Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from the Superior Court of Riverside County. No. RIP75656. Paulette Barkley, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.
Mahaffey and Associates and Douglas L. Mahaffey for Objector and Appellant.
Best Best & Krieger and William R. DeWolfe for Petitioners and Respondents.
OPINION
HOLLENHORST, J.
I. INTRODUCTION
Carol Kravagna (Kravagna) appeals from judgment after court trial entered on August 23, 2006. Kravagna contends: (1) the trial court erred in holding Kravagna lacked standing to enforce certain terms of a settlement agreement to which she was a party; (2) Kravagna was an intended or incidental third party beneficiary of those provisions of the settlement agreement; and (3) the trial court erred in refusing to receive extrinsic evidence to show whether the settlement agreement was reasonably susceptible of the meaning Kravagna asserted. We find no error, and we affirm.
II. FACTS AND PROCEDURAL BACKGROUND
A. The Parties
John L. McElroy (John) had three children: Gary McElroy (Gary), Coleen McElroy-Coombs (Coombs), and Rick McElroy (Rick). Gary is named in this action individually, as conservator of the estate and coconservator of the person of John before John’s death, cotrustee of the John L. McElroy Revocable Trust dated December 18, 1997 (1997 Trust), and cotrustee of the John L. McElroy 2001 Substituted Judgment Trust (2001 Trust). Coombs is named in this action individually and as coconservator of John’s person before his death. Rick is a beneficiary of the 2001 trust. In addition, John’s sister, Loa Wilson (Wilson), is named individually and as cotrustee of the 1997 Trust and 2001 Trust. Gary and Wilson are sometimes referred to herein as the cotrustees.
For clarity and ease of reference, we use the first names of persons who share a surname. In doing so, we intend no disrespect. (See In re Marriage of Olsen (1994) 24 Cal.App.4th 1702, 1704, fn. 1.)
Kravagna was John’s live-in companion for more than 20 years. Kravagna was described in the settlement agreement that is the subject of this appeal as “an individual, a named beneficiary in The 1997 Trust, a former long-time live-in companion of [John], . . . and a present or past plaintiff, cross-defendant, appellant; petitioner, joining party, objecting party and responding party in one or more of the following [listed] proceedings” relating to John’s conservatorship and estate.
B. Prior Proceedings
The procedural history of this case is long and tangled, and a brief recitation of relevant prior history will provide a context for the present issues. The case arose in January 1999 when Gary petitioned for appointment of a probate conservator of the person for John on the ground John was unable to provide for his personal needs. (See Conservatorship of McElroy (2002) 104 Cal.App.4th 536, 540-541.) The report of a probate investigator indicated that John had been diagnosed with psychosis due to dementia. (Id. at p. 541.)
The copy of the register of actions provided in the record on appeal runs to 62 pages.
At a hearing in February 1999, Kravagna appeared and objected to the petition. (Conservatorship of McElroy, supra, 104 Cal.App.4th at p. 541.) The parties purportedly reached a settlement agreement at a hearing in May 1999, and Gary and Coombs moved to confirm that agreement. Over Kravagna’s objections, the probate court granted the motion. The probate court appointed Gary and Coombs as conservators of the person of John and appointed Gary as conservator of John’s estate. (Ibid.) The probate court subsequently entered judgment approving the oral settlement agreement. (Id. at p. 542-543.)
In Conservatorship of McElroy, supra, 104 Cal.App.4th 536, we considered three consolidated appeals involving John’s estate. In No. E029587, we held that the settlement reached in open court was not enforceable because Kravagna’s nod of the head did not constitute valid oral consent to the agreement. (Id. at pp. 551-552). In No. E029770, we held the trial court did not abuse its discretion by approving the conservators’ motion for a substituted judgment without holding an evidentiary hearing. (Id. at pp. 554-555.) In No. E029940, we held the trial court did not abuse its discretion in granting the conservators’ petition for an order directing them to carry out the order approving the petition for substituted judgment notwithstanding the pendency of appeal. (Id. at p. 557.)
After remand, multiple filings and hearings continued. Disputes among the parties included Rick’s petition (joined by Kravagna) for accountings and removal of Gary and Wilson as trustees of the 2001 Trust. Kravagna claimed entitlement to a share of John’s estate based on various Marvin-type claims, and Kravagna filed various tort claims against the cotrustees.
From Marvin v. Marvin (1976) 18 Cal.3d 660.
John died in January 2005, leaving an estate valued at more than $30 million. The principal assets of John’s estate were: (1) an approximate 62-acre parcel of land in Murrieta (the 62 acres) containing the family home and storage garages; (2) an approximate 16-acre parcel of land in Murrieta (the 16 acres); (3) industrial buildings in Anaheim owned by John’s corporation; and (4) personal property antiques, collectibles, and jewelry.
C. July 2005 Settlement Agreement
Eventually, the parties engaged in mediation before Retired Judge Arthur Block, and in July 2005 the parties entered into a “Mutual Settlement Agreement and General Release” (Settlement Agreement) intended to resolve all their claims. Among other things, under the Settlement Agreement, Gary and Wilson, as trustees of the 1997 Trust, agreed to deliver to Kravagna, through a settlement escrow, a grant deed to the 16 acres, subject to a two-year $1.25 million first trust deed promissory note by Kravagna in exchange for and in payment of all her “Marvin”-type claims. Kravagna and her counsel agreed to deliver to Gary and Wilson, as trustees of the 2001 Trust, quitclaim deeds to the 62 acres. In addition, Kravagna and her counsel agreed to deliver notices of withdrawal of all notices of litigation pending against properties including the 62 acres. Kravagna agreed to release each of the other settling parties from any and all claims encompassed within the actions being settled and all matters encompassed within those actions, except for timely and faithful performance of the respective warranties, representations, and obligations undertaken by those clients in the Settlement Agreement.
The Settlement Agreement included a warranty against assignment stating that none of the claims or causes of action subject to the Settlement Agreement had been transferred to another party. The Settlement Agreement stated, “All parties and their attorneys represent and warrant that none of them will in the future in any way interfere, directly or indirectly, with the ability of the 2001 Trust and its Trustees to sell the some 62 acres . . . to the Murietta [sic] Valley Unified School District, or to any other buyer(s), . . .” or of Kravagna to sell the 16 acres.
Paragraph 6 of the Settlement Agreement (hereafter, Paragraph 6), around which the current proceedings center, provided: “It is agreed as follows between the above-listed clients of BB&K, on the one hand, and the above-listed client of Horspool & Parker,[] on the other hand:
Best Best & Krieger LLP (BB&K) represented “The 1997 Trust, The 2001 Trust, Gary McElroy . . .; Loa Wilson . . .; Coleen McElroy-Coombs . . . ; Marion McElroy, Individually, and Jaylee, Inc.”
Horspool and Parker represented Rick in connection with the Settlement Agreement.
“(a) With respect to the some 62 acres of land . . . in the event written cash offer(s) to purchase, in acceptable form (which acceptable cash offers shall be distributed to Gary, Coleen and Rick (‘The Primary Trust Beneficiaries’) for their review) have been received by the Co-Trustees of the 2001 Substituted Judgment Trust by the completion and closing of the Settlement Escrow, and in the event any express conditions for the completion of such purchase have been approved in writing by two out of the following three of The Primary Trust Beneficiaries on or before completion and closing of the Settlement Escrow pursuant to the above terms of this Settlement and Release Agreement, the Co-Trustees shall accept the highest and best such cash offer and shall enter into a conforming sale-purchase escrow with such buyer at First American (‘The Sale Escrow’), if the following approvals have been received:
“(i) In the event the cash purchase price is $24,000,000.00 or more, the approval of all of The Primary Trust Beneficiaries will be irrevocably presumed to have been given; [¶] . . . [¶]
“(b) In the event no sale-purchase contract and escrow with a buyer of the some 62 acres have been entered within thirty (30) business days of the completion and closing of the Settlement Escrow, the Co-Trustees shall enter into a contact with a broad-based consultant/broker company . . . for the purpose of finding a buyer at the highest cash price then obtainable, and assisting with sale of these properties to such a buyer. The co-trustees shall provide all offers received to the Primary Trust Beneficiaries and shall keep said Primary Trust Beneficiaries promptly informed of all offers received.”
Paragraph G of the general provisions of the Settlement Agreement stated, “Interpretation or Enforcement. In the event of any legal action relating to or arising out of this Settlement and Release Agreement (or any documentation delivered pursuant thereto or in connection therewith) that action will be brought within six months of any alleged breach in a court of competent jurisdiction located in the County of Riverside, the parties to this Settlement and Release Agreement consent to personal jurisdiction and venue in such a court. The parties hereby waive any other applicable statute of limitations. . . .”
Paragraph J of the general provisions of the Settlement Agreement stated, “Integrated Writing. This Settlement and Release Agreement (along with any other documentation specifically called for herein) constitutes the whole and only existing and binding agreement between the Settling Parties on the subject matter hereof, superseding all prior statements and understandings, whether written or oral. Other than the representations and agreements expressly stated as such in this Settlement and Release Agreement, there are no warranties, promises, or representations of any kind, express or implied, upon which the Settling Parties either party [sic] has relied in entering into this Settlement and Release Agreement, or as to the future relations or dealings of the Settling Parties.”
D. Current Proceedings
In July 2005, the cotrustees entered into a listing agreement with a real estate broker for the sale of the 62 acres. On August 1, 2005, Voit Development Company (Voit) sent a letter of intent to the cotrustees, their attorney, and Rick offering to purchase the 62 acres for $24 million in cash.
On August 24, 2005, Kravagna filed a “Status Report Regarding Settlement” in which she sought to have the matter resubmitted to Retired Judge Block for clarification and interpretation concerning Paragraph 6 as well as other disputes not relevant to this appeal. She stated that issues had arisen as to “[w]hether or not the trustees must accept a[] $24 million all cash offer received from VOIT Development Company pursuant to [P]aragraph 6” and “[w]hether or not the trustees violated the settlement agreement by retaining a broker to market the 62 acres prior to the ‘event’ set forth in [P]aragraph 6(b).” She represented that “there was to be a window of time of 30 days during which the 62 acre property would not be marketed to the public so that any party to the settlement agreement had an opportunity to present a cash offer.” A letter from her counsel to counsel for the cotrustees, attached as an exhibit to her status report, stated that Kravagna and Voit had entered into a joint venture for the purpose of purchasing and developing the 62 acres. The letter stated that Kravagna had specifically relied on Paragraph 6 before signing the agreement. The “status report” was not accompanied by any supporting declarations.
Also on August 24, 2005, Rick filed a status report in which he likewise requested referral of the matter to Retired Judge Block for resolution of the issues concerning the meaning of Paragraph 6.
At the status conference on August 24, 2005, before Judge Craig Riemer, Kravagna’s attorney informed the court there was a contractual deadline that would expire in two days, and Rick’s attorney joined the request for the appointment of Retired Judge Block. Judge Riemer ordered the matter back to Retired Judge Block as a referee to make recommendations on the issues Kravagna and Rick had raised and scheduled a further hearing for August 26 before Judge Gary Tranbarger. Judge Tranbarger continued the hearing until September 7.
Retired Judge Block issued recommended findings that (1) the cotrustees’ premature retention of a real estate broker violated the Settlement Agreement, and (2) the Voit offer of $24 million was to be accepted forthwith pursuant to the terms of the Settlement Agreement.
On August 29, 2005, Kravagna filed a brief in support of enforcement of the Settlement Agreement. The brief asserted, among other things, that the plain meaning of Paragraph 6 required acceptance of Voit’s offer. The brief was not accompanied by any supporting declarations.
On September 6, 2005, BB&K filed opposition papers. The opposition was supported by declarations of Gary and Attorney William R. DeWolfe (DeWolfe) of BB&K, among others. Gary’s declaration stated, “At no time during the negotiations which led up to the July 2005 settlement and release agreement did [Kravagna] or anyone on her behalf communicate to me that, in addition to the some 15 acres she is to receive under the settlement, she or anyone else wanted to have the right to also acquire the some 62 acres across the street from the 15 acres, or that the Trustees would be precluded from selling the 62 acres to the highest and best responsible buyer as early as possible. If any such suggestion or request had been communicated to me, I would have firmly rejected it.”
DeWolfe’s declaration stated, “The basic provisions with respect to the 62 acres appear in Paragraph (6) of the Agreement — to which the only parties were and are the clients of BB&K (all of the McElroy fiduciaries and family member beneficiaries but one) and Rick, the client of David Horspool.” DeWolfe’s declaration quoted the provisions of the Settlement Agreement in which all parties and their attorneys represented and warranted that they would not interfere with the sale of the 62 acres to the Murrieta Valley Unified School District (School District). The declaration continued, “Neither Carol nor Voit nor any alleged joint venture between them requested to be parties to paragraph (6) of the Agreement or third party beneficiaries to the provisions of that paragraph with respect to the sale of the 62 acres, and none of them is a party to the provisions of Paragraph (6) or any of its subparagraphs.
Kravagna’s counsel objected to Gary’s declaration on the ground it violated the mediation privilege set forth in Evidence Code section 1119. She likewise objected to DeWolfe’s declaration concerning Paragraph 6 on the ground it violated the mediation privilege. The objection stated, “If the court is inclined to overrule the mediation privilege and wants a full recitation of the facts, [Kravagna] respectfully requests the right to call the Honorable Judge Arthur S. Block to testify as to all the discussions that took place about her interest in having a window of opportunity to buy her long-term home sight [sic] for fair market value. It is blatantly false that the opportunity for her to purchase the property was not integrated and specifically included in the agreement by the express window of time during which no broker was to list the property.”
On September 7, 2005, the day of the hearing, Kravagna filed a brief in support of the court’s approval of the recommendations of Retired Judge Block. The brief stated that, as Retired Judge Block had found, the trustees were required to wait 30 days before hiring a broker for the sale of the 62 acres. The brief again stated that Kravagna “objects to waiving the mediation privilege, but if this court wants to hear all the details of why that window of time was built in, she is prepared to call Judge Block to testify. As an offer of proof she (and Judge Block) will support that the window was inserted so any of the parties — not just the blood heirs — could try [to] raise [$]24 million to buy the 62 acres.” A supporting declaration by Kravagna’s counsel stated that counsel was prepared to call Retired Judge Block “if the court overrules the mediation privilege and wants a full hearing on the reason why there was a 30 business day window carved out in the settlement agreement before which a broker could be retained. It is adamantly [sic] false that there was no[] detailed discussion at the mediation regarding that topic and its reason for insertion.”
At the September 7, 2005, hearing before Judge Tranbarger, counsel for Rick conceded that all Rick wanted was for the 62 acres to be sold as quickly as possible for as much money as possible. Judge Tranbarger indicated his intended ruling. He stated that Kravagna’s August 24 application had been procedurally defective, and he indicated that neither Kravagna nor Voit had standing to enforce Paragraph 6 and that Kravagna had given up any right to the 62 acres. He further stated to Kravagna’s counsel, “[I]f you were trying to negotiate a contract that called for this situation, then there should have been a clear indication in this contract that . . . Kravagna and her associates are going to make an offer. That offer is going to be made by such and such a time. And that offer must be accepted so everybody knows exactly what’s going on. [¶] You are reading between the lines. And I’m not saying you’re reading incorrectly, but as someone who simply read the settlement agreement I see paragraph 5 that says this is what’s going to happen to Carol Kravagna’s interest. Then I see [P]aragraph 6. This is what’s going to happen to the 62 acres. When I read [P]aragraph 6, your client is not there.” However, with the agreement of all counsel, Judge Tranbarger reassigned the case to Commissioner Paulette Barkley for all purposes.
Meanwhile, Voit increased its offer to $24.25 million plus any commissions that were owed to a broker and resubmitted the offer on September 8, 2005.
On October 3, 2005, Kravagna’s counsel brought a notice of motion and motion pursuant to Code of Civil Procedure sections 664.6 and 643 to adopt the referee’s finding and enforce the Settlement Agreement. The motion was supported by the declaration of Kravagna’s counsel stating that he had “personally participated in negotiating the subject settlement agreement” and that under the Settlement Agreement, “both parties specifically agreed that they would not directly or indirectly interfere with each other’s ability to sell the 62[-]acre parcel and the [16-]acre parcel.” The declaration stated that the Settlement Agreement “did not prohibit any party to the agreement from buying out the other party’s interest in the 62 acres.” Also on October 3, Kravagna’s counsel brought an ex parte application to specially set a motion for an order to enforce the Settlement Agreement and adopt the referee’s recommendations. That application was supported by the declaration of Kravagna’s counsel substantially similar to that described above.
On October 3 and 4, 2005, Rick’s counsel brought an ex parte application and petition for suspension of the cotrustees’ powers on the grounds, among others, the cotrustees had violated Paragraph 6(a) by failing to accept the Voit offer and by “retain[ing] a broker pre[]maturely in violation of [P]aragraph 6(b).”
Commissioner Barkley continued all the ex parte applications to October 19, 2005, and ordered a briefing schedule.
On October 13, 2005, BB&K filed an opposition supported by the declarations of Gary and DeWolfe. DeWolfe’s declaration stated that Paragraph 6 of the Settlement Agreement was “expressly only between [Rick] on the one hand and the other members of the McElroy family, on the other hand.” The declaration continued, “[Kravagna] is not [sic] and has never had any interest in the 62 acres and is not and never has been a party to the provisions of section (6) of the [S]ettlement [A]greement.”
At the October 19, 2005, hearing, Commissioner Barkley heard arguments of counsel and then received the agreement of all counsel that there was no opposition to her making a ruling and judgment under Code of Civil Procedure section 664.6 that the Settlement Agreement was enforceable. However, Commissioner Barkley requested further briefing on what had happened at the earlier hearings before Judges Riemer and Tranbarger concerning the 62 acres and the standing issue. Other matters, including personal property antiques missing from the 62 acres after Kravagna vacated that property, were set for an interim hearing on October 26.
At the October 26, 2005, hearing, Commissioner Barkley suggested that Kravagna place money in escrow to cover the estimated value of the antiques, after which Kravagna would receive the deed to her 16 acres. The cotrustees were unwilling to agree to such a procedure because Kravagna’s counsel had threatened to cloud title to the 62 acres to force the sale of that property to Voit. Eventually, an agreement was reached on the record that there would be no more clouding of the title to the 62 acres. After a recess, counsel reported that negotiation of a stipulated order was in progress. Commissioner Barkley ordered the attorneys to return to court the next morning with the final stipulated order.
The parties met and signed a stipulated order. The next day, Commissioner Barkley signed and entered the stipulated order. The stipulated order provided that neither Kravagna nor her attorneys or anyone associated with them would undertake any further activities clouding the title to the 62 acres. Specifically, the stipulated order stated Kravagna and her attorney warranted and represented “that neither they, nor any other person or entity to their knowledge, has recorded any document(s) purporting to cloud title of record to [the 62 acres]” and “that neither of them, nor any entity with which either of them is associated as a partner, joint venturer or otherwise, will in the future communicate, file or record, or cause to be communicated, filed or recorded, any document or thing (including but not limited to any Lis Pendens), purporting to cloud title to [t]he 62 Acres, . . .”
On November 7, 2005, Kravagna’s counsel filed an ex parte application seeking an order suspending the powers of the cotrustees and requesting an order to show cause re: preliminary injunction and temporary restraining order to prevent the cotrustees from selling the 62 acres to the School District. On November 15, the cotrustees filed an opposition to the application, and on November 14, Kravagna’s counsel filed a reply brief.
On November 15, 2005, Kravagna’s counsel served a notice of lodging of supplemental declaration of Kravagna regarding standing. The declaration stated:
“2. On August 28, 2005 I entered into a joint venture agreement with VOIT Development Company concerning the acquisition of the subject 62 acres of land. The joint venture agreement as to that purchase included a profit split wherein after VOIT purchased the subject property and after I contributed certain consideration as set forth in our agreement, VOIT would engineer and improve the 62 acres and then sell that property. Upon its sale, I would receive a specific percentage of the profits.
“3. Although the purchase agreement that was supplied by VOIT was not in my name, I am directly, economically benefitted from the purchase of that property.
“4. I am a partner in the purchase of the property and I will be economically damaged if that property cannot be sold to VOIT.
“5. When the subject settlement agreement was negotiated, there was a specific time frame that was negotiated before which a broker would list the subject 62 acres providing the parties to the settlement agreement an opportunity to buy the property. By definition, the ‘public’ was not going to receive a marketing of the property and, therefore, the only purchasers of the property before the listing agreement commenced would be the parties who signed the settlement agreement, or who learned about the availability of the property from one of those parties.
“6. I was absolutely included in this group of third parties who were benefitting from the delay between the execution of the settlement agreement and the listing of the property to the public. Accordingly, I entered into a joint venture with a purchaser and made certain that they timely submitted the maximum amount of purchase price to acquire the property in accordance with the terms and conditions of [P]aragraph 6(a) of the settlement agreement. . . .”
On November 18, 2005, Kravagna filed a reply to the cotrustees’ opposition to her ex parte application for an order suspending their powers.
A hearing was held before Commissioner Barkley on November 28, 2005, on, among other matters, the motion to adopt the referee’s written findings and enforce the written settlement agreement. Commissioner Barkley indicated her finding that Kravagna had no standing to enforce Paragraph 6. She explained that Paragraph 5 was intended to resolve the disputes as between Kravagna and the cotrustees, and that Paragraph 6 “was made because Rick [was] tired of not getting his request or his money and he wants this to proceed, but it is not meant in any way to protect Ms. Kravagna. [¶] As hard as this agreement was fought, there could have been a right of first refusal. There could have been any number of ways to get an ability to bid on that property or to do something regarding that property and it’s not it there.”
Commissioner Barkley also stated that because Kravagna lacked standing, Commissioner Barkley had rejected the opinion issued by Retired Judge Block with respect to the 62 acres. On November 9, 2005, the cotrustees filed a brief in opposition to Kravagna’s motion to adopt referee’s findings and enforce written settlement agreement. The brief was supported by the declarations of Gary and DeWolfe, among others. Gary’s declaration repeated his assertion from his earlier declaration that during the settlement negotiations, Kravagna had never communicated her wish to have the right to acquire the 62 acres.
It is undisputed that a sale of the 62 acres to the School District has been completed.
Commissioner Barkley held a hearing on December 6, 2005. Kravagna’s counsel argued that if the court were to find the Settlement Agreement ambiguous on the issue of Kravagna’s standing to enforce Paragraph 6, the court should take evidence to make that determination. Rick’s counsel stated, “I believe the Court has correctly analyzed Paragraph 6 in relation to the whole, in that it was an agreement between my client and the co-trustees and the other beneficiaries, and that by its terms, Miss Kravagna, being a party to the entire agreement, also agreed that [it] was between my client and the other beneficiaries and the co-trustees.” Kravagna’s counsel argued that Kravagna had standing as a settling party under the settlement agreement to enforce each of its provisions, including Paragraph 6. He then argued that if the settlement agreement were found to be ambiguous, “that requires really a factual determination, a hearing, evidence on what the parties’ intent was, . . .” However, he did not make an offer of proof or proffer any evidence on that point.
Commissioner Barkley reminded counsel that at the prior hearing, the court had found Kravagna had no standing to enforce Paragraph 6 directly. Kravagna’s counsel asked if the court was finding that Kravagna was not a third party beneficiary of Paragraph 6, and if so, what evidence the court was relying on to support that finding. Commissioner Barkley replied that she had before her “several volumes of declarations of legal briefs [sic], and nobody has asked for . . . oral testimony. The agreement is what the agreement is.” Kravagna’s counsel again suggested that the court should conduct an evidentiary hearing as to the intent of the parties. However, the court found that the contract was not reasonably susceptible to the interpretation that Kravagna was an intended beneficiary of Paragraph 6, and therefore there was no purpose in taking evidence on that issue.
Rick’s counsel represented to the court that “with respect to Paragraph 6, the thrust was not Miss Kravagna from my client’s point of view, it was trying to craft provisions” that would finally get Rick some money, and “in order to do that, that 62 acres had to be sold. And those benchmarks were put in there to somewhat divest the co-trustee[s’] ability to go out and try and market the property for some ungodly amount. We figured nobody would come in at 24 million, and so that was like the highest, the benchmark. We figured if somebody came in with 24 million dollars, take it. We figured everybody would jump on it.” Rick’s counsel stated that if Rick were to testify, that would be his testimony. Rick’s counsel made an offer of proof that “[t]he ability of Miss Kravagna or somebody with whom she was in a joint venture to come in and make an offer wasn’t thought about one way or the other . . . .” DeWolfe reminded the court that Gary had previously provided a declaration that “no one ever mentioned prior to the time that the July ’05 settlement agreement became effective that Carol Kravagna wanted to buy the 62 acres, had a claim to it.” At the close of the hearing, Commissioner Barkley ruled in favor of the cotrustees and directed BB&K to submit a proposed statement of decision.
In February 2006, Kravagna objected to the proposed statement of decision and proposed judgment and asked the court to receive oral testimony, specifically, to allow Retired Judge Block “to appear and testify as to his intent and the circumstances surrounding the settlement agreement. Kravagna further stated, “This court must, before it makes its final ruling and enters judgment, allow the testimony of Judge Block for this record. The Court so far has disallowed Judge Block to appear and testify. Before this court rules, it should set a final evidentiary hearing so Judge Block can testify as to his intent as a signing party and explain why he understood the words ‘each term’ to mean what they say.” (Bolding in original.)
A hearing was held on March 29, 2006, and Commissioner Barkley ordered the parties to appear later that afternoon before Judge Riemer for clarification of the proceedings he had conducted on August 24, 2005 — specifically, whether Judge Riemer had found Kravagna had standing to seek the reference to retired Judge Block of the issues concerning interpretation of Paragraph 6. Following that hearing, Judge Riemer issued a ruling stating he had not explicitly or implicitly found that Kravagna had standing, and “[i]nstead, the Court reasoned, and implicitly found, that the issue was moot in light of the facts that Rick McElroy was seeking the same relief and that his standing to do so was unchallenged.”
On August 11, 2006, the court issued its statement of decision holding that Kravagna had no standing to enforce Paragraph 6 or to enjoin the cotrustees from selling the 62 acres to a buyer other than Voit. The court further held that Kravagna was not an express or intended third party beneficiary of Paragraph 6 of the Settlement Agreement. Judgment after trial was thereafter entered on August 23, 2006.
III. DISCUSSION
A. Mootness
Plaintiffs contend the appeal should be dismissed as moot because the property underlying this litigation has been sold. To support their argument, plaintiffs rely on First Federal Bank of California v. Fegen (2005) 131 Cal.App.4th 798 (Fegen). In that case, the plaintiff sought the vacation of the sale of his real property at an execution sale after the defendant bank obtained a money judgment against the plaintiff, recorded an abstract of judgment, obtained a writ of execution from the trial court, and completed the sale. (Id. at p. 800-801.) After concluding it could not fashion any order that would have the effect of preventing the already completed sale, the appellate court held the case was moot and dismissed the appeal. (Id. at p. 801.)
Here, unlike in Fegen, the relief Kravagna seeks is for this court “to reverse with findings that [she] as a matter of law had standing to enforce Paragraph 6” or, in the alternative, “to remand for a complete evidentiary hearing for a trier of fact on what the parties[’] intent was as to who could and who could not bring the 24 million dollar offer referred to in [P]aragraph 6(a)(i).” Kravagna also states in her brief on appeal that before she “can pursue her rights and remedies for this breach of the Settlement Agreement, i.e., her damages for the co-trustees[’] failure to accept the $24 million plus offer from her joint-venture partner Voit — she must overturn the trial’s [sic] court’s factual finding she lacked standing to enforce Paragraph 6 of the Settlement Agreement . . . otherwise that finding will be used as res judicata or collateral estoppel to preclude her breach of contract or other tort claims.” Thus Fegen is distinguishable on the basis of the relief sought.
Because the issue of damages is premature, we need not reach the issue whether Kravagna, as a partner or joint venturer with Voit, would have standing to assert individual damages based on alleged loss to the partnership from its failure to purchase the 62 acres. (See, e.g., Tyrone v. Kelley (1973) 9 Cal.3d 1, 14 [holding that an objection was waivable to an individual party’s failure to join other partners as plaintiffs in an action alleging breach of a contract to which the partnership was a party].)
We also find Fegen distinguishable because that case was decided under Code of Civil Procedure section 701.680, which provides that the sale of property pursuant to that article is absolute except for limited statutory exceptions. (Fegen, supra, 131 Cal.App.4th at pp. 800-801.) Code of Civil Procedure section 701.680 is inapplicable to the present proceedings. We therefore decline to dismiss the appeal on the ground of mootness.
B. Kravagna’s Standing to Enforce Paragraph 6 as Party to Settlement Agreement
Kravagna contends that under the clear terms of the settlement agreement, she, as a party to the entire contract, had standing to enforce Paragraph 6.
1. Standard of Review
In general, interpretation of a written contract is a question of law, and this court is not bound by the trial court’s interpretation, but independently construes the writing. (Winet v. Price (1992) 4 Cal.App.4th 1159, 1166.) “Our objective in construction of the language used in the contract is to determine and to effectuate the intention of the parties. [Citation.] It is the outward expression of the agreement, rather than a party’s unexpressed intention, which the court will enforce.” (Ibid.) Thus, when a contract is reduced to writing, we ascertain the intention of the parties from the writing alone, if possible. (Civ. Code, § 1639; Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 955.)
2. Analysis
Based on the language of the general provisions of the Settlement Agreement that, “in consideration for each of the terms . . . set forth above and below” (italics added), Kravagna contends Paragraph 6, as one of the terms of the Settlement Agreement, was consideration for her release of all claims against the other settling parties. Thus, she contends, the Settlement Agreement unambiguously confers standing on her to enforce the terms of Paragraph 6. We disagree.
Reading the Settlement Agreement as a whole, it does not make Kravagna a party to the provisions of Paragraph 6. The recitals to the Settlement Agreement make clear it was intended to resolve not only disputes between Kravagna and the cotrustees but also disputes between Rick and the cotrustees. The introductory statement to Paragraph 6 makes clear that Paragraph 6 was an agreement specifically to resolve those disputes between the cotrustees and Rick. Kravagna was not a party to Paragraph 6.
C. Kravagna’s Standing as Third Party Beneficiary of Paragraph 6
Kravagna next contends she was an express or intended third party beneficiary of Paragraph 6, and as such, had standing to enforce its terms.
We discuss separately below Kravagna’s contention that the trial court erred in refusing to receive extrinsic evidence on the issue of whether she was a third party beneficiary of Paragraph 6.
1. Standard of Review
“‘Generally, it is a question of fact whether a particular third person is an intended beneficiary of a contract,’ which we review under the substantial evidence standard. [Citation.] If, however, as here, the issue is presented to the court on the basis of undisputed facts and uncontroverted evidence and only a question of the application of the law to those facts need be answered, our review is de novo: ‘[W]here . . . the issue [of whether a third party is an intended beneficiary] can be answered by interpreting the contract as a whole and doing so in light of the uncontradicted evidence of the circumstances and negotiations of the parties in making the contract, the issue becomes one of law that we resolve independently.’ [Citation.]” (Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891.)
2. Analysis
The plain terms of the Settlement Agreement make clear that Kravagna was not an express beneficiary of Paragraph 6 for the same reasons, discussed above, that Kravagna was not a party to the provisions of Paragraph 6. Kravagna also argues she was an intended beneficiary of Paragraph 6 because she was a member of the class for whose benefit Paragraph 6 was created. She notes that under Paragraph 6(b), the 62 acres was not to be marketed to the public for 30 days, and she argues that “[o]bviously this delay was to provide all the parties to the Settlement Agreement (who of course had knowledge of all its terms) an opportunity to buy the property. Indeed, by definition the ‘public’ was not going to receive marketing of the property, and therefore the only purchaser of the property before any listing agreement commenced would be the parties who signed the Settlement Agreement, or those who learned about the availability of the property from one of those parties.”
Contrary to Kravagna’s argument, we read nothing in the language of Paragraph 6 that prevented the cotrustees from marketing the 62 acres before the 30-day delay period. As Judge Tranbarger pointed out at the September 6, 2005, hearing, Paragraph 6(b) of the Settlement Agreement provided that “they [the cotrustees] are required to hire a broker at a certain period of time, not that they couldn’t hire a broker at a certain period of time.”
Moreover, as the record makes apparent, the School District had been in discussions for the possible purchase of the 62 acres for some time before the Settlement Agreement was entered into. At various hearings in 2004 and 2005, representatives of the School District appeared, and at one proceeding, a School District representative testified concerning the School District’s interest in purchasing the 62 acres. And the parties included an express warranty in the Settlement Agreement that none of them would interfere in any way with the cotrustees’ ability to sell the 62 acres to the School District or any other buyers. Thus, contrary to Kravagna’s assertion that the purpose of including Paragraph (6)(b) was “obviously” to allow the parties an opportunity to buy the 62 acres, the purpose of Paragraph 6(b) was just as likely to have been to allow time for completion of ongoing negotiations with the School District. We conclude that the inclusion of the permissive 30-day delay before the cotrustees listed the 62 acres does not establish that Kravagna was an intended beneficiary of Paragraph 6.
Attorney DeWolfe stated at one hearing that the School District had indicated an interest in the 62 acres since December 2002.
D. Failure to Receive Extrinsic Evidence
Kravagna contends the trial court erred in failing to receive extrinsic evidence relating to the parties’ intent as to Paragraph 6. Specifically, she contends that if she had been allowed to introduce evidence, (1) she would have testified that she specifically negotiated for the terms of Paragraph 6 and agreed to settle her claims in reliance on her right under Paragraph 6 to make an offer for the property; (2) she would have testified that Voit was her joint venture partner when Voit made its offer; (3) Rick’s testimony would have been consistent with the statement in his petition that “shopping the market” to try to get higher offers was contrary to his understanding when he signed the Settlement Agreement and that delaying acceptance of Voit’s offer was a breach of the settlement with Kravagna; (4) Retired Judge Block was expected to testify that the parties negotiated for Paragraph 6 and that Kravagna’s counsel had expressed the importance to Kravagna of Paragraph 6 because she wished to rely on it and purchase the 62 acres; (5) adverse or cross-examination of Gary and Wilson would “likely” have been “revealing on the issue of the purposes of Paragraph 6 if not its stated language and plain meaning; why they listed the property prematurely in violation of the agreement; [a]nd their disdain for [Kravagna]”; (6) the parties’ attorneys “would be expected to testify as to the circumstances surrounding the settlement agreement and specifically Paragraph 6”; and (7) she would have offered unspecified documentary evidence supporting her position.
The statement in his petition was just that — the petition did not include any declaration of Rick supporting the statement.
1. Standard of Review
“‘When there is ambiguity in the contract language, extrinsic evidence may be considered to ascertain a meaning to which the instrument’s language is reasonably susceptible. [Citation.] . . . [¶] We review the agreement and the extrinsic evidence de novo, even if the evidence is susceptible to multiple interpretations, unless the interpretation depends upon credibility. [Citation.] If it does, we must accept any reasonable interpretation adopted by the trial court. [Citation.]’ [Citation.] ‘[W]here . . . the extrinsic evidence is not in conflict, construction of the agreement is a question of law for our independent review. [Citation.]’ [Citations.] In contrast, ‘[i]f the parol evidence is in conflict, requiring the resolution of credibility issues, we would be guided by the substantial evidence test. [Citation.]’ [Citation.]” (ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266-1267.)
And, “if a trial court’s order is correct on any applicable theory of law, the order will be affirmed regardless of the basis for the trial court’s conclusion, as we review the correctness of the order, not the reasons given for the order. [Citation.]” (Cohen v. DIRECTV, Inc. (2006) 142 Cal.App.4th 1442, 1447-1448.)
2. Analysis
We agree with the trial court that the Settlement Agreement was not ambiguous and that testimony would therefore not have been admissible on the issue of interpretation of Paragraph 6. Moreover, we would find no error even if we were to assume for purposes of argument an inherent ambiguity existed in the Settlement Agreement or that evidence was admissible simply to establish that an ambiguity existed (see Pacific Gas & Electric Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 37-38.)
Although Kravagna contends the trial court erred in failing to permit evidence on the issue of the parties’ intent in including Paragraph 6 in the Settlement Agreement, the trial court certainly did not consider that issue in a vacuum. Beginning on August 24, 2005, Kravagna’s various motions, ex parte applications, and petitions raised the issue of the proper interpretation of Paragraph 6. At various times, Kravagna supported her filings with the declaration of her attorney, and, on November 15, she provided her own declaration. At various times, the cotrustees supported their oppositions with declarations of Gary and DeWolfe, and both sides requested the trial court to take judicial notice of various documents, including previously filed declarations. The issue was a partial subject of at least nine hearings before three separate judges.
Although the parties filed objections to each others’ declarations and requests for judicial notice, it does not appear that the trial court ruled on evidentiary objections. Those objections are therefore deemed waived, and all the evidence is deemed to be in the record for purposes of appeal. (See Demps v. San Francisco Housing Authority (2007) 149 Cal.App.4th 564, 578.)
Gary and DeWolfe expressly denied in their declarations that Kravagna was a party to Paragraph 6 or that she had communicated any wish during negotiations to acquire the 62 acres under Paragraph 6 or to be a party to Paragraph 6. Kravagna’s declaration did not refute those statements. However, nothing prevented Kravagna from providing a declaration stating what she now claims she was precluded from testifying about — specifically, that she had negotiated for the terms of Paragraph 6 and had agreed to settle her claims in reliance on her right under Paragraph 6 to make an offer for the property. Moreover, a person’s offer of testimony concerning his or her uncommunicated subjective intent is not competent extrinsic evidence when that party seeks an interpretation that differs from what was written in an agreement the court is interpreting. (Winet v. Price, supra, 4 Cal.App.4th at p. 1166, fn. 3.) The party’s outward expression of the agreement, not the party’s unexpressed intention, is controlling. (Id. at p. 1166.)
We would also find no error in the trial court’s refusal to take further evidence simply on the basis that Kravagna failed to raise the issue in a timely and procedurally appropriate fashion. Rule 3:1306 of the California Rules of Court provides, “(a) . . . [¶] Evidence received at a law and motion hearing must be by declaration or request for judicial notice without testimony or cross-examination, unless the court orders otherwise for good cause shown. [¶] (b) . . . [¶] A party seeking permission to introduce oral evidence, except for oral evidence in rebuttal to oral evidence presented by the other party, must file, no later than three court days before the hearing, a written statement stating the nature and extent of the evidence proposed to be introduced and a reasonable time estimate of the hearing. When the statement is filed less than five court days before the hearing, the filing party must serve a copy on the other parties in a manner to assure delivery to the other parties no later than two days before the hearing.” Kravagna has made no showing of compliance with these procedural requirements.
Finally, it is apparent, as Kravagna herself recognized in the trial court, that most of the evidence she sought to introduce was subject to the mediation privilege of Evidence Code section 1115 et seq.; see also Foxgate Homeowners’ Assn. v. Bramalea California, Inc. (2001) 26 Cal.4th 1, 13-14. Indeed, Kravagna objected to certain declarations on the basis that they violated the mediation privilege. The trial court had no authority to overrule the mediation privilege on its own motion, and nothing in the record suggests that privilege had been waived. To the contrary: at the hearing on October 19, DeWolfe objected that Kravagna’s attorney continually sought to have Judge Block violate the statutory provisions with respect to confidentiality of mediation.
Evidence Code section 1119 provides, “Except as otherwise provided in this chapter:
For all the above-stated reasons, we find no error in the trial court’s ruling.
IV. DISPOSITION
The judgment is affirmed. Costs shall be awarded to respondents.
We concur: RAMIREZ, P.J., RICHLI, J.
“(a) No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation is admissible or subject to discovery, and disclosure of the evidence shall not be compelled, in any . . . noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given.
“(b) No writing . . . that is prepared for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation, is admissible or subject to discovery, and disclosure of the writing shall not be compelled, in any . . . noncriminal proceeding in which, pursuant to law, testimony can be compelled to be given.
“(c) All communications, negotiations, or settlement discussions by and between participants in the course of a mediation or a mediation consultation shall remain confidential.”