Equassure v. de la Cruz CA2/7

Filed 6/22/21 Equassure v. de la Cruz CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
EQUASSURE, INC., B300397
Plaintiff and Appellant, (Los Angeles County
v. Super. Ct. No. BC641419)
EFREN DE LA CRUZ et al.,
Individually and as executors,
etc.,
Defendants and Appellants.
APPEALS from a judgment of the Superior Court of
Los Angeles County, Anthony J. Mohr, Judge. Affirmed as
modified.
Robert E. Stenson; Newhouse Law Group, Michael R.
Newhouse and Suzanne M. Henry for Plaintiff and Appellant.
John L. Dodd & Associates, John L. Dodd; Remer,
DiVincenzo & Griffith and Joseph P. DiVincenzo for Defendants,
Appellants Efren de la Cruz and Leonila de la Cruz, individually
and as executors of the Estate of Vladimir Micanovich.
_______________
Equassure, Inc. appeals the judgment entered following a
court trial in its action against Efren de la Cruz and Leonila
de la Cruz, in their individual capacities and as executors of the
estate of Vladamir Micanovich, alleging breach of a real estate
purchase contract and fraud. Equassure contends the trial court
erred in concluding the contractual obligations of Equassure, on
the one hand, and the de la Cruzes, on the other hand, were
discharged when neither side tendered performance by the
deadline set for close of escrow in a contract that specified time
was of the essence. Equassure also contends the court
misinterpreted the contract in ruling Equassure was entitled to
only a partial refund of its earnest money deposit and
misconstrued the basis for its fraud claim in concluding it had
failed to carry its burden of proof on that cause of action.
The de la Cruzes have also appealed, contending the court
erred in concluding Equassure was entitled to a refund of part of
its deposit and in calculating the amount of prejudgment interest.
In addition, they request we modify the judgment to state
explicitly the court’s implied finding the de la Cruzes were not
individually liable for any of Equassure’s claims. We modify the
judgment to reflect the proper amount of prejudgment interest
and, as modified, affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Parties
The de la Cruzes, former tenants and friends of Vladimir
Micanovich, are the executors of his estate. Leonila de la Cruz is
also an estate beneficiary. At the time of Micanovich’s death in
2011 at 96 years old, his estate owned, in whole or in part, four
2
contiguous parcels of land in Carson covering one and one-half
1
acres.
Equassure is a corporation owned by Robert E. Stenson,
who also serves as Equassure’s attorney and managing director.
2. The Vacant Land Purchase Agreement (VLPA)
In August 2015 the de la Cruzes, as executors of
Micanovich’s estate, entered into an agreement to sell all four of
the Carson parcels (“the property”) to Equassure, which, in turn,
intended to develop the property by building a multi-unit
2
apartment complex. Although the property contained occupied
structures, including a duplex and a single-family residence, the
parties used a printed California Association of Realtors form for
vacant land purchase agreements (C.A.R. Form VLPA), inclusive
of two addendums, to memorialize their agreement because
Stenson was not interested in the structures. He wanted the
land.
The VLPA provided for an all cash purchase of the property
for $3 million with a one-year escrow. Stenson explained at trial
1
The de la Cruzes are also the cotrustees of Micanovich’s
trust. Although the complaint alleges the estate owned in whole
or in part the parcels in question, the record at times refers to the
trust as the property owner. Because this discrepancy is not
material to the issues before us, we refer to the estate as the
property owner and the de la Cruzes as executors rather than
trustees, consistent with Equassure’s operative second amended
complaint and the parties’ appellate briefs.
2
The de la Cruzes received permission from the probate
court to proceed with any transfer of property in accordance with
the Independent Administration of Estates Act (Prob. Code,
§ 10450 et seq.), relieving the estate of the obligation to obtain
court approval for the sale to Equassure.
3
he had initially offered a lower price with a shorter escrow, but
ultimately agreed to a purchase price of $3 million in exchange
for a one-year escrow that would allow Equassure the time it
needed to obtain design, engineering and environmental
approvals from the city (“entitlements”) for land development.
Both parties acknowledged in the VLPA and at trial, however,
the sale was not dependent on Equassure obtaining its
entitlements. The VLPA expressly stated escrow would close on
August 18, 2016 “with no extensions, no conditions or
contingencies to closing; time is of the essence.”
The VLPA required Equassure to transfer into escrow in
two installments a total deposit of $150,000 to be applied to the
purchase price: The first $75,000 was to be made at the opening
of escrow and “released, non-refundable” to the seller (the
de la Cruzes as executors) at the end of a 45-day due diligence
period after contingencies were satisfied; the second $75,000 was
to be deposited within five months of acceptance and released to
the seller “at six months from acceptance date” “without any
further instructions, documentation or consent from Buyer.”
Because Equassure was purchasing the property explicitly
for its vacant land value and did not want to contend with delays
caused by tenants asserting any right to remain on the property,
the estate agreed to “deliver the Property to Buyer [Equassure]
free of any occupants at the close of escrow. This shall be one of
Buyer’s conditions of closing escrow.” In addition, the estate
promised “all debris and personal property not included in the
sale [including four large storage containers on the property]
shall be removed by Close of Escrow.” According to its terms, the
VLPA was a fully integrated agreement, and any changes were
4
invalid and unenforceable unless agreed to by the parties in
writing.
Before the parties executed the VLPA, the estate’s lawyer
Joseph P. DiVincenzo informed Equassure a title search in
connection with a prior escrow that had fallen through had
revealed a cloud on title on one of the parcels (parcel number 4).
In particular, records from the county recorder reflected an
individual named Stane Miletich owned a 50 percent undivided
interest in parcel 4, which she had transferred to the Stane
Miletich trust in 1993. Stane Miletich died in December 1996.
DiVincenzo told Equassure he was working on, and would be able
to resolve, the title issue within the next year before escrow
closed. At Equassure’s request, the estate promised in the VLPA
“to deliver good, marketable title at or before close of escrow.”
3. Post-contracting Activities
a. Equassure’s difficulty obtaining entitlements and its
subsequent proposals to amend the escrow
During the due diligence period Equassure worked on
obtaining entitlements. After the City of Carson indicated it
would support the project, Equassure waived its due diligence
contingencies and directed the earnest money payments be made
to the estate in accordance with the VLPA terms.
By July 2016, however, it had become clear to Stenson that
Equassure would not be able to complete its entitlements by the
August 18, 2016 closing date or even shortly thereafter. On
July 11, 2016 Stenson proposed to the de la Cruzes in writing to
keep the August 2016 closing date but change the payment
structure: Equassure would pay $450,000 and the de la Cruzes
5
3
would take back a note for the remaining $2.4 million. The
de la Cruzes, through the estate’s real estate agent Jerry Carew,
rejected the proposal, telling Stenson they wanted the full
purchase price at the close of escrow and to move on “without
being the bank.”
On July 29, 2016 Stenson wrote to Carew with a different
proposal: Extend the closing to December 31, 2016 with an offer
of four months of rent-free tenancy (the de la Cruzes lived on the
property) and a payment plan for the balance of the purchase
price. After talking with the de la Cruzes, Carew responded on
August 4, 2016 that the de la Cruzes were ready to close and did
not wish to extend the closing date. Stenson continued to press
for a formal amendment to the escrow. On August 19, 2016, the
day after escrow was scheduled to close, Stenson wrote to the
estate proposing that Equassure would “pay an additional
$50,000 nonrefundable deposit to be released to the sellers” in
exchange for the extension of escrow to the end of the year; if
entitlements were not approved by the end of the year,
Equassure “could exercise an option to extend the escrow for an
additional four months for an additional non-refundable deposit
of $55,000 which would be released from escrow immediately
upon exercising the extension option. If escrow is not closed by
the end of the extension option, it would automatically be
cancelled.” The estate did not accept the proposal.
b. The estate’s failed efforts to obtain marketable title by
the date scheduled for close of escrow
3
Stenson explained his proposal would have allowed
Equassure more time to complete its entitlements without having
to fund the $2.85 million balance by August 18, 2016, while still
enabling the de la Cruzes to close escrow on schedule.
6
The de la Cruzes were unsophisticated sellers, relying
entirely on DiVincenzo and Carew to handle the sale.
DiVincenzo testified as to his efforts on behalf of the estate to
obtain marketable title on parcel number 4: Initially he believed
an unrecorded 1978 grant deed from Stane Miletich to
Micanovich that he had discovered about the time the previous
escrow fell through could be recorded and satisfy the cloud on
title issue. But, citing problems with that chain of title (the
record showed the Miletich trust owned the property, not Stane
Miletich), the county recorder would not record the 1978 deed.
DiVincenzo then found among Micanovich’s papers Stane
Miletich’s 1993 trust, which designated Micanovich as the sole
beneficiary of all right, title and interest Stane Miletich owned in
parcel 4. DiVincenzo believed that, combined with the recorded
1993 deed from Stane Miletich to her trust, the two legal
documents would establish Micanovich’s sole ownership of
parcel 4 following Stane Miletich’s death. However, because the
trust documents were unsigned, it was not clear that a valid trust
existed; and DiVincenzo needed a court order that would
recognize the trust and confirm the chain of title. In June 2016
DiVincenzo filed a petition with the probate court on the estate’s
behalf to establish Micanovich’s title to parcel 4, but the hearing
on the petition was scheduled for October 2016, after the escrow
was scheduled to close.
DiVinecenzo testified that, to remove the cloud on the
Micanovich estate’s title before escrow was scheduled to close, he
had obtained an oral agreement from the Miletich heirs to
transfer all their interests in parcel 4 to the Micanovich estate for
$250,000, which the de la Cruzes would obtain from Equassure’s
purchase price payment at the close of escrow. Because the
7
assignment of $250,000 of its funds to the Miletich heirs was not
part of the existing escrow instructions, DiVincenzo testified he
had prepared agreements and the necessary deeds that, if signed,
would have allowed the transfer of title from the Miletiches to the
Micanovich trust and then to Equassure, all of which would have
occurred simultaneously at the close of escrow. He also testified
he planned to obtain ex parte relief from the probate court to
obtain the court order and establish the chain of title necessary
for escrow to close. DiVincenzo acknowledged the documents
were never signed and his plan never materialized. According to
DiVinenzo, the plan to obtain the Militeches’ interests fell
through when Equassure made clear it lacked the funds to be
able to pay the balance owed and close escrow by August 18,
2016. In fact, DiVincenzo testified, Stenson had told him in a
conversation in the middle of August 2016 that it could be up to
nine months before Equassure could obtain the entitlements.
On August 15, 2016, three days before the date set for close
of escrow, the Miletich relatives filed a quiet title complaint in
superior court asserting their legal interest in parcel 4.
Equassure was unaware of the quiet title lawsuit at that time.
c. The de la Cruzes’ demand to close escrow and
Equassure’s reply
The escrow closing date of August 18, 2016 came and went
without Equassure depositing any additional funds into the
escrow and without the de la Cruzes depositing the deeds to any
properties. On August 22, 2016 the estate, acting through
DiVincenzo, served Equassure with a demand to close escrow
8
(DCE) by August 25, 2016 pursuant to paragraph 19F of the
4
VLPA.
Equassure responded the next day in a letter to the escrow
officer, with copies to DiVincenzo and the de la Cruzes, asserting
the demand was improper and void because the estate had not
fully performed or tendered performance: It had not produced
current leases and rental agreements demonstrating that the
tenants other than the de la Cruzes had no legal right to occupy
the premises; the estate had not removed the four large storage
containers from the property; and it had not obtained from the
city a residential property report or a city waiver of that
requirement as then required under Carson Municipal Code
former section 5902, which the escrow agent testified at trial
would have been necessary for escrow to close. The letter did not
mention the estate’s failure to obtain marketable title because, as
Stenson testified at trial, he was not aware it remained an issue:
Neither the de la Cruzes nor their representatives had mentioned
any difficulty resolving the cloud on title. As to Equassure’s
obligation to pay the balance of the purchase price, Equassure
advised the estate, “Buyer can begin to make arrangements for
deposit of the necessary closing funds into escrow, if and when
Seller has fully performed all of its obligations and has satisfied
4
Paragraph 19F of the VLPA provides, “Close of Escrow:
Before Buyer or Seller may cancel this Agreement for failure of
the other Party to close escrow pursuant to this Agreement,
Buyer or Seller must first Deliver to the other Party a demand to
close escrow (C.A.R. Form DCE). The DCE shall: (i) be signed by
the applicable Buyer or Seller, and (ii) give the other Party at
least 3 Days After Delivery to close escrow. A DCE may not be
Delivered any earlier than 3 Days Prior to the scheduled close of
escrow.”
9
Buyer’s conditions of closing.” Stenson testified the letter was
not intended to put the estate in default; Equassure still wanted
to close the deal.
On September 27, 2016, after receiving no response to its
efforts to reach out and “have a dialogue” with the de la Cruzes,
Equassure filed a notice to seller to perform, enumerating the
same conditions as it had in its reply to the demand to close
escrow. Equassure still had not deposited the balance owed.
On September 29, 2016 DiVincenzo responded, asserting
the escrow was cancelled because Equassure had failed to
perform: “It has now been 43 days from the original closing date,
and the Buyer has still failed to deposit, or to legally tender, the
balance of the purchase price in order to close escrow. The buyer
has defaulted and the [VPLA] and the escrow are subject to
immediate cancellation.” DiVincenzo offered a “one time
agreement” to extend the escrow for an additional $200,000
nonrefundable deposit, to be added to the purchase price.
Equassure promptly denied the offer.
4. Equassure’s Lawsuit
In November 2016, after the property had been placed back
on the market, Equassure filed this lawsuit, suing the
de la Cruzes in their individual capacities and as executors, for
breach of contract, violation of the unfair competition statute
(Bus. & Prof. Code, § 17200) and fraud. The complaint sought
alternative remedies of benefit-of-the-bargain damages, specific
5
performance and rescission. It also recorded a notice of
5
Equassure’s operative second amended complaint also
included a claim for declaratory relief concerning parcel 4, which
Equassure acknowledges in its appellate brief was mooted before
trial by an intervening ruling from the probate court.
10
pendency of action (lis pendens). The parties agreed to a bench
trial.
5. The Parties’ Positions at Trial
Equassure argued at trial that it had been ready, willing
and able to close escrow on August 18, 2016 even without
receiving its entitlements. Although Stenson conceded
Equassure did not have the money in its account to close escrow,
Equassure “had access” to the $2.85 million balance it owed
through Stenson’s brother, who had financed Equassure’s other
acquisitions. Stenson provided his brother’s bank account
statements to demonstrate his brother had sufficient funds in his
investment accounts as of August 18, 2016 to pay the balance
owed. Stenson’s brother did not testify.
Stenson acknowledged no formal agreement or promissory
note had been prepared for his brother to transfer the funds and
he had not spoken to his brother about depositing the funds to
make sure escrow closed in August 2016 as scheduled. Asked at
trial as to why, if he had access, he did not deposit the money,
Stenson explained he did not want to tie up nearly $3 million in
escrow (and reduce his brother’s return on investment as
entitlements still needed to be obtained before the property could
be sold) without evidence that the de la Cruzes had fulfilled their
own “conditions precedent,” including removal of tenants and the
storage containers and obtaining marketable title. Nevertheless,
Stenson insisted, Equassure was ready, willing and able to
perform and could have paid the balance of the purchase price,
had the de la Cruzes not repudiated the contract on
September 29, 2016.
The de la Cruzes argued the estate could have satisfied all
the “concurrent conditions” it had assumed in order to close
11
escrow by August 18, 2016, including obtaining the necessary
deeds from the Miletich heirs and the requisite court order to
remove the cloud on title. In addition to DiVincenzo’s testimony
concerning his oral agreement with the Miletich relatives, the
de la Cruzes provided evidence they had made reservations to
move to a motel and to move the containers by close of escrow.
(The trial court was dubious the de la Cruzes had made
arrangements to move the containers, noting they had testified a
crane would be needed and no evidence had been submitted to
suggest one was obtained.) It was Equassure, they argued, that
could not, and did not, perform. Accordingly, Equassure had no
right to a return of any of its $150,000 earnest money deposit,
which the de la Cruzes contended they were entitled to retain as
liquidated damages as specified in the VLPA.
6. The Trial Court’s Statement of Decision
After an 11-day court trial the court made the following
findings in a detailed statement of decision:
(1) The parties’ respective obligations under the VLPA to
deliver marketable title and deposit the purchase price, among
other things, were mutually dependent, concurrent conditions.
When neither side fulfilled those conditions or tendered
performance by the closing date in a contract that specified time
is of the essence, the parties’ obligations were discharged. The
court found Justice Gilbert’s opinion in Pittman v. Canham
(1992) 2 Cal.App.4th 556 (Pittman) to be particularly on point in
these circumstances.
(2) Neither party had committed an anticipatory breach.
(3) Equassure could not carry its burden to demonstrate
specific enforcement because it had not demonstrated it was
ready, willing, and able to pay the $2.85 million balance due by
12
the scheduled closing date. The court found Stenson’s testimony
that he had “access” to funds from his brother, Equassure’s sole
investor, insufficient to carry its burden, particularly since
Stenson had acknowledged he had not obtained any form of
agreement from his brother or even discussed the effect of the
delay of entitlements on his brother’s funding. The fact that
Stenson’s brother had financed other projects did not mean he
would have deposited the purchase price in August 2016 with an
unanticipated nine-month wait on entitlements.
(4) Relying on the plain language of the VLPA, the court
found the first $75,000 deposit was nonrefundable; the second
was refundable if escrow did not close.
(5) Describing Equassure’s fraud cause of action as
premised on allegations the de la Cruzes never intended to sell
the property, the court found that Equassure had not proved that
claim by a preponderance of the evidence. As to Equassure’s
allegation the de la Cruzes committed fraud by failing to disclose
its ongoing negotiations with the Miletiches, the court stated it
“would have no difficulty finding fraud but for one fact”:
DiVincenzo disclosed the probate and the title issues related to
parcel 4 before Equassure signed the VLPA. While DiVincenzo
“should have been more forthcoming about his progress (or lack
thereof) of negotiations with the Miletich parties, . . . the court
does not believe his failure to do so constitutes fraud, especially
because many of the facts were available from the public record.”
(6) Equassure’s cause of action for violation of Business
and Professions Code section 17200 also failed because “the
defendants’ behavior does not fall within the definition of unfair
that our courts follow.”
13
The court entered judgment in favor of Equassure in the
amount of $101,856.16, $75,000 in compensatory damages plus
$26,856.16 in prejudgment interest, which it calculated from
December 4, 2015, the date Equassure made its first deposit of
6
$75,000 into escrow.
Both Equassure and the de la Cruzes filed timely notices of
appeal.
DISCUSSION
Equassure’s Appeal
1. Principles of Contract Interpretation
The fundamental goal of contract interpretation is to give
effect to the mutual intention of the parties as it existed at the
time they entered into the contract. (Hartford Casualty Ins. Co.
v. Swift Distribution, Inc. (2014) 59 Cal.4th 277, 288; Bank of the
West v. Superior Court (1992) 2 Cal.4th 1254, 1264; see Civ. Code,
§ 1636.) That intent is interpreted according to objective, rather
than subjective, criteria. (Brown v. Goldstein (2019)
34 Cal.App.5th 418, 432; Wolf v. Walt Disney Pictures &
Television (2008) 162 Cal.App.4th 1107, 1126.) When the
contract is clear and explicit, the parties’ intent is determined
solely by reference to the language of the agreement. (See Civ.
Code, §§ 1638 [“language of a contract is to govern its
interpretation, if the language is clear and explicit, and does not
involve an absurdity”]; 1639 [“[w]hen a contract is reduced to
writing, the intention of the parties is to be ascertained from the
writing alone, if possible”].) The words are to be understood “in
their ordinary and popular sense” (Civ. Code, § 1644); and the
6
The court filed an amended judgment nunc pro tunc to
correct a typographical error in the amount of prejudgment
interest awarded.
14
“whole of [the] contract is to be taken together, so as to give effect
to every part, if reasonably practicable, each clause helping to
interpret the other.” (Civ. Code, § 1641.)
When no ambiguity is asserted or there is no conflicting
extrinsic evidence concerning the meaning of a purported
ambiguity in the contract, the trial court’s interpretation of a
contract is a legal determination subject to de novo review. (City
of Hope National Medical Center v. Genentech, Inc. (2008)
43 Cal.4th 375, 393-394; Khan v. Shim (2016) 7 Cal.App.5th
49, 55.)
2. Equassure Failed To Carry Its Burden on Its Breach of
Contract Claim
To prevail on a cause of action for breach of contract, a
plaintiff must demonstrate (1) a contract existed; (2) plaintiff
performed or its performance was excused; (3) the defendant
7
breached; and (4) resulting damage. (Stockton Mortgage, Inc. v.
Tope (2014) 233 Cal.App.4th 437, 453; Rutherford Holdings, LLC
v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 228 (Rutherford).)
Equassure contends it carried its burden on each of these
elements. Although it concedes it failed to perform by tendering
the balance of the purchase price as required under the VLPA,
Equassure contends its obligation to do so was excused because it
was dependent on the de la Cruzes’s performance of several
conditions precedent—delivering marketable title, obtaining a
residential property report and removal of the tenants and
storage containers from the property.
Equassure relies on Rubin v. Fuchs (1969) 1 Cal.3d 50(Rubin) to support its argument that these requirements were
7
Equassure has explicitly abandoned on appeal any
argument it is entitled to specific performance.
15
conditions precedent to its own performance. In Rubin a buyer
agreed to purchase certain real property from the seller for
$30,000 in cash to be deposited before the close of escrow and
execution of a purchase money deed of trust for the balance. (Id.
at p. 52, fn. 1.) The sellers (defendants) agreed to subdivide the
property and record a tract map before the closing date. The
parties declared in the agreement “time was of the essence.”
Neither party performed its obligations by the dates specified in
the agreement for escrow to close. When the sellers cancelled the
escrow citing the buyer’s failure to perform and later sold the
property to a different buyer for a higher price, the buyer sued.
The trial court ruled in the sellers’ favor, finding the buyer had
failed to perform despite several demands by the sellers for the
buyer to deposit the deed of trust. The Supreme Court reversed,
holding the requirement that the sellers record a subdivision
tract map before close of escrow was a condition precedent to
buyer’s performance—the recording of the map was necessary for
the buyer to obtain the property description necessary for the
preparation of the deed of trust. (Id. at p. 54.) Accordingly, the
sellers’ failure to perform the condition precedent of recording the
subdivision tract map excused the buyer’s performance; and the
buyer could recover for breach of contract despite failing to
deposit the full down payment into escrow. (Ibid.)
“The rule is that provisions of a contract will not be
construed as conditions precedent in the absence of language
plainly requiring such construction. [Citations.] Instead,
whenever possible the courts will construe promises in a bilateral
contract as mutually dependent and concurrent.” (Rubin, supra,
1 Cal.3d at pp. 53-54; accord, Rutherford, supra, 223 Cal.App.4th
at p. 228; see Colaco v. Cavotec SA (2018) 25 Cal.App.5th 1172,
16
1183 [“courts shall not construe a term of the contract so as to
establish a condition precedent absent plain and unambiguous
contract language to that effect”].)
Unlike the circumstances in Rubin, Equassure’s payment
obligation due at close of escrow was not dependent on any prior
occurrence. (See Civ. Code, § 1436 [“[a] condition precedent is
one which is to be performed before some right dependent
thereon accrues, or some act dependent thereon is performed”];
Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 314 [same].)
To the contrary, the parties’ obligations, including the estate’s
promise to deliver marketable title, were expressly identified as
occurring before or “at close of escrow.” (See Patel v.
Liebermensch (2008) 45 Cal.4th 344, 350 [“‘[i]n a contract for the
sale of real estate the delivery of the deed and the payment of the
purchase price are dependent and concurrent conditions’”].)
Equassure alternatively argues the de la Cruzes repudiated
the VLPA on September 29, 2016, excusing Equassure’s
obligation to deposit the purchase price. (See Buckmaster v.
Bertram (1921) 186 Cal. 673, 678 [“positive repudiation of a
contract of sale by vendor excuses the vendee from a formal
tender of the price”]; City of Hollister v. Monterey Ins. Co. (2008)
165 Cal.App.4th 455, 507 [“where a party repudiates the contract
before the other’s performance is due, he thereby excuses the
other party entirely from performing”]; Kossler v. Palm Springs
Developments, Ltd. (1980) 101 Cal.App.3d 88, 102 [unequivocal
repudiation of the contract by one party excuses performance of a
concurrently conditional obligation of nonbreaching party].)
Relying on Pittman, supra, 2 Cal.App.4th 556, the trial
court found the de la Cruzes’ September 29, 2016 repudiation of
the VLPA occurred too late to make any difference. When
17
neither party had performed by the date required for
performance in a contract that established “time is of the
essence,” and that provision had not been waived, the court ruled,
the parties’ mutual obligations were discharged. We agree the
analysis in Pittman controls.
In Pittman the buyer and seller entered into a land
purchase/sale agreement. The buyer drafted the contract and,
pursuant to its terms, transferred an earnest money deposit into
escrow. The agreement and escrow instructions specified time is
of the essence. Prior to the December 24, 1987 closing date the
seller deposited a signed deed into escrow, but neglected to have
the deed notarized. After the omission was brought to the buyer’s
attention, the buyer stated she would have the deed notarized.
However, the December 24, 1987 closing date “came and went”
without either the seller depositing a notarized deed or the buyer
tendering the balance owed or a promissory note and deed of
trust. (Pittman, supra, 2 Cal.App.4th p. 558.) Several months
later, the seller entered into a contract with another purchaser.
The buyer sued the seller for breach of contract.
On appeal following a judgment for the seller, the buyer
acknowledged, in accordance with well-established law, that the
deposit of the balance by the buyer and the deposit of the deed by
the seller were concurrent conditions. (Pittman, supra,
2 Cal.App.4th at p. 559, citing Rubin, supra, 1 Cal.3d at pp. 53-54
and Chan v. Title Ins. & Trust Co. (1952) 39 Cal.2d 253.)
Nonetheless, the buyer argued, the failure of both parties to
perform did not automatically terminate the contract. The
contract remained viable—the escrow remained open—until
one side tendered performance and put the other in default.
(Pittman, at p. 559.)
18
The Pittman court rejected that analysis: “Contrary to
[buyer’s] assertion, the failure of both parties to perform
concurrent conditions does not leave the contract open for an
indefinite period so that either party can tender performance at
his leisure. The failure of both parties to perform concurrent
conditions during the time for performance results in a discharge
of both parties’ duty to perform. Thus, where the parties have
made time the essence of the contract, at the expiration of time,
without a tender by either party, both parties are discharged.
[Citation.] Here, because time was made the essence of the
contract, the failure of both parties to tender performance by
December 24, 1987, discharged both from performing. Neither
party can hold the other in default and no cause of action to
enforce the contract arises.” (Pittman, supra, 2 Cal.App.4th at
pp. 559-560.) The Pittman court continued, “We appreciate the
reluctance of a buyer to act first by placing money into escrow.
But in a contract with concurrent conditions, the buyer and seller
cannot keep saying to one another, ‘No you first.’ Ultimately, in
such a case, the buyer seeking enforcement comes in second; he
loses.” (Id. at p. 560; accord, Rutherford, supra, 223 Cal.App.4th
at p. 228 [when both parties “fail to perform the concurrent
conditions required for closing,” the duties of both parties are
discharged].)
Equassure contends the case at bar is more analogous to
Ninety Nine Investments, LTD v. Overseas Courier Service
(Singapore) Private, Ltd. (2003) 113 Cal.App.4th 1118 (Ninety
Nine Investments), than to Pittman, supra, 2 Cal.App.4th 556. In
Ninety Nine Investments the trial court denied a buyer’s request
for specific performance of a land purchase agreement,
concluding the buyer’s failure to satisfy performance conditions
19
by depositing the purchase money into escrow precluded the
buyer’s recovery for breach of contract. The court of appeal
reversed, finding no substantial evidence to support the court’s
finding. Distinguishing Pittman, the Ninety Nine Investments
court held, “[W]e cannot conclude that the mutual obligations of
the parties could be unilaterally extinguished because escrow was
not able to close on January 14, 2000. This was not a situation in
which the simple exchange of deed for consideration was
involved. Rather, the [multiple] escrows here required
performance of a number of steps, some necessarily in a
particular sequence, to permit the escrows to be in a position for
the simultaneous final concurrent exchange of deed for
consideration. . . . The evidence established without dispute that
appellant [buyer] had fulfilled its escrow and loan obligations and
that the inability to fund was not due to anything [buyer] had
failed to do. Indeed the loans could not be funded nor could the
escrows close on the scheduled closing date because [seller] had
failed to comply with its escrow obligations.” (Ninety Nine
Investments, at p. 1134.) Because the undisputed “evidence
established that [seller’s] failure to timely comply with its escrow
obligations prevented the escrows from closing and the loans
from funding by the closing date when they otherwise would
have. [Seller’s] conduct therefore operated to excuse [buyer’s]
performance by the closing date.” (Id. at pp. 1135-1136,
fn. omitted.)
In contrast to the seller in Ninety Nine Investments, the
de la Cruzes did nothing to prevent Equassure’s performance; nor
was this an especially complex escrow with sequential
performance conditions. Rather, the remaining obligations of
both sides were due “at close of escrow.” As the trial court found,
20
both Equassure and the de la Cruzes were unable to fulfill their
respective performance obligations, through no fault of the other,
in a time-is-of-the-essence contract that specified escrow would
close without contingencies or extensions on August 18, 2016.
Whether the performance obligations of both parties were
discharged, as Pittman held, or fully excused due to the other’s
simultaneous failure to perform, the result is the same. Both
sides failed to perform; neither can recover for breach of contract.
(See generally Chan v. Title Ins. & Trust Co., supra, 39 Cal.2d at
p. 258 [“time is of the essence” clause strictly enforced unless
waived]; Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1337-
1338 [“our review of the authorities reveals that California courts
generally do strictly enforce time deadlines in real estate sales
contracts, permitting the seller to cancel after the time specified
where time is specifically made of the essence unless there has
been a waiver or potential forfeiture”].)
Equassure insists this case differs from Pittman because of
paragraph 19F in the VLPA, which Equassure describes as a
“notice to cure clause.” As discussed, that paragraph requires a
seller who intends to cancel escrow due to the buyer’s
nonperformance to deliver to the buyer a DCE, which can be
served no more than three days before the date set for closure
8
and must give the buyer at least three days to perform. The
DCE form, in turn, advises the buyer that, if it does not close
escrow by the date identified in the DCE and the seller has fully
performed, the seller may cancel the escrow and seek legal
8
See footnote 4.
21
9
remedies including damages or specific performance. According
to Equassure, because the de la Cruzes did not (and could not)
perform or tender performance when they issued the DCE on
August 22, 2016, the DCE did not trigger in Equassure any
obligation to perform or be in default; and the de la Cruzes
repudiated the agreement, if not on August 25, 2016, then at
least on September 29, 2016 when they wrote to Equassure
affirmatively declaring the escrow cancelled.
Contrary to Equassure’s contention, paragraph 19F did not
relieve the buyer of any obligation to perform until the seller
tendered its own performance. Rather, when read together with
the clause requiring escrow to close on August 18, 2016 with no
contingencies or extensions and expressly stating time is of the
essence, paragraph 19F simply required the seller intending to
cancel the escrow for buyer nonperformance to provide notice
that the buyer had a specific time, not less than three days from
the date of notice, to perform. The paragraph does not mean
that, if no DCE were delivered, or, as here, was delivered after
the scheduled escrow close date of August 18th, that the parties’
obligations continued without an ending date. To hold otherwise
would render the provision requiring escrow to close on
August 18, 2016, no extensions, time is of the essence,
meaningless. (Cf. Pittman, supra, 2 Cal.App.4th at p. 560 [“such
9
The DCE, a printed California Association of Realtors form,
states, “Note To Buyer: If you do not close escrow by the end of
time period specified in this Demand to Close Escrow, and Seller
has fully performed, Seller may (i) immediately cancel the
Agreement; (ii) bring legal action against you for damages . . .; or
(iii) . . . (specific performance).”
22
a construction would render meaningless the parties’ agreement
10
that time is of the essence”].)
Equassure argues that, at the very least, it and the
de la Cruzes labored under a mutual mistake that their
obligations would continue beyond August 18, 2016 until one
party issued a DCE with a complete tender. That is clear, it
asserts, not only from Stenson’s testimony that the escrow would
remain open until one party performed and put the other in
default, but also from the August 22, 2016 delivery by the
de la Cruzes of the DCE. Thus, Equassure argues the court erred
in failing to rescind the contract for mutual mistake. However,
Equassure did not seek rescission in the trial court based on
mutual mistake, but on fraud. Accordingly, this argument is
forfeited. (Dumas v. Los Angeles County Bd. Of Supervisors
(2020) 45 Cal.App.5th 348, 357 [failure to raise argument in trial
court results in forfeiture on appeal]; see generally People v.
Trujillo (2015) 60 Cal.4th 850, 856 [any right may be forfeited by
failure to make timely assertion of right in trial court in first
instance].)
Finally, even if the parties’ obligations had not been
discharged and continued for six more weeks until the
de la Cruzes repudiated the VLPA on September 29, 2016,
Equassure’s breach of contract claim fails for another,
fundamental reason: It failed to demonstrate it was ready,
10
Equassure’s focus on the de la Cruzes’ failure to tender
performance with its DCE is misguided. To be sure, had the
de la Cruzes timely delivered a DCE at or before close of escrow
and satisfied their conditions, they could have sued for breach
when Equassure failed to perform. But the de la Cruzes did not
perform, nor have they sued.
23
willing and able to perform at any time, be it August 18, 2016
(the date set in the VLPA), August 25, 2016 (the date set in the
DCE) or September 29, 2016 (the date of the de la Cruzes’ alleged
repudiation). (See Ersa Grae Corp. v. Fluor Corp. (1991)
1 Cal.App.4th 613, 625 [party seeking damages for breach of
contract must demonstrate it was able to, and would have,
performed if not for the defendant’s repudiation; this requirement
is not limited to action for specific performance]; Dickey v. Kuhn
(1930) 106 Cal.App. 300, 303-304 [“elimination of the necessity of
an offer of performance does not dispense with the proof [at trial]
of ability to perform when that is made an issue in the case”].)
The trial court found Equassure lacked the necessary funding
and Stenson’s evidence Equassure could obtain the funding from
his investor brother too speculative, findings Equassure does not
directly challenge, let alone establish were erroneous as a matter
of law. (See Juen v. Alain Pinel Realtors, Inc. (2019)
32 Cal.App.5th 972, 978-979 [“‘where the issue on appeal turns
on a failure of proof at trial, the question for a reviewing court
becomes whether the evidence compels a finding in favor of the
appellant as a matter of law,’” that is, whether the appellant’s
evidence was “‘“uncontradicted and unimpeached” and . . . “of
such a character and weight as to leave no room for a judicial
determination that it was insufficient to support a finding”’”];
see also In re R.V. (2015) 61 Cal.4th 181, 201 [where a party fails
to carry its burden on an issue in the trial court, “the inquiry on
appeal is whether the weight and character of the evidence . . .
was such that the [trial] court could not reasonably reject it”];
Glovis America, Inc. v. County of Ventura (2018) 28 Cal.App.5th
62, 71 [same].)
24
In sum, in a case in which both parties insisted the other
perform first, while in reality neither was capable of performing
at all, the trial court did not err in concluding Equassure could
not carry its burden to demonstrate the estate breached the
contract by failing to perform its concurrent conditions.
3. The Court Did Not Err in Interpreting the VLPA as
Making the First $75,000 Deposit Nonrefundable
Equassure contends the court erred in construing
paragraph 7 in addendum 2 of the VLPA—“$75,000 of Earnest
Money Deposit to be released non-refundable, to the seller upon
removal of physical contingencies at the end of 45 day due-
diligence period”—to mean the deposit was nonrefundable for any
reason. Citing paragraph 27B of the VLPA (the liquidated
damages provision), Equassure contends the de la Cruzes may
retain the Equassure’s earnest money deposit only in the event
11
Equassure’s breach. Because the court found Equassure did not
breach (or that any breach was excused due to the de la Cruzes’
nonperformance), it asserts, there are no damages to be
liquidated; and Equassure’s earnest money deposit is necessarily
fully refundable.
In rejecting this argument, the trial court found use of the
word “nonrefundable” to describe the first $75,000 deposit meant
what it said: It is nonrefundable regardless of whether the buyer
subsequently breached the agreement.
The parties offered extrinsic evidence on the interpretation
issue: The de la Cruzes submitted letters and testimony from
11
Paragraph 27B provides, “Liquidated Damages: If Buyer
fails to complete this purchase because of Buyer’s default, Seller
shall retain, as liquidated damages, the deposit actually paid.”
25
DiVincenzo to prove they had bargained for a nonrefundable
deposit as part of the agreement to ensure they received some
consideration for taking the property off the market for more
than a year in the event the sale fell through, for whatever
reason. Equassure, in contrast, citing the same correspondence,
as well as Stenson’s testimony, insisted consideration for the
extended escrow was the increase in purchase price. The court
provisionally considered the evidence (see Wolf v. Walt Disney
Pictures & Television, supra, 162 Cal.App.4th at pp. 1126-1127)
and concluded none of it suggested an ambiguity as to the
meaning of nonrefundable. We agree. While forfeitures are
disfavored (see Ballard v. MacCallum (1940) 15 Cal.2d 439, 444
[in the event of two possible constructions, one of which leads to a
forfeiture and one of which avoids it, “the policy and rule are
settled . . . , the construction which avoids forfeiture must be
made if it all possible”]), there is no other reasonable construction
of the word “nonrefundable” to describe the first $75,000 deposit.
Equassure’s reliance on paragraph 27A of the VLPA is
misplaced. That paragraph provides, in the event of buyer’s
breach, any contractual language that works a forfeiture or
makes a deposit nonrefundable “shall be deemed invalid unless
the clause independently satisfies the statutory liquidated
damages requirements set forth in the Civil Code.” In other
words, any provision specifying a remedy for the buyer’s breach
must be reasonable at the time the contract was made in order to
be valid. (See Civ. Code, §§ 1671, subd. (b), 1675 & 1676.)
Because Equassure did not breach (or its breach is materially
excused by the de la Cruzes’ breach), there are no damages to
liquidate. The question is solely one of contract interpretation.
The court did not err in concluding the plain language of the
26
contract made the first $75,000 nonrefundable to the de la Cruzes
even in the absence of Equassure’s breach.
4. Equassure Has Not Demonstrated the Court Erred in
Concluding It Failed To Carry Its Burden on Its Fraud
Cause of Action
Equassure contends the court misunderstood its fraud
claim as one of fraudulent concealment and found it could not
carry its burden because the de la Cruzes disclosed the cloud on
title prior to Equassure’s agreement to the VLPA. Because it also
alleged promissory fraud, contending the de la Cruzes induced its
agreement to the VLPA without any intention of performing their
obligations, including delivering marketable title, Equassure
argues, the court’s singular focus on the precontract disclosures
of the cloud on title did not resolve their promissory fraud claim.
“‘Promissory fraud’ is a subspecies of the action for fraud
and deceit. A promise to do something necessarily implies the
intention to perform; hence where a promise is made without
such intention, there is an implied misrepresentation of fact that
may be actionable fraud.” (Lazar v. Superior Court (1996)
12 Cal.4th 631, 638; accord, Behnke v. State Farm General Ins.
Co. (2011) 196 Cal.App.4th 1443, 1453.) The elements of
promissory fraud are “(1) a promise made regarding a material
fact without any intention of performing it; (2) the existence of
the intent not to perform at the time the promise was made;
(3) intent to deceive or induce the promisee to enter into a
transaction; (4) reasonable reliance by the promisee;
(5) nonperformance by the party making the promise; and
(6) resulting damage . . . .” (Behnke, at p. 1453.)
Contrary to Equassure’s contention, the court understood,
and directly addressed, its claim for promissory fraud, stating,
“The essence of Plaintiff’s fraud cause of action appears to be that
27
the Defendants had no intention of performing. They allegedly
structured the transaction in order to obtain a significant portion
of the purchase price ($150,000 to be exact) from escrow before
the closing and then engage in chicanery in order to prevent the
closing, thereby keeping the money as well as the property. The
court is almost, but not quite, convinced of this intent.” Although
the court found the de la Cruzes not particularly knowledgeable
about the transaction (concluding they relied entirely on
DiVincenzo) or, for that matter, credible, the court found “the
evidence does not preponderate” in Equassure’s favor with regard
to promissory fraud, implicitly finding the de la Cruzes intended
to sell the property for $3 million at the time they entered into
the VLPA.
The court went on to separately address the aspect of the
fraud claim premised on the failure to disclose the problems with
the Miletich heirs regarding clean title. The record does not
support Equassure’s contention the court misunderstood its fraud
cause of action.
Equassure alternatively contends the court erred in
concluding it had failed to carry its burden to demonstrate
promissory fraud, emphasizing evidence that the estate filed a
petition with the probate court to clarify title in June 2016, less
than two months before escrow was scheduled to close, with a
hearing date on the motion long after the closing date.
Equassure also cites the de la Cruzes’ failure to obtain a
residential property report or waiver of such a report as further
proof they never intended to perform the conditions of the VLPA.
To obtain reversal on appeal, however, Equassure must do more
than cite favorable evidence; it must show that it was entitled to
judgment on the fraud claim as a matter of law because the
28
evidence was “uncontradicted and unimpeached” and of such a
character and weight as to leave no room for a judicial
determination that it was insufficient to support a finding.
(See Juen v. Alain Pinel Realtors, Inc., supra, 32 Cal.App.5th at
pp. 978-979.) In addition to the evidence Equassure cites, there
was also evidence DiVincenzo engaged in efforts to clear the title
to effect the sale. Although the court found DiVincenzo could
have been more forthcoming with Equassure as to those efforts,
the court found the de la Cruzes intended to clear the title and
sell the property at the time they entered into the contract.
Equassure disagrees with the court’s analysis, but it has not
shown the court’s findings were erroneous as a matter of law.
The de la Cruzes’ Appeal
5. The Court Did Not Err in Concluding the Estate Was Not
Entitled to the Full $150,000 Deposit
In response to Equassure’s claim it was entitled to the
return of the $150,000 it had deposited into escrow, the
de la Cruzes argued Equassure had committed an anticipatory
breach when, in letters and in a conversation with DiVincenzo in
mid-August before escrow was scheduled to close, Stenson
indicated Equassure lacked the funds to perform under the
escrow terms and sought new terms. As a result, the
de la Cruzes contend the court erred in concluding Equassure
was entitled to any part of the deposit that had been released to
them prior to August 18, 2016. They argue they are entitled to
retain the entire $150,000 deposit as liquidated damages for
Equassure’s anticipatory breach.
An anticipatory breach of contract occurs when a party to a
contract, expressly or by implication, repudiates the contract
before the time for his or her performance. (Romano v. Rockwell
29
Internat., Inc. (1996) 14 Cal.4th 479, 489; Mammoth Lakes Land
Acquisition, LLC v. Town of Mammoth Lakes (2010)
191 Cal.App.4th 435, 463.) “‘An express repudiation is a clear,
positive, unequivocal refusal to perform [citations]; an implied
repudiation results from conduct where the promissor puts it out
of his power to perform so as to make substantial performance of
his promise impossible.’” (Mammoth Lakes Land Acquisition, at
p. 463.)
At the threshold, because the de la Cruzes did not file a
cross-complaint for breach of contract, instead asserting
Equassure’s anticipatory breach only as an affirmative defense to
Equassure’s complaint, their claim to retain the entire $150,000
deposit as liquidated damages is, at best, suspect. They cite no
authority to support their argument a seller who has not sued the
buyer for breach of contract is entitled to retain a refundable
deposit after the transaction has been cancelled, and we doubt
such a proposition is valid.
In any event, the trial court did not err in concluding
Equassure had not committed an anticipatory breach, finding
Equassure’s written proposals were just that, proposals, not
unequivocal repudiations of the VLPA terms. Without directly
disputing that finding, the de la Cruzes cite what they claim is
uncontradicted evidence of an express repudiation of the VLPA—
DiVincenzo’s testimony that he had asked Stenson in early
August 2016 whether Equassure was going to close without the
entitlements and Stenson replied he “wanted the entitlements”
12
before closing. However, the de la Cruzes emphasized this
12
DiVincenzo testified that, in mid-August, before the
scheduled closing date, he asked Stenson directly, “Are you going
30
testimony in closing argument; and the court rejected it,
implicitly interpreting Stenson’s statement that he “wanted to
close” with entitlements as an expression of desire, an
interpretation consistent with both Stenson’s testimony at trial
and his written proposals. The court also questioned
DiVincenzo’s overall credibility at trial and resolved any conflict
in the evidence on this point in favor of Equassure.
The de la Cruzes’ argument Equassure “put it out of its
power to perform” by failing to obtain a firm commitment from
Stenson’s investor brother to be able to close also fails. Whether
Equassure had the funds to close on August 18, 2016 or not, it did
not do anything prior to that time that made it impossible for it
to obtain the funds at closing. (Cf. Am-Cal Inv. Co. v. Sharlyn
Estates, Inc. (1967) 255 Cal.App.2d 526, 538 [the act of conveying
the land to a third party during the 30-day extension period
constituted an anticipatory breach].)
Relying on Gold Mining & Water Co. v. Swinerton (1943)
23 Cal.2d 19, 29, the de la Cruzes argue the trial court
misapplied the law of anticipatory breach because proof of
inability to perform on the date set for performance is sufficient
for anticipatory breach. Gold Mining holds no such thing. In
that case the Supreme Court explained the difference between
anticipatory breach (a repudiation by the promisor before the
promise is due) and a partial breach at time of performance
followed by a total repudiation, which is also a breach, albeit not
anticipatory. (Ibid.) To the extent the de la Cruzes argue they
are entitled to the full deposit as liquidated damages due to
Equassure’s nonpayment of the purchase price by August 18,
to close without having your entitlements? And he [Stetson]
answered that he wanted the entitlements before we closed.”
31
2016, they failed to demonstrate Equassure’s nonperformance
was not discharged or excused by their own failure to fulfill
concurrent conditions, including delivering marketable title. The
court did not credit DiVincenzo’s testimony the estate could have
delivered marketable title by August 18, 2016 but for Equassure’s
anticipatory breach hindering his agreement with the Militech
heirs. The de la Cruzes have not demonstrated that finding was
erroneous as matter of law.
Finally, citing Civil Code section 3399, the de la Cruzes
argue the omission of the word “nonrefundable” with regard to
the second $75,000 deposit was scrivener error that did not
reflect the actual agreement of the parties. (See Civ. Code,
§ 3399 [“[w]hen, through fraud or a mutual mistake of one party,
which the other at the time knew or suspected, a written contract
does not truly express the intention of the parties, it may be
revised on the application of a party aggrieved, so as to express
that intention, so far as it can be done without prejudice” to the
rights acquired by third parties in good faith].) They emphasize
it was Stenson who, in precontract negotiations, initially
proposed the idea of a nonrefundable deposits, made in two parts.
Following negotiations in June and July 2015, DiVincenzo told
Carew to prepare a counteroffer that would, among other things,
make half of the deposit nonrefundable and released to seller
after 45 days and the second half nonrefundable and released to
seller 60 days after escrow opened. Carew responded, suggesting
a counteroffer that required Equassure to deposit “$150,000 EMD
[earnest money deposit] with 50% of it going non-refundable after
the 45 days due diligence period . . . [and] [t]he remaining 50% of
the EMD is released non-refundable 6 months from
acceptance . . . .” On August 14, 2015 Equassure proposed its
32
own counteroffer, accepting some, but not all, of the estate’s
terms in Seller’s addendum 2.
The record does not contain the conclusive evidence the
de la Cruzes describe. The only addendum 2 in the record is
addendum 2 of the VLPA, which omits the word “non-refundable”
in connection with the second deposit. Citing the absence of any
documentary evidence to support the de la Cruzes’ argument of a
mutual agreement that both deposits were intended to be
nonrefundable, the court concluded there was neither ambiguity
nor mistake. The VLPA meant what it said. The second deposit
was refundable; the first was not. None of the extrinsic evidence
the de la Cruzes highlighted compels a different conclusion.
6. The Award of Prejudgment Interest Must Be Modified
Civil Code section 3287, subdivision (a), provides, “A person
who is entitled to recover damages certain, or capable of being
made certain by calculation, and the right to recover is vested in
the person upon a particular day, is entitled also to recover
interest thereon from that day, except when the debtor is
prevented by law, or by the act of the creditor from paying the
debt.” “Under this provision, the trial court has no discretion—it
must award prejudgment interest from the first day there exists
both a breach and a liquidated claim.” (Watson Bowman Acme
Corp. v. RGW Construction, Inc. (2016) 2 Cal.App.5th 279, 293;
accord, Union Pacific Railroad Co. v. Santa Fe Pacific Pipelines,
Inc. (2014) 231 Cal.App.4th 134, 198 [Prejudgment interest is
“designed to compensate for the presumed harm caused by the
inevitable delays inherent in litigation. While the party that
ultimately prevails awaits final judgment in his or her favor, the
losing party enjoys the use of the funds in question as the lawsuit
winds its way through the courts. Thus, “‘[t]he purpose of
33
prejudgment interest is to compensate plaintiff for [the] loss of
use of his or her property”’”].)
Finding Equassure was entitled to a refund of the second
deposit pursuant to the VLPA, the court awarded Equassure
prejudgment interest beginning on December 4, 2015, the date
the escrow company wired the first deposit to the de la Cruzes as
executors in accordance with the VLPA. Because the trial court
ruled (and we have agreed) Equassure is not entitled to a refund
of that deposit, the court’s calculation was error.
While all parties agree the court’s prejudgment interest
calculation needs to be modified if we affirm the court’s finding
concerning the second $75,000 deposit, they disagree as to when
prejudgment interest begins. Equassure contends it should
commence on January 27, 2016, the date Stenson deposited the
second $75,000 payment into the escrow. The de la Cruzes
contend the appropriate date is October 4, 2016, when, they
assert, Equassure formally demanded its deposit returned. In
light of our holding the parties’ obligations under the contract
were excused or discharged when escrow did not close by
August 18, 2016, August 19, 2016 is the date certain on which
Equassure had the right to a refund of its second deposit.
Accordingly, we modify the judgment to reflect an award of
13
$21,534.24 in prejudgment interest.
7. Further Modification of the Judgment Is Not Necessary
13
The parties do not dispute the court correctly calculated a
daily prejudgment interest amount of $20.54794. In modifying
the award, we have multiplied that daily amount by 1048 days
(from August 19, 2016 to July 3, 2019, the date of entry of
judgment).
34
The de la Cruzes request we further modify the judgment
to explicitly state the court’s implied finding that they were not
liable in this lawsuit in their individual capacities. No
modification is necessary. The court found the de la Cruzes liable
in their capacities as executors under the contract for $75,000. It
found in their favor on all other claims, including the fraud claim,
findings we have affirmed. There is no reasonable reading of the
judgment in which the de la Cruzes were found individually
liable.
DISPOSITION
The judgment is modified to reflect prejudgment interest in
the amount of $21,534.24. As modified, the judgment is affirmed.
Equassure and the de la Cruzes are to bear their own costs on
appeal.
PERLUSS, P. J.
We concur:
SEGAL, J.
FEUER, J.
35