Opinion
G054711
11-26-2018
HARBOR MARINA, LLC, Plaintiff and Respondent, v. GOLDEN HILLS PROPERTIES, LLC, Defendant and Appellant.
Steckbauer Weinhart, William W. Steckbauer, Sean A. Topp; Morrison & Foerster and Miriam A. Vogel for Defendant and Appellant. Loeb and Loeb, Andrew S. Clare and Robert J. Catalano for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00706930) OPINION Appeal from a judgment of the Superior Court of Orange County, Randall J. Sherman, Judge. Judgment affirmed. Request for judicial notice denied. Steckbauer Weinhart, William W. Steckbauer, Sean A. Topp; Morrison & Foerster and Miriam A. Vogel for Defendant and Appellant. Loeb and Loeb, Andrew S. Clare and Robert J. Catalano for Plaintiff and Respondent.
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This is the second appeal concerning a dispute arising out of the exercise of an option by Golden Hills Properties, LLC (defendant) to purchase the leasehold interest of plaintiff Harbor Marina, LLC (plaintiff) in a commercial property ground lease. In a nutshell, after the purchase price was determined, defendant refused to pay unless it received an offset for net operating income plaintiff earned before the transaction closed.
In the first appeal (Harbor Marina, LLC v. Golden Hills Properties, LLC (Aug. 1, 2016, G051955) [nonpub. opn.] (Harbor Marina 1)), we reversed and remanded to the trial court with directions to enter a specific performance judgment in favor of plaintiff. We also directed the court to: (1) "determine and allocate income and expenses to place the parties in the same position they would have been in" but for defendant's wrongful demand for an offset; and (2) calculate the date on which the sale should have closed, i.e., the latter of 90 days after the option was exercised or 30 days after the option was exercised and the purchase price was finally determined. (Harbor Marina 1, at p. 9.)
On remand the court calculated and adopted a closing date urged by plaintiff and rejected a closing date advanced by defendant.
In this appeal, defendant argues the calculated closing date is at odds with our directions to follow the strict time limits set out in the lease. We disagree and affirm.
FACTS AND PROCEDRUAL HISTORY
Harbor Marina 1 set out the facts leading up to the first appeal. We do not repeat all those facts but only those necessary to this opinion.
Plaintiff and defendant are parties to a ground lease (Lease); defendant is the lessor and plaintiff is the lessee. Pursuant to the Lease defendant exercised an option to purchase plaintiff's leasehold interest at fair market value, as defined in the Lease, which was to be determined by an appraisal. The appraisal was completed a year after the option was exercised. When plaintiff made demand for payment of the $5.065 million appraised price, defendant agreed to do so only if plaintiff paid it "Interim Operating Revenue" of approximately $1.165 million plus two months' rent.
Plaintiff sued for the purchase price and defendant cross-complained for the Interim Operating Revenue. The trial court found in favor of defendant and offset the claimed Interim Operating Revenue against the purchase price.
On appeal, we concluded defendant did not purchase the Interim Operating Revenue, but only the leasehold interest and improvements. (Harbor Marina 1, supra, G051955 at p. 6.) We directed the court to "determine and allocate income and expenses to place the parties in the same position they would have been in if the transaction had closed on date specified in the Lease." (Id. at p. 9.) We further directed the court to "calculate the date on which the transaction should have closed (Closing Date) based upon Paragraph 11(c) [transaction to close by the latter of "'90 days after the option to purchase is exercised or . . . 30 days after the option to purchase is exercised and the purchase price finally determined'"]." (Ibid.)
On remand, plaintiff asserted the proper closing date was August 20, 2014, the date which was 30 days after the purchase price was finally determined by the appraisal, in accordance with Paragraph 11(c) and our the decision in Harbor Marina 1.
Defendant argued the proper closing date was December 28, 2013, which was 165 days after it exercised the option to purchase on July 16, 2013. It claimed the appraisal was required to be completed no later than 135 days after the option was exercised and the Lease did not provide for any extension.
The court agreed with plaintiff and rejected defendant's arguments. It explained, "Defendant is really asking this court to disregard the date on which the purchase price was 'finally determined', and to instead use the date on which the purchase price should have been finally determined, if the parties and the arbitrators had met all the deadlines contained in the parties' agreement." It further explained, defendant was essentially asking the court to "find an ambiguity as to the date on which 'the purchase price [is] finally determined,'" and it noted Harbor Marina 1 "has already spoken against finding an ambiguity where none exists."
DISCUSSION
"'When there has been a decision upon appeal, the trial court is reinvested with jurisdiction of the cause, but only such jurisdiction as is defined by the terms of the remittitur. The trial court is empowered to act only in accordance with the direction of the reviewing court; action which does not conform to those directions is void.'" (Karlsen v. Superior Court (2006) 139 Cal.App.4th 1526, 1530, italics omitted.)
Here, the trial court did exactly what we directed it to do. It calculated the closing date as August 20, 2014, which was 30 days after the option was exercised and the purchase price was finally determined, and which was later than 90 days after the option was exercised, all as provided in Paragraph 11(c) of the Lease. The court then determined and allocated income and expenses to place the parties in the same position they would have been in if the transaction had closed on that date.
Defendant urges us to look beyond Paragraph 11(c), and argues the closing date should have been December 28, 2013, based on other Lease provisions governing the appraisal process. Specifically, defendant claims the closing date should have been earlier because the appraisals took longer than the 135-day period provided in the Lease. These arguments lack merit for several reasons.
First, we did not direct the trial court to look at the timing of the appraisals on remand. Thus, the trial court had no authority to do so. (Karlsen v. Superior Court, supra, 139 Cal.App.4th at p. 1530.)
Second, while the appraisals were being done, no one ever raised any question about their timing. More specifically, defendant never complained the appraisals were not being completed in a timely manner, or otherwise challenged the resulting delay. As shown by the record, defendant's unwarranted demand that plaintiff pay it more than $1.6 million in Interim Operating Revenue was the only reason the transaction did not close, after the appraisals were completed and the purchase price was finally determined. (Harbor Marina 1, supra, G051955 at pp. 3, 6.)
Third, defendant did not raise the appraisal timeliness issue in the trial or in the first appeal. Defendant's claim for Interim Operating Revenue was the only issue litigated at trial and the only issue appealed. (Harbor Marina 1, supra, G051955 at p. 4.) Defendant cannot now raise an issue that could have been previously raised and argued.
Fourth, it appears defendant is attempting to make an end run around our decision in Harbor Marina 1, which held it was not entitled to the Interim Operating Revenue. Defendant cannot recover indirectly what it could not recover directly.
Fifth, we reject defendant's argument the court's calculation of the closing date in accordance with our directions resulted in an absurd conclusion or made the Lease "extraordinarily harsh, unjust or inequitable." Contrary to its claim, plaintiff was not required to put on evidence the purchase price was fair and just as of the August 20, 2014 closing date. As plaintiff notes, defendant did raise this issue in the first appeal and we rejected it. (Harbor Marina 1, supra, G051955 at p. 8.) Nor did setting the August closing date create a failure of consideration. Rather, it was consistent with the terms of the Lease and the parties' course of conduct.
For all these reasons we hold the court correctly determined the date on which the transaction would have closed but for defendant's wrongful demand for an Interim Operating Revenue offset against the purchase price as determined by appraisal.
As an aside, we also observe defendant has waived any claim that the amount of the judgment is incorrect, because it did not challenge the amount the court ordered it to pay or the sufficiency of the evidence to support the judgment. (Telish v. State Personnel Bd. (2015) 234 Cal.App.4th 1479, 1487, fn. 4.)
Finally, plaintiff requested we take judicial notice of defendant's petition for rehearing following our first opinion, arguing it shows defendant conceded the trial court's closing date ruling was correct. Although defendant did not file any opposition, we deny the request for judicial notice because the subject rehearing petition is not relevant to our decision.
DISPOSITION
The judgment is affirmed. Plaintiff is entitled to costs on appeal.
THOMPSON, J. WE CONCUR: BEDSWORTH, ACTING P. J. IKOLA, J.