Opinion
NOT TO BE PUBLISHED
Appeal from judgments of the Superior Court of Los Angeles County, No. BC353185, James R. Dunn, Judge; Joseph Kalin, Judge.
Law Offices of Hilda Garzon-Ayvazian and Hilda Garzon-Ayvazian for Plaintiffs and Appellants.
O’Neill, Huxtable & Abelson and Mary L. O’Neill for Defendant and Respondent Dave Fly.
Gutierrez, Preciado & House, Calvin House; Davis & Davis, M. Stephen Davis and Matthew S. Davis, for Defendant and Respondent Eastland Escrow, Inc.
DOI TODD, J.
Appellants Rene Rivera (Rene) and his mother Rose Rivera (Rose) entered into an agreement to purchase real property from respondent Dave Fly. Escrow for the transaction was opened at respondent Eastland Escrow, Inc. Fly terminated the escrow and sold the property to a third party. Appellants sued the seller and the escrow company on various grounds.
The trial court treated a late-filed demurrer by Eastland as a motion for judgment on the pleadings and granted the motion on the ground that the action was barred by the one-year contractual limitations period in the escrow instructions. Appellants contend on appeal that the court erred because there were sufficient allegations of delayed accrual in the operative complaint. We agree, but we nevertheless conclude that the operative complaint fails to state a cause of action because there are no allegations that Eastland’s actions caused appellants to suffer harm.
The case proceeded to trial against Fly for breach of contract, and after a two-day court trial judgment was entered in his favor on the ground that appellants had failed to demonstrate their own compliance with the terms of escrow. Because appellants have failed to meet their burden of demonstrating error, we affirm the judgment in favor of Fly.
FACTUAL AND PROCEDUARL BACKGROUND
The operative third amended form complaint alleges as follows. On or about May 1, 2003, Fly agreed to sell to Rene real property located on Glenfinnan Avenue in Azusa, California for the sum of $150,000. The parties’ written “Agreement to Sell Real Estate” provided a closing date of June 16, 2003. Fly selected Eastland to handle the escrow and Rene deposited $1,000 into escrow. A few weeks later Rose was substituted as the buyer in place of her son; both Fly and Eastland knew that Rene was the real buyer. Rene received his deposit back and placed the money into Rose’s account so that she could deposit $1,000 into escrow.
“For the purpose of reviewing the court’s ruling on the judgment on the pleadings, we turn to the material facts that are pleaded in the complaint, which, except for contentions, deductions or conclusions of law, are deemed to be true in this appeal. (Pang v. Beverly Hospital, Inc. (2000) 79 Cal.App.4th 986, 989.)” (Camacho v. Automobile Club of Southern California (2006) 142 Cal.App.4th 1394, 1397–1398.) We also assume the truth of facts contained in exhibits to the complaint. (108 Holdings, Ltd. v. City of Rohnert Park (2006) 136 Cal.App.4th 186, 193.)
The escrow instructions, which were attached as an exhibit to the complaint, identify a closing date of June 19, 2003. There is no explanation as to why this date differs from that in the agreement to sell real estate. The escrow instructions provide at paragraph No. 5: “If the conditions of this escrow have not been complied with at the expiration date in these escrow instructions, you are instructed to complete the conditions at the earliest possible date, unless Buyer or Seller have made written demand upon you for... cancellation of this escrow. In that event, mutual written escrow instructions are required.... [¶]... if after the expiration date of the escrow closing and this escrow has not closed, this escrow may be cancelled by any one party by the electing party depositing into escrow a written demand on the other party or parties to perform hereunder within five days from deposit of said demand, and if such other party or parties do not perform within said five days then said escrow will be cancelled by the party electing to cancel with the additional deposit of a written cancellation instruction from said party after said five days.” Paragraph No. 5 also provides that the escrow holder agency would terminate six months following the date last set for close of escrow and that if the escrow was not closed or cancelled with the six-month period, Eastland would have no further obligations as escrow holder other than to disburse funds and documents pursuant to mutual written escrow instructions.
Paragraph No. 6 of the escrow instructions state that “NO NOTICE, DEMAND OR CHANGE OF INSTRUCTION SHALL BE OF ANY EFFECT UNLESS GIVEN IN WRITING BY ALL PARTIES AFFECTED THEREBY.”
The escrow instructions further provide at paragraph No. 8: “All parties agree that as far as your rights and liabilities are involved, this transaction is an escrow and not any other legal relation and you are an Escrow Holder only on the within express terms and you shall have no responsibility of notifying me or any of the parties to this escrow of any sale, resale, loan, exchange, or other transaction involving any property herein described... regardless of the fact such transaction(s) may be handled by you in this escrow or another escrow. NO ACTION SHALL LIE AGAINST ESCROW HOLDER FOR ANY CLAIMS, LOSS, LIABILITY OR ALLEGED CAUSE OF ACTION OF ANY KIND OR NATURE WHATSOEVER, HOWEVER CAUSED OR OCCURRED UNDER THIS ESCROW OR IN CONNECTION WITH THE HANDLING OR PROCESSING OF THIS ESCROW UNLESS BROUGHT WITHIN TWELVE (12) MONTHS AFTER THE CLOSE OF ESCROW, OR A CANCELLATION OR TERMINATION OF THIS ESCROW FOR ANY REASON WHATSOEVER.”
On June 23, 2003, Fly signed amended escrow instructions stating that buyer and seller mutually agreed to cancel the escrow. Rose did not receive the amended instructions until 8 months later on February 11, 2004, and did not sign the amended instructions. Fly did not deposit into escrow a demand that Rose perform within five days. According to the complaint, the escrow was cancelled unilaterally by Fly on June 23, 2003. On June 24, 2003, Fly sold the property to another buyer.
Six months later on or about February 11, 2004, Rene contacted Eastland to inquire about the escrow for the sale of the property to the other buyer. Eastland informed him that it was not involved in the subsequent escrow. Eastland again sent Rose amended escrow instructions for her signature on June 8, 2006, showing that the escrow was still open. The second and last time Eastland stated that it had no involvement in the subsequent escrow was on July 11, 2006, when Eastland’s owner and president, Sue Thomas, testified under oath in a small claims action brought by Rene for return of his mother’s deposit that Eastland was not involved in the subsequent escrow for the sale of the property. Rene had no reason to doubt Eastland’s truthfulness and had no way of verifying by public records that Eastland had handled the escrow. Rene first learned that Eastland had handled the escrow when Fly informed appellants’ attorney in August 2006, when he was served with their original complaint.
Appellants filed their original complaint against Fly for breach of contract in June 2006, three years after the property had been sold to the other buyer. Fly answered the complaint. Appellants filed an amendment to the complaint on October 12, 2006 substituting Eastland as Doe 1, asserting claims for breach of contract, fraud and breach of fiduciary duty. Eastland’s demurrer to the second amended complaint was sustained with leave to amend on the ground that the action was barred by the one-year contractual limitations period set forth in the escrow instructions.
Appellants filed their third amended complaint against Fly and Eastland, and Eastland demurred again on the same ground. Although appellants had opposed the prior demurrer on substantive grounds, they opposed the demurrer to the third amended complaint on the sole ground that the demurrer was untimely, despite the fact that their opposition to the demurrer was also untimely. At the hearing, the trial court sua sponte treated the late-filed demurrer as a motion for judgment on the pleadings, and granted the motion on the ground that the third amended complaint against Eastland was barred by the one-year contractual limitations period. Appellants’ motion to set aside the judgment was denied and appellants filed their first notice of appeal.
While the record on appeal contains an “order granting judgment on the pleadings,” there is no separate judgment. An order on a motion for judgment on the pleadings is not appealable; an appeal lies only from the judgment itself. (Fraser-Yamor Agency, Inc. v. County of Del Norte (1977) 68 Cal.App.3d 201, 207.) Because the order states that the “court granted judgment on the pleadings” in favor of Eastland and against appellants, we exercise our discretion to treat the order as an appealable judgment. (Campbell v. Jewish Com. for P. Service (1954) 125 Cal.App.2d 771, 772–773.)
The case then proceeded to a two-day bench trial on appellants’ cause of action for breach of contract against Fly. The court entered judgment in favor of Fly, finding that while the evidence showed that Fly had satisfied all the conditions of escrow by June 19, 2003, including the delivery of a signed deed, there was no evidence that Rose had either tendered the funds necessary to close escrow by June 19, 2003 or that she had been approved for a loan by that date. The court further found that appellants “were unable to offer any testimony as to their damages,” and noted that the witness they had called to testify as an expert on the fair market value of the property had failed to qualify as an expert. Appellants filed a second notice of appeal from this judgment. Appellants also filed notices of appeal from the orders granting attorney fees to Eastland and Fly. The appeals have been consolidated.
DISCUSSION
I. APPEAL FROM THE JUDGMENT IN FAVOR OF EASTLAND.
A. The Trial Court Did not Lack Jurisdiction
We first address appellants’ argument that the trial court lacked jurisdiction to enter judgment on the pleadings in the absence of an answer having been filed by Eastland. Although appellants appear to have abandoned this argument in light of their request that we rule on the judgment, we find no merit to this contention in any event.
Code of Civil Procedure section 438, subdivision (b)(2) expressly authorizes a trial court to grant judgment on the pleadings on its own motion. The reference to the filing of an answer as a prerequisite to moving for judgment on the pleadings appears only in subdivision (f) of section 438, which concerns motions filed by a plaintiff or defendant. There is nothing in the statute that suggests the filing of an answer is a jurisdictional prerequisite to the trial court granting judgment sua sponte. Appellants have pointed to no authority supporting their contention. To the contrary, we note that in Camacho v. Automobile Club of Southern California, supra, 142 Cal.App.4th at p. 1397, where the appellate court affirmed a judgment on the pleadings granted on the trial court’s own motion following the defendant’s demurrer, there is no indication in the opinion that the defendant had filed an answer. Other appellate courts have recognized a trial court’s inherent power to convert various motions into judgment on the pleadings motions in order to control litigation and conserve judicial resources. (See, e.g., Coshow v. City of Escondido (2005) 132 Cal.App.4th 687, 701 [affirming the conversion of motions in limine into a judgment on the pleadings motion].)
B. Motion for Judgment on the Pleadings
A motion for judgment on the pleadings is equivalent to a demurrer and is governed by the same standard of review. (Camacho v. Automobile Club of Southern California, supra, 142 Cal.App.4th 1394, 1398.) Thus, our task on appeal is to independently determine whether the complaint states a cause of action. (Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1064–1065.) In making this determination, which raises only questions of law, we may consider new theories made on appeal. (Id. at p. 1065.) We review a trial court’s disposition of the matter, not its reasons for the disposition. (Ibid.) A pleading which on its face is barred by a limitations period does not state a viable cause of action and is subject to judgment on the pleadings. (Hunt v. County of Shasta (1990) 225 Cal.App.3d 432, 440.) In order to avoid such a judgment, the plaintiff must plead specific facts which show an excuse, tolling or other basis for avoiding the time bar. (Spray, Gould & Bowers v. Associated Internat. Ins. Co. (1999) 71 Cal.App.4th 1260, 1266, fn. 4.)
The trial court granted judgment on the pleadings in favor of Eastland on the ground that appellants’ lawsuit against Eastland was barred by the one-year contractual limitations period in paragraph No. 8 of the escrow instructions. We agree with appellants that they pled sufficient allegations to invoke the delayed discovery rule on their claims against Eastland, and that the motion was therefore improperly granted for this reason. The delayed discovery rule prevents the clock from beginning to run on a limitation period until the plaintiff discovers or, through reasonable diligence, should have discovered all facts essential to her cause of action. (CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1536.) Although not addressed by appellants, we note that the delayed discovery rule applies to a contractual limitations period. (Moreno v. Sanchez (2003) 106 Cal.App.4th 1415, 1433; Weatherly v. Universal Music Publishing Group (2004) 125 Cal.App.4th 913. 919; Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.)
If a plaintiff’s complaint reveals a time bar, she “‘must specifically plead facts which show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’” (CAMSI IV v. Hunter Technology Corp., supra, 230 Cal.App.3d at p. 1536.) Here, the third amended complaint alleges that Eastland denied its involvement in the subsequent escrow to Rene on at least two occasions, including once under oath; Rene had no reason to doubt Eastland’s truthfulness or to seek to discover its involvement from public records; Eastland sent Rose amended escrow instructions as late as June 8, 2006 showing that escrow was still open; and Rene did not discover Eastland’s wrongful conduct until Fly informed Rene’s attorney in August 2006 of Eastland’s involvement. These allegations satisfied appellants’ burden to plead around the time bar.
But this does not end our analysis. As noted above, it is our duty on appeal to independently determine whether the operative complaint states a cause of action and we may affirm a judgment on the pleadings for a reason different than that relied on by the trial court.
The operative third amended form complaint essentially alleges that Eastland breached its duties to appellants by accepting Fly’s unilateral cancellation of the escrow; failing to serve appellants with a demand that they perform the escrow conditions within five days; immediately opening another escrow on the property; and then lying about its involvement in the subsequent escrow. But the only allegations of causation and damage in the third amended complaint are the preprinted language that “Plaintiff suffered damages legally (proximately) caused by defendant’s breach of the agreement” in the amount of $350,000, and that “Because of plaintiff’s reliance upon defendant’s conduct, plaintiff has been damaged” in the amount of $350,000 plus interest from June 24, 2003, attorney fees and costs. What is missing from the operative complaint are any allegations that appellants were ready, willing and able to perform the escrow conditions. In other words, there are no allegations to support the claim that Eastland’s actions caused appellants to suffer harm. “[B]asic to the statement of a cause of action for damages premised on wrongful or negligent conduct is a showing the charged conduct caused the claimed damages.” (Hutchison v. Southern California First Nat. Bank (1972) 27 Cal.App.3d 572, 578.)
The first cause of action is for breach of contract. The elements for breach of contract are (1) the existence of a valid contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) resulting damage to the plaintiff. (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)
Paragraph No. 3 of the operative form complaint contains the preprinted language that “plaintiff has performed all obligations to defendant except those obligations plaintiff was prevented or excused from performing.” But in the factual allegations set forth in the attachment to the complaint which more fully describe the parties’ actions, the only obligation appellants are alleged to have performed is Rose’s deposit of $1,000 into escrow. There are no allegations that Rose had the ability to fund the transaction had she been given an additional five days to do so. Without any such allegation, the element of the contract claim that appellants were harmed by Eastland’s actions is absent.
The second cause of action is for fraud. “The well-established common law elements of fraud which give rise to the tort action for deceit are: (1) misrepresentation of a material fact (consisting of false representation, concealment or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to deceive and induce reliance; (4) justifiable reliance on the misrepresentation; and (5) resulting damage.” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 481.) In paragraph No. 5 of the third amended form complaint, appellants allege that Rene relied on Eastland’s misrepresentations in not bringing any action against Eastland for three years. But there are no allegations that Eastland’s conduct induced appellants not to perform the escrow conditions when they were otherwise capable of doing so.
Finally, the third cause of action is for breach of fiduciary duty. “The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1599.) There are no allegations in this cause of action as to how Eastland’s actions harmed appellants.
Although Eastland pointed out in its demurrer to the third amended complaint that this operative pleading contained no allegations that appellants were capable of performing, the parties did not address this issue in their appellate briefs. We therefore requested further briefing on this issue. Appellants argue that the lack of allegations in the third amended complaint that they were ready, willing and able to perform is irrelevant because their prior complaints contained such allegations. The authorities appellants cite do not stand for the proposition that a plaintiff may rely on allegations in a superseded complaint that have been omitted from the operative pleading. But even if appellants could somehow rely on their prior allegations, our review of the record does not bear out appellants’ assertion as to what they previously pled. The original and first amended complaints merely allege that on June 23, 2003, Rose, who was obtaining the loan for the purchase of the property, was informed by Real Estate Bank Group that the loan would not be funding the following day, and the second amended complaint makes the contradictory allegation that on June 3, 2003, Real Estate Bank Group assured Rene that “it would be a matter of days for the loan to close.” Nowhere in any of these prior complaints is there any allegation that the loan would have funded had appellants been given an additional five days to perform the escrow conditions. Thus, even if it had been proper for the trial court to consider these earlier allegations, they do not save the third amended complaint.
Appellants did not ask the trial court for leave to amend the third amended complaint and did not do so in their appellate briefs. It is not clear if they are doing so in their supplemental briefing, but, if so, appellants have not met their burden of demonstrating how they can amend their operative complaint to allege that they were ready, willing and able to perform. (McMartin v. Children’s Institute International (1989) 212 Cal.App.3d 1393, 1408 [plaintiff must set forth factual allegations that sufficiently state all required elements of cause of action].) Aside from their prior allegations, which we have found to be insufficient, appellants point to amended escrow instructions from Eastland dated June 19, 2003, which appellants claim demonstrated that Rose was “going to get funding.” These amended instructions, which the trial court ruled inadmissible at the subsequent trial against Fly, state: “A new Conventional Trust Deed loan in favor of Inter Mountain Mortgage, in the principal amount of $142,500.00 at an interest rate of 6.00%, for a term of 30 years. Borrower(s) signature on loan documents shall constitute full acceptance and approval of all lender terms and conditions and shall be Escrow Holder’s authorization to comply with all terms and conditions contained therein.” Although there is a space for Rose’s signature on these instructions, the instructions are unsigned and appellants point to no documents showing Rose’s signature on any loan documents. By itself, this document does not demonstrate that Rose had been approved for a loan. The only other evidence appellants point to is “the fact that Appellants testified at trial that Rose Rivera was going to get the funding,” but our own review of the trial transcript shows that there was no testimony by appellants that Rose had been approved for a loan. Thus, appellants have not demonstrated that they are entitled to amend their third amended complaint.
In short, “[t]he lack of adequate allegations of causation between defendant’s conduct and plaintiffs’ claimed damages is a fatal omission supporting the order sustaining the general demurrer” or, in this case, the judgment on the pleadings. (Hutchison v. Southern California First Nat. Bank, supra, 27 Cal.App.3d at p. 580.)
II. APPEAL FROM THE JUDGMENT IN FAVOR OF FLY.
Appellants contend there was insufficient evidence to support the trial court’s judgment in favor of Fly on their claim against him for breach of contract. In reviewing such a challenge, “‘“the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted,” to support the findings below,’” and we must therefore view the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053.)
Appellants argue that Fly’s unilateral cancellation of the escrow on June 23, 2003 without giving them five days to perform constituted an anticipatory repudiation of the escrow instructions that excused their performance. Fly counters that the applicable contract is not the escrow instructions, but the written agreement to sell the property. He points out that the escrow instructions specifically state on page two that they “are executed for the sole purpose of enabling the Escrow Holder to complete this transaction, and are not intended to amend, modify, supersede or in any way change that certain agreement entered into by the parties hereto and dated prior to these escrow instructions.” We need not decide this issue, because even assuming that Fly can be held liable to appellants for breaching the escrow instructions, appellants still had the burden to demonstrate that they were ready, willing and able to perform.
“Although it is true that an anticipatory breach or repudiation of a contract by one party permits the other party to sue for damages without performing or offering to perform its own obligations ([Civ. Code] § 1440), this does not mean damages can be recovered without evidence that, but for the defendant’s breach, the plaintiff would have had the ability to perform.” (Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 625.) Appellants are correct that they were not required to prove that they had actually performed by tendering the funds to escrow; they were only required to show that they had the ability to perform. But appellants failed to do so. On appeal, they point only to the amended escrow instructions from Eastland dated June 19, 2003, discussed above, which appellants claim “provided proof that Appellant Rose had in fact been approved for a loan with Inter Mountain Mortgage in the amount of $142,500 at the rate of interest of 6 percent.” Appellants argue that it was error for the trial court not to admit these amended instructions into evidence, but they provide no further analysis or authority as to why this is so. We therefore give this argument no consideration. (Associated Builders & Contractors, Inc. v. San Francisco Airports Com. (1999) 21 Cal.4th 352, 366.) In the absence of admissible evidence, appellants did not prove at trial that they were ready, willing and able to perform. Thus, they have failed to meet their burden on appeal of establishing that the trial court erred in granting judgment in favor of Fly. We therefore need not address appellants’ argument that they were entitled to damages.
We also note that appellants filed a notice of appeal from the award of attorney fees to Fly. Because appellants did not present any argument on this issue, we deem their appeal from this award as having been abandoned. (Berger v. Godden (1985) 163 Cal.App.3d 1113, 1120; Rossiter v. Benoit (1979) 88 Cal.App.3d 706, 710–711.)
DISPOSITION
The judgments are affirmed. Respondents are entitled to recover their costs on appeal.
We concur: BOREN, P. J., ASHMANN-GERST, J.