Community Rebuild Partners v. Chanin CA2/5

Filed 7/14/21 Community Rebuild Partners v. Chanin CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
COMMUNITY REBUILD B302457
PARTNERS, LLC, et al.,
(Los Angeles County
Plaintiffs and Respondents, Super. Ct. No. LC105136)
v.
SAM CHANIN, et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of the
County of Los Angeles, C. Virginia Keeny, Judge. Affirmed.
WLA Legal Services, Inc., Steven Zelig, for Defendants and
Appellants.
Law Office of Baruch C. Cohen, Baruch C. Cohen, for
Plaintiffs and Respondents.
I. INTRODUCTION
The parties1 to this unlawful detainer action filed cross-
motions for summary judgment. The trial court granted sellers’
motion, denied buyers’ motion, and entered judgment entitling
sellers to possession of a residential property located in Sherman
Oaks (the property).
Buyers appeal from the orders on the cross-motions,
arguing that their evidence established, as a matter of law, that
they took possession of the property under a purchase agreement
and were therefore not subject to eviction as tenants under the
unlawful detainer statutes (Code Civ. Proc., § 1161, et seq.). In
the alternative, buyers maintain that their evidence raised
triable issues about whether they took possession of the property
under a lease. We affirm.
1 The named plaintiffs are Community Rebuild Partners,
LLC, Community Rebuild Partners Asset Holdings, LLC, and
Community Rebuild Partners (collectively “sellers”). The
defendants are Sam and Lieba Chanin (collectively “buyers”).
Because the buyers share the same last name, we will refer to
them by their first name for purposes of clarity.
2
II. FACTUAL BACKGROUND2
A. Transactional Documents
In May 2016,3 Community Rebuild Partners, as “Seller,”
and Lieba, as “Buyer,” entered into a California Association of
Realtors form “Residential Purchase Agreement and Joint
Escrow Instructions” for the purchase of the property (purchase
agreement). The total purchase price was $2,575,000. The
purchase agreement’s financing terms called for an initial deposit
into escrow of $100,000; a first loan in the amount of $2,060,000;
and a balance of $415,000 to be deposited into escrow. The
purchase agreement also provided that escrow would close 180
days from acceptance of buyers’ offer.
In paragraph 3-J of the purchase agreement, buyer was
required to deliver to seller, within three days of the execution of
that agreement, a lender’s letter stating that buyer was
preapproved for the loan amount of $2,060,000.
In paragraph 6, entitled “Other Terms,” the purchase
agreement provided: “Buyer shall be moving into the property at
2 As explained below, although the parties filed cross-
motions for summary judgment, this appeal turns on whether the
trial court properly granted sellers’ motion; if the court’s order on
sellers’ motion was correct, buyers’ motion was moot. The facts
are therefore based on those submitted in support of and in
opposition to sellers’ motion.
3 Lieba executed the purchase agreement on May 18, 2016,
and Gregory Hebner, on behalf of Community Rebuild Partners,
executed it on May 20, 2016.
3
the onset of escrow. Buyer shall pay $18,000 a month for rent.
$6,000 from each month’s rent paid shall be credited towards the
purchase price with a cap of $36,000 to be credited. See attached
interim occupancy agreement[.]” (Original capitalized.)
At the same time they executed the purchase agreement,
the parties also entered into a California Association of Realtors
form “Interim Occupancy Agreement Buyer in Possession”
(occupancy agreement). The occupancy agreement identified
Community Rebuild Partners as the “Seller/Landlord” and Lieba
as the “Buyer/Tenant.” It recited that the parties had “entered
into a purchase agreement for the . . . property . . . [and that the]
escrow for [that] agreement [was] scheduled to [close in] 180 days
. . . .” The occupancy agreement next stated that “Seller, as
Landlord, and Buyer, as Tenant, agree as follows: [¶] . . . [¶]
A. Landlord rents to Tenant and Tenant rents from Landlord
[the property] . . . . [¶] B. The [property is] for the sole use as a
personal residence by . . . [buyer and her family].”
The term of the occupancy agreement was to “begin[] on . . .
June 1, 2016 (‘Commencement Date’) . . . and . . . terminate at
5:00 p.m. on the earliest of: (a) the date scheduled for [the] close
of escrow of the purchase agreement . . . , or (b) mutual
cancellation of the purchase agreement. Tenant shall vacate the
[property] upon termination of [the occupancy agreement],
unless: (I) Landlord and Tenant have signed a new agreement,
(II) mandated by local rent control law, or (III) Landlord accepts
Rent from Tenant (other than past due Rent), in which case a
month-to-month tenancy shall be created which either party may
terminate pursuant to California Civil Code [section] 1946.1.”
In paragraph 3, entitled “Rent,” the occupancy agreement
defined rent as “all monetary obligations of Tenant to Landlord
4
under the terms of this [a]greement, except security deposit.”
The agreement then provided that “Tenant agrees to pay $18,000
per month for the term of [the a]greement.” The first month’s
rent of $18,000 was due by personal check on May 25, 2016.
Paragraph 26 of the agreement, entitled “Possession,” stated,
“Tenant is not in possession of the [property,]” and listed
remedies in the event “Landlord is unable to deliver possession
within 5 . . . calendar days.”
In paragraph 41, entitled “Other terms and conditions;
Supplements[,]” the occupancy agreement provided “$6,000 of
each month’s rent shall go towards the purchase price with a cap
of $36,000[.]” (Original capitalized.) The standard security
deposit due under most residential leases, however, was not
required under the occupancy agreement.
The parties also executed at the same time as the purchase
agreement and occupancy agreement, a California Association of
Realtors form “Addendum No.1” (addendum), which provided:
“The following terms and conditions are hereby incorporated in
and made [a] part of the: [purchase agreement] . . . . [¶] This
addendum is not only incorporated into the attached purchase
[agreement], but this addendum shall also superceed [sic]
anything agreed upon in the purchase [agreement]. [¶] Buyer to
deposit $100,000 at the opening of escrow. This deposit shall be
released to the Seller 10 days after opening escrow, at which time
Buyer shall remove their inspection contingency. Once a signed
contingency removal is received by escrow, it shall serve as
instruction to release the [nonrefundable] deposit to the Seller.
[¶] Buyer to lease the house from Seller until [the] close of
escrow. Close of escrow shall occur no later tha[n six] months
from the fully executed purchase [agreement] date. Seller offers
5
the Buyer two, one month extensions at the end of [the] lease
term, if needed in order to close escrow. [¶] Terms of the lease
are as follows: [¶] Monthly rent shall be $18,000 a month. At
the end of the lease term $6,000 of each month’s rent shall be
credited towards the purchase price with [the] cap on the credit of
$36,000. [¶] Tenant/Buyer shall be responsible for all
maintenance and wear and tear on the property. [¶]
Tenant/Buyer shall be taking full responsibility of the property as
if they have taken ownership of the home. Any modifications or
repairs will be paid for by the Tenant/Buyer, and approved by the
Seller. Buyer/Tenant will carry a homeowners insurance
policy/renter[’]s policy starting from the time of move-in. [¶] Any
additional escrow, title costs, or transfer taxes above what would
be for a purchase price of $2,575,000 shall be paid for by the
Buyer.” (Original capitalized.)
B. Sellers’ Evidence
Buyers took possession of the property on June 6, 2016, and
have continuously occupied the property since that time. They
timely paid monthly rent in the amount of $18,000 during the
term of the occupancy agreement from June through December
2016.4 Buyers did not exercise their option to extend the
occupancy period an additional two months.
4 In her deposition, Lieba testified that buyers paid $18,000
for the month of December 2016, in addition to the $18,000 per
month they were required to pay under the six-month term of the
occupancy agreement from June through November 2016.
6
After December 2016, buyers ceased making monthly
payments of $18,000. Instead, they tendered $7,000 checks for
the months of January, February, March, and April 2017, which
sellers refused to accept. From and after December 2016, buyers:
failed to tender the purchase price for the property; failed to close
escrow; failed to acquire title to the property; failed to pay or
tender rent (after April 2017); did not vacate and return
possession of the property; and did not offer to cancel the
purchase agreement.
Based on buyers’ representation that Lieba would purchase
the property, Gregory Hebner, on behalf of the property’s owner,5
agreed to rent the property to buyers pending the close of escrow.
Hebner would not have agreed to rent the property to buyers if he
knew Lieba would not pay the purchase price and would not
return the property at the end of the six-month occupancy period.
5 Community Rebuild Asset Holdings, LLC, is the company
that has owned the property since November 2014. Hebner is the
sole owner and managing member of Community Rebuild
Partners, LLC, which, in turn, owns a majority interest in and
manages the property’s owner. The property’s owner authorized
Community Rebuild Partners to enter into the purchase
agreement on its behalf.
7
C. Buyers’ Evidence6
In support of buyers’ cross-motion, Lieba declared that:
After reviewing a listing for the property, Lieba contacted the
listing broker, Michelle Hirsh, and visited the property with her
on two occasions. Following a home inspection of the property on
her behalf by a home inspection company, Lieba decided to make
an offer. She used Hirsh as buyers’ broker and submitted an
offer that included a term allowing her family to take possession
of the property pending close of escrow. Sellers accepted buyers’
offer which also included a deposit of $100,000 and payments of
$18,000 per month “for possession of the [property],” $6,000 of
which per month would be credited toward the purchase price.
According to Lieba, “[s]eller demanded that [she] provide proof of
funds for the down payment and a loan approval letter before he
would allow [her family] to take possession.”
Prior to executing the purchase agreement, the addendum,
and the occupancy agreement, Lieba did not speak to anyone
other than Hirsh concerning the negotiation of those documents.
Specifically, she never discussed the creation of a landlord-tenant
relationship between the parties and never intended to be a
tenant; she only intended to purchase the property.
Sellers did not require Sam to execute a lease, even though
he would be occupying the property with Lieba. And, as part of
the purchase transaction, Lieba was required to show proof of
6 In their opposition to sellers’ motion, buyers incorporated
by reference the facts they submitted in support of their cross-
motion. Those facts are therefore included in our recitation of
buyers’ evidence.
8
funds sufficient to complete the purchase of the property and to
procure homeowners’ insurance (which she was unable to obtain
because title to the property was not in her name).
According to Lieba, she was unable to obtain a mortgage to
complete the purchase of the property due to certain conduct by
sellers. She therefore intended to vacate the property, but sellers
refused to refund any portion of her deposit or the payments she
had made in return for possession. Buyers therefore decided to
sue sellers and to remain in possession of the property pending
the outcome of their lawsuit. Although buyers offered to pay
sellers $7,000 per month while their family remained in
possession, sellers refused their offer.
In support of their cross-motion, buyers also submitted
excerpts from the depositions of Hebner and Hirsh, as well as two
declarations by Hebner. In his deposition, Hebner testified that
he never spoke directly to buyers until after they had moved into
the property. He assumed it was buyers’ idea to take possession
of the property under the occupancy agreement because that
term was in their offer and Hirsh had told him buyers “needed a
couple of months to get their mortgage in order.” In his
declarations, Hebner stated that he agreed to rent the property to
buyers based on their representation that Lieba would purchase
the property. He also confirmed that he would not have agreed to
rent the property to buyers if he knew Lieba would not be able to
pay the purchase price and would not return the property when
the lease term was over.
In her deposition, Hirsh testified that Hebner told her what
to include in the occupancy agreement and the addendum. She
and Hebner worked on the occupancy agreement together and
then presented it to buyers who made their own revisions. She
9
understood that buyers needed time to close the transaction, “but
[that] they also needed a home to move into, and they wanted to
move into [the property] prior to actually closing escrow, so . . .
[the] occupancy agreement [was drafted] to allow [buyers] to
move into the house and . . . pay a monthly amount, [a portion of]
which . . . would go towards the purchase price once we closed
escrow.”
The last time Hirsh visited the property, the pool did not
have a fence around it. Hirsh explained that when she sold a
property, she did not necessarily recommend installing fencing
directly around a pool if the home had other pool-safety features.
But when she leased a property with a pool, she “would . . . tell
the landlord . . . it would be a good idea to put a fence around the
pool just as a[n] extra precaution . . . .”
III. PROCEDURAL BACKGROUND
A. Buyers’ Lawsuit
In March 2017, buyers sued sellers and others for fraud
and various other causes of action. On April 23, 2021, we
dismissed Lieba’s appeal from one of the trial court’s orders in
that matter, under the disentitlement doctrine, finding that
Lieba’s refusal to comply with the court’s order prevented her
from seeking relief on appeal. (Chanin v. Community Rebuild
Partners et al. (Apr. 23, 2021, B299188) [nonpub. opn.].)
10
B. Unlawful Detainer Complaint and Demurrers
On January 9, 2017, sellers served Lieba with a three-day
notice to pay rent or quit.
On January 23, 2017, sellers filed an unlawful detainer
complaint against buyers seeking to summarily evict them from
the property. The complaint attached a copy of the occupancy
agreement.
In May 2017, sellers filed a second amended unlawful
detainer complaint, attaching, among other things, the purchase
agreement and addendum. Buyers demurred, and the trial court
sustained the demurrer without leave to amend, ruling that
“[t]he complaint shows no landlord[-]tenant relationship. The
remedy for [sellers] is ejectment.”
In June 2017, the trial court entered a judgment of
dismissal, from which sellers timely appealed.
C. Appeal and Remittitur
In April 2019, this court issued an opinion reversing the
judgment of dismissal, holding that “the transactional documents
do not unambiguously demonstrate as a matter of law that
buyers took possession of the property under the purchase
agreement. Instead, a fair reading of the allegations of the
operative complaint and the attached documents shows sellers
sufficiently pleaded that buyers initially took possession under a
fixed-term lease that expired and that buyers were thereafter
subject to eviction under Code of Civil Procedure section 1161 for
unlawfully holding over. The trial court therefore erred in
11
sustaining the demurrer.” (Community Rebuild Partners, LLC v.
Chanin et al. (Apr. 25, 2019, B284632) [nonpub. opn.].)
We added: “In finding that [buyers] have not shown at the
pleading stage—as a matter of law—that they took possession
under the purchase agreement and that [seller] has sufficiently
pleaded possession pursuant to a lease, we do not express an
opinion on the ultimate merits of the parties’ respective
contentions or the definitive interpretation of the transactional
documents.” (Community Rebuild Partners, LLC v. Chanin et al.,
supra, B284632.) We remanded the matter to the trial court with
instructions to enter a new order overruling the demurrer. The
remittitur issued on June 25, 2019.
D. Cross-Motions for Summary Judgment
On August 8, 2019, sellers filed their third amended
complaint for unlawful detainer. On August 27, 2019, sellers
filed their motion for summary judgment and supporting papers
and, the next day, buyers filed their cross-motion for summary
judgment and supporting papers. The parties also filed opposing
papers and replies.
On September 13, 2019, the trial court held a hearing on
the cross-motions. Following argument, the court found that “the
extrinsic evidence offered by [buyers] (other than the language of
the contracts [themselves]) is insufficient to create a triable issue
of fact as to whether the parties intended a buyer-seller
arrangement. . . . [W]hen the three agreements are considered
together, the language is unambiguous and creates a
landlord[-]tenant relationship as a matter of law. [¶] There is no
triable issue of fact as to the relationship and in fact, the court
12
concludes that . . . [buyers] are tenants and unlawful detainer is
an allowable remedy.”
On September 24, 2019, the trial court entered a judgment
in favor of sellers from which buyers timely appealed.
IV. DISCUSSION
A. Disentitlement Doctrine
As we discuss above, we have already concluded, in case
number B299188, that Lieba’s conduct in the buyers’ lawsuit
supported the application of the disentitlement doctrine to
dismiss her appeal from that trial court’s order confirming the
arbitrator’s order. For the reasons we discuss in case number
B299188, we dismiss Lieba’s appeal under the disentitlement
doctrine. (See Stoltenberg v. Ampton Investments, Inc. (2013) 215
Cal.App.4th 1225, 1233–1234 [disentitlement doctrine applied to
appellant who was in violation of orders issued by a trial court
from a different jurisdiction].)
Because Sam, however, was not a party to the prior appeal
and is an appellant here, we decline to exercise our discretion to
further apply the doctrine to his appeal.
B. Sam Forfeited Arguments on Appeal
Although Sam is a named appellant in this appeal, he was
not a signatory to any of the transactional documents at issue on
appeal. Further, Sam conceded in the trial court that he did not
have an independent basis for remaining on the property and
would therefore vacate the property if judgment of possession
13
was entered against Lieba.7 On this record, we conclude that
Sam forfeited any argument that he had an independent basis to
possess the property. In any event, even if Sam had not forfeited
his arguments on appeal, we would reject them on the merits for
the reasons we discuss below.
C. Prior Opinion Reversing Demurrer
Sam maintains that our prior opinion reversing the trial
court’s ruling on demurrer, case number B284632, determined
that the transactional documents were ambiguous on the issue of
whether they created a landlord-tenant relationship. According
to Sam, that determination is “law of the case” and was binding
on the trial court. (Morohoshi v. Pacific Home (2004) 34 Cal.4th
482, 491.) We disagree.
As we describe above, in our prior opinion, we reversed the
trial court’s ruling sustaining buyers’ demurrer to the unlawful
detainer complaint, holding that sellers had adequately alleged
the existence of a landlord-tenant relationship and the
transactional documents attached to the complaint did not
contradict those allegations by showing, unambiguously, that
7 During the hearing on the cross-motions for summary
judgment, the trial court inquired whether a judgment of
possession against Sam would be appropriate. In response, his
counsel stated: “The reality is . . . that if judgment of possession
is given against Lieba [], Sam [] and the children will be leaving
also together. So that’s really not an issue. And it’s never been
an issue.” The court therefore entered a judgment of possession
against both Lieba and Sam.
14
buyers took possession of the property under the purchase
agreement.
Contrary to Sam’s assertion, we did not hold that the
documents were ambiguous on the issue of whether buyers took
possession under a lease; nor were we required to do so under the
procedural posture of that case. Instead, we concluded only that,
at the pleading stage, sellers had alleged sufficient facts to state
a cause of action for unlawful detainer. We expressly declined to
state any opinion on the definitive interpretation of the
transactional documents. The trial court was therefore not
bound by our decision—under the law of the case or otherwise—
to conclude that the language of the documents was ambiguous
on the creation of a tenancy.
D. Summary Judgment in Unlawful Detainer
1. Standard of Review
Our review of the trial court’s rulings on the cross-motions
for summary judgment8 is governed by well-established
principles. “‘“A trial court properly grants a motion for summary
judgment only if no issues of triable fact appear and the moving
party is entitled to judgment as a matter of law. (Code Civ. Proc.,
§ 437c, subd. (c); see also id., § 437c, subd. (f) [summary
8 In an unlawful detainer action, a “motion for summary
judgment may be made at any time after the answer is filed upon
giving five-days notice. Summary judgment shall be granted or
denied on the same basis as a motion under [Code of Civil
Procedure s]ection 437c.” (Code Civ. Proc., § 1170.7.)
15
adjudication of issues].)”’” (State of California v. Allstate Ins. Co.
(2009) 45 Cal.4th 1008, 1017.) “We review the trial court’s
decision [on a summary judgment motion] de novo, considering
all of the evidence the parties offered in connection with the
motion (except that which the court properly excluded) and the
uncontradicted inferences the evidence reasonably supports.
[Citation.]” (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.)
“In moving for summary judgment, a ‘plaintiff . . . has met’
his ‘burden of showing that there is no defense to a cause of
action if’ he ‘has proved each element of the cause of action
entitling’ him ‘to judgment on that cause of action. Once the
plaintiff . . . has met that burden, the burden shifts to the
defendant . . . to show that a triable issue of one or more material
facts exists as to that cause of action or a defense thereto. The
defendant . . . may not rely upon the mere allegations or denials’
of his ‘pleadings to show that a triable issue of material fact
exists but, instead,’ must ‘set forth the specific facts showing that
a triable issue of material fact exists as to that cause of action or
a defense thereto.’ (Code Civ. Proc., § 437c, subd. (o)(1).)”
(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849.)
2. Unlawful Detainer Statutes
“‘Unlawful detainer actions are authorized and governed by
state statute. (Code Civ. Proc., § 1161 et seq.) The statutory
scheme is intended and designed to provide an expeditious
remedy for the recovery of possession of real property.’ (Larson v.
City and County of San Francisco (2011) 192 Cal.App.4th 1263,
1297 . . . , citing Birkenfeld v. City of Berkeley (1976) 17 Cal.3d
129, 151 . . . .) ‘The remedy is available in only three situations:
16
to a lessor against a lessee for unlawfully holding over or for
breach of a lease; to an owner against an employee, agent, or
licensee whose relationship has terminated; and to a purchaser at
an execution sale, a sale by foreclosure, or a sale under a power of
sale in a mortgage or deed of trust against the former owner and
possessor.’ (Greene v. Municipal Court (1975) 51 Cal.App.3d 446,
450 . . . (Greene).) Unlike the foregoing situations, ‘[a] vendee in
possession of land under a contract of sale who has defaulted in
the payment of an installment of the purchase price, is not
subject to removal by the summary method of unlawful detainer.’
(Id. at p. 451; see Francis v. West Virginia Oil Co. (1917) 174 Cal.
168, 169–171 . . . ; Goetze v. Hanks (1968) 261 Cal.App.2d 615,
617 . . . .)” (Taylor v. Nu Digital Marketing, Inc. (2016) 245
Cal.App.4th 283, 288–289.)
Sellers’ third amended unlawful detainer complaint alleged
that buyers continued in possession of the property after the
expiration of the six-month term of the interim occupancy
agreement. They therefore sought recovery of possession under
Code of Civil Procedure section 1161, subdivision 1.9 That
section makes the continuation of a tenant’s possession after
expiration of the term a form of unlawful detainer for which the
landlord may recover possession in summary proceedings.
(Fisher v. City of Berkley (1984) 37 Cal.3d 644, 706.)
9 Code of Civil Procedure section 1161 provides, in pertinent
part: “A tenant of real property, for a term less than life . . . is
guilty of unlawful detainer: [¶] 1. When the tenant continues in
possession, in person or by subtenant, of the property, or any part
thereof, after the expiration of the term for which it is let to the
tenant . . . .”
17
Thus, to prevail on their cause of action for unlawful
detainer, sellers were required to show that: (1) buyers were
tenants under a fixed-term lease; (2) the lease had expired; and
(3) buyers were holding over.
3. Rules of Contract Interpretation
Under the rules of contract interpretation, “we first
consider the mutual intention of the parties at the time the
contract . . . was formed. (Civ. Code, § 1636.) Our initial inquiry
is confined to the writing[s] alone. (Id., § 1639; [Citation.].) ‘“The
‘clear and explicit’ meaning of these provisions, interpreted in
their ‘ordinary and popular sense,’ unless ‘used by the parties in
a technical sense or a special meaning is given to them by usage’
(Id., § 1644), controls judicial interpretation. (Id., § 1638.) Thus,
if the meaning a layperson would ascribe to contract language is
not ambiguous, we apply that meaning. [Citations.]”’ [Citation.]
At the same time, we also recognize the ‘interpretational
principle that a contract must be understood with reference to
the circumstances under which it was made and the matter to
which it relates. ([Id.], § 1647).’ [Citation.]” (Mountain Air
Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th
744, 752.) Thus, “‘[w]e consider the contract as a whole and
interpret its language in context so as to give effect to each
provision, rather than interpret the contractual language in
isolation. [Citation.]’” (Wind Dancer Production Group v. Walt
Disney Pictures (2017) 10 Cal.App.5th 56, 69.)
“Ordinarily, the objective intent of the contracting parties
is a legal question determined solely by reference to the contract’s
terms. (Civ. Code, § 1639 [‘[w]hen a contract is reduced to
18
writing, the intention of the parties is to be ascertained from the
writing alone, if possible . . .’]; Civ. Code, § 1638 [the ‘language of
a contract is to govern its interpretation . . .’].) [¶] The court
generally may not consider extrinsic evidence of any prior
agreement or contemporaneous oral agreement to vary or
contradict the clear and unambiguous terms of a written,
integrated contract. (Code Civ. Proc., § 1856, subd. (a); Cerritos
Valley Bank v. Stirling (2000) 81 Cal.App.4th 1108, 1115–1116
. . . ; Principal Mutual Life Ins. Co. v. Vars, Pave, McCord &
Freedman (1998) 65 Cal.App.4th 1469, 1478 . . . [parol evidence
may not be used to create a contract the parties did not intend to
make or to insert language one or both parties now wish had
been included].) Extrinsic evidence is admissible, however, to
interpret an agreement when a material term is ambiguous.
(Code Civ. Proc., § 1856, subd. (g); Pacific Gas & Electric [Co. v.
G.W. Thomas Drayage etc. Co. (1968)] 69 Cal.2d [33,] 37 [(Pacific
Gas & Electric)] [if extrinsic evidence reveals that apparently
clear language in the contract is, in fact, susceptible to more than
one reasonable interpretation, then extrinsic evidence may be
used to determine the contracting parties’ objective intent]; Los
Angeles City Employees Union v. City of El Monte (1985) 177 Cal.
App.3d 615, 622 . . . .)” (Wolf v. Walt Disney Pictures & Television
(2008) 162 Cal.App.4th 1107, 1126.)
4. Analysis
As noted, the dispositive issue on appeal is whether sellers
established, as a matter of law, that buyers possessed the
property as tenants. If they did, then Hebner’s declaration
testimony in support of sellers’ motion showed that the six-month
19
term of the occupancy agreement expired in December 2016, and
that buyers were hold overs from and after that point. Sellers
therefore satisfied their burden of proving the other elements of
the unlawful detainer cause of action, and buyers do not contend
otherwise. We thus interpret the transactional documents to
determine whether they created a landlord-tenant relationship.
a. Transactional documents are not ambiguous
As we have already concluded in our prior opinion, the
transactional documents at issue here sufficiently demonstrated
that the buyers took possession of the property pursuant to a
lease and also demonstrated that they did not, as a matter of law,
take possession under the purchase agreement.
The purchase agreement and addendum included
numerous references to the terms, “rent,” “monthly rent,” “each
month’s rent,” “lease,” “terms of the lease,” and “lease term.”
Those terms, as commonly understood, are clear and explicit, and
strongly suggest that buyers would be tenants during the escrow
period prior to their acquisition of title.
Further, the occupancy agreement—which was a separate
document prepared to express the parties’ respective rights and
obligations during the interim occupancy—also used the terms
“rent,” “past due rent,” and “each month’s rent” and specifically
defined the parties as “Tenant” and “Landlord,” and those terms
were used consistently throughout the agreement to identify the
parties. Those terms are not unfamiliar to laypersons and would
be commonly understood by them to refer to the parties to a
lease, as distinguished from a purchase agreement.
20
The occupancy agreement also recited, in a paragraph
entitled “Possession,” that the “Tenant” was not yet in possession
of the property, and that if the “Landlord” was unable to deliver
possession within five days of the commencement date, the
tenant could terminate the agreement. That provision directly
linked buyers’ possession of the property to the occupancy
agreement, independent of any rights buyers may have had
under the purchase agreement. Thus, the language of the
transactional documents, and in particular the occupancy
agreement, clearly and explicitly evinces an intent to create a
landlord-tenant relationship.
Sam counters that the transactional documents are
ambiguous, but does not explain how the repeated use of terms
like “Landlord,” “Tenant,” “Rent,” “rent to,” “rent from,” “Lease,”
“Lease Term,” and “tenancy,” when understood in their ordinary
and popular sense, could describe to a layperson anything other
than a landlord-tenant relationship. Nor does he explain how
those terms, as applied in the context of the purchase
transaction, could be susceptible to more than one meaning. (See
Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 391 (Dore)
[An ambiguity arises when language is reasonably susceptible of
more than one application to material facts].)
Instead, Sam contends that the transactional documents
contain certain other provisions which, on their face, raise an
ambiguity concerning the parties’ intent to lease the property.
For example, Sam argues that the $100,000 deposit required
under the purchase agreement, when combined with the $6,000
per month payments toward the purchase price required under
the occupancy agreement, were inconsistent with an intent to
lease. Although those provisions, in isolation, may have
21
suggested the existence of a vendee relationship (see Greene,
supra, 51 Cal.App.3d at p. 451), we do not read the provisions in
isolation, but instead consider them in the context of all the
transactional documents (see Cates Construction, Inc. v. Talbot
Partners (1999) 21 Cal.4th 28, 39–40). Thus, although the
purchase agreement required a $100,000 deposit, it did not tie
that deposit to buyers’ ability to possess the property.10 Instead,
the deposit was part of the financing terms for the purchase.
Further, that the transactional documents allowed a portion of
the rent to be credited against the purchase price “does not, in
and of itself, transfer possession from a landlord-tenant
relationship to one of purchaser and seller.” (Provouskivitz v.
Snow (1977) 74 Cal.App.3d 554, 533.) At best, those two
provisions demonstrate that the parties agreed to both the
eventual sale of the property and a six-month lease, which does
not defeat the existence of a landlord-tenant relationship. (Ibid.)
Sam also contends that the addendum’s provision requiring
buyers to maintain and repair the property during the escrow is
fundamentally inconsistent with the creation of a tenancy.
Citing to a landlord’s nondelegable duties under the implied
warranty of habitability, Sam maintains that the provision
10 Sam maintains that buyers were required, as a condition of
occupancy, to show proof that they could pay the $100,000 down
payment and fund the purchase of the property. But the
transactional documents do not support that assertion; in fact,
the purchase agreement independently required buyers to show
preapproval of the required loan amount and also required Lieba
to represent that the funds for the deposit “would be good when
deposited.” Neither the addendum nor the occupancy agreement
had such requirement.
22
shifting those duties to buyers is inconsistent with an intent to
create a tenancy and instead shows that the parties intended
that buyers’ interim occupancy would be as owners, not tenants.
And, according to Sam, the fact that Hirsh did not recommend
that sellers place a fence around the pool is contrary to a finding
that the parties entered into a lease. We disagree.
That sellers sought to delegate a nondelegable obligation to
maintain the property and did not place a fence around the pool
may suggest that sellers were overreaching and lacked caution,
but do not demonstrate that they intended buyers to possess the
property as owners. To the contrary, that sellers attempted to
shift obligations they would otherwise be required to undertake
as landlords is entirely consistent with the parties’
understanding that sellers were landlords, at least during the six-
month period of the occupancy agreement. Moreover, the
provision that “Tenant/Buyer shall be taking full responsibility of
the property as if they have taken ownership of the [property]”
(italics added), acknowledged that the buyers would not, in fact,
take such ownership. And, that Hirsh, who was not a party to
the transactional documents, did not advise sellers to place a
fence around the pool was consistent with the intent of the
parties to enter into both a purchase agreement and a six-month
lease during the escrow period.
Finally, Sam emphasizes that he did not execute the
occupancy agreement and concludes that such an omission is
inconsistent with an intent to create a tenancy. According to
Sam, a landlord in sellers’ position would have required Sam to
be bound under the lease along with Lieba. But Sam does not
explain why this is so or support his assertion with legal
authorities or citations to the record. We thus reject that
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argument as waived. (Duarte v. Chino Community Hospital
(1999) 72 Cal.App.4th 849, 856.)
None of the provisions of the transactional documents cited
by Sam, when considered in the context of the agreements as a
whole, suggest that the numerous references to the terms, “rent,”
“monthly rent,” “lease,” “lease terms,” “landlord,” and “tenant,”
were anything but a clear and unambiguous description of a six-
month lease.
b. Extrinsic evidence
“‘Even if a contract appears unambiguous on its face, a
latent ambiguity may be exposed by extrinsic evidence which
reveals more than one possible meaning to which the language of
the contract is yet reasonably susceptible.’ [Citation.] ‘The test
of admissibility of extrinsic evidence to explain the meaning of a
written instrument is . . . whether the offered evidence is relevant
to prove a meaning to which the language of the instrument is
reasonably susceptible.’” (Dore, supra, 39 Cal.4th at p. 391.)
And, as explained above, once extrinsic evidence reveals that
apparently clear language in the contract is susceptible to more
than one reasonable interpretation, then extrinsic evidence may
be used to determine the contracting parties’ objective intent.
(Pacific Gas & Electric, supra, 69 Cal.2d at p. 37.)
In an apparent attempt to satisfy his burden to show that
there was a triable issue of material fact on the issue of whether
buyers possessed the property under the terms of a six-month
lease, Sam relies on extrinsic evidence, without specifying
whether he is using it to show a latent ambiguity in the
documentation or, instead, to shed relevant light on the parties’
24
true intention under those agreements. We will assume, for the
sake of argument, that buyers’ extrinsic evidence was proffered
for both purposes, and thus consider all their extrinsic evidence.
We nevertheless conclude that buyers failed to show either a
latent ambiguity or a triable issue of fact regarding the parties’
objective intent on the lease issue.
As Lieba explained to Hirsh, buyers needed six-months to
obtain financing, close escrow, and acquire title. But they also
needed a place to live during that time and wanted to move into
the property. Under those circumstances, the creation of a six-
month fixed-term tenancy was wholly consistent with buyers’
needs and desires; and, delivering them possession without such
a tenancy in place would have been inconsistent with their
present lack of funding to close the purchase transaction.
Moreover, Lieba’s testimony that she never intended to
enter into a lease transaction, and always intended to purchase
the property, was also irrelevant to the issue of the parties’
mutual intent. As she admitted, she never spoke to anyone about
the creation of a tenancy. Thus, her subjective, unexpressed
intentions about the parties’ transaction could not operate to
show that the language of the documents describing a tenancy
was reasonably susceptible to some different meaning.
(Reigelsperger v. Siller (2007) 40 Cal.4th 574, 579–580; Bryant v.
California Dairies, Inc. (1935) 4 Cal.2d 128, 133.)
In addition, Lieba’s conclusory testimony that sellers
demanded, as a precondition to occupancy, that she show proof of
funds for the loan and the deposit was insufficient to show an
ambiguity in the documents because she was already obligated
under the purchase agreement to show proof of funds for the loan
and to represent that the funds for the deposit would “be good
25
when deposited with the [e]scrow [h]older.” Nor was that
testimony sufficient to raise a triable issue on the parties’ intent
to lease because demanding proof of funds before agreeing to a
tenancy was reasonable to ensure that buyers would be able to
close as represented once the lease term expired.
Moreover, none of the “admissions” attributed to sellers
had any tendency to show that they intended to allow buyers to
occupy the property as owners during the escrow period. For
example, buyers emphasize Hebner’s testimony that they
requested interim occupancy as part of their offer to purchase the
property. That testimony, which was generally consistent with
Lieba’s and Hirsh’s concerning the parties’ negotiations, shed no
light on the means by which that occupancy would ultimately be
permitted. The only evidence on that issue was the language of
the subsequently drafted documents that clearly described
possession as tenants.
Similarly, Hebner’s testimony that he would not have
agreed to rent the property to Lieba if he knew she would be
unable to pay the purchase price and would not return the
property to him was not inconsistent with an intent to rent. And,
it was irrelevant in any event as his unexpressed state of mind.
Likewise, Hirsh’s testimony that she negotiated the right to
interim occupancy because Lieba and her family needed a place
to live and needed extra time to close escrow merely corroborated
the undisputed facts, but did not suggest or imply an intent on
behalf of the parties that was different from the one expressed in
the subsequently drafted documents.
Finally, the fact that sellers allowed buyers to inspect the
property before making an offer on it was not relevant to, much
less inconsistent with, the parties’ subsequent intent to create a
26
fixed-term tenancy to accommodate buyers’ need for a place to
live during the extended escrow period. Instead, their inspection
of the property showed only that they intended to proceed with
the potential purchase of the property, a fact that was consistent
with an intent to rent the property during that escrow.
The trial court therefore did not err in concluding that,
based on the evidence submitted by the parties, sellers were
entitled to judgment on their unlawful detainer as a matter of
law.
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V. DISPOSITION
The judgment is affirmed. Plaintiffs are awarded costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KIM, J.
We concur:
BAKER, Acting P. J.
MOOR, J.
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