NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
GRIMES, J.
This is an appeal from the sustaining of a demurrer to the first amended complaint without leave to amend. Plaintiffs alleged two causes of action, for reformation of a real estate contract and quiet title. Defendants demurred for failure to state a cause of action and uncertainty. We find both causes of action were adequately pled and reverse the dismissal of this action.
The standard of review of a dismissal after the sustaining of a demurrer without leave to amend is well settled. A demurrer tests the legal sufficiency of the complaint. We review the complaint de novo to determine whether it alleges facts sufficient to state a cause of action. For purposes of review, we accept as true all material facts alleged in the complaint, but not contentions, deductions or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Our review includes the exhibits to the complaint. (Trinity Park, L.P. v. City of Sunnyvale (2011) 193 Cal.App.4th 1014, 1027.)
We draw the following facts from the allegations of the operative complaint, assumed to be true for purposes of a demurrer, including the exhibits. Before January 1998, plaintiffs owned four contiguous parcels of land identified in a survey as parcels A-1, B-1, C-1 and C-3. On two parcels, plaintiffs operated a nursery school. The schoolhouse was on parcel A-1. The play yard was on parcel C-3. For years, a fence had separated these parcels from parcels B-1 and C-1. There were rental houses on parcels B-1 and C-1. Defendants offered to buy parcels B-1 and C-1 in November 1997. In early 1998, the parties entered into a contract providing that plaintiffs would sell parcels B-1 and C-1 to defendants for $650,000.
After the transaction closed, plaintiffs continued to own and operate the nursery school on parcels A-1 and C-3, which remained fenced off from parcels B-1 and C-1. In 2007, plaintiffs offered to sell parcels A-1 and C-3 to defendants. The parties agreed on a purchase price for the two parcels of $725,000 and opened escrow in April 2007. A title search conducted in April 2007 revealed that plaintiffs had mistakenly transferred title in parcel C-3 to defendants in the 1998 transaction. The 1998 contract provided for the sale of parcel C-3 to defendants without the parties' knowledge and despite their intention that plaintiffs would only sell parcels B-1 and C-1 to defendants in 1998.
Defendants dishonestly denied any mistake and demanded a $35,000 reduction in the purchase price for parcel A-1, believing they no longer had to pay for parcel C-3. Plaintiffs realized they could choose to cancel the 2007 deal or agree to sell only parcel A-1 for the reduced purchase price. They chose to proceed with the sale of parcel A-1 at the reduced price. The parties closed escrow on the sale of parcel A-1 in May 2007. Defendants refused to pay plaintiffs any consideration for the acquisition of parcel C-3, "apparently believing it simply good fortune to have unintentionally acquired title to parcel C-3 back in 1998."
In the first cause of action for reformation of contract, plaintiffs alleged the January 1998 contract did not express the mutual intent of the parties. Plaintiffs did not intend to transfer title to parcel C-3 in the January 1998 contract. Defendants did not intend to obtain title to parcel C-3 in the January 1998 contract and paid no consideration for that parcel. Plaintiffs' intent to retain possession of parcel C-3 was shown by their continuing to operate the nursery school and play yard on parcels A-1 and C-3 from 1998 until 2007. Defendants shared that same intent as shown by their not exercising any rights in parcel C-3 from 1998 until 2007. Even if defendants knew or suspected that parcel C-3 had been mistakenly conveyed in 1998, they did nothing to inform plaintiffs, who continued to have full and exclusive enjoyment and use of the parcel from 1998 until 2007. Parcel C-3 was inadvertently transferred due to the mutual mistake of the parties, or due to the mistake of plaintiffs which defendants knew or suspected. No third parties have acquired any rights in parcel C-3, although defendants transferred it to a limited liability company, because that company is the alter ego of defendants.
The second cause of action seeks to quiet title in parcel C-3 for the reasons previously alleged and alleges the legal description of the property.
Civil Code section 3399 authorizes reformation of an instrument "[w]hen, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties . . . ." Civil Code section 3399 permits reformation of a deed or other contract for the purchase and sale of real estate to make it conform to the mutual intent and understanding of the parties. (Bailard v. Marden (1951) 36 Cal.2d 703, 708-710; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1382, fn. 19; La Mancha Dev. Corp. v. Sheegog (1978) 78 Cal.App.3d 9, 16.)
The first amended complaint adequately alleged all of the facts supporting a cause of action to reform the 1998 contract to provide for the transfer of only parcels B-1 and C-1, and not C-3. Plaintiffs alleged all parties mistakenly believed that only parcels B-1 and C-1 were transferred in 1998, until a title search was conducted in 2007 after defendants had offered to buy parcel C-3 and the fourth parcel. None of the parties intended in 1998 that parcel C-3 be transferred to defendants, and defendants paid no consideration for parcel C-3. Parcel C-3 was fenced off from the parcels the parties intended to transfer in 1998 and remained fenced off at all times until 2007. From before 1998 until 2007, plaintiffs had free, uncontested use of parcel C-3 and continued to operate the nursery school with the play yard on parcel C-3. The complaint alleges in several paragraphs that none of the parties knew of the mistake until 2007. In paragraphs 27 and 28, the complaint alleges that if defendants knew of or suspected the mistake, they did not disclose it to plaintiffs and knew any transfer of parcel C-3 was inadvertent. The complaint alleges defendants backed out of their deal to buy parcel C-3 in 2007 dishonestly, believing that good fortune had bestowed upon them ownership of a parcel for which they never paid any consideration.
Defendants' demurrer rested on the theory that the parties had an "overall" intent to transfer all four parcels from plaintiffs to defendants, an intent that formed in 1998 and was consummated in 2007, and there was no mistake since, ultimately, defendants did acquire all four parcels, and plaintiffs were paid for them, "with the sole difference being the $35,000 reduction in compromise." This argument completely ignores the allegations of the complaint, which we must accept as true. The argument rests on a wholly different version of the facts, none of which appears in, nor may be reasonably inferred from, the allegations of the complaint. Plaintiffs adequately alleged facts supporting the first cause of action for reformation of contract.
The second cause of action to quiet title is also adequately pled. Quiet title is an appropriate remedy to establish any kind of legal or equitable right, title or interest in real property against an adverse claim. (Code Civ. Proc., § 760.010 et seq.) The second cause of action conformed with the pleading requirements for a quiet title action. The complaint was verified, alleged plaintiffs' title and basis of title, the property's description, and the adverse claims which plaintiffs seek to have determined. (Id., § 761.020.) A quiet title cause of action may be asserted in addition to any other remedy to establish plaintiffs' title to parcel C-3. (Id., § 760.030, subd. (a).)
DISPOSITION
The judgment of dismissal is reversed. The matter is remanded with instructions that the trial court vacate its order of dismissal and permit plaintiffs to prosecute their first amended complaint.
BIGELOW, P. J. and RUBIN, J., concurs.
