against . . . a plaintiff [who would bear the burden of proof by a preponderance of the evidence at trial], [the defendant] must present evidence that would require a reasonable trier of fact not to find any underlying material fact more likely than not--otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact." (Id. at pp. 850-851, fns. omitted.)
Aguilar stated:
"To speak broadly, all of the foregoing discussion of summary judgment law in this state, like that of its federal counterpart, may be reduced to, and justified by, a single proposition: If a party moving for summary judgment in any action . . . would prevail at trial without submission of any issue of material fact to a trier of fact for determination, then he should prevail on summary judgment. In such a case, . . . the 'court should grant' the motion 'and avoid a . . . trial' rendered 'useless' by nonsuit or directed verdict or similar device. [Citations.]" (Id. at p. 855, italics added.)
"On appeal, we exercise 'an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.' [Citation.] 'The appellate court must examine only papers before the trial court when it considered the motion, and not documents filed later. [Citation.] Moreover, we construe the moving party's affidavits strictly, construe the opponent's affidavits liberally, and resolve doubts about the propriety of granting the motion in favor of the party opposing it.' [Citations.]" (Seo v. All-Makes Overhead Doors (2002) 97 Cal.App.4th 1193, 1201-1202.)
In reviewing de novo a trial court's grant of a motion for summary judgment, we also review de novo the interpretation of a contract "where the interpretation does not turn on the credibility of extrinsic evidence." (Morgan v. City of Los Angeles Bd. of Pension Comrs. (2000) 85 Cal.App.4th 836, 843.)
II
Purchase Price Under the Agreement
The Manocks contend the trial court erred by concluding that because the Agreement was not ambiguous and extrinsic evidence is not admissible to show otherwise, there is no triable issue of material fact regarding the amount of the purchase price for the Property.
A
In moving for summary judgment, the Trups filed a separate statement asserting the undisputed fact that the purchase price for the Property under the Agreement was $215,000. In opposing the Trups' motion, the Manocks filed a separate statement disputing the Trups' asserted undisputed fact that the purchase price for the Property under the Agreement was $215,000. As support for that dispute, the Manocks cited the declaration of Chesley Manock in which he stated:
"7. In late 1992 on a social visit to our home . . . Rory Trup suggested that I sell the easterly house [i.e., the Property] to him stressing the benefit that if he lived next door he could be next door to help me restore my cars. I told him that if he would move in I would sell it to him for what I owed on it plus another $215,000. Rory Trup agreed to the purchase price and told me that he had good credit and could arrange a loan promptly. . . .
"8. Sometime in December 1992 Rory brought to me a document entitled 'Real Estate Purchase Option' with an attachment entitled 'Addendum to Real Estate Purchase Option' [citation.] As Rory explained it to me[,] he would need some time to arrange a loan so he wanted an option to purchase for the time being.
"9. My wife and I signed the 'Option to Purchase' on December 23, 1992[,] at which time the Trups paid the consideration price for the option of $3,353.45. At all times, including the time that I signed the 'Option Agreement[,]' my understanding was that as to the purchase price of the [P]roperty it was $215,000 plus the Trups paying off my existing mortgage; and that pending the sale of the [P]roperty (during the option period) that the Trups would move into the house on January 1, 1993, would be responsible for maintaining the [P]roperty and would be responsible for paying the monthly mortgage, the property taxes and the property insurance premiums. [¶] . . . [¶]
"14. In December 2004[,] Rory Trup and I had a very unfriendly conversation. In that talk[,] he told me that he wanted me to sign over the house to him and I asked him when I was going to be paid the $215,000 purchase price. He denied that was our agreement and that he had only agreed to pay the mortgage off. As a result of his contention that he did not owe me $215,000 and as a result of his refusal to acknowledge, much less agree to the terms of the original agreement, I refused to cooperate with his efforts to transfer title into his and his wife's name.
"15. Contrary to the statements of [the Trups], contained in their declarations supporting their Motion for Summary Judgment (i.e., that the agreement for the purchase of the property was $215,000 to be paid by taking over and paying off the mortgage), the [actual] agreement was that the Trups would pay off the mortgage and pay my wife and [me] an additional $215,000.
"16. When I signed the original 'Option Agreement' drafted by Rory Trup[,] I believed it reflected our agreement. Now that I have read the agreement after this dispute arose[,] I can see how the agreement is ambiguous. However, at all times I relied upon . . . Rory Trup's representations at the time the 'Option Agreement' was signed that the agreement was for a purchase price of both $215,000 and paying off the existing mortgage."
However, the Trups objected to the admission of that declaration as irrelevant to the extent it set forth "the subjective thoughts of Chesley Manock as to why he entered [into] the [A]greement and attempts to supplement and/or vary the written [Agreement] despite [its] clear terms . . . . Absent ambiguity or an absurdity, this testimony is inadmissible. [Citations.] Extrinsic evidence is not admissible to vary the terms of an unambiguous integrated agreement. [Citation.]"
In its order granting the Trups' motion for summary judgment, the trial court stated:
"Chesley Manock's declaration is the sole evidence in support of [the Manocks'] argument that a triable issue of fact exists . . . regarding the purchase price. [Chesley] Manock states he offered to sell the property 'for what I owed on it plus another $215,000' and [the Trups] agreed. He states at the time he signed the . . . Agreement his understanding was that the purchase price was to be $215,000 plus [the Trups] paying off his existing mortgage. [Citations.] He believes the . . . Agreement is ambiguous.
"[Chesley] Manock's testimony in this regard is inadmissible parol evidence. The terms of a writing which the parties intend as a final expression of their agreement cannot be contradicted by evidence of a prior agreement. (Code Civ. Proc., § 1856(a).) The [Agreement] is an integrated document and states, 'This agreement shall constitute the entire agreement between the parties hereto, and no prior negotiations[,] agreements or representations, whether oral or in [writing], shall be effective.' The purchase price is listed as $215,000. The parties were aware of the Great Western Bank mortgage on the [P]roperty because the Addendum refers to it. If the parties intended for the purchase price to be $215,000 plus the mortgage[,] then one would normally expect the [A]greement to say so, especially when the stated purchase price is off by a factor of two. Because there is no cognizable dispute over the purchase price, there is no triable issue that [the Trups] are entitled to specific performance of the [Agreement].
"[The Manocks] make the same arguments regarding the cross-complaint for breach of contract and unjust enrichment as for the complaint. For the reasons explained above, [the Trups] are entitled to enforce the [Agreement] and they did not breach . . . the [Agreement] by refusing to pay $215,000 in addition to the first mortgage. . . ."
B
"An option [to purchase real property], when supported by consideration, is a contract by which an owner gives another the exclusive right to purchase his property for a stipulated price within a specified time. [Citation.]" (County of San Diego v. Miller (1975) 13 Cal.3d 684, 688.) Therefore, an option agreement must set forth the purchase price for the optionee's purchase of the real property. (Ibid.)
"When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is 'reasonably susceptible' to the interpretation urged by the party. If it is not, the case is over. [Citation.] If the court decides the language is reasonably susceptible to the interpretation urged, the court moves to the second question: what did the parties intend the language to mean? [Citation.] [¶] Whether the contract is reasonably susceptible to a party's interpretation can be determined from the language of the contract itself [citation] or from extrinsic evidence of the parties' intent [citation]." (Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 847-848.) If a contract is susceptible to two different reasonable interpretations, the contract is ambiguous. (Ibid.) A court must then construe that ambiguous contract language "by applying the standard rules of interpretation in order to give effect to the mutual intention of the parties [citation]." (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 798.)
"Even if a contract appears unambiguous on its face, a latent ambiguity may be exposed by extrinsic evidence which reveals more than one possible meaning to which the language of the contract is yet reasonably susceptible." (Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912.) "The test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible." (Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37.) Alternatively stated, "[t]he decision whether to admit parol [i.e., extrinsic] evidence involves a two-step process. First, the court provisionally receives (without actually admitting) all credible evidence concerning the parties' intentions to determine 'ambiguity,' i.e., whether the language is 'reasonably susceptible' to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is 'reasonably susceptible' to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step--interpreting the contract. [Citation.]" (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)
On appeal, a "trial court's ruling on the threshold determination of 'ambiguity' (i.e., whether the proffered evidence is relevant to prove a meaning to which the language is reasonably susceptible) is a question of law, not of fact. [Citation.] Thus[,] the threshold determination of ambiguity is subject to independent review. [Citation.]" (Winet v. Price, supra, 4 Cal.App.4th at p. 1165.) If the contract language is determined to be ambiguous and conflicting extrinsic evidence was admitted on the meaning of that language, "any reasonable construction will be upheld as long as it is supported by substantial evidence. [Citation.]" (Id. at p. 1166.)
If, however, no extrinsic evidence was admitted or the extrinsic evidence is not conflicting, the construction of the ambiguous contract language is a question of law subject to our independent construction. (Winet v. Price, supra, 4 Cal.App.4th at p. 1166.)
C
The Manocks assert there is a triable issue of material fact on the question of the purchase price for the Property under the Agreement. They argue that because the Agreement is ambiguous regarding the purchase price for the Property and there is conflicting extrinsic evidence on the purchase price, the trial court erred by granting the Trups' motion for summary judgment.
The relevant language of the Agreement provides: "The purchase price thereof shall be the sum of Two Hundred Fifteen Thousand ($215,000.-) Dollars . . . ." Furthermore, the Agreement's addendum provided that the Trups were to pay "the monthly Great Western Bank (GWB) loan # 09462054 until close of escrow" and "[a]ll reduction of [principal] amount [of GWB loan] as paid by the [Trups] will be so credited at escrow close." Citing the Agreement and their declarations, the Trups' separate statement asserted it was an undisputed fact that the purchase price for the Property was $215,000.
In opposition, the Manocks' separate statement disputed that the purchase price was $215,000. Their separate statement asserted: "The purchase price of the [P]roperty was $215,000 plus payment of the existing mortgage." In support of that disputed fact, they cited only excerpts from the declaration of Chesley Manock, in which he stated, as quoted above, "I told [Rory Trup] that if he would move in I would sell [the Property] to him for what I owed on it plus another $215,000. Rory Trup agreed to the purchase price . . . ." He further stated: "At all times, including the time that I signed the [Agreement,] my understanding was that as to the purchase price of the [P]roperty it was $215,000 plus the Trups paying off my existing mortgage . . . ." Finally, he stated: "[T]he [actual] agreement was that the Trups would pay off the mortgage and pay my wife and [me] an additional $215,000." The Trups objected to the declaration of Chesley Manock as irrelevant to the extent it set forth "the subjective thoughts of Chesley Manock as to why he entered [into] the [A]greement and attempts to supplement and/or vary the written [Agreement] despite [its] clear terms . . . . Absent ambiguity or an absurdity, this testimony is inadmissible. [Citations.] Extrinsic evidence is not admissible to vary the terms of an unambiguous integrated agreement. [Citation.]" The trial court implicitly concluded the purchase price for the Property as expressed in the Agreement was unambiguous and sustained the Trups' objections to the declaration of Chesley Manock "to the extent he purports to express his understanding that the purchase price was other than as stated in the [Agreement]."
In reviewing the trial court's threshold determination that the purchase price for the Property as expressed in the Agreement was unambiguous, we apply a de novo standard of review and independently consider whether that contract language is reasonably susceptible of the meaning urged by the Manocks. (Winet v. Price, supra, 4 Cal.App.4th at p. 1165.) In so doing, we first "provisionally receive[] (without actually admitting) all credible evidence concerning the parties' intentions to determine 'ambiguity,' i.e., whether the language is 'reasonably susceptible' to the interpretation urged by a party." (Ibid.)
Assuming arguendo that the declaration of Chesley Manock is credible evidence of the parties' intention regarding the purchase price of the Property, we nevertheless conclude, based on our provisional consideration of that declaration, that the Agreement's language regarding the purchase price of the Property is not reasonably susceptible to the interpretation urged by the Manocks. That declaration asserts it was the parties' intent (or, at least, it was Chesley Manock's understanding) at the time of the Agreement that the purchase price of the Property was to be $215,000, plus the Trups' payment of the mortgage balance (i.e., about $215,000), which would essentially result in a total price of about $430,000. However, the language of the Agreement, as quoted above, provides that the price is $215,000. Furthermore, the Agreement provides that all payments made by the Trups toward the GWB mortgage are to be credited toward that purchase price of $215,000. Therefore, after provisionally considering the declaration of Chesley Manock, we nevertheless conclude the Agreement's language cannot be reasonably interpreted as the Manocks so urge (i.e., that the purchase price of the Property under the Agreement is $215,000 plus payment of the GWB mortgage balance).
Because the Agreement's language is not reasonably susceptible to the Manock's proposed interpretation, the trial court correctly sustained the Trups' objection to the declaration of Chesley Manock as irrelevant extrinsic evidence and concluded that the Agreement was unambiguous regarding the purchase price of the Property. Extrinsic evidence is not admissible to prove a meaning that "flatly contradict[s] the express terms of the [A]greement." (Winet v. Price, supra, 4 Cal.App.4th at p. 1167, citing Stevenson v. Oceanic Bank (1990) 223 Cal.App.3d 306, 317-318; see also Civ. Code, § 1638 ["The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity."].)
Accordingly, we independently conclude the Agreement's language is unambiguous that the purchase price of the Property is $215,000, and any payments made by the Trups toward the GWB mortgage on the Property are to be credited toward that purchase price at the close of escrow. Therefore, there is no triable issue of fact regarding the purchase price of the Property under the Agreement.
To the extent the Manocks argue the Agreement is ambiguous because "there is no language connecting Section (1) of the [A]greement to the 'Addendum,' " we conclude the purchase price of $215,000 set forth in that section was sufficiently connected to the other provisions set forth in the addendum by the express incorporation of the addendum into the printed portion of the Agreement at the bottom of the first page (i.e., "SUBJECT TO: See Addendum to R.E. Purchase Option, attached"). In any event, there is nothing set forth in the addendum that conflicts with, or otherwise creates any ambiguity regarding, the Agreement's express provision that the purchase price of the Property is $215,000.
III
Just and Reasonable Consideration
The Manocks contend the trial court erred by granting the Trups' motion for summary judgment because there is a triable issue of material fact regarding whether the consideration (i.e., the purchase price) for the Property under the Agreement was just and reasonable to them as of the time the Agreement was executed in December 1992.
A
Civil Code section 3391 sets forth the requirements for specific performance of a contract:
"Specific performance cannot be enforced against a party to a contract in any of the following cases:
"1. If he has not received an adequate consideration for the contract;
"2. If it is not, as to him, just and reasonable . . . ."
A plaintiff seeking specific performance of an option to purchase real property therefore has the affirmative burden to prove the contract was fair and just at the time it was signed and the purchase price was adequate consideration for the property. (Civ. Code, § 3391; Vezaldenos v. Keller (1967) 254 Cal.App.2d 816, 829.) "The burden is upon a vendee seeking specific performance of a contract for the sale of real property to prove the adequacy of the consideration." (Paratore v. Perry (1966) 239 Cal.App.2d 384, 387.) "Whether the sales price in any particular case is fair and adequate is 'peculiarly a question of fact for the trial court to determine in the light of all the circumstances . . . .' [Citations.]" (Gilbert v. Mercer (1960) 179 Cal.App.2d 29, 31.)
B
The Trups' complaint alleged that "[t]he consideration set forth in the Agreement was the fair and reasonable value of the Property[,] namely $215,000[,] which at the time the Agreement was entered into was just and reasonable to [the Manocks]." (Italics added.) In the Manocks' answer to the complaint, they generally and specifically denied each and every allegation contained in the complaint.
In support of the Trups' motion for summary judgment, the Trups' separate statement asserted the undisputed fact that "[t]he consideration set forth in the . . . Agreement was the fair and reasonable value of the Property[,] namely $215,000[,] which at the time the Agreement was entered into was just and reasonable." In support of that asserted statement of undisputed fact, the Trups cited excerpts from their declarations and the Agreement. In the declarations of Rory Trup and Regina Trup, they each stated: "The consideration set forth in the . . . Agreement was the fair and reasonable value of the Property taken in an 'as is' condition, namely $215,000[,] which at the time the Agreement was entered into was just and reasonable given the condition of the Property with its numerous problems that we have since repaired."
In the Manocks' separate statement of disputed facts in opposition to the Trups' motion, they stated that they "[d]isputed" the Trups' asserted fact that the consideration set forth in the Agreement was the fair and reasonable value of the Property, namely $215,000, which at the time the Agreement was entered into was just and reasonable. In support of that disputed fact, the Manocks' separate statement cited excerpts from the declaration of Chesley Manock, in which he stated that: "The value of the [P]roperty at the time we entered into the [A]greement far exceeded the balance owed on the mortgage [i.e., $215,000], Trup's alleged purchase price, and additionally far exceeded the value of the balance on the mortgage and the price I agreed to of $215,000. Accordingly, I strongly dispute both contentions of the Trups as to what the purchase price is and that the purchase price they have alleged is 'fair and reasonable.' " (Italics added.)
Although the trial court's written order did not expressly conclude there was no triable issue regarding whether the purchase price for the Property was just and reasonable, we presume the court implicitly so concluded in granting the Trups' motion for summary judgment on their complaint for specific performance of the Agreement. We further note the court's subsequent judgment expressly states: "The [Trups] have fully performed their obligations under the Agreement, including paying the full purchase price for the Property. The Court also specifically finds the consideration was reasonable under the circumstances." (Italics added.)
C
Citing the excerpt from Chesley Manock's declaration, the Manocks assert they presented sufficient evidence to establish a triable issue of fact regarding whether the consideration (i.e., the purchase price) for the Property under the Agreement was just and reasonable as to them.
A plaintiff who moves for summary judgment bears the initial burden of production to make a prima facie showing that there is no triable issue of fact regarding each element of his or her cause of action. (§ 437c, subd. (p)(1); Aguilar, supra, 25 Cal.4th at p. 850.) In the circumstances of this case, the Trups, in moving for summary judgment, had the burden to produce evidence showing the purchase price of $215,000 for the Property was adequate consideration and just and reasonable to the Manocks at the time the Agreement was executed on December 23, 1992. Assuming arguendo the Trups' declarations regarding the past value of the Property were admissible and probative evidence on that question of fact, it appears the Trups satisfied their initial burden of production by asserting in their declarations that (presumably, in their opinion) the fair, just, and reasonable value of the Property in December 1992 was $215,000.
"The owner of real property may testify to its value without a showing of special qualifications. [Citations.]" (Paratore v. Perry, supra, 239 Cal.App.2d at p. 386.) Although the Trups do not cite any case or other authority showing they, as optionees under the Agreement, were qualified to testify on the value of the Property in December 1992, we assume arguendo they were in a similar position at that time to an owner of the Property and therefore could testify on their opinion regarding its value. In any event, in opposing the Trups' motion for summary judgment, the Manocks did not object to the Trups' declarations to the extent they expressed that opinion on the value of the Property, and the Manocks did not argue the Trups lacked the requisite knowledge or qualifications to express that opinion.
On shifting of the burden of production to the Manocks, the Manocks satisfied their burden of production to show a triable issue of fact on that question by presenting the contrary opinion set forth in the declaration of Chesley Manock that the value of the Property in December 1992 "far exceeded" the $215,000 purchase price alleged by the Trups. The owner (e.g., Chesley Manock) of real property may testify regarding the value of that property without showing any special qualifications for that opinion testimony. (Paratore v. Perry, supra, 239 Cal.App.2d at p. 386.) In so doing, the Manocks satisfied their burden to make a prima facie showing that a triable issue of material fact exists as to an element of the Trups' cause of action for specific performance (i.e., that the consideration of $215,000 for the Property was just and reasonable to the Manocks at the time the Agreement was executed). (§ 437c, subd. (p)(1).) The opinion of Chesley Manock that the value of the Property in December 1992 "far exceeded" $215,000 constituted substantial evidence that $215,000 was not just and reasonable consideration for the Manocks at the time the Agreement was executed. Because the Trups bear the burden of persuasion on the question of fact whether the purchase price of $215,000 was just and reasonable consideration for the Property in December 1992 and the Manocks presented evidence the value of the Property "far exceeded" that amount and therefore that amount was not just and reasonable consideration as to them, there exists a triable issue of material fact on that question, which precludes summary judgment on the Trups' complaint for specific performance of the Agreement. Accordingly, we conclude the trial court erred by granting the Trups' motion for summary judgment.
As the court noted in Paratore, other courts have found to be inadequate consideration purchase prices that are only a few thousand dollars less than (representing as little as a 15 percent difference from) the fair market values of the subject properties. (Paratore v. Perry, supra, 239 Cal.App.2d at p. 387.)
D
Although the Trups cite Foley v. Cowan (1947) 80 Cal.App.2d 70 (Foley), a Second Appellate District opinion, as support for their assertion the Manocks failed to make a prima facie showing of a triable issue of fact on the question of whether $215,000 was just and reasonable consideration for the Property in December 1992, we conclude Foley is distinguishable from the circumstances in this case and, in any event, we are not persuaded by its reasoning. In Foley, the plaintiff's complaint for specific performance alleged the purchase price of $2,600 was a fair and reasonable value of the property subject to the option to purchase. (Id. at p. 75.) The defendant's answer generally and specifically denied each and every allegation of the complaint. (Ibid.) However, the answer did not specifically allege the value of the property. (Id. at pp. 75-76.) At trial, the defendant did not argue that he refused to perform under the option agreement because the purchase price of $2,600 was not a fair and reasonable value of the property. (Id. at p. 73.) The trial court entered a judgment for the plaintiff, requiring the defendant to convey the property to plaintiff for the agreed purchase price of $2,600. (Id. at p. 72.)
On appeal, Foley noted it was the plaintiff's burden to allege and prove the contract was just and reasonable as to the defendant. (Foley, supra, 80 Cal.App.2d at pp. 74-75.) However, although the plaintiff did not present at trial any affirmative proof of the value of the property, Foley faulted the defendant for not specifically alleging in his answer the value of the property and for only denying that the $2,600 purchase price was its just and reasonable value. (Id. at pp. 75-76.) Foley stated:
"[T]he attempted denial [in the defendant's answer] was not sufficient to make an issue as to value. The denial that $2,600 was the fair and reasonable value was not the equivalent of an allegation of value substantially in excess of the sum agreed to be paid. It would have been a truthful denial if the purchase price was slightly below the fair and reasonable value, but this is not sufficient. A consideration, to be adequate, need not amount to the full value of the property. [Citations.] The value as alleged in the complaint, not being sufficiently denied, was admitted. The trial judge evidently considered the denial to be a nullity, for in summing up the evidence he stated: 'You [i.e., the defendant] admit the fair value of the property and there is no evidence to the contrary,' and counsel for defendant made no reply. Although there was no proof or finding as to the value of the property, none was required, since there was no issue as to value.
" . . . A complaint for specific performance is sufficient upon the point in question if it alleges facts, proof of which would entitle the plaintiff to a decree of specific performance. [Citations.] In the present case, the consideration being adequate, the question whether the agreement was just and reasonable as to defendant was to be determined solely from a consideration of the agreement, and principally from the terms and conditions upon which the purchase price was to be paid." (Foley, supra, 80 Cal.App.2d at p. 76.)
After considering the terms and conditions of the agreement, Foley concluded the agreement was just and reasonable as to the defendant and affirmed the judgment for the plaintiff. (Foley, supra, 80 Cal.App.2d at p. 77.)
We conclude Foley is distinguishable from the circumstances in this case. Although the Manocks' answer (like the answer in Foley) only generally and specifically denied the Trups' allegation that the purchase price was just and reasonable as to the Manocks, the Manocks opposed the Trups' motion for summary judgment and disputed the Trups' separate statement of material fact that $215,000 was just and reasonable consideration for the Property at the time the Agreement was executed. In support of their opposition, the Manocks presented the declaration of Chesley Manock, in which he stated the value of the Property in December 1992 "far exceeded" $215,000 and therefore was not fair and reasonable to the Manocks. Therefore, unlike Foley, this case involves a motion for summary judgment. Furthermore, in opposing the Trups' motion for summary judgment, the Manocks disputed the Trups' allegation that $215,000 was just and reasonable consideration for the Property in December 1992 and presented admissible evidence in support of that dispute.
Furthermore, unlike in Foley, the Trups' evidence did not merely generally deny the plaintiffs' allegation that $215,000 was just and reasonable consideration for the Property, but their evidence expressly stated the value of the Property "far exceeded" $215,000 at the time the Agreement was executed. Therefore, unlike in Foley, the Manocks' denial of the Trups' assertion was "the equivalent of an allegation [and proof] of value substantially in excess of the sum agreed to be paid." (Foley, supra, 80 Cal.App.2d at p. 76.) Chesley Manock's opinion that the value of the Property "far exceeded" $215,000 was not equivalent to the "truthful denial," described in Foley, "if the purchase price was slightly below the fair and reasonable value . . . ." (Ibid.) An opinion that the value "far exceeded" the purchase price cannot be equated with a statement that the purchase price was "slightly below" the fair and reasonable value of the property. We conclude the circumstances in Foley are distinguishable from the circumstances in this case.
In any event, to the extent Foley concluded that a defendant's general and specific denial of a plaintiff's allegation that the purchase price is just and reasonable consideration is insufficient to, in effect, avoid a judgment on the pleadings, we disagree with its reasoning and decline to follow it. A plaintiff seeking specific performance of a contract has the affirmative burden to allege and prove that the purchase price is just and reasonable consideration to the defendant. A plaintiff's allegation that the purchase price is just and reasonable consideration may be sufficiently controverted by the defendant's answer generally and specifically denying that allegation. (§ 431.30, subd. (b)(1).)
Contrary to the language in Foley, quoted above, "[t]he effect of a general denial is to 'put in issue the material allegations of the complaint.' [Citation.]" (Advantec Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621, 627 (Advantec).) Therefore, by generally and specifically denying the allegations of the Trups' complaint, the Manocks' answer effectively put in issue the Trups' allegation that $215,000 was just and reasonable consideration for the Property in December 1992. In so doing, unlike Foley, we conclude the Manocks sufficiently made an issue of the Property's value. (Cf. Foley, supra, 80 Cal.App.2d at p. 76.). To the extent Foley holds otherwise, we disagree with its reasoning and decline to follow it. Rather, as with the allegation of licensure required in the plaintiff's complaint in Advantec, the Manocks' general denial of the material allegation required in the Trups' complaint that $215,000 was just and reasonable consideration was sufficient to put in issue that allegation. (Advantec, at p. 627.)
Like the defendant in Advantec, the Manocks were not required to allege in their answer an affirmative defense that $215,000 was not just and reasonable consideration for the Property in December 1992 (or allege a specific fair market value for the Property). (Advantec, supra, 153 Cal.App.4th at p. 627.) Because the Manocks controverted the Trups' allegation that $215,000 was just and reasonable consideration for the Property in December 1992 (and presented substantial evidence in opposition to the Trups' asserted fact in moving for summary judgment), the Trups have the burden of proving that fact by producing at trial evidence showing, by a preponderance of the evidence, that $215,000 was just and reasonable consideration for the Property as to the Manocks when the Agreement was executed on December 23, 1992. (Cf. Advantec, at pp. 627-628.) We are not persuaded by Foley to reach a contrary conclusion.
DISPOSITION
The judgment is reversed and the matter is remanded for further proceedings consistent with this opinion. The trial court shall award the costs on appeal on completion of the proceedings in this case.
WE CONCUR: BENKE, Acting P. J., HALLER, J.