Colonies-Pacific 19A v. Best Buy Stores CA4/2 ( 2013 )

Filed 12/12/13 Colonies-Pacific 19A v. Best Buy Stores CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.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
FOURTH APPELLATE DISTRICT
DIVISION TWO
THE COLONIES-PACIFIC 19A, LLC,
Cross-complainant and Appellant, E055373
v. (Super.Ct.No. CIVRS913003)
BEST BUY STORES, L.P., OPINION
Cross-defendant and Respondent.
APPEAL from the Superior Court of San Bernardino County. David A.
Williams, Judge. Affirmed.
Gresham, Savage, Nolan & Tilden, Theodore K. Stream and Jamie E. Wrage for
Cross-complainant and Appellant.
Robins, Kaplan, Miller & Ciresi, Michael A. Geibelson and Edward D. Lodgen
for Cross-defendant and Respondent.
Cross-defendant and respondent Best Buy Stores, L.P. (Best Buy) sued cross-
complainant and appellant The Colonies-Pacific 19A, LLC (the Colonies) requesting
the trial court declare the real property lease between the parties was not amended and
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that the lease had been breached by the Colonies. The Colonies cross-complained
raising causes of action for (1) breach of contract, (2) promissory estoppel, (3) breach of
the covenant of good faith and fair dealing, (4) fraud, and (5) declaratory relief. The
trial court granted summary judgment in favor of Best Buy, finding the lease was not
amended and the Colonies breached the contract.
The Colonies raises six issues on appeal along with subissues. First, the
Colonies asserts the trial court erred because the Colonies raised triable issues of
material fact concerning the breach of contract cause of action. Specifically, the
Colonies faults the trial court for not considering issues of waiver and equitable
estoppel. Second, the Colonies asserts the trial court erred in regard to the breach of the
covenant of good faith and fair dealing cause of action because there are disputed issues
of fact concerning waiver and equitable estoppel. Third, the Colonies contends the trial
court erred because the Colonies raised triable issues of material fact for the promissory
estoppel cause of action. Specifically, the Colonies asserts there is conflicting evidence
concerning the existence of a clear promise and reasonable reliance on that promise.
Fourth, the Colonies contends the trial court erred because the Colonies raised
triable issues of material fact for the fraud cause of action, in particular, the element of
justifiable reliance. Fifth, the Colonies asserts the trial court erred in granting summary
judgment on the declaratory relief action for the same reasons it erred in the other
causes of action. Sixth, the Colonies asserts the trial court erred by excluding experts’
declarations. The first five issues in this case could be summarized as follows: Do
principles of waiver and/or estoppel apply to a breach of contract when a landlord does
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not commence construction per a lease agreement because people who were not
signatories to the lease are negotiating a possible amendment to the lease concerning
delaying the construction dates? We affirm the judgment.
FACTUAL AND PROCEDURAL HISTORY
James Costanzo (Costanzo) was an associate partner for Pacific Development
Group.1 Fred Karp (Karp) and Melissa Moseley (Moseley) were directors of real estate
for Best Buy Co., Inc.2 [Redacted Text.]
On April 22, 2008, the Colonies and Best Buy entered into a lease agreement.
Per the lease, Best Buy would rent space in the Colonies Crossroads Shopping Center,
located in Upland. The lease provided the Colonies would commence constructing Best
Buy’s store by May 15, 2009. The lease granted Best Buy the right to cancel the lease if
construction did not commence by May 15, 2009. Per the lease, construction was
scheduled to be completed by April 15, 2010. Any amendments to the lease were
required to be made in writing.
Signatories to the lease agreement on behalf of the Colonies included (1) Daniel
W. Richards, Managing Member of BGRW Lakes, LLC; (2) Jeffrey S. Burum,
Managing Member of BGRW Lakes, LLC; (3) Arn K. Youngman, Trustee of the Arn
K. Youngman Trust, General Partner of Pacific Development Group II; and (4) Dennis
1Pacific Development Group II, as opposed to Pacific Development Group, is a
member of Pacific-Upland, LLC, which is a member of the Colonies.
2 The party involved in this lawsuit and named in the lease is Best Buy Stores,
L.P. as opposed to Best Buy Co., Inc.
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M. Berryman, Trustee of the Berryman Family Trust, General Partner of Pacific
Development Group II. Pat Matre, Vice President of Real Estate for BBC Property Co.,
signed for Best Buy.
In addition to Best Buy, the shopping center would include Nordstrom’s Rack,
BevMo, Tilly’s, Fresh & Easy, and Red Robin. On December 12, 2008, Costanzo sent
an e-mail to Karp reflecting construction of the Best Buy store could commence on May
11, 2009, and be completed on December 11, 2009; however, BevMo and Tilly’s would
not be completed until February 15, 2010, while Nordstrom’s Rack, Fresh & Easy, and
Red Robin would not be completed until April 15, 2010. Costanzo wrote, “So if you go
ahead of everyone you would be the only tenant standing in a big parking lot. If you
want to move to the Nordstrom’s schedule then obviously there will [be] more of a
center and less construction interference. Let me know what you would like to do.”
[Redacted Text.]
On February 27, 2009, Kenneth Wolfson (Wolfson), a member of the law firm
representing the Colonies, sent a draft lease amendment to a paralegal in Best Buy’s
“Legal—Real Estate” Department. The amendment reflected construction would
commence on or before November 15, 2009, instead of the originally agreed upon May
15, 2009. On February 27, a senior paralegal at Best Buy informed Wolfson that she
was waiting for responses from people at Best Buy concerning the proposed date
changes in the draft amendment. On March 1, 2009, via e-mail, Karp informed
Costanzo that he was moving to a different position within Best Buy. Karp asked if
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Costanzo would be available to finalize the lease amendment because it would be better
to “finish th[e] amendment rather than pass it on to someone else.”
Between March 9 and 12 Karp and Costanzo continued e-mailing each other
trying to find a time to talk to one another. On March 27, Costanzo sent an e-mail to
Karp: “I haven’t heard anything on the revised amendment that we sent out last week.
Any update?” Karp replied that he was in Miami but would check on the lease
amendment the following week. On April 1, Costanzo sent another e-mail to Karp:
“[A]ny update on our amendment? Please let me know.” On April 21, Karp replied
that he had reviewed the amendment with two people, including Moseley, and Moseley
would “get the amendment resolved.” [Redacted Text.]
On April 22, Costanzo sent an e-mail to Moseley explaining that he was “trying
to get the Best Buy and Nordstrom’s Rack schedule on the same track.” Costanzo
expressed hope that the amendment would be signed soon. [Redacted Text.]
On June 15, Costanzo sent an e-mail to Moseley reflecting Best Buy made a
proposal that the rent on the store be lowered to $18 per square foot in exchange for a
construction commencement date of February 28, 2010. Costanzo believed he could
“convince the partners” to lower the rent to $20 per square foot “[i]n order to end any
dispute.” Moseley responded that she would not be able to get approval for anything
higher than $19.25 per square foot. Moseley also asked Costanzo to clarify information
pertaining to the scheduled possession date of the store in light of the new construction
dates. Moseley set forth the optimal possession dates for Best Buy.
[Redacted Text.]
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On November 23, 2009, Best Buy filed a complaint for declaratory relief. Best
Buy alleged the Colonies (1) breached the lease by not commencing construction on
May 15, 2009, (2) anticipatorily breached the lease by (a) admitting it could not meet
the scheduled possession date and the substantial completion date; (b) refusing to build
the store pursuant to the design modifications provided by Best Buy; and (c) not
constructing the shopping center in a manner consistent with the site plan. Best Buy
further alleged that if the amendment to the lease were valid, then the amendment was
also breached due to the Colonies not commencing construction by November 15, 2009.
Best Buy requested the trial court declare the lease (and amendment to the extent it was
valid) terminated as a result of the actions and inactions of the Colonies.
The Colonies filed a first amended cross-complaint against Best Buy raising
causes of action for (1) breach of contract, (2) promissory estoppel, (3) breach of the
covenant of good faith and fair dealing, (4) fraud, and (5) declaratory relief. The
Colonies alleged it complied with every aspect of the lease except commencing
construction because it relied on Best Buy’s “repeated promises” concerning modifying
the construction schedule. The Colonies faulted Best Buy for not executing the
amendment to the lease “until it was impossible for the Colonies to comply with the
original dates under the Lease.” The Colonies asserted it would have commenced
construction on or before May 15, 2009, if not for Best Buy’s actions.
Best Buy moved for summary judgment. Best Buy asserted (1) the lease was not
amended, and (2) the Colonies failed to commence construction on May 15, 2009, so
therefore Best Buy had a right to cancel the lease. As a result, Best Buy contended it
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did not breach the lease. The Colonies opposed the motion. The Colonies conceded it
did not commence construction on May 15, 2009, but asserted it failed to do so because
the lease was modified to reflect construction would be delayed. As a result, the
Colonies argued it was not required to commence construction on May 15.
Further, the Colonies asserted the lease modification did not create new
construction dates. Rather, the modification reflected only that the construction work
would commence on the “Nordstrom’s Rack construction schedule.” The Colonies
asserted this evidence created a triable issue of fact, which should result in summary
judgment being denied. In regard to equity, the Colonies asserted Best Buy (1) waived
its right to enforce the May 15 commencement date “when it asked and agreed to extend
the date”; and (2) was estopped from requiring the Colonies to meet the construction
schedule in the lease due its own actions, upon which the Colonies relied.
The trial court issued a tentative ruling finding it was undisputed the Colonies
failed to commence construction on May 15, and therefore “Best Buy did have the right
to terminate the lease.” In regard to the waiver and estoppel arguments of the Colonies,
the trial court found the contentions to be unpersuasive because Karp did not have the
authority to bind Best Buy and Costanzo did not have the authority to bind the Colonies;
as a result the trial court concluded there was not an amendment, modification, or
promise the Colonies could have reasonably relied upon. Thus, the trial court
tentatively concluded, “Best Buy terminated the lease agreement in accordance with the
terms of the lease agreement and it did not breach the contract.”
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As to the covenant of good faith and fair dealing, the trial court found Best Buy
continued negotiating with the Colonies after May 15, but the Colonies never provided a
firm commencement date due to ongoing negotiations with another tenant. Further, the
court found Best Buy’s attempts to lower the rent due to the construction delays did not
indicate bad faith given the “sluggish economy” and that “rent concessions are
common.” The court held there were no triable issues of material fact for the good faith
and fair dealing cause of action.
In regard to promissory estoppel and fraud, the trial court found Karp’s e-mail
about preferring to open with the rest of the stores in the shopping center did not
constitute a clear promise, because Karp did not have the authority to modify the
contract. The court found Karp was merely stating his preference. For the factor of
reliance, the trial court concluded there was evidence that Costanzo acknowledged an
amendment to the lease would be required and that the Colonies had difficulty finding a
new date to commence construction, thus the Colonies could not have justifiably relied
on Karp’s e-mail as a modification to the lease. Since reliance could not be shown, the
trial court concluded the promissory estoppel and fraud causes of action both failed.
Thus, the court tentatively granted summary judgment in favor of Best Buy on the
cross-complaint of the Colonies.
At the hearing on the motion, the Colonies argued: (1) Karp and Costanzo had
authority to modify the lease, or (2) there was a triable issue of fact as to whether they
had authority to modify the lease. The Colonies asserted Karp was a director of real
estate at Best Buy and the only point of contact for the construction project, so the
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Colonies could reasonably rely on Karp’s representations. The trial court remarked the
evidence reflected a Best Buy real estate committee was involved in the lease
negotiations, which put the Colonies on notice that a committee—not just Karp—was
involved in the lease process. Additionally, the court noted Karp commented that the
lease needed to be amended, which also put the Colonies on notice of Karp’s authority
or lack thereof.
The Colonies argued that the real estate committee was only relevant to new
leases, not modifications of existing leases, so Karp could be found to have ostensible
authority to modify the lease. The trial court responded that the evidence reflected Karp
did not have authority to bind Best Buy “on his own.”
In regard to waiver, the Colonies asserted Best Buy waived its right to terminate
the contract based upon the failure to commence construction, because the Colonies
ceased proceeding with construction due to Best Buy’s “request.” In regard to reliance,
the Colonies argued that only “rare cases” are removed from the jury on the issue of
reliance, because it is typically a factual question. The Colonies asserted this was not a
rare case and the issue should be presented to a jury because Karp had ostensible
authority and the modified agreement involved scheduling Best Buy to open with the
rest of the stores in the shopping center—not to commence construction on a specific
date. The trial court responded that it was not reasonable to rely on the e-mails when
(1) there was a contract reflecting a specific construction commencement date, and
(2) the e-mails reflected the need for an amendment to the lease.
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In closing, the Colonies asserted “reasonable minds could differ as to the facts,”
and therefore the matter should be presented to a jury. The trial court said there was
nothing in the evidence reflecting Karp had the authority to amend or modify the lease
on his own. The trial court granted summary judgment in favor of Best Buy on the
cross-complaint of the Colonies. Best Buy asserted that since its complaint involved
only a request for declaratory relief, then the trial court’s ruling on the declaratory relief
cause of action of the Colonies was essentially a finding on Best Buy’s complaint. In
response, the trial court declared the lease was not amended and was properly
terminated by Best Buy. The court designated Best Buy the prevailing party.
DISCUSSION
A. 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. [Citation.]’
[Citation.] A motion for summary judgment is properly granted ‘if all the papers
submitted show that there is no triable issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.’ [Citation.]” (Biancalana v. T.D.
Service Co. (2013) 56 Cal. 4th 807, 813.)
B. BREACH OF CONTRACT: WAIVER
The Colonies contends the trial court erred by granting summary judgment on the
breach of contract cause of action, because Best Buy waived its right to terminate the
contract for failure to commence construction on a certain date.
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“Like any other contractual terms, timeliness provisions are subject to waiver by
the party for whose benefit they are made. [Citation.]” (Galdjie v. Darwish (2003) 113
Cal. App. 4th 1331, 1339, fn. omitted.) “Case law is clear that ‘“[w]aiver is the
intentional relinquishment of a known right after knowledge of the facts.” [Citations.]
The burden . . . is on the party claiming a waiver of a right to prove it by clear and
convincing evidence that does not leave the matter to speculation, and “doubtful cases
will be decided against a waiver” [citation].’ [Citations.] The waiver may be either
express, based on the words of the waiving party, or implied, based on conduct
indicating an intent to relinquish the right. [Citation.]” (Waller v. Truck Ins. Exchange,
Inc. (1995) 11 Cal. 4th 1, 31.)
The evidence reflects Costanzo gave Best Buy the option of proceeding with
construction as scheduled or delaying construction in order for Best Buy to open with
the other stores in the shopping center. Karp informed Costanzo that his preference
would be delaying construction, but the lease should be amended. The draft amendment
to the lease was never executed. [Redacted Text.]
Given the foregoing evidence, there is nothing indicating Best Buy either
expressly or impliedly waived a right to have construction commence on May 15, 2009.
Karp’s e-mail expressly reflected an amendment to the lease should be executed. The
only reasonable inference to be drawn from this evidence is that the modified dates
would not be effective unless the lease were formally amended. Given that the
amendment was never signed, Best Buy did not waive its right to have construction
commence on May 15. Accordingly, we conclude the trial court did not err by finding
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there was not a triable issue of material fact as to waiver, because the evidence does not
support a finding that Best Buy voluntarily relinquished its right to have construction
commence on or before May 15.
The Colonies asserts there is a triable issue of fact concerning waiver [redacted
text]. The Colonies argument is not persuasive because the evidence reflects Karp set
forth his preference that the construction be delayed, but wrote that an amendment to
the lease should be executed. The only reasonable inference to draw from this evidence
is that execution of the amendment needed to be complete in order for a waiver of the
construction dates to be effective. Thus, without the amendment, there was no waiver.
Next, in support of its argument, the Colonies highlights an e-mail Karp sent to
Moseley, in which Karp [redacted text]. The Colonies asserts this evidence creates a
triable issue of material fact as to whether Best Buy voluntarily relinquished its right to
have construction commence on May 15, because it reflects the Colonies “agreed” with
Best Buy’s request to delay construction.
The Colonies argument is not persuasive because it is trifling with the semantics
in a hearsay-type of communication. The e-mail between Karp and Moseley is a
summary of the e-mail conversation Karp had with Costanzo. In the summary, Karp
characterized the conversation as Costanzo agreeing to the delay; however, this
evidence does not overcome the fact that in the actual e-mail dialog between Karp and
Costanzo, Karp informed Costanzo that an amendment to the lease would likely need to
be executed. Karp did not waive a right in the e-mail to Costanzo because Karp
included the condition that an amendment be executed. The Colonies has not presented
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evidence that Best Buy voluntarily relinquished its right to have construction commence
on May 15. Thus, we conclude the trial court did not err.
C. BREACH OF CONTRACT: EQUITABLE ESTOPPEL
The Colonies contends the trial court erred by granting summary judgment on the
breach of contract cause of action because the court should have applied principles of
equitable estoppel.
“Equitable estoppel ‘rests firmly upon a foundation of conscience and fair
dealing.’ [Citation.]” (Superior Dispatch, Inc. v. Insurance Corp. of New York (2010)
181 Cal. App. 4th 175, 187.) Unlike waiver, “[e]stoppel does not require a voluntary
relinquishment of a known right.” (Hoopes v. Dolan (2008) 168 Cal. App. 4th 146, 163.)
Rather, estoppel applies “where the party to be estopped has engaged in inequitable
conduct, induced another party to suffer a disadvantage, and then sought to exploit the
disadvantage. [Citation.] ‘Broadly speaking, “estoppel” refers less to a doctrine than to
a conceptual pattern, first articulated in the courts of equity, which has come to pervade
our law. When it is successfully invoked, the court in effect closes its ears to a point—a
fact, argument, claim, or defense—on the ground that to permit its assertion would be
intolerably unfair. It is commonly said that the party to be estopped, having conducted
himself in manner X, will “not be heard” to assert Y.’ [Citation.]” (Id. at p. 162.)
[Redacted Text.] In December 2008, when Karp informed Costanzo that he
preferred to delay the construction, Karp wrote, “We probably need to amend the lease
to reflect the different dates.” Costanzo replied that he would “look at all of the dates
and send a proposed amendment.”
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[Redacted Text.] After the May 15 commencement date passed, Best Buy
continued trying to work with the Colonies. On June 16, 2009, Moseley proposed a rent
reduction and asked Costanzo to clarify the revised construction schedule [redacted
text]. [Redacted Text.]
The evidence reflects Best Buy notified the Colonies of its desire to start
construction of the store on May 14, but by November the Colonies still had not
commenced construction. Best Buy remained in contact with the Colonies while the
Colonies continued revising the construction schedule [redacted text].
The evidence does not reflect inequitable conduct and exploitation on the part of
Best Buy. The evidence reflects Best Buy informed the Colonies of its committee
approval process for real estate transactions, Karp and Costanzo discussed the
possibility of delaying construction, Moseley informed the Colonies that Best Buy
decided against delaying construction, and then Best Buy waited six months while
construction failed to commence. Best Buy did not induce the Colonies to suffer a
disadvantage; rather, Best Buy waited while the Colonies was given an opportunity to
fix its failure to meet the construction date, but the Colonies continued to delay. Given
the evidence, we conclude the trial court did not err in finding there is not a triable issue
of material fact concerning equitable estoppel because Best Buy conducted itself in an
open manner.
The Colonies asserts Best Buy acted inequitably and exploited the Colonies
because the Colonies was ready to begin construction prior to May 15, but did not
because “Best Buy requested that the construction schedule be delayed so it could open
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with the other tenants.” The Colonies argument is not persuasive because the evidence
does not support a finding of exploitation on the part of Best Buy—[redacted text]. Best
Buy did not hide the fact that an amendment to the lease would be needed to modify the
construction dates, and Best Buy gave the Colonies six months to cure its failure to
commence construction. There is nothing supporting a finding that Best Buy tried to
exploit the Colonies.
D. BREACH OF THE COVENANT OF GOOD FAITH AND FAIR
DEALING
In its Appellant’s Opening Brief, the Colonies references its breach of contract
contentions in its assertions concerning the cause of action for breach of the good faith
and fair dealing covenant. Both breach contentions concern the trial court’s alleged
failure to consider “evidence of waiver and equitable estoppel.” Since we have
concluded ante, that the Colonies failed to provide evidence supporting a finding of
waiver and/or equitable estoppel, we will not examine the issue again, and conclude
principles of waiver and equitable estoppel were also not supported in relation to the
cause of action for breach of the good faith and fair dealing covenant. (See Peterson
Development Co. v. Torrey Pines Bank (1991) 233 Cal. App. 3d 103, 116 [conclusions
for breach of contract will apply to issue concerning the breach of good faith and fair
dealing covenant].)
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E. PROMISSORY ESTOPPEL
The Colonies contends the trial court erred by granting summary judgment on the
promissory estoppel cause of action because there are disputed issues of material fact
concerning the existence of a clear promise and reasonable reliance on that promise.
“The elements of a promissory estoppel claim are ‘(1) a promise clear and
unambiguous in its terms; (2) reliance by the party to whom the promise is made;
(3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting
the estoppel must be injured by his reliance.’ [Citation.] [¶] ‘Promissory estoppel is “a
doctrine which employs equitable principles to satisfy the requirement that
consideration must be given in exchange for the promise sought to be enforced.”
[Citation.]’ [Citation.] Because promissory estoppel is an equitable doctrine to allow
enforcement of a promise that would otherwise be unenforceable, courts are given wide
discretion in its application. [Citations.]” (US Ecology, Inc. v. State of California
(2005) 129 Cal. App. 4th 887, 901-902.)
We begin with the factor of a clear and unambiguous promise. “‘To be
enforceable, a promise need only be “‘definite enough that a court can determine the
scope of the duty[,] and the limits of performance must be sufficiently defined to
provide a rational basis for the assessment of damages.’”’” (Aceves v. U.S. Bank, N.A.
(2011) 192 Cal. App. 4th 218, 226.) “[A] party seeking to establish promissory estoppel
cannot rely on extrinsic evidence to explain an ambiguous statement. [Citations.]”
(Garcia v. World Sav., FSB (2010) 183 Cal. App. 4th 1031, 1044.)
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In January 2009, Karp sent an e-mail to Costanzo reading, “I prefer to open with
the rest of the center [versus] the construction nightmare . . . We probably need to
amend the lease to reflect the different dates.” (Ellipses in original.) Costanzo
responded that he would “look at all of the dates and send a proposed amendment.” The
communication between Karp and Costanzo reflects Karp’s preference and a need to
create an amendment to the lease. The e-mail does not reflect a promise on the part of
Best Buy, because there is nothing indicating the exact date changes such that a court
could determine the modified scope of the duties of the Colonies and Best Buy.
The Colonies contends Karp’s e-mail constituted a promise because the lease
could be modified via e-mail. Assuming the Colonies is correct, the larger problem is
that Karp’s e-mail does not set forth a promise that would permit a court to determine
the modified scope of the parties’ duties. The e-mail reflects only Karp’s preference
and a need to create an amendment to the lease with new dates. Without the new dates,
there cannot be a promise because the scope of the duties is too vague. For example, if
a court were to try to determine from the e-mail if a breach of contract occurred when
construction had yet to commence in November it would be impossible, because the
scope of the duties was not defined—it cannot be determined from Karp’s e-mail what
new duty the Colonies had in relation to commencing construction. Thus, we conclude
the trial court did not err in finding there is not a triable issue of fact on the element of a
clear promise.
Next, we address the issue of reliance on the promise. On February 27, 2009,
Wolfson sent a draft lease amendment to a paralegal in Best Buy’s “Legal—Real
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Estate” Department. On February 27, a senior paralegal at Best Buy informed Wolfson
that she was waiting for responses from people at Best Buy concerning the proposed
date changes in the draft amendment. On March 1, 2009, via e-mail, Karp informed
Costanzo that he was moving to a different position within Best Buy. Karp asked if
Costanzo would be available to finalize the lease amendment because it would be better
to “finish th[e] amendment rather than pass it on to someone else.”
On March 27, Costanzo sent an e-mail to Karp: “I haven’t heard anything on the
revised amendment that we sent out last week. Any update?” Karp replied that he was
in Miami but would check on the lease amendment the following week. On April 1,
Costanzo sent another e-mail to Karp: “[A]ny update on our amendment? Please let me
know.” On April 21, Karp replied that he had reviewed the amendment with two
people, including Moseley, and Moseley would “get the amendment resolved.”
Given that Costanzo and Wolfson were trying to secure the amendment to the
lease, the Colonies has not shown it relied on a promise in Karp’s e-mail. The evidence
reflects an acknowledgement on the part of the Colonies that an amendment was needed
in order for the modified dates to be effective. Thus, the Colonies was not relying on
Karp’s e-mail as a promise.
[Redacted text] however, this does not create a triable issue of material fact on
the element of reliance because, without having secured the amendment that the
Colonies knew it needed, the decision [redacted text] appears to be a “misguided belief
or guileless action” based on a “‘hopeful expectation.’” “A mere ‘hopeful expectation
[] cannot be equated with the necessary justifiable reliance.’ [Citation.]” (Aceves v.
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U.S. Bank, N.A., supra, 192 Cal.App.4th at p. 227.) The evidence reflects the Colonies
knew it needed the lease amendment. Therefore, the decision [redacted text] is not
evidence of justifiable reliance, it is evidence of a misguided belief.
F. FRAUD
The Colonies asserts the trial court erred by granting summary judgment on its
fraud cause of action because there is a triable issue of material fact on the element of
justifiable reliance. (Lazar v. Superior Court (1996) 12 Cal. 4th 631, 638 [“Justifiable
reliance” is an element of fraud].) We have concluded ante, that the Colonies failed to
support a finding of reliance in regard to the cause of action for promissory estoppel.
Thus, we will not repeat the “reliance” analysis here. We conclude the trial court did
not err by granting summary judgment on the fraud cause of action because there is not
a triable issue of fact for the element of justifiable reliance.
G. DECLARATORY RELIEF
The Colonies asserts the trial court erred by granting summary judgment on its
declaratory relief cause of action due to the errors asserted ante, i.e. waiver, equitable
estoppel, and promissory estoppel. We have rejected the waiver and estoppel
contentions of the Colonies ante. Accordingly, we conclude the trial court did not err
by granting summary judgment on the declaratory relief cause of action.
H. EVIDENTIARY RULINGS
1. PROCEDURAL HISTORY
The Colonies submitted the declaration of an expert, William Bauman (Bauman).
Bauman was a commercial real estate broker with a background in developing retail
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centers. Bauman declared it had been his experience that retailers preferred to open
their stores “with as many other retailers as possible,” so as to avoid opening a store in a
construction environment. Bauman has also found developers would try to comply with
tenants’ requests to modify construction schedules, and those requests can be made via
e-mail.
Best Buy objected to Bauman’s declaration on the basis that it was speculative,
in that Bauman did not declare he ever reviewed the lease at issue or the correspondence
between Karp, Moseley, and Costanzo. Best Buy asserted Bauman’s testimony about
the construction industry in general would not aid the trier of fact because it was too
general and broad to be helpful. The trial court sustained the objection but did not give
reasons for the decision.
The Colonies also submitted the declaration of a second expert, John J. Flynn
(Flynn). Flynn had a background in construction and developing commercial real estate
projects. In Flynn’s experience, he found retailers in a shopping center wanted to open
their stores at the same time to avoid construction problems around their stores. Flynn
also found construction schedules often changed and those changes can be made via e-
mail.
Best Buy objected to Flynn’s declaration for the same reasons it objected to
Bauman’s declaration. The trial court did not rule on Best Buy’s objection to Flynn’s
declaration. In the trial court’s tentative ruling, it mentioned the experts’ declarations:
“The Colonies ha[s] also submitted declarations from experienced real estate
consultants indicating that it is a common practice to conduct modifications, to suit
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development schedules, by e-mail even where a written agreement is in place. This
argument is unpersuasive because otherwise the written agreement, in this case, a lease
agreement, would have no effect. The Colonies and Best Buy were bound by the terms
of the lease agreement.”
2. ANALYSIS
The Colonies contends the trial court erred by sustaining Best Buy’s objections
to Bauman’s and Flynn’s declarations concerning the construction industry practice of
changing development schedules via e-mail.
“We review the trial court’s evidentiary rulings on summary judgment for abuse
of discretion. [Citation.]” (Kincaid v. Kincaid (2011) 197 Cal. App. 4th 75, 82-83.)
Knowledge of industry practices is generally only helpful when trying to interpret
ambiguous provisions of a contract. (Hartnell Community College Dist. v. Superior
Court (2004) 124 Cal. App. 4th 1443, 1451; Lugosi v. Universal Pictures (1979) 25
Cal. 3d 813, 826.)
In this case, there was no need to address ambiguities in the contract language.
As set forth ante, the motion could be resolved by relying on the express and
unambiguous language in the lease and correspondence. Accordingly, the experts’
declarations about industry customs were irrelevant. Therefore, the trial court acted
within reason by sustaining the objection to Bauman’s declaration and presumably also
excluding Flynn’s declaration.
The Colonies asserts the declarations were relevant because they helped to prove
waiver, equitable estoppel, and reliance. The Colonies does not explain how the
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declarations would have proved these matters. In light of the fact that the experts do not
mention the lease or communications of Best Buy and the Colonies in their declarations,
it is unclear how the declarations would have assisted a trier of fact in deciding these
matters. (Evid Code, § 801, subd. (a) [expert testimony must “assist the trier of fact”].)
General information about e-mail practices in the construction industry would not add
value to the evidence concerning waiver, estoppel, and reliance, because the question is
not whether it was proper to communicate via e-mail—the questions in this case
concern the content of the lease and communications and whether it was reasonable to
rely on the words therein.
DISPOSITION
The judgment is affirmed. Respondent, Best Buy, is awarded its costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER
J.
We concur:
HOLLENHORST
Acting P. J.
CODRINGTON
J.
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