JACKSON, J.
Defendants South Gate SPE, L.L.C., South Gate Land Corporation and Cal-American Income Property Fund VIII appeal from a summary judgment in favor of plaintiff Garfield Beach CVS, L.L.C. We affirm.
The Community Redevelopment Agency (Agency) of the City of South Gate owned land to be redeveloped. In March 1978, the Agency entered into a lease and land purchase agreement with a developer, South Gate Plaza Partners (Plaza), for development of the South Gate Shopping Center on the land. On November 1, 1979, Plaza entered into a sublease (Sublease) with Sav-On Drugs, Inc. (Sav-On) to build and operate a drug store on a specified parcel of the land (Premises), with use of part of the adjacent common area designated for parking.
In Sublease Article 22, Option To Purchase (Purchase Option), as part of the consideration for the sublease,
Plaza and the Agency entered into an Amended and Restated Lease and Agreement for Purchase of Land as of December 11, 1979 (Ground Lease), the original version of which the parties had entered into March 21, 1978 and had previously amended on June 25, 1979. Section 7 required Plaza to purchase the shopping center property from the Agency on or before the expiration date of the lease, the term of which was set at 12 years and 8 months.
Another provision in Attachment F acknowledged that the sublease was subject to approval by the Agency and stated that, upon its approval, Attachment F shall be conformed with the approved sublease, which had to be initialed by the Agency and Plaza.
The Agency, Plaza and Sav-On entered into a "Non-Disturbance and Attornment Agreement" (NDA), effective November 1, 1979. The NDA provided that neither Plaza nor the Agency would interfere with "Sav-On's possession of the Premises and Sav-On's rights and privileges under the Sublease," so long as Sav-On was not in default. It also provided that, if the Agency assumed Plaza's position as the sublessor as the result of termination of the Ground Lease, "[t]he rights and obligations of Sav-On . . . shall . . . be the same as now set forth in the Sublease, and by this reference the Sublease is incorporated herein as a part of this Agreement."
A few years later, on May 11, 1982, the Agency and Plaza again modified and restated the Ground Lease. The May 1982 version of Attachment F contained the same text as the December 1979 version concerning the Purchase Option terms as to the property affected, the price, and the manner and time of exercising the option, including the provision that the option would expire January 1, 2001.
Successors in interest subsequently replaced Plaza, Sav-On and the Agency. In 1982, Plaza assigned the Ground Lease to defendant Cal-American Income Properties Fund No. VIII (Cal-American). Cal-American's affiliate, defendant South Gate SPE L.L.C., took over management of the shopping center property. The Agency gave written consent to the assignment of the Ground Lease, including the Sublease and other subtenants' leases.
In 1993, defendant South Gate Land Corporation (SG Land) purchased the shopping center property. The Agency issued a grant deed conveying fee title to the property to SG Land.
In 2006, Cal-American gave written consent for plaintiff Garfield Beach CVS, L.L.C. (CVS) to assume the Sublease in place of Sav-On. On June 23, 2006, CVS wrote to Cal-American, exercising the Purchase Option by giving the required written notice and confirming that the purchase would occur within the required 60-day period. CVS requested that Cal-American forward the required draft deed and parcel map to prepare for finalizing the purchase.
Cal-American rejected CVS's exercise of the Purchase Option on the ground that, pursuant to Attachment F, the option expired January 1, 2001. CVS believed it was not bound by Attachment F, in that Sav-On entered into the Sublease before Attachment F was executed, and Sav-On was never a party to a written agreement containing the purported January 1, 2001 expiration date. Cal-American estimated the value of the Premises at the time CVS exercised the option to be at least $4.5 million.
CVS filed this action against defendants for declaratory relief and breach of contract. It then moved for summary judgment. The trial court granted the motion, ruling that CVS's Purchase Option contained in the Sublease is enforceable, and defendants breached the Sublease by failing to cooperate with CVS's efforts to exercise the Purchase Option.
Defendants' primary contention is that triable issues of material fact exist regarding the enforceability of the Purchase Option based on the provisions of the Ground Lease, particularly the January 1, 2001 Purchase Option expiration date in Attachment F. Defendants also contend that, as a matter of law, the Purchase Option is unenforceable for two reasons: First, Plaza had no authority to grant Sav-On an option to purchase the Premises, because Plaza did not own the shopping center property at the time it entered into the Sublease. Second, Health and Safety Code sections 33437 and 33439 require redevelopment agreements to include provisions designed to prevent a party from reaping windfall profits from transfer of redeveloped land and, contrary to those requirements, enforcing the Purchase Option as written in the Sublease would amount to a windfall to CVS totaling millions of dollars. For the reasons set forth below, we disagree with defendants' contentions.
Code of Civil Procedure section 437c, subdivision (c), provides that a "motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The moving party's papers are strictly construed, and the opposing party's papers are liberally construed. All doubts as to the propriety of granting the motion, i.e., as to whether there are any triable issues of material fact are to be resolved in favor of the party opposing the summary judgment. (Lonicki v. Sutter Health Central (2008) 43 Cal.4th 201, 206.)
On appeal, we exercise our independent judgment in determining whether there are no triable issues of material fact and the moving party thus is entitled to judgment as a matter of law. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.) When the summary judgment involves the interpretation of a written contract, we make an independent interpretation of the contract. (See Milazo v. Gulf Ins. Co. (1990) 224 Cal.App.3d 1528, 1534.)
Defendants present a somewhat convoluted argument to the effect that the NDA incorporates by reference Attachment F to the Ground Lease and, therefore, the January 1, 2001 option expiration date became a part of the Sublease. Essentially, defendants claim that the NDA constituted an agreement between Sav-On, Plaza and the Agency to modify or supersede the expiration language in the Purchase Option set forth in the Sublease.
As we demonstrate below, the NDA is not subject to the interpretation defendants seek to give it. Further, the provisions of the Ground Lease are irrelevant to our determination as to the enforceability of the Purchase Option.
Basic principles of contract interpretation are well-established: "`[T]he primary object of all interpretation is to ascertain and carry out the intention of the parties. [Citations.] All the rules of interpretation must be considered and each given its proper weight, where necessary, in order to arrive at the true effect of the instrument. [Citation.]' [Citation.]" (City of Manhattan Beach v. Superior Court (1996) 13 Cal.4th 232, 238.) A contract must be construed according to the "ordinary and popular" meaning of its language. (Civ. Code, § 1644; Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1265.) Generally, "if the meaning a layperson would ascribe to contract language is not ambiguous, we apply that meaning." (AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 822.) "contract must be interpreted by consideration of the whole agreement and not isolated provisions. (City of Manhattan Beach, supra, at p. 240.)
The primary reason that the Ground Lease is irrelevant is that Sav-On was not a party to the Ground Lease and, therefore, never expressly agreed to alter the Purchase Option to include the January 1, 2001 expiration date specified on Attachment F. The Purchase Option existed before the Ground Lease was finalized; Sav-On entered into the Sublease, including the Purchase Option, with Plaza on November 1, 1979. Plaza and the Agency did not enter into the Ground Lease until December 11, 1979.
The NDA, which Sav-On, Plaza and the Agency entered into, did refer to the Ground Lease in its recitals. It is clear, however, that the intention of the parties in entering into the NDA was to assure Sav-On's interests under the Sublease were protected from interference by either Plaza or the Agency. As defendants acknowledge in their reply brief, a subtenant such as Sav-On has no direct contractual relationship with the property owner. A non-disturbance agreement is a standard real estate device by which a subtenant can have a contractual relationship sufficient to obtain assurances from the property owner that, absent the subtenant's default, the subtenant's sublease will remain in effect for the full term in the event the master lease between the original tenant and the property owner fails or is terminated for any reason. (See Miscione v. Barton Development Co. (1997) 52 Cal.App.4th 1320, 1333-1334, dis. opn. of Hollenhorst, J.)
Contrary to defendants' assertions, the terms of the Ground Lease were not incorporated by reference into the NDA. Thus, Sav-On's signature on the NDA did not also constitute Sav-On's agreement to the Ground Lease. The only mention in the NDA of the Ground Lease was in a recital which stated that "reference is hereby made to said [Ground] Lease for the particular terms and conditions therein contained." This language differs markedly from the language used regarding the Sublease. The NDA states that "by this reference the Sublease is incorporated herein as a part of this Agreement." Had the parties intended to incorporate the Ground Lease, they would have used similar language to that used to incorporate the Sublease. Their failure to do so shows that the parties did not intend to incorporate the Ground Lease into the NDA. (Cf. People v. Weatherill (1989) 215 Cal.App.3d 1569, 1578-1579 [inclusio unius est exclusio alterius, the inclusion of one thing is necessarily the exclusion of another]; see also O'Malley v. Wilshire Oil Co. (1963) 59 Cal.2d 482, 494 [this principle may apply to contracts as well as statutes].)
The fact that the Sublease is incorporated by reference in the NDA shows that the Agency and Plaza were on notice of the terms of the Sublease and that Sav-On's rights under the Sublease would be enforceable against the Agency should the Ground Lease be terminated or cancelled. The NDA's emphasis on maintaining Sav-On's rights under the Sublease is inconsistent with any intent by the parties to the NDA to change the terms of the Purchase Option in the Sublease in the absence of Sav-On's express agreement to such change.
Defendants further contend that, whether or not the Ground Lease was incorporated by reference, the NDA, the Ground Lease and the Sublease must all be read together and construed as one agreement. The cases on which defendants rely, however, do not support their contention. They are readily distinguishable from the facts in the instant case.
For example, defendants cite Freedland v. Greco (1955) 45 Cal.2d 462 for the proposition that "`"several papers relating to the same subject-matter and executed as parts of substantially one transaction are to be construed together as one contract."'" (Id. at p. 468.) In Freedland, the "`"several papers"'" construed together were a sequence of letters between the contracting parties. Here, we have several contracts executed independent of one another.
Defendants cite Mleynek v. Headquarters Companies (1984) 165 Cal.App.3d 1133 for the proposition that need for construing documents together is especially applicable where the documents refer to each other. (Id. at p. 1136.) The documents which referred to each other in that case were two agreements between the same two parties. As stated above, Sav-On was not a party to the Ground Lease which provided that the Purchase Option expiration date was January 1, 2001.
Defendants also rely on the proposition that "`[w]here two or more instruments are executed contemporaneously, with reference to each other, for the purpose of attaining a preconceived object, they must all be construed together . . . .'" (Collins v. Home Savings & Loan Assn. (1962) 205 Cal.App.2d 86, 98.) The instruments at issue here, the Sublease and Ground Lease, were not executed contemporaneously with reference to one another.
Defendants also assert that they were required to honor the terms of the Ground Lease with the Agency. The truth of that assertion is irrelevant to the issue here, that is, whether CVS had the right to exercise the Purchase Option in 2006 pursuant to the Sublease. Enforcement of the Ground Lease is a matter between defendants Cal-American, as Plaza's successor in interest, and defendant SG Land, as the Agency's successor in interest. In sum, neither the NDA nor the Ground Lease supports defendants' contention that the Purchase Option was unenforceable because it was not exercised prior to January 1, 2001.
We disagree with defendants' further contention that the Purchase Option is unenforceable, in that Plaza was not the property owner and therefore had no authority to grant the option to Sav-On. This assertion fails to interpret the Sublease in context of the various agreements. Interpretation of a contract must include consideration of the context surrounding a contract provision in question. (City of Manhattan Beach v. Superior Court, supra, 13 Cal.4th at p. 240.)
Plaza and the Agency originally entered into a lease and purchase agreement on March 21, 1978. This agreement later was amended and restated as the Ground Lease. They had agreed that Plaza would buy the shopping center property. Had Plaza fulfilled its obligation to do so before Sav-On exercised the option and completed the purchase, Plaza would have taken the place of the Agency as property owner.
More importantly, the provisions of the Ground Lease confirm the Agency had given Plaza such authority. Plaza and the Agency had agreed that no sublease that Plaza negotiated would become effective unless the Agency approved it. The Agency would not have approved Sav-On's Sublease if it objected to the Purchase Option. The Agency's agreement to the option is shown in the plain language of the NDA, where the Agency expressly agreed to be bound by the Sublease as the sublessor, "as if the Sublease were originally made directly from Property Owner in favor of Sav-On," in the event the Agency ever succeeded to the interest of Plaza under the Sublease. As circumstances evolved, Plaza's successor as lessee under the Ground Lease did, in fact, purchase the shopping center property over 10 years before the Purchase Option was exercised.
Additionally, the Purchase Option was referenced in section 7 of the Ground Lease, as part of the formula for determining the purchase price which Plaza would pay for the shopping center property. Section 7 provided that, if Sav-On had already exercised the Purchase Option and paid the Agency for the Premises, then Plaza's purchase price would be reduced by $300,000. Again, this shows that the Agency approved of the Purchase Option.
Defendants assert that the Agency had authority to "establish restrictions or covenants running with the land" pursuant to Health and Safety Code section 33439
Subdivision (c) of Health and Safety Code section 33437, however, is inapplicable. It was not enacted until 1997, well after the 1979 date of the Sublease. Health and Safety Code section 33439 was in effect in 1979, but is irrelevant to the issues raised in plaintiff's complaint.
Defendants argue that the option expiration date in Attachment F constituted a covenant running with the land under Health and Safety Code section 33439, and that the covenant was created when the Agency and Plaza entered into the Ground Lease and recorded the short form of the lease. Defendants cite no authority supporting this argument. In the absence of citation to relevant authority, we may reject the argument. (People v. Cates (2009) 170 Cal.App.4th 545, 552.)
In any event, the record reveals that, as authorized by Health and Safety Code section 33439, the Agency entered into a declaration of covenants, conditions and restrictions with Sav-On and Plaza as of the same date the Agency and Plaza entered into the Ground Lease, December 11, 1979. The fact that the declaration does not expressly or by inference refer to the Purchase Option indicates that the parties had no intention of including the January 1, 2001 expiration date as a covenant running with the land.
In summary, the Purchase Option was enforceable when CVS exercised it in 2006. Therefore, there is no triable issue of material fact as to the right of CVS to purchase the Premises for $300,000 in accordance with the Purchase Option. The trial court properly granted the motion for summary judgment. (Code Civ. Proc., § 437c, subd. (c).)
Defendants contend that the trial court erred in denying their ex parte application to continue the hearing on the motion for summary judgment so that defendants could have time to depose Joseph Commes, the lawyer who reportedly drafted Attachment F to the Ground Lease for the Agency. We disagree.
Code of Civil Procedure section 437c, subdivision (h), provides that a party may request a continuance of a hearing on a motion for summary judgment by making an ex parte application, supported by an affidavit showing good cause for the continuance, "at any time on or before the date the opposition response to the motion is due." (See Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 253-254.) If the affidavit fails to make a showing of good cause, the trial court is not required to grant the continuance. (Code Civ. Proc., § 437c, subd. (h); Cooksey, supra, at p. 254.) We review a trial court's denial of a request for continuance for abuse of discretion. (Cooksey, supra, at p. 254.)
Defendants filed their ex parte application for a continuance on May 15, 2009, less than a week prior to the date set for the hearing and about two weeks after filing their opposition to the motion for summary judgment. CVS opposed the application on the grounds it was untimely and the option expiration date set forth in Attachment F was irrelevant. The trial court denied the application.
As previously stated, the Ground Lease is not relevant to the question of whether the Purchase Option is enforceable. Accordingly, the trial court did not abuse its discretion in denying the request for a continuance.
The judgment is affirmed. Plaintiff shall recover its costs on appeal.
We concur:
WOODS, Acting P. J.
ZELON, J.
