Schauerman v. Noble

Filed 3/25/09 Schauerman v. Noble CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

Plaintiff brought an action for specific performance of an agreement for the sale of real property to him from defendant. Following trial before the court in two phases, a verdict was entered in favor of plaintiff. Defendant challenges two findings made by the court: first, that performance of a condition precedent in the contract between the parties was subject to waiver by plaintiff; and second, that the remedy of specific performance of the contract was not barred by the equitable doctrine of unclean hands. We conclude that defendant has failed to show lack of substantial evidence to support the trial courts findings, and affirm the judgment.

STATEMENT OF FACTS[1]

Defendant owned a 7.39-acre parcel of real property adjacent to Highway 101 in unincorporated Del Norte County that she proposed to divide into three parcels for sale. In November of 2004, defendant entered into separate contracts to sell two of the parcels: one, with plaintiff Samuel Schauerman, to sell him a 2.89-acre parcel (designated as parcel 1) for the amount of $135,000; and another, to sell a two-acre parcel (designated as parcel 2) to Jack and Linda Martin for the amount of $75,000. Defendant retained ownership of the third parcel.

Plaintiff and the Martins paid defendant deposits, as specified in the two agreements. Defendant agreed to obtain approval from the county for the division of the single lot into three parcels, and within 60 days after the lot split was completed the balance of the purchase price for each of the two sold parcels was to be paid by the buyers. The parties contemplated that approval for the lot split would be obtained in three to four months. The agreement with plaintiff contained the following provision (the access contingency) which is at issue in this appeal: This sale is contingent on seller obtaining additional access to the property from Turnbull Lane in addition to the deeded easement. The access contingency was added to the agreement at the request of plaintiff and his father.

About a month after the contract was executed plaintiff began to occupy a house on parcel 1, in accordance with another provision of his agreement with defendant that specified he shall have possession of the property prior to the completion of this sale. Defendant continued to make the mortgage payments on the property. Plaintiff refused to enter into a rental agreement with defendant or pay rent to her while she attempted to effectuate the lot split. Pursuant to the agreement defendant rather than plaintiff paid the property taxes on the parcel before the lot split. Plaintiff did carry liability insurance on the property as provided in the contract, and made improvements to the property particularly interior painting and sheet rocking after he took possession.

On January 25, 2005, defendant learned that she could not get approval for access to parcel 1 from Turnbull Lane, and so advised plaintiff of the failure of the contingency. Plaintiff informed defendant that he waived the access contingency, and directed her to proceed with the lot split. Defendant agreed to do so, although she complained to plaintiff that she needed an additional $7,500 to defray the increased costs incurred to complete improvements necessary to obtain the lot split.[2]

By February of 2006, plaintiff was still living on the property and defendant had yet to obtain approval for the lot split. Defendant brought an unlawful detainer action against plaintiff to evict him from the property. Plaintiff and the Martins brought an action for specific performance of their agreements against defendant.[3]

The proceeding was bifurcated, with the first phase of the trial devoted to determining the meaning, scope and enforceability of the access contingency in the agreement between defendant and plaintiff. Following a hearing on January 17, 2007, which by stipulation of the parties was not reported, the court found that the access contingency was included in the contract for the sole benefit of plaintiff and was subject to waiver by him. Therefore, the court further found, plaintiff validly waived the access contingency and the contract was not rescinded due to failure of the contingency.

At the second phase of the trial defendant argued that following the execution of the contract plaintiff and his father acted in an inequitable or oppressive manner in relation to the lot split and sale of the property, which demonstrated unclean hands and negated their entitlement to specific performance of the contract. Defendant testified in support of her unclean hands defense that on February 6, 2007, she enlisted the Roto-Rooter company to check the septic lines and leach fields on Parcel 1 as part of the drainage work on the property. Defendant offered evidence that plaintiffs presence on the property may have caused the cessation of the work that day, although nothing indicates that plaintiff took any action to prevent the completion of the project.[4]

Also in February of 2006, a contractor visited Parcel 1 to make an inspection and give defendant an estimate of the cost of excavation work necessary to complete the lot split. Defendant testified that plaintiff swore and yelled, Get off my property. Plaintiff countered that he directed defendant to leave the property only after she appeared on the premises to do some work and started screaming at him in vulgar language.

Evidence of a rather confusing nature was also presented that in 2005 clean fill soil was dumped on the property at the instigation of defendant to backfill a drainage ditch. After consulting with defendant, plaintiff granted the county permission to dump additional soil in the same area in September of 2005. Some of the soil dumped by the county trucks had asphalt and rebar in it, which was unsuitable and illegal for use as fill, so defendant asked the county to not bring any more fill onto the property. According to defendant, the county failed to remove the illegal material until a month later, which caused a further delay in completion of the drainage work.

The evidence also shows without dispute that obtaining the lot split was much more costly and difficult than the parties contemplated. Defendant spent a total of nearly $40,000 to acquire approval for the lot split. By the date of the second phase of the trial, defendant had satisfied all of the obligations imposed by the various county agencies for approval of the lot split, with the exception of the sole and rather perfunctory requirement of designating a name for the frontage road and installing a road sign.

At the conclusion of the second phase of the trial the court found that plaintiff established the elements necessary to obtain specific performance of the agreement, and defendant failed to prove unclean hands on the part of plaintiff that might provide defendant grounds for rescission of the contract. Specific performance of the contract was ordered. After the lot split was completed a receiver was appointed to execute the documents necessary to transfer ownership of Parcel 1 to plaintiff. This appeal followed.

I. The Finding that the Access Contingency was Included in the Contract for Plaintiffs Benefit.

Defendant argues that the trial court erred by interpreting the access contingency as a condition included in the agreement solely for plaintiffs benefit. She directs our attention to the language in the contingency provision that uses the word sale not purchase,  which she maintains supports the finding that the contingency was for the benefit of the seller and at most for the benefit of both the buyer and the seller. Defendant also suggests that the extrinsic evidence necessary to discern the intent of the parties is inconsistent with the trial courts interpretation of the contingency. She urges that the trial courts interpretation fails to represent the mutual intention of the parties, and claims that the failure of the access contingency to occur precludes enforcement of the contract.

An established rule of contract law is that where the defendants duty to perform under the contract is conditioned on the happening of some event, the plaintiff must prove the event transpired. (Consolidated World Investments, Inc. v. Lido Preferred Ltd. (1992) 9 Cal.App.4th 373, 380; Cochran v. Ellsworth (1954) 126 Cal.App.2d 429, 440441.) However, The performance of a condition may be legally excused on several different grounds. [Citations.] When a condition is legally excused, the obligation of the other contracting party becomes unconditional and may be enforced. (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 319.)

Waiver of a condition precedent may eliminate an excuse for nonperformance. It is well settled a contracting party may waive conditions placed in a contract solely for that partys benefit. (Sabo v. Fasano (1984) 154 Cal.App.3d 502, 505; see also Ball v. McDonnell Douglas Corp. (1973) 30 Cal.App.3d 624, 629; Isaacson v. G. D. Robertson & Co. (1948) 85 Cal.App.2d 71, 75.) Conditions precedent in a contract, like any other contractual terms, are subject to waiver by the party for whose benefit they are made. (See 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, 767, p. 694 [A condition may be waived; i.e., the party whose duty is dependent upon the other partys performance of a condition may make his duty independent, binding himself to perform unconditionally. . . .].) (Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1339, italics & fn. omitted.) Whether there has been a waiver of a provision in a contract is a question of fact, and a finding of waiver must be upheld on appeal if it is supported by substantial evidence. (National Farm Workers Service Center, Inc. v. M. Caratan, Inc. (1983) 146 Cal.App.3d 796, 803.)

A glaring deficiency in the record defeats defendants contention that the evidence fails to support the finding that the access contingency was for plaintiffs sole benefit and was validly waived by him. A record of the first phase of the trial was not prepared and is not part of the record on appeal. As defendant has acknowledged, the trial court relied on extrinsic evidence to interpret the meaning of the access contingency, and specifically to determine whether it was intended to benefit her instead of or as well as plaintiff. Without a record, we do not have that evidence before us and we cannot review it.

In our review of the trial courts ruling, we must adhere to the rule that,  an order of the lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.  [Citation.] (Generale Bank Nederland v. Eyes of the Beholder Ltd. (1998) 61 Cal.App.4th 1384, 1398; see also Bennett v.McCall (1993) 19 Cal.App.4th 122, 127.) By taking this appeal, defendant assumed the burden of showing reversible error by an adequate record. [Citation.] (Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998) 65 Cal.App.4th 1422, 1433; see also Stevens v. Owens-Corning Fiberglas Corp. (1996) 49 Cal.App.4th 1645, 1657.) It is the burden of appellant to provide an accurate record on appeal to demonstrate error. Failure to do so precludes an adequate review and results in affirmance of the trial courts determination. (Estrada v. Ramirez (1999) 71 Cal.App.4th 618, 620, fn. 1; see also Davenport v. Unemployment Ins. Appeals Bd. (1994) 24 Cal.App.4th 1695, 1700.) A necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed. [Citations.] (Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416.)

Where, as here, conflicting extrinsic evidence has been admitted and considered as an aid to the interpretation of a contract provision, we cannot disturb any reasonable construction of the agreement by the trial court which is supported by substantial evidence. (In re Marriage of Fonstein (1976) 17 Cal.3d 738, 746747; McCrary Construction Co. v. Metal Deck Specialists, Inc. (2005) 133 Cal.App.4th 1528, 1535; Winet v. Price (1992) 4 Cal.App.4th 1159, 11651166.) Having failed to provide us with the record necessary to review the evidence relied on by the trial court to resolve the factual issue presented, defendant has no basis upon which to demonstrate that the evidence adduced at trial was insufficient to support the trial courts finding. (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132.) Without the proper record, we cannot evaluate issues requiring a factual analysis. (Pringle v. La Chapelle (1999) 73 Cal.App.4th 1000, 1003.) We must presume that the trial courts interpretation of the contract is supported by substantial evidence. (See State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 610; Generale Bank Nederland v. Eyes of the Beholder, Ltd., supra, 61 Cal.App.4th 1384, 13981399.) Failure to provide an adequate record on an issue requires that the issue be resolved against appellant. (Barak v. The Quisenberry Law Firm (2006) 135 Cal.App.4th 654, 660; see also In re Marriage of Wilcox (2004) 124 Cal.App.4th 492, 498.)[5]

II. Defendants Defense of Unclean Hands.

We turn to defendants assertion that plaintiffs unclean hands associated with the property transaction should negate any right he has to specific performance of the contract. Defendant directs our attention to three instances of plaintiffs unconscionable conduct which, she argues, requires a balancing of the equities between the parties in her favor and defeats the claim for specific performance: his interaction with a Roto-Rooter employee in February of 2007, that resulted in cessation of necessary drainage work on the property; his verbal conflict with a contractor the same month that prevented defendant from obtaining an estimate for drainage work; and, [m]ost blatantly, the illegal refuse he had dumped on the property. Defendant maintains that plaintiffs obstructionist actions resulted in delays to the accomplishment of the subdivision of the property required by the contract.

Unclean hands is an affirmative defense in actions seeking equitable relief. (Wilson v. S.L. Rey, Inc. (1993) 17 Cal.App.4th 234, 244.) Plaintiffs action for specific performance brought into play equitable principles and rights between parties, and justified assertion of an unclean hands defense by defendant. (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 847.) We deal here with . . . an equitable proceeding [citation], to which equitable doctrines are applicable. [Citation.] One of these is the rule that he who comes into equity must come with clean hands. [Citation.] (Rosenfeld, Meyer & Susman v. Cohen (1987) 191 Cal.App.3d 1035, 1061.)

Unclean hands is an equitable rationale for refusing a plaintiff relief where principles of fairness dictate that the plaintiff should not recover, regardless of the merits of his claim. It is available to protect the court from having its powers used to bring about an inequitable result in the litigation before it. (Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76 Cal.App.4th 970, 985.) The [unclean hands] doctrine demands that a plaintiff act fairly in the matter for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of his claim. [Citation.] (Yu v. Signet Bank/Virginia (2002) 103 Cal.App.4th 298, 322.) A finding of unclean hands requires inequitable conduct by the plaintiff in connection with the matter in controversy and provides a complete defense to the plaintiffs action. (Dickson, Carlson & Campillo v. Pole (2000) 83 Cal.App.4th 436, 446.) Unclean hands applies when it would be inequitable to provide the plaintiff any relief, and provides a complete defense to both legal and equitable causes of action. (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 56.)

Whether the defense applies in particular circumstances depends on the analogous case law, the nature of the misconduct, and the relationship of the misconduct to the claimed injuries. [Citation.] The decision of whether to apply the defense based on the facts is a matter within the trial courts discretion. (Dickson, Carlson & Campillo v. Pole, supra, 83 Cal.App.4th 436, 447; see also CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 641; Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th 612, 623.)

We review the trial courts finding that defendant failed to establish an unclean hands defense under the deferential substantial evidence standard. (CaliforniaSchool Employees Assn., Tustin Chapter No. 450 v. Tustin Unified School Dist. (2007) 148 Cal.App.4th 510, 521; In re Marriage of Dancy (2000) 82 Cal.App.4th 1142, 1157.) Under this standard of review, our duty begins and ends with assessing whether substantial evidence supports the verdict. [Citation.] [The] reviewing court starts with the presumption that the record contains evidence to sustain every finding of fact. [Citation.] We review the evidence in the light most favorable to the respondent, resolve all evidentiary conflicts in favor of the prevailing party and indulge all reasonable inferences possible to uphold the [judgment]. (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 908.)

While plaintiffs conduct may have been generally related to the matter in controversy that is, the property transaction and more specifically defendants obligation to pursue and obtain the lot split we are not persuaded that the trial court abused its discretion by finding that the defense of unclean hands was not established by defendant. In none of the incidents cited by defendant did plaintiff affirmatively seek to impede or delay efforts to complete the lot split. Plaintiff testified that he did not attempt to prevent the Roto-Rooter employee from performing the drainage work, but rather at most disclosed that he was the occupant of the property. The other incident was merely part of the ongoing personal animosity between the parties, and seems from the evidence presented to be as much the fault of defendant as plaintiff. The dumping of unsuitable debris at the drainage ditch was an unfortunate mistake or misunderstanding that was primarily attributable to the actions of the county, not any misconduct by plaintiff. Further, plaintiff had no reason to delay the consummation of the transaction; to the contrary, all evidence indicates that he was eager to obtain the lot split and with it his ownership of the property. We do not find that plaintiff engaged in unconscionable, bad faith, or inequitable conduct.

And finally, none of the actions taken by plaintiff had any appreciable impact on the ultimate performance of the contract by defendant. At most, in the context of the entire transaction plaintiffs actions may have caused inconsequential conflicts or delays in the final approval of the lot split and transfer of ownership to him.[6] [T]here must be a direct relationship between the misconduct and the claimed injuries . . .  so that it would be inequitable to grant [the requested] relief.   [Citation.] The issue is not that the plaintiffs hands are dirty, but rather   that the manner of dirtying renders inequitable the assertion of such rights against the defendant.    [Citation.] The misconduct must   prejudicially affect . . . the rights of the person against whom the relief is sought so that it would be inequitable to grant such relief.   [Citation.] (Kendall-Jackson Winery, Ltd. v. Superior Court, supra, 76 Cal.App.4th 970, 979.)  The defense of unclean hands does not apply in every instance where the plaintiff has committed some misconduct in connection with the matter in controversy, but applies only where it would be inequitable to grant the plaintiff any relief. [Citation.] (OFlaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1099; see also California School Employees Assn., Tustin Chapter No. 450 v. Tustin Unified School Dist., supra, 148 Cal.App.4th 510, 523.) Substantial evidence supports the trial courts determination that plaintiffs actions did not constitute unclean hands or other inequitable conduct that precludes granting him specific performance of the contract. (Golden West Baseball Co. v. City of Anaheim (1994) 25 Cal.App.4th 11, 42.)[7]

Accordingly, the judgment is affirmed.

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[1] We are severely impaired in our recitation of the pertinent facts by defendants failure to provide an adequate record on appeal, specifically, a reporters transcript of the first phase of the trial on January 17, 2007. It appears that those proceedings were not reported. Our statement of facts will accordingly be somewhat abbreviated, by necessity rather than by choice.

[2] Plaintiff declined to agree to any increase in the purchase price of the property. The Martins agreed to pay defendant an additional $7,500 beyond the contract price to assist her with the costs associated with the lot split.

[3] At trial, defendant did not contest the transaction with the Martins, and stipulated to carry out voluntarily all actions necessary to transfer property to them as specified in the agreement between them.

[4] A receipt from Roto-Rooter for the date February 6, 2007, states: Stopped work upon arrival of property owner. We do not work on other peoples property without their permission. Plaintiff testified that he talked to the Roto-Rooter worker, but did not request that he leave the premises or do anything else to prevent completion of the work. Defendant also testified that the work was finished.

[5] We realize that defendant is a pro per litigant who is not versed in imparting arguments to the court. Nevertheless, we cannot overlook serious deficiencies in the presentation of defendants case to this court which prevent our review on appeal.  When a litigant is appearing in propria persona, [s]he is entitled to the same, but no greater, consideration than other litigants and attorneys [citations]. [Citations.] (Harding v. Collazo (1986) 177 Cal.App.3d 1044, 1056.)

[6] And we observe that plaintiff has neither sought nor been awarded any damages for the delay in the transfer of the property to him.

[7] In light of our conclusions we also reject defendants claim that based upon the above arguments the court erred in appointing a receiver to execute the escrow documents.

* Retired judge of the Superior Court of Marin County, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.