RUSHING, P. J. —
Bernice Jacobs (Jacobs) appeals from a judgment entered by the trial court after a demurrer to her complaint was sustained without leave to amend. Jacobs is a real estate broker who claims that she is owed a commission for her efforts to sell a parcel of property in Marin County. She alleges that, although certain owners did not sign the agreement that promised the
Jacobs is a licensed California real estate broker.
The listing price for the property was $2.2 million and if Jacobs procured a buyer for the property during the listing period (or if there was a contract for sale entered into by the sellers within 60 days after the expiration of that period), Jacobs would receive a commission of $200,000. However, the agreement specified that if an entity called the "Open Space Land Trust" bought the property, Jacobs would receive no commission.
Besides Jacobs, only one person signed the agreement, John B. Locatelli (Locatelli). He signed as trustee of the John B. Locatelli Trust. There are signature lines, however, for additional parties, including (1) "Gregory J. Gates, Trustee of the Gregory J. Gates Invivos Trust"; (2) Gisele Hainry; (3) Joe Mendes; (4) Sylvie Mendes, and; (5) the "Santa Cruz Clean and Sober Homes a California Non-profit Corporation."
These signature lines, however, are left blank — neither these five defendants (nor any of the other owners of the property) signed the agreement. Jacobs claims, however, that Locatelli told her when he was signing the agreement that he was authorized to act on behalf of the other owners. She claims that a written "agency agreement" exists between Locatelli and the owners, which she contends she will obtain through discovery. (We also note that the term, "Owner," is defined in the agreement not just as Locatelli, but as "John B. Locatelli, Trustee of the John B. Locatelli Trust, et al.")
Although the owners did not sign the agreement, Jacobs claims that they were aware of her retention as a broker and that two individual owners,
After the agreement was finalized, Jacobs began working to market the property. She spent significant effort in this work, identifying and contacting potential buyers, working sometimes "12-14 hours per day ...." On or about April 15, 2013, Jacobs contacted an entity called The Trust For Public Land (TPL). She identified herself as the exclusive broker for the property and exchanged e-mails with Joe Henry, TPL's director of acquisitions.
"Within a couple days," as Jacobs puts it, she called Locatelli to tell him the "good news" that TPL was interested in buying the property. Locatelli, rather than being pleased, was angry and asked for the contact information for Joe Henry at TPL. Locatelli, according to Jacobs, asserted that he had been speaking with TPL for three years and that he wanted to change the exemption in the agreement from the Open Space Land Trust to TPL.
Jacobs claims that she investigated what Locatelli had said about his prior contact with TPL — and that Joe Henry told her that he did not know Locatelli and had never spoken with him prior to Jacobs's contacting him. Henry also told Jacobs that he was not aware the property was for sale until he had been contacted by Jacobs. Locatelli then called Jacobs and told her that he had instructed TPL not to speak with her about the property and that TPL was to deal directly with him about the sale. Sometime in 2013, the owners and TPL entered into an agreement for TPL to buy the property. The sale, however, was never consummated, apparently because issues arose between the owners and TPL.
On April 4, 2014, Jacobs filed a complaint against the owners of the property (as well as TPL). She purported to plead causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, anticipatory breach (implied repudiation), and specific performance. The owners filed a demurrer to the original complaint. They argued that, as they had not signed the agreement, Jacobs's complaint was barred by the statute of frauds and that any argument that Locatelli signed on their behalf was foreclosed by the agreement itself and the fact that the property was held as tenants in common, not by a partnership.
Jacobs opposed, arguing, among other things, that Locatelli signed the agreement on behalf of the joint venture, which consisted of all of the owners of the property. After the owners replied, the court sustained the demurrer
On December 18, 2014, Jacobs filed her first amended complaint. Jacobs again attempted to plead causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, anticipatory breach (implied repudiation), and specific performance. Jacobs repeated and expanded on her prior allegations, claiming that the owners were part of a joint venture, the purpose of which was to invest in the property, which they acquired after foreclosing on the prior owner of the property, to whom the owners had lent funds.
The owners again demurred to the complaint. They argued that Jacobs's joint venture allegations did not save her complaint against the statute of frauds because the agreement did not have a reference to Locatelli's authority to sign on their behalf or to the joint venture itself, that multiple beneficiaries under a deed of trust (which they argued they were) did not constitute a joint venture in any event, that lenders are not joint venturers, and that Jacobs's specific performance claim was barred because the agreement was a personal services contract. Jacobs filed her opposition and the owners replied.
In an order dated March 5, 2015, the trial court sustained the owners' demurrer without leave to amend, again without explaining its reasoning in writing. The only defendant left in the case was Locatelli.
"On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [216 Cal.Rptr. 718, 703 P.2d 58]; Buckaloo v. Johnson (1975) 14 Cal.3d 815, 828 [122 Cal.Rptr. 745, 537 P.2d 865].) The court does not, however, assume the truth of contentions, deductions or conclusions of law. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125 [271 Cal.Rptr. 146, 793 P.2d 479].) The judgment must be affirmed `if any one of the several grounds of demurrer is well taken. [Citations.]' (Longshore v. County of Ventura (1979) 25 Cal.3d 14, 21 [157 Cal.Rptr. 706, 598 P.2d 866].) However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 103 [101 Cal.Rptr. 745, 496 P.2d 817].)" (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967 [9 Cal.Rptr.2d 92, 831 P.2d 317].)
The main dispute between the parties is whether the trial court properly sustained the demurrer to Jacobs's contract-based claims because of the statute of frauds. Before we discuss the relevant law, it is necessary to explain precisely what the agreement shows.
A plain visual inspection of the document shows that Locatelli's signature was the only one, besides that of Jacobs. Right above his signature line is the notation "Owner: John B. Locatelli, Trustee of the John B. Locatelli Trust," with his title listed as "Trustee." As mentioned above, while there were signature lines for the remaining owners, they were left blank. However, at the very top of the agreement, "Owner" is defined (with italics added) as "John B. Locatelli, Trustee of the John B. Locatelli Trust, et al." "[E]t al" clearly means, in this context, "and others." (Webster's 3d New Internat. Dict. (1993) p. 779.)
The owners argue that the issue presented here is straightforward — they did not sign the agreement to pay Jacobs a commission and they therefore cannot be bound by it. This argument has some surface appeal. As our Supreme Court stated nearly 30 years ago, "[a] broker's real estate commission
The "courts have long had little sympathy for the broker who fails to adhere to the statute of frauds." (Phillippe, supra, 43 Cal.3d at p. 1261.) Even where unfairness results, the statute of frauds has been enforced. (Ibid.) The statute of frauds is so strong in this context that the only manner in which a defendant may be estopped from asserting the defense is if there is a "showing of actual fraud by the party to be charged ...." (Id. at p. 1264.)
Jacobs alleges in her complaint that "Locatelli told [her], at the time he executed the [a]greement, that he was authorized to act on behalf of all" the owners. Seizing on this allegation that Jacobs did not have written proof of Locatelli's supposed agency at the time the listing agreement was signed, the owners assert the relevancy of the equal dignities rule, a close relative of the statute of frauds. This rule "is embodied in section 2309 of the Civil Code and reads as follows: `An oral authorization is sufficient for any purpose, except that an authority to enter into a contract required by law to be in writing can only be given by an instrument in writing.'" (McGirr v. Gulf Oil Corp. (1974) 41 Cal.App.3d 246, 254 [115 Cal.Rptr. 902].)
Despite the attention they are paid by the owners, however, neither the statute of frauds itself (as expressed in Phillippe) nor the equal dignities rule is directly applicable here. The owners entirely ignore the fact that Jacobs does specifically allege that a "written agency agreement exists between [Locatelli]" and the owners. Instead of dealing with this allegation in their appellate brief, the owners, within the space of a few sentences, skip from discussing the requirement of a written authorization between the owners and Locatelli to the entirely distinct issue of whether Jacobs had to be in possession of Locatelli's authorization itself (an argument left undeveloped and for which the owners provide us no analysis). In any event, if true,
The real issue is whether Jacobs's allegation that Locatelli signed on behalf of the other owners, who formed a joint venture, is sufficient to satisfy the statute of frauds. Although Locatelli tried to argue that even he was not liable to pay the commission, an argument the trial court rejected, the crux of this dispute is the effect of Jacobs's allegation that Locatelli signed on behalf of the other owners. This takes us into another realm, which is the applicability of the statute of frauds to the identity of parties to an agreement, an issue neither party briefed entirely adequately on appeal.
As a result of Sterling, it is indisputably the law that "when ambiguous terms in a memorandum are disputed, extrinsic evidence is admissible to resolve the uncertainty." (Sterling, supra, 40 Cal.4th at p. 767.) The agreement must still provide the essential terms, and it is "clear that extrinsic evidence cannot supply those required terms." (Ibid.) "It can, however, be used to explain essential terms that were understood by the parties but would otherwise be unintelligible to others." (Ibid.)
We are of the view that the trial court should have allowed the case to proceed so that Jacobs could introduce extrinsic evidence of the manner in
The correctness of this result is also exemplified by a case which the owners argue is "similar to the case at bar," Elias Real Estate, LLC v. Tseng (2007) 156 Cal.App.4th 425 [67 Cal.Rptr.3d 360] (Elias). In that case, the trial court granted specific performance to a buyer of real estate. (Id. at p. 429.) The appellate court reversed because the sale contract had only been signed by one brother to a partnership and there was "absolutely no evidence admitted at trial that the [brother/partners had] executed a written authorization with respect to the sale of the [p]roperty" — so the buyer's action was barred by the statute of frauds. (Id. at p. 430.) As this quotation shows, Elias involved an appeal from a trial in which all of the evidence was available to the appellate court for consideration. (Ibid.) If anything, Elias stands for the proposition that the trial court's sustaining of the owners' demurrer was erroneous because it prohibited the hearing of any evidence at all. We do not believe that the statute of frauds justified the trial court's order.
As the above discussion makes clear, there is a close relationship between the parol evidence rule and the statute of frauds, although they are in fact separate. Having discarded the owners' arguments about the statute of frauds, we now turn to their apparent argument that, because the agreement was fully integrated, Jacobs's claims were barred by the parol evidence rule itself.
The owners argue that paragraph 20 of the agreement constitutes a complete integration of the contract and that any evidence of what Locatelli might have told Jacobs prior to or at the signing of the agreement cannot now be used to argue that they, in addition to Locatelli, are beholden to pay her under the agreement. That paragraph, in relevant part, reads as follows: "
The owners do not successfully point to a single provision of the agreement which is contradicted by Jacobs's allegations. Their only attempt is to point to paragraph 5 of the agreement, which, though we mentioned it above, we now quote: "
The owners argue that paragraph 5 makes it clear that only the owner, "as defined," has the authority to execute the agreement and that there were no exceptions which would have allowed Locatelli to sign on behalf of any other owners. But they curiously do not go on to say how the term is in fact, defined. As we have mentioned, the term "Owner" is defined as "John B. Locatelli, Trustee of the John B. Locatelli Trust, et al." Given the ambiguity of what was meant by "et al." we do not believe that Jacob's allegation that Locatelli signed on behalf of the other owners or on behalf of the joint venture between all of the owners of the property would necessarily contradict the terms of the agreement. We therefore do not believe that the parol evidence rule, even apart from the statute of frauds, stands as a bar to Jacobs's claims against the owners.
The judgment of dismissal is reversed. The matter is remanded to the trial court for further proceedings consistent with the views expressed herein. Costs on appeal are awarded to Jacobs.
Premo, J., and Elia, J., concurred.
All further statutory references are to the Civil Code unless otherwise noted.