Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Alameda County Super. Ct. No. RG05-241380
Ruvolo, P. J.
This appeal arises from a dispute arising out of the sale of two skilled nursing facilities, together with the real property upon which each facility is located. The dispute was resolved by a settlement agreement under which appellants, the sellers, were to recover ownership of one of the properties upon their fulfillment of certain conditions, and respondents, the buyers, were to receive clear title to the other property upon payment of certain debts. The settlement was never consummated, and this litigation ensued. Appellants contend that the trial court erred in ruling they had failed to fulfill their obligations under the settlement, and by awarding clear title to both nursing home properties to respondents. We reject appellants’ contentions, and affirm the judgment.
Facts and Procedural Background
In reciting the factual background of this litigation, we adopt the facts as expressly or impliedly found by the trial court, and we resolve all evidentiary conflicts, and construe the trial court’s findings, in respondents’ favor. (Whiteley v. Philip Morris, Inc. (2004) 117 Cal.App.4th 635, 642, fn. 3; see also Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660; SFPP v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 461-462; Kotler v. Alma Lodge (1998) 63 Cal.App.4th 1381, 1383, fn. 1.)
Appellants Rodelio and Herminigilda Manuel formerly owned and operated a number of skilled nursing facilities, including two that are involved in this litigation: Wisteria Care Center (Wisteria) and Milpitas Care Center (Milpitas). In 1999, after the California Department of Health Care Services rescinded appellants’ certification, they sold Wisteria and Milpitas to respondents Floro and Patricia Zarate. Respondents paid a portion of the purchase price for the two facilities by means of promissory notes secured by deeds of trust on the real property on which the facilities are located.
In early 2000, respondents deeded a 40 percent interest in Wisteria to Joseph and Juliana Taburaza. Respondents defaulted on the payments due to appellants under the promissory notes, and appellants recorded notices of default on both properties. During the same time period, appellants had an appeal pending challenging a judgment against them that had been obtained by their creditor, Orthopaedic, Neurological & Rehabilitation Services, Inc. (ONR).
On July 9, 2002, appellants, respondents, and ONR engaged in a mediation that resulted in a written settlement agreement. In essence, the settlement agreement was structured so that respondents would pay for and receive Milpitas, and appellants would assume the debt on Wisteria and regain ownership of it. All existing claims among the parties were released, except for the obligations undertaken in the settlement agreement.
More specifically, with respect to Milpitas, the settlement agreement provided that: (1) respondents would pay appellants’ debt to ONR, in the amount of $125,000 plus interest; (2) respondents would pay appellants $200,000 plus 10 percent interest by August 1, 2007; (3) appellants would immediately rescind all of the notices of default that they had recorded; and (4) when the amounts owed by respondents under the settlement agreement had been paid in full, appellants would cancel the promissory notes that were secured by deeds of trust on Milpitas.
With respect to Wisteria, the settlement agreement provided that respondents would return ownership of that facility and property to appellants or their nominee if and when certain conditions were satisfied, including: (1) appellants paid off or assumed the debts to Zion’s Bank and Comerica Bank that were secured by Wisteria, so that respondents would no longer be personally liable on those debts, and the deed of trust on respondents’ home securing the Comerica Bank loan would be released; and (2) appellants or their nominee received a license from the California Department of Health Services permitting them to operate Wisteria as a skilled nursing facility. On their part, respondents agreed to hold appellants or their nominee harmless with respect to any claim by the Taburazas related to Wisteria.
Respondents made the payments to ONR and to appellants that were called for under the settlement agreement. However, other terms of the settlement agreement were not fulfilled. Appellants failed to rescind the pending notices of default. Instead, they continued to pursue foreclosure proceedings. They substituted their daughter as the trustee on the deeds of trust, and filed new notices of default. In addition, although they took steps to assume the financing on Wisteria and to obtain the necessary license to operate it, they never succeeded in fulfilling either of these conditions of the settlement agreement. Appellants contended that respondents interfered with their efforts to do so, and that respondents’ actions constituted a repudiation of the settlement agreement.
Rescissions of the notices of default were not recorded until June 2006, a few months before the litigation went to trial.
On November 9, 2005, respondents filed an action in the Alameda County Superior Court for breach of contract and to quiet title in both the Milpitas and Wisteria properties. Appellants filed a cross-complaint on February 16, 2006.
In 2006, while the litigation was pending, a dispute developed between the parties regarding the amount of interest owed by appellants under the settlement agreement. On April 14, 2006, respondents tendered what they contended was the remaining balance due to appellants under the settlement agreement by depositing that amount into the client trust account of a law firm, to be paid to appellants upon the surrender of the promissory notes and reconveyance of the deeds of trust on Milpitas. Appellants did not satisfy these conditions, and as of the date of trial, the funds remained in the law firm’s trust account.
On April 17, 2006, respondents filed an amended complaint alleging that they had made this tender.
The action was tried to the court without a jury beginning on October 16, 2006, and was submitted on October 27, 2006. On January 23, 2007, the trial court issued a notice of intended decision. On February 2, 2007, appellants filed a request for statement of decision. On February 13, 2007, respondents filed proposals regarding the statement of decision, and appellants filed an actual proposed statement of decision. On the same day, the trial court ordered both parties to file proposed statements of decision. Respondents complied with this order on February 28, 2007.
On March 13, 2007, the trial court signed and filed a statement of decision. The same document was also entered on the court’s electronic docket, on the same date, as the judgment in the action. The statement of decision found that respondents had fulfilled the conditions of the settlement agreement, and that the sum deposited with the law firm constituted the full amount that they then owed appellants, and that the conditions placed on the tender regarding surrender of the promissory notes and deeds of trust on Milpitas did not invalidate the tender, because respondents were legally entitled to impose those conditions. The statement of decision also rejected appellants’ contention that the transfer to the Taburazas constituted a breach of the settlement agreement.
As to appellants, the statement of decision found that they had not complied with the conditions required under the settlement agreement for them to be entitled to regain ownership of Wisteria, and rejected their claims that respondents had interfered with their efforts to do so. It further found that appellants had breached the settlement agreement by failing to rescind the notices of default, reinstituting foreclosure proceedings, and refusing to reconvey the deeds of trust on Milpitas. Accordingly, it held that neither appellants nor anyone claiming under them had any further claim to either Wisteria or Milpitas, and ordered title to both properties quieted in respondents.
On March 28, 2007, appellants filed a motion for new trial and for judgment notwithstanding the verdict, and a separate motion for relief from forfeiture. After a hearing on May 4, 2007, the trial court denied both motions. Appellants filed a timely notice of appeal on May 10, 2007.
Discussion
A. Procedural Issues
B. Appellants’ Standing to Appeal
As a threshold matter, respondents contend that appellants lack standing to bring this appeal, because they admitted at trial that they have assigned their rights to acquire the Wisteria property to third parties. Notwithstanding appellants’ failure to file a reply brief addressing this argument, we reject it. On our own motion, we take judicial notice of our own files, which establish that appellants have filed a second, separate notice of appeal from the trial court’s postjudgment order in the case below awarding attorney fees to respondents, payable by appellants. (Zarate v. Manuel (A120686, app. pending); see Deschene v. Pinole Point Steel Co. (1999) 76 Cal.App.4th 33, 37, fn. 2 [Court of Appeal took judicial notice, on its own motion, of its own prior unpublished opinion in related case].)
A reversal of the underlying judgment in the present appeal would benefit appellants by requiring a reversal of the attorney fee award as well. (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1120.) Accordingly, whether or not appellants are directly aggrieved by the judgment insofar as it affects the ownership of the Wisteria property (an issue which we do not resolve here), appellants are still aggrieved by the judgment insofar as it forms the basis for the attorney fee award against them. Thus, appellants have standing to bring this appeal. (Cf. Consumer Cause, Inc. v. Mrs. Gooch’s Natural Food Markets, Inc. (2005) 127 Cal.App.4th 387, 395-396 [nonparty class member who successfully objects to settlement has standing to appeal adverse decision on member’s motion seeking attorney fee award]; Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289 [expert witness had standing to appeal from order setting witness’s deposition fee, even though witness was not party to action].)
C. Entry of Judgment, Motion to Remand, and Sanctions
In their opening brief on appeal, appellants argued that the trial court erred by failing to enter a judgment. After respondents filed their brief, appellants filed a motion to remand this matter to the trial court for entry of judgment. Respondents opposed the motion, and sought sanctions on the ground that it was frivolous. The motion was referred to this panel for decision in conjunction with the appeal on the merits.
Appellants admitted at oral argument in this court that they did not bring the issue of the purported lack of a judgment to the attention of the trial court until the hearing on their posttrial motions. Arguably, appellants forfeited their right to raise this issue on appeal by failing to raise it in the trial court—which easily could have remedied the problem—except by mentioning it in passing at a hearing devoted to other questions. (See generally In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 117; In re Marriage of Hinman (1997) 55 Cal.App.4th 988, 1002; In re Aaron B. (1996) 46 Cal.App.4th 843, 846.) Nevertheless, we have deemed it preferable to exercise our discretion to decide this purely legal issue on its merits. (Petropoulos v. Department of Real Estate (2006) 142 Cal.App.4th 554, 561.)
As both parties acknowledge, the trial court’s signed statement of decision, which resolved all the issues between the parties, was filed and entered into the trial court’s electronic docket both as the statement of decision and as the judgment. It has long been settled law in California that “the substance or effect of the judgment and not its designation is determinative of its finality.” (Estate of Lock (1981) 122 Cal.App.3d 892, 896.) Moreover, California courts follow a “ ‘well-established policy, based upon the remedial character of the right of appeal, of according that right in doubtful cases “when such can be accomplished without doing violence to applicable rules.” ’ [Citations.]” (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 901.) Thus, as our Supreme Court reiterated only last year, “[r]eviewing courts have discretion to treat statements of decision as appealable when they must, as when a statement of decision is signed and filed and does, in fact, constitute the court’s final decision on the merits. [Citations.]” (Ibid.; accord, Estate of Lock, supra, 122 Cal.App.3d at p. 896.)
In accordance with these authorities, we treat the trial court’s statement of decision as the judgment in this matter, and deny the motion to remand. We decline, however, to grant respondents’ request for sanctions against appellants based on the filing of this motion. Respondents did not comply with the requirement of California Rules of Court, rule 8.276(b)(1), that a motion for sanctions on appeal be supported by a declaration supporting the amount of sanctions sought.
D. Premature Filing of Statement of Decision
Appellants argue that the trial court erred by filing its statement of decision before the expiration of their time in which to file their objections to respondents’ proposed statement of decision. They contend that this premature filing precluded them from raising the issues of respondents’ alleged repudiation of the settlement agreement, and of the asserted absence of any basis for imposing a forfeiture of appellants’ rights under the settlement agreement.
Respondents counter that any error was harmless, because appellants brought the alleged errors in the trial court’s statement of decision to the court’s attention by motion after it was filed. Specifically, appellants raised the question of repudiation in their motion for new trial, and filed a separate motion for relief from forfeiture. Moreover, in ruling on appellants’ posttrial motions, the trial judge expressly stated that he had considered appellants’ arguments on their merits with respect to their disagreements with the statement of decision.
An appellant who seeks to reverse a trial court judgment based on a procedural error has the burden to show how the error affected the outcome of the case. Our state Constitution provides that “No judgment shall be set aside . . . for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.” (Cal. Const., art. VI, § 13.)
As a corollary to this constitutional provision, Code of Civil Procedure section 475 provides that “The court must, in every stage of an action, disregard any error, improper ruling, instruction, or defect, in the pleadings or proceedings which, in the opinion of said court, does not affect the substantial rights of the parties. No judgment, decision, or decree shall be reversed or affected by reason of any error, ruling, instruction, or defect, unless it shall appear from the record that such error, ruling, instruction, or defect was prejudicial, and also that by reason of such error, ruling, instruction, or defect, the said party complaining or appealing sustained and suffered substantial injury, and that a different result would have been probable if such error, ruling, instruction, or defect had not occurred or existed. There shall be no presumption that error is prejudicial, or that injury was done if error is shown.”
In keeping with these constitutional and statutory mandates, appellate courts will not reverse on the basis of a procedural error, such as the filing of a statement of decision or judgment before the expiration of the losing party’s time to object, unless the appellant affirmatively demonstrates that the error was prejudicial. (In re Marriage of Steiner & Hosseini (2004) 117 Cal.App.4th 519, 524-525.) In the present case, appellants have not carried their burden to demonstrate the existence of prejudicial error stemming from the premature filing of the statement of decision. We find no basis for reversal of the judgment on this ground.
E. Substantive Issues
In addition to the procedural issues discussed above, appellants proffer three substantive challenges to the trial court’s decision. Each of these involves an attack on the trial court’s factual findings. To that extent, all of them are governed by the substantial evidence standard of review. (Williams v. City of Belvedere (1999) 72 Cal.App.4th 84, 89-90 [“[S]ince the trial court acted as a trier of fact, the court’s factual findings, express or implied, must be affirmed so long as they are supported by substantial evidence. [Citations.]”].)
To prevail under the substantial evidence standard of review, an appellant must affirmatively demonstrate that the record does not contain evidence from which a reasonable trier of fact could reach the findings in question. (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1632-1633.) As our Supreme Court has explained: “ ‘The rule is well established that a reviewing court must presume that the record contains evidence to support every finding of fact, and an appellant who contends that some particular finding is not supported is required to set forth in his brief a summary of the material evidence upon that issue. Unless this is done, the error assigned is deemed to be waived. [Citation.] It is incumbent upon appellants to state fully, with transcript references, the evidence which is claimed to be insufficient to support the findings.’ [Citations.]” (In re Marriage of Fink (1979) 25 Cal.3d 877, 887, italics added; accord, e.g., Road Sprinkler Fitters Local Union No. 669 v. G & G Fire Sprinklers, Inc. (2002) 102 Cal.App.4th 765, 781-782; Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.)
Moreover, an appellant has the burden of providing an adequate record for the review of the issues the appellant intends to raise. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140-1141.) All of the material evidence germane to each argument must be presented, not just the evidence favoring the appellant. (Cal. Rules of Court, rule 8.204(a)(2)(C); Foreman & Clark Corp. v. Fallon, supra, 3 Cal.3d at p. 881; In re S.C. (2006) 138 Cal.App.4th 396, 402.)
In the present case, the statement of facts in appellants’ opening brief details only the evidence favoring appellants’ contentions. Moreover, it contains no citations whatsoever to the reporter’s transcript. Instead, it is supported only by a few scattered references to the exhibits introduced into evidence at trial. However, none of these references is supported by a page citation to appellants’ appendix.
Appellants’ failure to include in their appendix the exhibits relied upon in their opening brief violates California Rules of Court, rule 8.124(b)(1)(B), which requires an appellant’s appendix to include exhibits that are “necessary for proper consideration of the issues.” Compounding this error is the fact that appellants’ appendix includes numerous documents filed with the trial court that are not pertinent to the issues raised on appeal, thus violating California Rules of Court, rule 8.124(b)(2)(A).
For all of the foregoing reasons, to the extent that appellants’ substantive contentions on appeal rest on challenges to the trial court’s factual findings, we deem those challenges to have been waived. Accordingly, we address ourselves only to issues that pertain to the legal consequences of those factual findings.
F. Forfeiture of Rights to Wisteria Property and
Appellants contend that the trial court erred in finding that their right under the settlement agreement to regain ownership of the Wisteria property had lapsed due to their failure to comply with the conditions on that right within a reasonable time. Appellants contend that they should have received at least as much time to comply with the conditions imposed on them as the settlement agreement allowed respondents to pay off their debt on the Milpitas property. The settlement agreement does not so provide, however, and appellants do not contend that the trial court erred in interpreting it to provide for a reasonable time limit.
The question of whether a party complied with the conditions of a contract within a reasonable time is one for the trier of fact. (See generally Brasher’s Cascade Auto Auction v. Valley Auto Sales & Leasing (2004) 119 Cal.App.4th 1038, 1059 [“Generally, questions of reasonableness are regarded as questions of fact or mixed questions of law and fact. [Citation.]”]); April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 832-833 [whether plaintiff exercised reasonable diligence in discovering facts giving rise to cause of action is question for trier of fact]; Schwartz v. Helms Bakery Limited (1967) 67 Cal.2d 232, 237-238, fn. 3 [in the tort context, reasonableness is a mixed question of law and fact traditionally answered by juries].) Appellants have not presented sufficient argument or authority to persuade us that the trial court erred in finding that the interval of over four years between the execution of the settlement agreement and the trial in this action was sufficient.
Appellants also argue that the trial court “improperly refused to consider” their motion for relief from forfeiture. It is clear from the record, however, that the trial court fully considered appellants’ motion, but did not find it persuasive. Nor do we.
2. Respondents’ Interference with Appellants’ Exercise of Contractual Rights
Throughout this litigation, appellants have taken the position that respondents interfered with their attempts to comply with the conditions placed by the settlement agreement on their ability to regain ownership of the Wisteria property. Specifically, appellants argue on appeal that respondents prevented them or their nominee from getting a license to operate the facility, and refused to provide documents they needed in order to obtain financing to pay off respondents’ loans from Zion’s Bank and Comerica Bank.
The trial court expressly found, however, that “[appellants] did not produce competent evidence that [respondents’] actions contributed to [appellants’] inability to obtain a license from the Department of Health Services,” and that “[appellants] did not produce any competent evidence that [respondents’] actions contributed to [appellants’] inability to pay off or assume the Zion’s Bank and/or Comerica Bank loans encumbering the Wisteria [p]roperty.” For the reasons stated ante, appellants have waived any right to challenge these findings on appeal.
Appellants also contend that respondents failed to comply with the terms of the settlement agreement by not arranging to clear any cloud on the title to the Wisteria property caused by the Taburazas’ interest therein. The trial court found that “the transfers to the Taburazas occurred before the execution of the [s]ettlement [a]greement and were disclosed to [appellants],” and therefore did not constitute a breach of the agreement. Appellants have waived any right to challenge this finding on appeal.
This argument appears in appellants’ brief under the heading dealing with respondents’ alleged interference with appellants’ efforts to comply with the settlement conditions. It more properly constitutes a separate argument that respondents themselves failed to comply with the settlement agreement’s terms.
Moreover, the settlement agreement did not obligate respondents to clear the title to the Wisteria property. Rather, it provided that respondents would “hold [appellants or their] nominee harmless from any claim by the Taburazas related to the Wisteria transfer.” Because, as the trial court found, appellants never fulfilled the conditions that would have entitled them to have title to the Wisteria property transferred to them, the issue of any potential claim by the Taburazas never ripened. Accordingly, neither did respondents’ obligation to hold appellants harmless from such a claim.
In any event, respondent Floro Zarate testified at trial, without contradiction, that respondents had paid the Taburazas what they owed them, and that they had an understanding with the Taburazas that the latter would comply with the court’s decision with respect to ownership of the Wisteria property. Given the language of the settlement agreement, and appellants’ waiver of any challenge to the sufficiency of the evidence to uphold the trial court’s findings, this testimony is adequate to establish that respondents did not breach the settlement agreement with respect to the Taburazas’ interest in the Wisteria property.
3. Respondents’ Repudiation of Settlement Agreement
Finally, appellants argue that the trial court erred in rejecting their claim that respondents’ communications with the California Department of Health Services regarding their license application constituted a repudiation of the settlement agreement. Here again, appellants’ argument founders on the trial court’s factual findings.
As already noted, the court found that appellants did not show that respondents’ communications with the Department of Health Services contributed to their inability to obtain a license. A fortiori, those communications cannot have amounted to a repudiation of the contract.
Disposition
The judgment is affirmed. Respondents are awarded their costs on appeal.
We concur: Reardon, J., Sepulveda, J.