NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

AARON, J.

INTRODUCTION

Vinetta Lough, now deceased, and her sons, plaintiff Richard Lough and defendant Rodger Lough,1 began investing in real property in the 1970's and amassed a substantial portfolio of properties over the years. In 2007, Vinetta filed a complaint against Richard alleging that he had induced her, for "estate planning purposes," to transfer title to investment properties that she owned to him and Rodger, and to put any new properties that she acquired in his and Rodger's names, with an agreement that the properties would continue to belong to and be controlled by Vinetta and would be put back in her name upon her request. Vinetta charged Richard with financial elder abuse, breach of contract, and other causes of action based on his alleged disavowal of the agreement and his assertions that he owned interests in the properties in question as reflected on title, that he had no obligation to return the properties to Vinetta, and that Vinetta had no right to control the properties. Richard filed a cross-complaint against Vinetta and Rodger for conversion, fraud, and related causes of action, alleging that Vinetta and Rodger had for decades fraudulently converted Richard's share of certain rent proceeds and investment money generated by the properties for their own personal use, and that Vinetta's allegation that she retained ownership and control over the properties was false.

In May 2008, on the eve of the trial of the underlying action, Vinetta, Rodger, and Richard reached a settlement (the settlement agreement) after discussions in the chambers of Judge Di Loreto, the trial judge assigned to the case. The terms of the settlement agreement were put on the record in court with all parties present. Although Judge Di Loreto directed Rodger's counsel to reduce the settlement agreement to writing, Judge Di Loreto stated that the agreement was binding even if not reduced to writing. The parties later agreed that the reporter's transcript setting forth the settlement agreement would "stand on its own," and that counsel would not draft a separate written agreement.2

The portion of the settlement at issue in the present case is the parties' agreement that Richard and Rodger would transfer title to four properties held in their names to Vinetta (the subject properties). Richard claims that the settlement agreement unambiguously provided that Vinetta could do whatever she wanted with those properties, except that she could not give any interest in the properties or proceeds from them to one of her sons or his children unless she treated the other son or his children equally (the equal gifting provision). Richard claims that Vinetta breached the equal gifting provision by transferring the properties to her trust, which provided that three of the properties would pass to Rodger upon her death and that the fourth property would pass to her grandchildren. The trust further provided that the devise would be revoked as to Richard's children if Richard claimed that the terms of the trust did not comply with the settlement agreement.

After Vinetta's death, Richard sought to enforce of the equal gifting provision of settlement agreement by filing a petition against Rodger for fraud,3 specific performance, breach of contract and related causes of action.4 Following a bench trial, the court issues a statement of decision and entered judgment in favor of Rodger, based on the court's finding that the settlement agreement did not constitute an agreement by Vinetta to make any gift to Richard either during her lifetime or upon her death, under any circumstances. Richard contends that the trial court erred in construing the settlement agreement to require a written agreement signed by the parties with respect to, in the court's words, "any executory agreement or undertaking by Vinetta . . . (a) to make any sort of gift to Richard during her lifetime, or (b) to provide in any way for Richard upon her death."5 Richard also contends that the court erred in finding that the equal gifting provision is ambiguous and, therefore, that it is not part of the settlement agreement. We conclude that the equal gifting provision is unambiguous and enforceable and, accordingly, we reverse the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The essential facts regarding the dispute that led to the 2008 settlement agreement are set forth above. The relevant terms of the settlement agreement are as follows. Richard and Rodger agreed to deed four properties to Vinetta, namely, the house that Vinetta lived in, referred to by the parties as "Bayview,"6 and three unimproved lots, which the parties referred to, respectively, as "Point Dume," "Amor," and "Shangri La." The remaining properties that were the subject of the litigation were to be divided equally between Richard and Rodger.

Regarding the Point Dume, Amor, and Shangri-La properties, Judge Di Loreto explained the settlement agreement to Vinetta on the record as follows: "Those three lots are going to be deeded over to you as your sole property and you can do with them [what] you want to do. Obviously, if you want to sell some of it so you have some immediate access to cash and then once you have that, the money, you can do whatever you want with it. You can, if you want to, give a portion of it to charity, if you want to give it to other people. But to the extent that you make any gift to either [of]your two sons or your grandchildren, you have to treat them equally, fair enough ?" Vinetta responded, "I do." (Italics added.)

Later in the proceedings, Richard's counsel stated that during settlement discussions in Judge Di Loreto's chambers, there had been discussion that the Bayview residence "would be essentially a life estate for [Vinetta][,]" and that Judge Di Loreto had said that "it was going to be left to the grandkids." Judge Di Loreto responded, "No, no, no, no, no, no, it's not left to the grandkids. Whatever is left over, she can leave it to the grandkids equally if she wants to but she doesn't have to. It's hers, period, okay."

Richard stated, "That's not my understanding, Judge." Judge Di Loreto responded, "I made it real clear, our understanding was[¶] . . . [¶][t]hat [Vinetta is] going to treat you fairly, that whatever she wants to do with that property is hers and that, if she wants to give it to charity, she can give it to charity, it's hers, that's why we're giving it to her. This is not a gift cum onere with strings attached, it's not, it's hers and so whatever she wants to do, whatever is left, she'll treat it equally. She doesn't have to give it to you." Vinetta's counsel then stated that Vinetta was "willing to commit that she will leave the house for the benefit of the grandchildren, whatever is left when she's done with it, she will leave that for the grandchildren."

Judge Di Loreto emphasized that the settlement agreement that was being put on the record was a binding agreement, stating that "basically what we're doing today is, in fact, a settlement, we're going to put it on the record. Even though nobody signed anything, it's just as good. [¶] [The court reporter] is taking down everything that I say, so it's going to be part of a settlement that's going to be enforceable. Do you understand?" Vinetta responded, "Yes." Judge Di Loreto asked Vinetta, "Do you understand everything Ms. Lough?" Vinetta responded, "I should." Judge Di Loreto said, "Well, not you should, do you understand it?" Vinetta responded, "I do." Judge Di Loreto then asked, "Do you agree to it?" Vinetta responded, "Yeah."

The court ordered that copies of the transcript of the hearing be provided to counsel for both sides "so they can draft the stipulation, even though at this point in time we have it on the record so it's binding, even though it's not reduced to writing but it should be reduced to writing." Vinetta's counsel told the court that he would reduce the settlement agreement to writing within two weeks. The court responded, "So if I continue this matter until, say, May 16th, you'll be able to come in here with something to have formally in writing so I won't have to look to the court reporter every time?" Vinetta's counsel replied, "That would certainly be my client's desire, Your Honor. I will do everything to make that happen." In a declaration prepared in September 2013 in support of a motion by Rodger for summary adjudication in the present case, Vinetta's former counsel stated: "Ultimately, it was agreed between me and counsel for Richard that as between Vinetta, on the one hand, and Richard and Rodger, on the other hand, the May 5, 2008, transcript would stand on its own and we would not draft a separate settlement agreement. However, we did agree that a judgment would be entered to effectuate the terms of the settlement with respect to the four properties that Vinetta was going to retain and to confirm that Vinetta held title to those properties free and clear of any claims or interests of Richard (or Rodger)."

In accordance with the settlement agreement, Richard transferred his interests in the Bayview, Point Dume, Amor, and Shangri-La properties to Vinetta. On May 16, 2008, the court entered a judgment quieting title to those properties in Vinetta's name and providing that the court reserved "jurisdiction to enforce this Judgment as provided by Code of Civil Procedure section 664.6." The judgment did not mention the equal gifting provision.

On June 20, 2008, Vinetta executed an amended and restated declaration of trust, which amended the trust that she had executed in November 2005.7 Vinetta's 2008 amended trust provided that unless Vinetta sold the Bayview property during her lifetime, upon her death it would pass to her grandchildren in equal shares and be held in trust for their benefit. Pursuant to the terms of the trust, upon Vinetta's death, the balance of her estate was to be distributed to Rodger free of trust or to his living children to be held in trust, if he was not then living. The amended trust provided that except as provided therein, Vinetta had "intentionally omitted to provide for any of her heirs, including her son Richard S. Lough." (Capitalization of entire name omitted.) The amended trust further provided that if Richard "contest[ed]" or "attack[ed]" any provision of the trust or sought to impair or invalidate any part of Vinetta's estate plan, the gift of shares of the Bayview property to his children was revoked and the property would pass solely to Rodger's children. The words "contest" and "attack" included "any claim that the terms of this trust do not comply with the [May 5, 2008 settlement agreement]."

Vinetta died in April 2011 at the age of 96. As trustee of Vinetta's 2008 amended trust, Rodger transferred Shangri La and Point Dume to himself. Vinetta had obtained a reverse mortgage on the Bayview property and received approximately $1,260,422 from the reverse mortgage. At trial, Richard claimed that Vinetta had breached the settlement agreement by using Bayview reverse mortgage funds to make both direct and indirect gifts to Rodger, including paying Rodger's attorney fees, without making equal gifts to Richard. Regarding the Amor property, Richard claimed that Vinetta had breached the settlement agreement by entering into a "sham" sale agreement, under which Rodger acquired the property in exchange for a $1,000 initial payment and $50,000 interest-only note with the principal being due in 10 years, when Vinetta would have been 104 years old. When Vinetta died, the largely unpaid note was gifted to Rodger when he received 100 percent of Vinetta's estate.

The present case proceeded to trial before Judge Monarch, essentially as an action for breach of the settlement agreement against Rodger and Vinetta's estate.8 After a court trial, the court issued a statement of decision. The court stated that its understanding was that the only issue before the court was "whether Vinetta agreed that in the event she made a gift of any portion of the property awarded to her to Rodger or his children, that she would make an equal gift to Richard and his children. It was the understanding of the Court that each of the parties agreed as to the award of the four properties to Vinetta as well as to the formula which would result in a fair and equitable award of the remaining properties to Rodger and Richard. The Court was required to determine only whether Exhibit 36 [(the reporter's transcript of the settlement agreement)] contained an enforceable oral agreement concerning gifts."

The court construed the settlement agreement to require a "written stipulation with regard to any executory agreement or undertaking by Vinetta . . . (a) to make any sort of gift to Richard during her lifetime, or (b) to provide in any way for Richard upon her death." The court stated: "The inference is reasonable that Vinetta would never execute an agreement containing the [equal] gift provision asserted by Richard. Richard's testimony in this regard simply was not credible when matched against the credible and undisputed evidence of animus that existed between Vinetta and Richard on May 5, 2008, and which had pre-existed for a period of several years."

Regarding Judge Di Loreto's statement about equal gifting ("But to the extent that you make any gift to either your two sons or your grandchildren, you have to treat them equally, fair enough."), the court stated: "This provision is ambiguous. In the event of a gift to any one of the six people referred to, is there a requirement that an equal gift be made to the other five? May the gifts be a gift of cash to one or more and property to the others? Are the two sons to be treated as one class of recipients and the grandchildren [as] another? Do the gifts have to be made at the same time? How is `equal' defined? Can gifts be made during Vinetta's lifetime and an equalization be determined from her estate after she dies? There are probably several other possible interpretations of this provision, all of which, the Court infers, Vinetta would object to." The court inferred from the parties' history that "on May 5, 2008, it is an understatement that Vinetta lacked donative intent when it came to Richard."

The court quoted Judge Di Loreto's statement that the parties' understanding in settling the underlying case was that Vinetta "was going to treat [Richard] fairly, that whatever she wants to do with that property is hers and that, if she wants to give it to charity, she can give it to charity, it's hers, that's why we're giving it to her. This is not a gift cum onere with strings attached, it's not, it's hers and so whatever she wants to do, whatever is left, she'll treat it equally. She doesn't have to give it to you." The court inferred "that this comment from . . . Judge [Di Loreto] enhanced Vinetta's perspective that she had no obligation to gift to Richard in any context or regard." The court found that Richard's position regarding the equal gifting provision was inconsistent with Judge Di Loreto's "statement . . . that Vinetta could leave her property `to whoever, I don't care, it's her money. . . .'" The court also stated that Richard's position was "inconsistent with the judgment entered in favor of Vinetta two weeks later on May 16, 2008[,]" noting that Richard did not raise the equal gifting issue before entry of that judgment.

The court found that there was "general uncertainty and lack of complete understanding experienced by Vinetta concerning any agreement regarding gifts. . . ." The court explained that it was "not finding that there was no binding or enforceable settlement entered into on May 5, 2008. The record shows otherwise through the judgments and orders entered thereafter." The court, in its words, "simply determined that the terms of the settlement are not as Richard claims with regard to the existence of an agreement by Vinetta to leave anything to Richard under any circumstances. In short, Richard did not establish that such an agreement existed."

The court entered judgment in favor of Rodger.

DISCUSSION

I. Applicable Legal Principles

A settlement agreement is a contract; therefore, the legal principles that apply to contracts generally also apply to settlement agreements. (Sully-Miller Contracting Co. v. Gledson/Cashman Construction, Inc. (2002) 103 Cal.App.4th 30, 36.) We independently review the trial court's interpretation of the equal gifting language in the settlement agreement. (Chumash Hill Properties, Inc. v. Peram (1995) 39 Cal.App.4th 1226, 1230.)

"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." (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 956.) "`"The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties." [Citation.] . . . "If contractual language is clear and explicit, it governs."'" (Powerine Oil Co., Inc. v. Superior Court (2005) 37 Cal.4th 377, 390.) "[L]anguage in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract. [Citation.] Courts will not strain to create an ambiguity where none exists." (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18-19.)

"The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other." (Civ. Code, § 1641.) Accordingly, it is the court's "`duty to so construe every provision of a written instrument as to give force and effect, not only to every clause but to every word in it. . . .'" (Pico Citizens Bank v. Tafco, Inc. (1958) 165 Cal.App.2d 739, 746.) The court should avoid an interpretation that renders part of the instrument surplusage. (In re Tobacco Cases I (2010) 186 Cal.App.4th 42, 49; National City Police Officers' Assn v. City of National City (2001) 87 Cal.App.4th 1274, 1279.) "A contract term should not be construed to render some of its provisions meaningless or irrelevant." (Estate of Petersen (1994) 28 Cal.App.4th 1742, 1753.)

"Under the plain meaning rule, courts give the words of the contract . . . their usual and ordinary meaning." (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 162.) The plain meaning rule applies when a court concludes, as a matter of law, that contract language is so clear that reasonable minds cannot disagree as to its meaning. (Denver D. Darling, Inc. v. Controlled Environments Construction, Inc. (2001) 89 Cal.App.4th 1221, 1235.) When contract language is unambiguous, the court will not consider extrinsic evidence offered to prove an interpretation that is contrary to the contract's explicit terms. (Id. at p. 1236.) Extrinsic evidence is admissible to explain an ambiguity, not to create one. (Weber v. Dobyns (1961) 193 Cal.App.2d 402, 406; Associated Lathing & Plastering Co. v. Louis C. Dunn, Inc. (1955) 135 Cal.App.2d 40, 46.)

II. The Settlement Agreement Does Not Require a Subsequent Written Agreement

Richard contends that the trial court erred in construing the settlement agreement to require a written agreement signed by the parties with respect to "any executory agreement or undertaking by Vinetta . . . (a) to make any sort of gift to Richard during her lifetime, or (b) to provide in any way for Richard upon her death." The court did not rule that the parties' failure to reduce the settlement agreement to a written agreement rendered the entire settlement agreement unenforceable. Rather, the court ruled that the equal gifting provision that Richard seeks to enforce was unenforceable because that specific provision was not set forth in a written agreement.

We conclude that the entire settlement agreement, including the equal gifting provision, is enforceable despite not having been reduced to writing. As noted above, Judge Di Loreto made it clear when the settlement agreement was being put on the record that the agreement would be binding on all of the parties. At the beginning of the hearing, Judge Di Loreto stated, "basically what we're doing today is, in fact, a settlement, we're going to put it on the record. Even though nobody signed anything, it's just as good. [¶] [The court reporter] is taking down everything that I say, so it's going to be part of a settlement that's going to be enforceable. [¶] Do you understand?" Vinetta responded, "Yes." (Italics added.)

Later, Judge Di Loreto ordered that copies of the transcript of the hearing be provided to counsel for the purpose of reducing the settlement agreement to writing, and suggested that "it should be reduced to writing." At the same time, however, Judge Di Loreto made it clear that he was providing counsel the transcript "even though at this point in time we have it on the record so it's binding, even though it's not reduced to writing. . . ." (Italics added.) As noted, Rodger's counsel stated in a declaration that the parties subsequently agreed that the May 5, 2008 transcript would stand on its own and that there would not be a separate written settlement agreement. Thus, the settlement agreement that was put on the record unambiguously provides that it is binding regardless of whether it would later be reduced to a written agreement, and the parties subsequently acknowledged that the agreement was binding without a separate written agreement.

The court itself, in its statement of decision, stated that it was "not finding that there was no binding or enforceable settlement entered into on May 5, 2008. The record shows otherwise through the judgments and orders entered thereafter." The transcript of the settlement agreement provides no basis for the conclusion that although the agreement put on the record was generally valid and binding without a subsequent written agreement, the equal gifting provision was unenforceable absent a written agreement signed by the parties. Judge Di Loreto made it clear, and the parties agreed, that the entire settlement agreement, including the equal gifting provision, would be binding and enforceable. (See Elyaoudayan v. Hoffman (2003) 104 Cal.App.4th 1421, 1429-1430 [oral settlement agreement was binding and enforceable despite the parties' failure to later execute a formal written agreement where the parties orally agreed on all material terms of the agreement with the mutual intention that the oral agreement would be binding and their agreement to sign a formal written agreement showed no more than an intent to further reduce the oral agreement to writing].)

III. The Equal Gifting Provision is Part of the Settlement Agreement and is Enforceable

Richard contends that the trial court erred in finding that the equal gifting provision is ambiguous and, therefore, is not part of the settlement agreement. We agree.

As noted, Judge Di Loreto articulated the equal gifting provision primarily through the following statement regarding Richard and Rodger's agreement to deed the Point Dume, Amor, and Shangri-La properties to Vinetta: "Those three lots are going to be deeded over to you as your sole property and you can do with them [what] you want to do. Obviously, if you want to sell some of it so you have some immediate access to cash and then once you have that, the money, you can do whatever you want with it. You can, if you want to, give a portion of it to charity, if you want to give it to other people. But to the extent that you make any gift to either [of] your two sons or your grandchildren, you have to treat them equally, fair enough?" (Italics added.) Vinetta responded, "I do."

Contrary to the finding of the trial court, the italicized language, read in context, is not ambiguous. Rather, the language clearly means that Vinetta was free to do whatever she wanted with the subject properties, with the exception that she could not give any interest in the properties to one of her sons or his children unless she made an equal gift to the other son or his children. She was not obligated to give any interest in the properties to Richard or his children, or to Rodger or his children, but if she chose to do so, she had to make an equal gifts to the other son or to that son's children.9

Other statements that Judge Di Loreto made during the May 5, 2008 proceeding reflect the parties' agreement regarding the equal gifting provision. After Judge Di Loreto made the initial statement regarding the equal gifting provision, Vinetta's counsel sought clarification that she could "leave [the subject properties] to the Red Cross [or any other third party]." Judge Di Loreto responded, "If she wants to leave it to [whomever], I don't care, it's her money. The only thing is whatever is left, if there is any left. . . ." Judge Di Loreto was distracted at that point and did not complete his thought. However, regarding the Bayview residence, Judge Di Loreto later clarified that Vinetta was not obligated to leave it to her grandchildren and added, "Whatever is left over, she can leave it to the grandkids equally if she wants to but she doesn't have to. It's hers, period, okay." (Italics added.) Judge Di Loreto later stated, "I made it real clear, our understanding was[¶] . . . [¶][t]hat [Vinetta is] going to treat you fairly, that whatever she wants to do with that property is hers and that, if she wants to give it to charity, she can give it to charity, it's hers, that's why we're giving it to her. This is not a gift cum onere with strings attached, it's not, it's hers and so whatever she wants to do, whatever is left, she'll treat it equally. She doesn't have to give it to you." (Italics added.) The italicized language reflects the agreement that if Vinetta chose to give one of her sons or that son's children any interest in the subject properties that remained after she had done whatever else she wanted to do with those properties, she was obligated to give a gift of equal value to her other son or to that son's children.

The trial court essentially found that the equal gifting provision was ambiguous because neither Judge Di Loreto nor the parties articulated precisely how the equal-treatment requirement would be implemented in the event that Vinetta chose to give an interest in any of the subject properties to her sons or grandchildren. The rhetorical questions that the court posed to exemplify a purported ambiguity in Judge Di Loreto's equal gifting statement—e.g., whether the gifts could consist of cash to one and property to the other and whether the gifts had to be made simultaneously—all go to the specific details of how the equal gifting provision would be effectuated, and not to any uncertainty as to whether Vinetta was required to treat Rodger and Richard (or their children) equally.

The fact that Judge Di Loreto did not spell out specifically how the equal gifting provision was to be implemented and left this for future determination does not render the essential meaning of the provision ambiguous or unenforceable. "`The modern trend of the law is to favor the enforcement of contracts, to lean against their unenforceability because of uncertainty, and to carry out the intentions of the parties if this can feasibly be done. Neither law nor equity requires that every term and condition of an agreement be set forth in the contract. [Citations.] The usual and reasonable terms found in similar contracts can be looked to, unexpressed provisions of the contract may be inferred from the writing, external facts may be relied upon, and custom and usage may be resorted to in an effort to [make up for] a deficiency if it does not alter or vary the terms of the agreement. [Citations.]' [Citations.] At bottom, `[i]f the parties have concluded a transaction in which it appears that they intend to make a contract, the court should not frustrate their intention if it is possible to reach a fair and just result, even though this requires a choice among conflicting meanings and the filling of some gaps that the parties have left.'" (Larwin-Southern California, Inc. v. JGB Investment Co. (1979) 101 Cal.App.3d 626, 641; Provost v. Regents of University of California (2011) 201 Cal.App.4th 1289, 1302 [Nonmaterial terms of an agreement may be negotiated after a basic agreement has been reached.].) Thus, the fact that there were different ways in which Vinetta could have treated Richard and Rodger or their children equally—e.g., by giving separate properties of equal value or selling property and equally distributing the proceeds—does not render the settlement agreement ambiguous as to whether Vinetta was obligated to treat them equally.

In reaching its decision, the trial court made findings regarding Vinetta's subjective understanding, presumably based on the evidence at trial regarding the deterioration of her relationship with Richard, in disregard of the plain meaning of the equal gifting provision. In its statement of decision the court stated that it inferred that Judge Di Loreto's comment that "`whatever is left, she'll treat it equally[]' . . . enhanced Vinetta's perspective that she had no obligation to gift to Richard in any context or regard." The problem with that inference is that Vinetta's subjective understanding of the equal gifting provision, or any subjective view that there was no equal gifting requirement, is irrelevant to the plain meaning of the equal gifting provision, which Judge Di Loreto articulated as part of a settlement agreement that all parties agreed was binding.

Further, there was no evidentiary basis for the court to infer that Judge Di Loreto's statement that Vinetta was to treat remaining properties equally would "enhance" Vinetta's view that she had no obligation to treat Richard and Rodger and their children equally with respect to any disposition of the subject properties. The court's inference that Judge Di Loreto's comments regarding equal and fair treatment caused Vinetta to conclude that "she had no obligation to gift to Richard in any context or regard[]" is purely speculative. The inference is also counterintuitive because Judge Di Loreto's equal-treatment reference supports, rather than undermines, Richard's interpretation of the equal gifting provision—i.e, it supports the reasonable inference that Vinetta was obligated to treat Richard and Rodger equally rather than the inference that Vinetta reasonably concluded that she "had no obligation to gift to Richard in any context or regard."

Rodger argues that Richard opened the door to extrinsic evidence and that substantial evidence supports the trial court's finding that the settlement agreement did not include "an agreement by Vinetta to leave anything to Richard under any circumstances." Under California's parol evidence rule, extrinsic generally is not admissible to add to, detract from, or vary the terms of a written contract (Code Civ. Proc., § 1856), but it may be admissible to determine the parties' intended meaning of language used in an integrated agreement. (Bionghi v. Metropolitan Water Dist. of Southern California (1999) 70 Cal.App.4th 1358, 1364-1365 (Bionghi), quoting Pacific Gas & Electric Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 39-40 (Pacific Gas).) In Pacific Gas, the California Supreme Court held that "rational interpretation [of a written contract] requires at least a preliminary consideration of all credible evidence offered to prove the intention of the parties. . . . If the court decides, after considering this evidence, that the language of the contract, in the light of all the circumstances, `is fairly susceptible of either one of the two interpretations contended for . . .' [citations], extrinsic evidence relevant to prove either of such meanings is admissible." (Pacific Gas, supra, 69 Cal.2d at pp. 39-40.)

Thus, the parol evidence rule allows a court to consider extrinsic evidence of the parties' contractual intent to construe ambiguous contract terms. However, the trial court here did not consider extrinsic evidence to construe the meaning of the equal gifting provision that Judge Di Loreto articulated; instead, the court used extrinsic evidence as a basis to nullify the equal gifting provision and find that the settlement agreement did not include any agreement by Vinetta "(a) to make any sort of gift to Richard during her lifetime, or (b) to provide in any way for Richard upon her death." Essentially, the court excised the equal gifting provision from the settlement agreement as surplusage.

Under Pacific Gas, the court could have considered extrinsic evidence to discern the intent of the parties regarding the meaning of the equal gifting provision, if the parties had disputed their intended meaning of particular words that Judge Di Loreto used in articulating the provision. However, the court could not properly use extrinsic evidence to find that notwithstanding Judge Di Loreto's explicit articulation of Vinetta's equal gifting obligation, there was no agreement requiring equal gifting between Richard and Rodger or their respective children. "Pacific Gas & Electric is . . . not a cloak under which a party can smuggle extrinsic evidence to add a term to [or omit a term from] an integrated contract, in defeat of the parol evidence rule." (Bionghi, supra, 70 Cal.App.4th at pp. 1365-1366; Commerce & Industry Ins. Co. v. Chubb Custom Ins. Co. (1999) 75 Cal.App.4th 739, 746 [Although extrinsic evidence may be admissible to resolve disputes about ambiguous contract language, "it cannot be used to substantiate unexpressed intention, and thereby vary clear and explicit contract provisions."].)

In the context of a family law case, the California Supreme Court held that "[p]roperty settlement agreements, unlike those providing for support and maintenance, are binding on the court if not induced by fraud or duress or in violation of the confidential relationship of the parties. [Citation.] The court is not at liberty to disregard such an agreement or to enter a decree that modifies any of its terms." (Verdier v. Verdier (1950) 36 Cal.2d 241, 247, italics added.) The same principle applies here—the settlement agreement was binding and the court was not at liberty to modify it by excising the equal gifting provision.

Rodger contends that under the doctrine of res judicata, the May 2008 judgment quieting title to the subject properties in Vinetta's name operates as a conclusive bar to Richard's claims. Richard argues that the May 2008 judgment does not bar his claims because the settlement agreement was not merged into that judgment.

Merger is the substitution of rights and duties under a judgment for those under a settlement agreement or a cause of action. (Flynn v. Flynn (1954) 42 Cal.2d 55, 58.) When a settlement agreement is merged into a judgment, only the judgment remains. (Berti v. Santa Barbara Beach Properties (2006) 145 Cal.App.4th 70, 75; Wade v. 20th Century Ins. Co. (1988) 206 Cal.App.3d 32, 37 ["`A compromise settlement can be the basis of a final judgment thereby operating as a merger and bar of all preexisting claims and causes of action.'"].) This principle applies when the judgment and the settlement agreement are the same—i.e., the judgment incorporates the agreement by reference or the agreement is expressly set out in the judgment. (In re Marriage of Jacobs (1982) 128 Cal.App.3d 273, 283.) Whether a settlement agreement is merged into a judgment is a question of law. (Mitchell v. Marklund (1965) 238 Cal.App.2d 398, 403.)10

The quiet title judgment in the present case does not reflect an intent to merge the entire settlement agreement in the judgment. The judgment did not reference, much less incorporate, the settlement agreement, nor did it set forth the terms of the settlement agreement; rather, it simply quieted title to the subject properties in Vinetta's name. The fact that the judgment does not include the equal gifting provision pertaining to those properties does not preclude Richard from seeking to enforce that provision.

Regarding claim preclusion, "[a] valid final judgment in favor of the plaintiff merges the [plaintiff's] claim in the judgment. The cause of action is extinguished and the only remaining right of action is on the judgment." (7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 401, p. 1034). However, "[i]f the second action is on a different cause of action, as where . . . new rights accrued since the rendition of the former judgment, there is no merger." (7 Witkin, supra, § 404, p. 1038.) In the present case, a new right accrued after entry of Vinetta's quiet title judgment when Richard discovered that Vinetta had breached the equal gifting provision of the settlement agreement by gifting three of the four subject properties and equity proceeds from Bayview entirely to Rodger without making an equal gift to Richard.

The May 2008 quiet title judgment does not show an intent to merge the entire settlement agreement into the judgment; it shows an intent only to quiet title to the subject properties in Vinetta's name. Thus, with respect to the equal gifting provision, the May 2008 settlement agreement is not merged into the quiet title judgment.11 The quiet title judgment did not preclude the court from adjudicating Richard's claim that Vinetta breached the settlement agreement by giving the properties to Rodger.

Rodger also contends that in the trial court, Richard essentially sought quasi-specific performance of Vinetta's alleged oral agreement to make a will for his benefit with respect to the subject properties, and that the alleged agreement cannot be specifically enforced because it is not sufficiently clear, definite, and certain regarding the precise act to be performed.12 He further contends that as a contract to make a will, the existence of the alleged equal gifting agreement is subject to the standard of proof of Probate Code section 21700, subdivision (a)(4), which requires "[c]lear and convincing evidence of an agreement between the decedent and the claimant or a promise by the decedent to the claimant that is enforceable in equity" to establish "[a] contract to make a will or devise. . . ." (Id. at subd. (a).)

Vinetta's agreement to treat Richard and Rodger (or their respective children) equally if she chose to give any interest in the subject properties to them does not have to meet the certainty requirement for specific performance of a contract because an award of damages for breach of the agreement provides an adequate remedy, and Richard has sought that remedy at trial and in this appeal. The equitable remedy of specific performance or quasi-specific performance of an agreement is not available when an adequate remedy at law exists in the form of damages for breach of contract. (Wilkison v. Wiederkehr (2002) 101 Cal.App.4th 822, 834-835; Thayer Plymouth Center, Inc. v. Chrysler Motors Corp. (1967) 255 Cal.App.2d 300, 306.)

Vinetta's equal gifting agreement is not a contract to make a will subject to the standard of proof required by Probate Code section 21700, subdivision (a)(4), because Vinetta could have performed the agreement during her lifetime. (See Byrne v. Laura (1997) 52 Cal.App.4th 1054, 1064-1065 [Although decedent's oral promise to provide support for lifetime of promisee was enforceable against the decedent's estate, the statute requiring a contract to make a will to be in writing did not apply to the promise because the promisee could have predeceased the promisor, and in that event the contract could have been fully performed during promisor's lifetime.]; In re Estate of Ziegler (2010) 187 Cal.App.4th 1357, 1365 [agreement to transfer property upon death was a contract to make a will because it could be performed only after death by decedent's personal representative by conveying property that otherwise belonged to the decedent's estate].) In any event, the unambiguous language of the equal gifting provision is sufficient to support a finding by clear and convincing evidence that Vinetta agreed that any interest in the subject properties that she held at the time of her death could pass by will or trust to her children or grandchildren (as opposed to any other recipient) only if such interest were divided equally between Richard and Rodger or between their children. (See Byrne v. Laura, at p. 1067 [decedent's promise to give all of his property to his life partner was not too uncertain to enforce; the only uncertainty was how decedent intended to effectuate the promise].)

DISPOSITION

The judgment is reversed. The trial court is directed to conduct such further proceedings as may be necessary to enforce the equal gifting provision. Richard is awarded his costs on appeal.

NARES, Acting P. J. and HALLER, J., concurs.