Opinion
G053356
07-24-2017
SOUTH COAST MERCED LAND, LLC, Plaintiff and Appellant, v. RED MOUNTAIN ASSET FUND II, LLC, Defendant and Respondent.
Everett L. Skillman; Manning & Kass, Ellrod, Ramirez, Trester and Scott Wm. Davenport for Plaintiff and Appellant. Burkhalter Kessler Clement & George, Daniel J. Kessler and Ros M. Lockwood for Defendant and Respondent.
ORDER MODIFYING OPINION AND DENYING PETITION FOR REHEARING; NO CHANGE IN JUDGMENT
It is ordered that the opinion filed herein on July 24, 2017, be modified as follows:
On page 10, delete footnote 3 and replace it with the following footnote 3:
At oral argument, for the first time, counsel for South Coast argued that even if the specific performance claim failed, South Coast still had a claim for damages and a claim for breach of the implied covenant of good faith and fair dealing. We deem the argument raised for the first time at oral argument to have been forfeited. (People v. Pena (2004) 32 Cal.4th 389, 403; Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398, 1408; In re Marriage of Armato (2001) 88 Cal.App.4th 1030, 1047, fn. 1.)
In a petition for rehearing, South Coast argued that it had addressed the other claims for relief in its appellate briefs, and that rehearing was therefore necessary to address the other causes of action. South Coast stated in its opening appellate brief: "The Second Amended Complaint primarily seeks specific performance of the Agreement." In specifically addressing the trial court's alleged error in entering judgment on the
pleadings, South Coast argued: "South Coast alleged facts sufficient to state a cause of action against Red Mountain for specific performance." The other causes of action, all of which were dismissed by the motion for judgment on the pleadings, were not discussed specifically anywhere in South Coast's briefs. Indeed, it is only in Red Mountain's respondent's brief that the causes of action raised in the second amended complaint—specific performance, breach of contract, declaratory relief, breach of the implied covenant of good faith and fair dealing, and restitution/unjust enrichment—are even mentioned.
Even if the additional causes of action were properly before us on appeal, our conclusion that the trial court did not err in granting the motion for judgment on the pleadings would not change. Any cause of action based on the purchase agreement would be subject to the outside closing date, as discussed in the text.
This modification does not effect a change in the judgment. The petition for rehearing is DENIED.
FYBEL, J. WE CONCUR: BEDSWORTH, ACTING P. J. ARONSON, J.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00754655) OPINION Appeal from a judgment of the Superior Court of Orange County, Ronald L. Bauer, Judge. Affirmed. Everett L. Skillman; Manning & Kass, Ellrod, Ramirez, Trester and Scott Wm. Davenport for Plaintiff and Appellant. Burkhalter Kessler Clement & George, Daniel J. Kessler and Ros M. Lockwood for Defendant and Respondent.
* * *
INTRODUCTION
Red Mountain Asset Fund II, LLC (Red Mountain) agreed to sell real property to South Coast Merced Land, LLC (South Coast). The agreement included an "outside closing date," and provided that the agreement would terminate if escrow had not closed by the date specified. The outside closing date came and went, and escrow had not closed. Red Mountain therefore notified South Coast the agreement was terminated. South Coast sued for specific performance of the agreement.
The trial court granted a motion in limine to exclude inadmissible parol evidence regarding the meaning of the agreement, and then granted Red Mountain's motion for judgment on the pleadings. The court did so on the ground there was no reasonable interpretation of the agreement that would give South Coast a cause of action for specific performance. South Coast appeals.
We affirm. The trial court did not err by granting the motion for judgment on the pleadings. Further, the trial court's interpretation of the agreement was correct. Red Mountain properly terminated the agreement, and South Coast had no grounds for seeking specific performance of the agreement.
STATEMENT OF FACTS AND PROCEDURAL HISTORY
In August 2012, South Coast and Red Mountain entered a written agreement for South Coast's purchase of real property in Costa Mesa, California from Red Mountain. South Coast intended to build multiple residential units on the property. At the time, the property was contaminated and required clean-up measures. The purchase agreement provided that Red Mountain would remove or remediate all hazardous substances and contaminants. If Red Mountain failed to do so by the close of escrow, South Coast could postpone closing or could accept the property and have its costs of remediation credited against the purchase price. The purchase agreement also made clear that at the time the parties were entering the contract, Red Mountain did not own full title to one parcel that was intended to be part of the property sold.
The agreement was amended in writing seven times. The original purchase agreement and its amendments will be referred to herein as the "purchase agreement."
The initial purchase agreement tied the escrow closing date to the completion of certain acts envisioned by the agreement, but provided that "[i]n any event, closing must occur no later than January 31, 2014." The second amendment to the purchase agreement provided that the purchase agreement would terminate "[i]n the event the Closing Date does not occur by August 1, 2014."
Section 2 of the fifth amendment first added the term "outside closing date" to the purchase agreement (although the concept of the outside closing date had previously been included in the purchase agreement as the date by which the agreement would terminate if escrow had not closed): "Subject to the earlier termination of the Agreement . . . and to the extension of the Outside Closing Date as provided below, in the event the Closing does not occur by December 31, 2013 (the 'Outside Closing Date'), this Agreement shall terminate, and the Deposit shall be returned to Buyer." This section of the purchase agreement gave South Coast the right to extend the outside closing date for set periods of time by making nonrefundable extension payments. Further, this section provided: "Notwithstanding the foregoing, provided that, as of December 31, 2013, Buyer has obtained the Entitlements, the Outside Closing Date shall be automatically extended without any requirement for an Extension Payment by Buyer, until (a) Seller has obtained all of the Closure Approvals and completed the Seller's Property Condition Obligations, (b) Seller has obtained fee title to all of Assessor Parcel Number: 422-091-06 (Parcel 7 as shown of the Title Report), and (c) Seller has completed such other of its obligations under the Agreement so that Seller is in a position to Close the sale of the Property to Buyer."
Both the sixth and seventh amendments to the purchase agreement provided further opportunities for South Coast to purchase additional extensions to the outside closing date. The seventh amendment provided that the current outside closing date of the purchase agreement was July 31, 2014, and gave South Coast the opportunity to extend the outside closing date for three more 30-day periods (until the end of October 2014). Neither of these amendments modified the language of section 2 of the fifth amendment regarding the automatic extension of the outside closing date if the entitlements were obtained.
As explained post, the parties stipulated before trial that the relevant date for the termination of the agreement was the end of October 2014.
Section 7(a) of the purchase agreement contained a general termination provision, which gave Red Mountain the right to terminate the agreement and cancel escrow if South Coast failed to perform any of its obligations.
By the end of October 2014, escrow had not closed. At that time, South Coast sent a letter to Red Mountain in which it purported to give notice of Red Mountain's "uncured defaults under Section 8(c) of the Agreement." (Section 8(c) of the purchase agreement addressed Red Mountain's failure to perform its obligations, and South Coast's concomitant right to specific performance.) Several days later, Red Mountain sent written notice to the escrow company and South Coast of the termination of the purchase agreement and the cancellation of the escrow.
South Coast filed a complaint for specific performance, breach of contract, declaratory relief, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Red Mountain filed a demurrer to that complaint on the ground it did not state a cause of action. The trial court overruled the demurrer, without comment.
Before trial started, the trial court granted Red Mountain's motion in limine to exclude inadmissible parol evidence to vary, alter, or augment the purchase agreement regarding the meaning of the term "outside closing date."
At the same time, the trial court concluded Red Mountain's interpretation of the purchase agreement—that once the outside closing date passed, Red Mountain's obligations under the agreement ended, and Red Mountain had the absolute right to terminate the agreement—was the only reasonable one. The court therefore granted Red Mountain's oral motion for judgment on the pleadings on the ground the purchase agreement did not permit South Coast to state a claim for relief. Judgment was entered, and this appeal followed.
DISCUSSION
I.
THE COURT HAD JURISDICTION TO RULE ON THE MOTION FOR JUDGMENT ON THE
PLEADINGS, DESPITE OVERRULING AN EARLIER DEMURRER MADE ON THE SAME GROUNDS.
South Coast argues that the trial court did not have jurisdiction to consider Red Mountain's motion for judgment on the pleadings because the motion was simply a motion for reconsideration of the previously overruled demurrer.
"[S]ection 1008 of the Code of Civil Procedure . . . essentially forbids trial courts from reconsidering orders previously rendered in the action—either their own or those made by other judges—'unless made according to this section.' A motion made in accordance with section 1008 must include reference to new or different facts, circumstances, or law before the earlier order may be reconsidered." (Bennett v. Suncloud (1997) 56 Cal.App.4th 91, 96.)
In Coshow v. City of Escondido (2005) 132 Cal.App.4th 687, 699, the plaintiff's complaint and amended complaints were subject to a series of demurrers, which were sustained in part and overruled in part. Motions for summary judgment and summary adjudication were denied. (Id. at p. 700.) Immediately before trial, the court's rulings on motions in limine essentially eviscerated the plaintiff's case. (Ibid.) The court then construed the defendants' additional motions in limine as motions for judgment on the pleadings, and granted them. (Id. at pp. 700-701.)
On appeal, the plaintiff argued the trial court erred because a motion for reconsideration of the rulings on the demurrers and motions for summary judgment was the only way to revisit the issues addressed by those motions. (Coshow v. City of Escondido, supra, 132 Cal.App.4th at p. 701.) The appellate court affirmed the trial court's judgment, finding no procedural error. "Here, the motions in limine, although directed at particular items of Coshow's evidence, had the cumulative effect of an objection to all evidence on the ground Coshow failed to state any cause of action, entitling City and Department to judgment as a matter of law. [Citation.] Although the court previously overruled City's and Department's demurrers and denied their motions for summary adjudication of claims and summary judgment, those rulings did not deprive the court of its inherent power to grant judgment on the pleadings if it believed Coshow's allegations, even if proved, would not establish a cause of action. Indeed, it is not uncommon that as a case proceeds to trial and additional discovery is conducted, evidence is revealed which will either substantiate or disprove a cause of action. Once the court here sustained various objections to Coshow's evidence, no viable cause of action remained. Thus, the court properly exercised its inherent powers over the proceedings by construing the motions in limine as a motion for judgment on the pleadings. [Citation.]" (Id. at pp. 701-702.)
South Coast argues Coshow is distinguishable because in that case the defendants did not make a motion for judgment on the pleadings; they filed motions in limine, which the trial court construed as a motion for judgment on the pleadings. We see this as a distinction without a difference.
II.
THE TRIAL COURT DID NOT ERR BY GRANTING THE MOTION IN LIMINE.
"California's parol evidence rule is codified in section 1856 of the Code of Civil Procedure. Subdivision (a) of section 1856 provides: 'Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.' As explained by Justice Traynor, '[w]hen the parties to a written contract have agreed to it as an "integration"—a complete and final embodiment of the terms of an agreement—parol evidence cannot be used to add to or vary its terms.' [Citation.]" (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 953.) The original agreement, and each amendment thereto, contains an integration clause. Both Red Mountain and South Coast agreed in their trial court briefs on the motion in limine that the purchase agreement is an integrated contract.
"The basic goal of contract interpretation is to give effect to the parties' mutual intent at the time of contracting. [Citations.] When a contract is reduced to writing, the parties' intention is determined from the writing alone, if possible. [Citation.] 'The words of a contract are to be understood in their ordinary and popular sense.' [Citations.] [¶] Extrinsic evidence is admissible to prove a meaning to which the contract is reasonably susceptible. [Citations.] If the trial court decides, after receiving the extrinsic evidence, the language of the contract is reasonably susceptible to the interpretation urged, the evidence is admitted to aid in interpreting the contract. [Citations.] Thus, '[t]he test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether it appears to the court to be plain and unambiguous on its face, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible.' [Citation.] [¶] The threshold issue of whether to admit the extrinsic evidence—that is, whether the contract is reasonably susceptible to the interpretation urged—is a question of law subject to de novo review. [Citations.] [¶] The ultimate construction placed on the contract might call for different standards of review. When no extrinsic evidence is introduced, or when the competent extrinsic evidence is not in conflict, the appellate court independently construes the contract. [Citations.] When the competent extrinsic evidence is in conflict, and thus requires resolution of credibility issues, any reasonable construction will be upheld if it is supported by substantial evidence. [Citations.] [¶] California recognizes the objective theory of contracts [citation], under which '[i]t is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation' [citation]. The parties' undisclosed intent or understanding is irrelevant to contract interpretation. [Citations.]" (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc., supra, 109 Cal.App.4th 944, 955-956.)
In the motion in limine, Red Mountain asked the trial court to exclude "evidence seeking to vary, alter, or augment the terms of the parties' integrated written contract by way of inadmissible parol evidence." The motion also contended, "the parol evidence rule excludes the introduction of any extrinsic evidence, whether oral or written, to vary, alter, or augment the terms of the subject Purchase and Sale Agreement (the 'PSA'). Here, [South Coast] will attempt to introduce evidence that alters the terms of the PSA with regard to the clearly defined term, 'Outside Closing Date.' [Red Mountain] anticipates that [South Coast] will offer evidence of [South Coast]'s strained interpretation of the term, 'Outside Closing Date,' which [South Coast] contends holds the same meaning as the more flexible and separately defined term, 'Closing Date.' Such evidence must be excluded pursuant to the parol evidence rule because the language of the PSA is not reasonably susceptible to the interpretation of the 'Outside Closing Date' urged by [South Coast]."
The specific parol evidence Red Mountain sought to exclude was the deposition testimony of Brent Little and Brian Bauer regarding their subjective understanding of the terms of the purchase agreement. (Little is South Coast's principal, who signed the purchase agreement on South Coast's behalf; Bauer is South Coast's managing member and in-house counsel.)
In opposition, South Coast argued the parol evidence was not being offered to contradict or add to the terms of the purchase agreement, but to interpret its terms. South Coast contended that "the issue is not whether the term 'Outside Closing Date' is itself ambiguous or unambiguous; the issue is whether, as [South Coast] contends, [South Coast]'s right to postpone the 'Close of Escrow' under Section 6 of the Fifth Amendment applies to the Outside Closing Date under Section 2 such that by exercising the right to postpone under Section 6, [South Coast] postponed the Close of Escrow past the Outside Closing Date. On that issue, the agreement is not as 'clear' and 'unambiguous' as [Red Mountain] contends."
South Coast did not point to any evidence besides the testimony of Bauer and Little as to their understanding of the meaning of the purchase agreement that would be offered to interpret the agreement. South Coast did not advise the trial court of any extrinsic evidence that would be admissible as to the parties' objective intent (i.e., letters exchanged between the parties, or testimony regarding statements by Red Mountain's agents as to the parties' discussions of the meaning of the purchase agreement). The court properly excluded extrinsic evidence of Bauer's and Little's subjective intent as to the meaning of the purchase agreement's terms.
Based on the absence of extrinsic evidence of the meaning of the purchase agreement's terms, did the trial court properly grant the motion for judgment on the pleadings? A motion for judgment on the pleadings is in effect a general demurrer to the pleadings, which we review de novo. (Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal.App.4th 289, 296-297.) "Both a demurrer and a motion for judgment on the pleadings accept as true all material factual allegations of the challenged pleading, unless contrary to law or to facts of which a court may take judicial notice. The sole issue is whether the complaint, as it stands, states a cause of action as a matter of law. [Citations.] The scope of a trial court's inquiry on a motion for nonsuit is similarly limited. A motion for nonsuit or demurrer to the evidence concedes the truth of the facts proved, but denies as a matter of law that they sustain the plaintiff's case. A trial court may grant a nonsuit only when, disregarding conflicting evidence, viewing the record in the light most favorable to the plaintiff and indulging in every legitimate inference which may be drawn from the evidence, it determines there is no substantial evidence to support a judgment in the plaintiff's favor. [Citations.]" (Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 27-28, italics omitted.)
III.
THE TRIAL COURT DID NOT ERR IN GRANTING THE
MOTION FOR JUDGMENT ON THE PLEADINGS.
A claim for specific performance requires proof of "the existence of a contract, its terms which establish the obligation in issue, the occurrence of any conditions precedent to enforcement of the obligation, and the breach of that obligation." (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 383.)
At oral argument, for the first time, counsel for South Coast argued that even if the specific performance claim failed, South Coast still had a claim for damages and a claim for breach of the implied covenant of good faith and fair dealing. We deem the argument raised for the first time at oral argument to have been forfeited. (People v. Pena (2004) 32 Cal.4th 389, 403; Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398, 1408; In re Marriage of Armato (2001) 88 Cal.App.4th 1030, 1047, fn. 1.)
"'"A defendant is entitled to judgment on the pleadings if the plaintiff's complaint does not state a cause of action. In considering whether a defendant is entitled to judgment on the pleadings, we look only to the face of the pleading under attack . . . . All facts alleged in the complaint are admitted for purposes of the motion, and the court determines whether those facts constitute a cause of action. The court also may consider matters subject to judicial notice."'" (Harris v. Grimes (2002) 104 Cal.App.4th 180, 185.)
Judgment on the pleadings should not be granted if there is a reasonable possibility that a defect in the complaint can be cured by amendment. (Minsky v. City of Los Angeles (1974) 11 Cal.3d 113, 118; La Jolla Village Homeowners' Assn. v. Superior Court (1989) 212 Cal.App.3d 1131, 1141, overruled in part on another ground in Jimenez v. Superior Court (2002) 29 Cal.4th 473.) The burden of proving a reasonable possibility of amendment is on the plaintiff. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
The issue here is whether Red Mountain had an obligation to sell the property to South Coast. The purchase agreement provided that it "shall terminate" if the closing did not occur by the outside closing date. The outside closing date set forth in the purchase agreement—December 31, 2013—had passed. Each of the contracted for and purchased extensions of the outside closing date had passed. In order for South Coast to establish a right to specific performance of the purchase agreement, it had to prove that the outside closing date did not mean what it said, that it had been extended in some other way, or that another provision of the purchase agreement trumped it.
"'[W]here an ambiguous contract is the basis of an action, it is proper, if not essential, for a plaintiff to allege its own construction of the agreement. So long as the pleading does not place a clearly erroneous construction upon the provisions of the contract, in passing upon the sufficiency of the complaint, we must accept as correct plaintiff's allegations as to the meaning of the agreement.' [Citation.] Whether a contract is ambiguous is a question of law. [Citation.] . . . . [¶] Where a complaint is based on a written contract which it sets out in full, a general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible. [Citation.] While plaintiff's interpretation of the contract ultimately may prove invalid, it was improper to resolve the issue against her solely on her own pleading. 'In ruling on a demurrer, the likelihood that the pleader will be able to prove his allegations is not the question.' [Citation.]" (Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239-240; see Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2017) ¶ 7:48.25, p. 7(I)-30 [if contract attached as an exhibit to the complaint is ambiguous, the plaintiff's interpretation must be accepted as correct when sufficiency of the complaint is challenged].) South Coast's second amended complaint does not contain a specific interpretation of the closing date of the agreement.
The parties' stipulated facts, filed before the trial, are binding for all purposes. (Estate of Burson (1975) 51 Cal.App.3d 300, 306.) South Coast argues on appeal that the parties' stipulated facts were properly considered by the trial court in ruling on the motion for judgment on the pleadings. South Coast's stipulated facts include the following: "Under the Purchase Agreement, as amended, the last Outside Closing Date was October 31, 2014." Likewise, Red Mountain's stipulated facts include the following: "Including all extensions, the last Outside Closing Date was October 29, 2014, however, the parties referred to October 31, 2014 as the Outside Closing Date."
The trial court was left with the following when considering the motion for judgment on the pleadings: (1) The issue was the interpretation of the term outside closing date in the agreement; (2) the trial court had properly granted the motion in limine to exclude parol evidence of the meaning of that term; (3) South Coast's complaint did not include a proposed interpretation of the term; and (4) in their separate statements of stipulated facts, the parties had stipulated that the outside closing date was no later than October 31, 2014. Under these circumstances, the trial court did not err in granting the motion for judgment on the pleadings.
Our conclusion is supported by the authorities cited by Red Mountain, which stand for the proposition that the language used in a contract creating an absolute right to terminate the contract must be given meaning, even if the result to the nonterminating party is harsh or unfair. In Gerdlund v. Electronic Dispensers International (1987) 190 Cal.App.3d 263, the sales representatives' agreements provided that either the representatives or the employer could terminate the agreements "at any time and for any reason." (Id. at p. 268.) The court found that parol evidence of a promise that the representatives would not be terminated as long as they were doing a good job was inadmissible to contradict the written contract's language. (Id. at pp. 272-274.) "The term 'any reason' is plainly all-inclusive, encompassing all reasons 'of whatever kind,' good, bad, or indifferent. [Citation.]" (Id. at p. 273.)
A provision in the parties' lease in Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC (2010) 185 Cal.App.4th 1050 (Thrifty) provided: "'If, for any reason (other than delays caused by Tenant) the Lease Term has not commenced by June 30, 2008, Tenant and Landlord shall each have the right to terminate this Lease.'" (Id. at p. 1055.) The lease also contained provisions that gave the landlord the right to terminate the lease if certain financial and approval contingencies could not be satisfied. (Id. at p. 1055.) The tenant filed a lawsuit in November 2006 for, among other things, specific performance. (Id. at p. 1057.) The case came to trial in August 2008, and the landlord moved for a nonsuit on the ground it had the right to terminate the lease because the lease term had not commenced by June 30 of that year. (Id. at p. 1059.)
The trial court granted the motion for nonsuit (Thrifty, supra, 185 Cal.App.4th at p. 1059), and this court affirmed. "Thus, we come at last to the court's construction of article 3, and agree that it 'meant what it said.' . . . . The parties freely negotiated a provision under which either could terminate the lease—'for any reason' if the lease did not begin by June 30, 2008. That provision must be given effect, and we cannot read it out of the lease simply because one party feels its operation was harsh or unfair. [Citation.]" (Id. at p. 1064.)
South Coast responds that Gerdlund and Thrifty are inapplicable because the purchase agreement does not contain the words "for any reason," as did the sales representatives' agreement and the lease, respectively, in those cases. We do not read the phrase "for any reason" as the key to the courts' decisions in those cases. Rather, the crucial fact was that the written contract provided an absolute right in one party to terminate the contract. In particular, in Thrifty the condition precedent to termination was the passage of time without the lease term beginning. In the present case, the written contract provided that it would terminate if a specific date passed.
The terms of the purchase agreement allowed for one additional way to extend the outside closing date, even if the purchased extensions had all expired. Section 2 of the Fifth Amendment to the purchase agreement provided the outside closing date would be automatically extended if, before December 31, 2013, the City of Costa Mesa had approved all entitlements required to develop the property with 24 residential lots, units or condominiums.
On appeal, Red Mountain argues that the entitlements had not been approved before December 31. "[O]n May 27, 2014, South Coast's Brent Little reported in a[n] email to Red Mountain's management team that the City had 'approved' entitlement of the project. . . . In actuality, the entitlement process would not be complete until July 18, 2014, as Little failed to accurately account for the appeals period and the fact that the City would need to issue a Notice of Determination prior to the approval process being complete. Nevertheless, Little reported that the project was 'considered entitled' and noted in his email that he understood it would be three months until 'the regulators will consider processing our No Further Action Letter'. . . . "
South Coast contends that "the parties stipulated that on May 27, 2014, City's Planning Commission conditionally approved an 'Initial Study/Mitigated Negative Declaration' for the master plan and a tentative tract map for the development of 28 residential units on the subject property [citing Red Mountains' stipulation of facts]. Also, the parties had agreed in writing that in or before July 2014, City had approved the development of 28 residential lots on the property at issue [citing the seventh amendment to the Agreement]." This does not, however, address whether the entitlements were approved before December 31, 2013.
Recital A to the Seventh Amendment, which was effective as of July 30, 2014, provides, in relevant part: "The City of Costa Mesa has approved the development of 28 residential lots, units or condominiums on the Property." --------
The automatic extension of the outside closing date required that the entitlements be approved before December 31, 2013. The evidence attached to the complaint, and of which the court could take judicial notice, showed the automatic extension provision did not become operative. The trial court did not err in granting the motion for judgment on the pleadings.
South Coast argues, correctly, that the purchase agreement and all of its amendments, and all of the clauses within those amendments, must be read together in a way that gives meaning to every part. South Coast therefore argues that it had the right to specific performance of the purchase agreement because South Coast performed the conditions precedent required of it, while Red Mountain purported to terminate the agreement. Red Mountain counters, and the trial court agreed, that the use of a different term in the Fifth Amendment—outside closing date—must have a different meaning than other terms such as closing of escrow, and that it was intended as a final date by which all performance by either party under the purchase agreement would end. The evidence properly before the trial court in ruling on the motion for judgment on the pleadings supports Red Mountain's interpretation.
IV.
THE TRIAL COURT DID NOT ERR BY FAILING TO PLACE
THE BURDEN OF PROOF ON RED MOUNTAIN.
South Coast argues that because the motion for judgment on the pleadings was based on Red Mountain's affirmative defense of termination of contract, Red Mountain had the burden of proving that under the circumstances it had the right to terminate the contract, and that it properly exercised that right. (See CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 635 ["the affirmative defense must clearly appear on the face of the complaint in order to support a demurrer. A demurrer based on an affirmative defense cannot properly be sustained where the action might be barred by the defense, but is not necessarily barred. [Citation.] Nor is a demurrer the appropriate procedure for determining the truth of disputed facts or what inferences should be drawn where competing inferences are possible."]).
South Coast contends that under section 7 of the purchase agreement, Red Mountain could not terminate the purchase agreement unless South Coast failed to perform its obligations under the agreement, and that Red Mountain failed to prove such a failure in the motion for judgment on the pleadings. As explained, ante, the motion for judgment on the pleadings was not based on the general right to terminate based on failure of one party's obligations, but on the passing of the outside closing date, which relieved both parties of all obligations under the purchase agreement. Therefore, this argument fails.
DISPOSITION
The judgment is affirmed. Respondent to recover costs on appeal.
FYBEL, J. WE CONCUR: BEDSWORTH, ACTING P. J. ARONSON, J.