Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from the Superior Court of Riverside County. Harold W. Hopp, Judge. Super.Ct.No. INC047643.
Giardinelli & Duke, D.W. Duke and J Niswonger for Defendant and Appellant.
No appearance for Plaintiffs and Respondents.
OPINION
McKinster, J.
Defendant Walter Block appeals from a judgment awarding Melvin and Valondra Lesher $30,000 for breach of an option to purchase real property for $235,000. He contends that the option was invalid. He also contends that the Leshers presented no evidence that they attempted to exercise the option and that because they failed to prove that they were able to purchase the property, they were not entitled to damages. Finally, he contends that there is no evidentiary basis for the court’s award of $30,000.
We agree that the Leshers failed to present any evidence of their ability to purchase the property for the contract price on the date of the breach, and we reverse the judgment.
BACKGROUND
In summary form, and stated in the light most favorable to the judgment, the following are the underlying facts. Walter Block was at one time the stepfather of Melvin Lesher. In early 2004, at a time when the Leshers were in financial difficulty, Block purchased the Leshers’ residence at 23050 Longvue Road in Sky Valley for $235,000. In March 2004, Block and the Leshers entered into a monthly rental agreement, whereby Block rented the property to the Leshers with an option for the Leshers to repurchase the property within three years for $235,000. The monthly rent of $1,600 was to be applied to the purchase price and to property taxes, and the Leshers agreed to pay Block $5,000 at the close of escrow if the Leshers repurchased the property.
The Leshers asked Block to sell them the house in September 2004. However, Block refused to sell the house and instead initiated eviction proceedings. The relationship between Block and the Leshers had soured after an incident at work, on September 15, 2004, in which Melvin Lesher was injured in an altercation with Block and with Lesher’s nephew. All three men worked at that time for KBI, a construction company. Lesher’s injuries left him unable to work.
Acting in propria persona, the Leshers filed a complaint in December 2004, alleging breach of contract, common counts and fraud. They sought damages in the amount of $30,000 on the breach of contract and common counts causes of action and did not specify their damages on the fraud cause of action.
After a bench trial, at which the Leshers represented themselves, the court awarded them $30,000 in damages. Block filed a timely notice of appeal after his motion for new trial was denied.
LEGAL ANALYSIS
SUBSTANTIAL EVIDENCE SUPPORTS THE COURT’S FINDING THAT BLOCK BREACHED THE CONTRACT, BUT THERE IS NO EVIDENCE THAT THE LESHERS SUFFERED COMPENSABLE DAMAGES AS A RESULT OF THE BREACH
Block asserts that there was insufficient evidence that he breached the real estate purchase contract because there was no evidence that the Leshers offered to purchase the property. He also contends that because there was no evidence that the Leshers could have purchased the property for the contract price, the Leshers failed to prove that they were damaged by his repudiation of the contract. We disagree with the first contention, but we agree with the second.
To exercise an option, the optionee need only communicate to the optionor his election to accept the option. (Riverside Fence Co. v. Novak (1969) 273 Cal.App.2d 656, 661.) Here, the court did not expressly find that the Leshers communicated to Block their election to exercise the option. Block did not object to the omission of that finding from the statement of decision, however, and the doctrine of implied findings therefore requires us to infer that the trial court made all factual findings which are necessary to support the judgment. (Fladeboe v. American Isuzu Motors, Inc. (2007) 150 Cal.App.4th 42, 58.) We then review the implied findings under the substantial evidence rule. (Id. at p. 60.)
To determine the existence of substantial evidence, we view the entire record in the light most favorable to the prevailing party, resolving all conflicts and indulging all reasonable inferences from the evidence to support the judgment. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053.)
Here, there was substantial evidence that the Leshers did communicate to Block that they wanted to repurchase the property from him and that it was that communication which precipitated the unlawful detainer action. The Leshers’ complaint in this case alleged that “As soon as Walter Block found out there is approx 78,000.00 [sic] he refused to sell our house and has been trying to evict us.” (This apparently refers to a potential profit of $78,000 to be made by selling the house.) In their answer to Block’s unlawful detainer complaint, the Leshers stated, “We talked to Walter [Block] about selling the house and he said move out.” During questioning by Block’s attorney in this case, Valondra Lesher testified that that was an accurate statement. In the context of the Leshers’ complaint, the trial court could reasonably infer from Valondra’s testimony that shortly before Block initiated eviction proceedings, the Leshers told him that they wanted to repurchase the property. That is sufficient to prove that the Leshers communicated their decision to exercise the option. (Riverside Fence Co. v. Novak, supra, 273 Cal.App.2d at p. 661.)
Once the optionee communicates his acceptance of the option, the option is transformed into a contract for the purchase and sale of the property. If the optionor refuses to perform, he is in breach of the contract. (Wachovia Bank v. Lifetime Industries, Inc. (2006) 145 Cal.App.4th 1039, 1049-1050.) The Leshers’ acceptance of the option and Block’s refusal to sell the property is therefore legally sufficient evidence that Block breached the contract.
Block also asserts that the option was not enforceable because it failed to contain all of the material contract terms that would be contained in the ultimate contract of sale. Specifically, he asserts that the purchase price could not be ascertained because the contract provides that all payments the Leshers made under the rental agreement would be applied to the purchase price. He argues that “subtract[ing] the entire amounts paid from the purchase price would leave [Block] owing more on the property than he would receive from [the Leshers] at the time they exercised the option.” He contends that this compels the conclusion that there were terms left for future negotiation, thus rendering the option unenforceable.
To be enforceable, an option contract must contain “all the material contract terms that would be contained in the ultimate contract of sale.” (Patel v. Liebermensch (2007) 154 Cal.App.4th 373, 385.) The essential terms include the parties, the term of the option, the identity of the property and the price and method of payment. (Ibid.) However, the terms of the contract need only be clear enough that a court could “‘fairly and equitably determine the intentions of the parties and enforce the contract in a reasonable manner to give effect to their intentions. . . .’ [Citation.]” (Id. at p. 388.) Here, the contract states that the Leshers could purchase the property for $235,000 at any time within three years and that Block would receive $5,000 “at close of escrow with our new loan to purchase,” with the Leshers paying all closing costs. Whether or not it was a good deal for Block, there is no uncertainty as to the purchase price.
We do agree, however, that the Leshers presented no evidence that they were able to purchase the property. That omission is fatal to their claim for damages.
The Leshers’ cause of action for breach of contract accrued upon Block’s repudiation of the option. However, to obtain damages resulting from repudiation of a contract, the plaintiff must prove that he or she would have been able to perform as required by the contract. (Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 625.) If the plaintiff would not have been willing or able to perform his or her obligations under the contract—in this case, to complete the purchase of the property for the contract price—the defendant’s breach did not cause any damages. (Ibid.) The Leshers did not testify or offer any direct evidence of their ability to purchase the property for the contract price at the time of Block’s repudiation of the option, and there is no evidence in the record which supports an inference that the Leshers had access to funds or financing to purchase the property in September 2004. According to the Leshers, Block offered to buy the house in February 2004 because they were in financial difficulty. They had filed a Chapter 13 bankruptcy. They offered no evidence that their financial condition had improved sufficiently by September 2004, just seven months later, that they were able to repurchase the property. Accordingly, their claim for damages fails, and the judgment must be reversed.
In light of our resolution of these issues, we need not address Block’s other contentions.
DISPOSITION
The judgment is reversed. Defendant to recover costs on appeal.
We concur: Ramirez, P.J. Miller, J.