Opinion
No. B164423.
11-3-2003
HOROWITZ/WOOD-VICTORY & FALLBROOK, L.P, Plaintiff and Appellant, v. FALLBROOK SQUARE PARTNERS LIMITED PARTNERSHIP et al., Defendants and Respondents.
Overland & Borenstein, Mark A. Borenstein, and Kelley B. Poleynard, for Plaintiff and Appellant. Gibson, Dunn & Crutcher, Wayne W. Smith, David A. Battaglia, and Erin M. Alexander, for Defendants and Respondents.
I. INTRODUCTION
Plaintiff, Horowitz/Wood-Victory & Fallbrook, a limited partnership, appeals from a judgment of dismissal after a demurrer was sustained without leave to amend in favor of defendants, Fallbrook Square Partners Limited Partnership, (the owner) and GGP, Limited Partnership (the developer). The developer is a general partner of the owner. The demurrer was sustained on the ground plaintiff lacked standing to pursue the action because it was not a party to the contract it was seeking to enforce. We affirm.
II. BACKGROUND
A. The Complaint
In reviewing the dismissal, all well-pleaded factual allegations must be assumed as true. (Naegele v. R. J. Reynolds Tobacco Co. (2002) 28 Cal.4th 856, 864-865; Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 946; Haggis v. City of Los Angeles (2000) 22 Cal.4th 490, 495-496, 993 P.2d 983; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967, 831 P.2d 317; Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal. Rptr. 718, 703 P.2d 58.) The complaint contained causes of action for: contract breach (first); implied covenant breach (second), and declaratory relief (third). The complaint was based on contractual obligations under an agreement entitled, "First Amendment to and Restatement of Declaration of Establishment of Restrictions and Covenants Affecting Land," which was entered into on October 1, 1985. The October 1, 1985, agreement had five parties: the owner; J.C. Penney Company, Inc. ("Penney"); Sears, Roebuck and Company ("Sears") now Fairbanks Equity Ltd. ("Fairbanks"); Mervyns; and Dayton Hudson Corporation ("Target"). Penney, Sears, Fairbanks, and Target owned individual tracts within the parcel. The October 1, 1985, agreement concerns the development of a regional shopping center, the Fallbrook Mall, in Canoga Park. The agreement also regulates the development of the enclosed mall and other retail shopping areas on the property. The mall was substantially developed by the late 1980s. The shopping center consisted largely of an enclosed mall. The four tract owners provided stores for the enclosed mall.
On November 8, 1995, the October 1, 1985, agreement was amended by Amendment Number One ("amendment one"). Amendment one, which was attached to the complaint as exhibit B, reflected: the acquisition of the Sears tract by Fairbanks; the replacement of Sears with Fairbanks as a "party" under the agreement; and other changes to the original development. The development changes included: the demolition of three structures on the Fairbanks Tract; the construction of a new grocery store; and the reconfiguration of the common areas.
Plaintiff purchased a portion of the Fairbanks tract in 1996. This included the area where the three structures were demolished and the grocery store was to be built. Plaintiff subsequently leased the grocery store building to Ralphs Grocery Company. The remainder of the Fairbanks tract was conveyed to Univest L.P. ("Univest"). In other words, plaintiff owns just a portion of the Fairbanks tract.
The complaint alleged that, as of March 15, 2002, plaintiff was the designated agent of the Fairbanks tract under the terms of the October 1, 1985 agreement, as amended. Plaintiff sought relief from defendants, the owner and its general partner the developer, who are currently redeveloping the mall as an open-air shopping development which is anchored by a Home Depot, a home improvement store. Because of the redevelopment, the developer demolished the existing enclosed mall stores, shopping areas, and parking locations. It was alleged that: the demolition was done without obtaining the written consent of Univest or plaintiff on behalf of the Fairbanks Tract; the written consent of Univest or plaintiff was required by the terms of the October 1, 1985, agreement; and the demolition was accomplished without regard to the adverse effect the new development would have on the businesses located on the Fairbanks tract.
B. The Demurrer
Defendants demurred to the complaint on standing grounds. In support of the demurrer, defendants requested judicial notice of documents including the October 1, 1985, agreement. Also, defendant sought judicial notice of a November 8, 1995, amendment to the October 1, 1985, agreement. The October 1, 1985, agreement was recorded October 2, 1986. The November 8, 1995, amendment to the agreement was not recorded until July 30, 1996.
The October 1, 1985, agreement provides in part: "The term Party means Fallbrook Square Partners, J.C. Penney Company, Inc., Sears, Roebuck and Co., Mervyns, and Dayton-Hudson Corporation, and any successor Person to such Persons acquiring any interest in or to any portion of their respective Tracts in the Shopping Center except as is otherwise provided in subparagraphs 1, 2, 3 and 4 of this Paragraph V of Article I. . . . [P] The exceptions to a successor becoming a Party by reason of any transfer or conveyance of the whole or any part of the interest of any Party in and to such Partys Tract are as follows: [P] . . . [P] 4. The successor acquires by such transfer or conveyance: [P] (a) Less than all of a Partys Tract or if a Party has more than one Tract, less than all of the Partys Tracts; or [P] (b) An undivided interest, such as that of joint tenant, or tenant in common, in such Partys Tract or Tracts; or [P] (c) An undivided interest, legal or equitable, in the assets of any Party other than an individual, which interest is not also an interest in the Partys Tract or Tracts. [P] In the circumstances described in this subparagraph 4, the Persons holding all of the interests in such Tract or Tracts are to be jointly considered a single Party. In order that other Parties shall not be required with respect to said Tract or Tracts to obtain the action or agreement of, or to proceed against, more than one Person in carrying out or enforcing the terms, covenants, provisions and conditions of this [agreement], then in the circumstances described in subparagraph 4(a) above, the Persons holding the interest of the Party in and to not less than seventy percent (70%) of said Tract or Tracts in question, shall designate one of their number as such Partys agent to act on behalf of all of such Persons, and in the circumstances described in subparagraph 4(b) above, Persons holding not less than seventy percent (70%) in interest in such Party or the holders of undivided interests totaling not less than seventy percent (70%) of the entire estate in and to said Tract or Tracts in question, shall designate one of their number as such Partys Agent to act on behalf of all such Persons. If any Tract or Tracts is owned by Persons owning an undivided interest therein under any form of joint or common ownership, then in the determination of such seventy percent (70%) in interest, each such owner of such undivided interest shall be deemed to represent a percentage in interest of the whole of such Tract ownership equal to his fractional interest in such Tract or Tracts. . . ." The November 8, 1995, amendment number one to the October 1, 1985, agreement substituted Fairbanks as a "party" in place and instead of Sears.
Defendant also requested the trial court judicially notice a publicly recorded document entitled "NOTIFICATION OF DESIGNATION OF AGENT," dated March 14, 2002, which was recorded the next day. Plaintiff designated itself as an agent pursuant to paragraph (I)(V)(4) of the October 1, 1985, agreement. Plaintiff, under the terms of paragraph (I)(V)(4) of the October 1, 1985, agreement, was required to designate an agent.
In addition, defendant requested judicial notice of the notice of a ruling by Judge Dzintra I. Janavs which denied plaintiffs preliminary injunctive relief request in this action. Judge Janavs ruled in part: "Fairbanks, now Univest, eventually sold around 18% of its property to Plaintiff . . . and [Univest] currently holds the remaining [82%] interest in the Fairbanks tract. . . . [P] Because Plaintiff acquired only 18% of the Fairbanks tract, it appears it did not become a party to the [October 1985 agreement], and has no standing to complain. [P] The [October 1985 agreement] defines party to the [October 1985 agreement] to include successors of the original parties, except as provided in subparagraphs 1, 2, 3, and 4 of this Paragraph V of Article I. [P] Plaintiff contends that it and Univest are considered a single entity. The [October 1985 agreement], however, explicitly provides that successor entities are not considered a party or parties when they hold an undivided interest such as that of joint tenants or tenants in common of a tract . . . . The parties to the [October 1985 agreement] are expressly not required to deal with every entity that has an interest in a parcel. When an entity acquires less than a full tract, only the parties who own a 70% or greater interest in the tract are authorized to designate an agent to represent the combined interests of all of the owners of that specific tract . . . . The acts of the 70% owner are binding on all other entities with an interest in the tract and the other entities are deemed not parties . . . . [P] Plaintiff has only an 18% interest in the Fairbanks tract, and there is no evidence that Univest has appointed Plaintiff to act as its agent. [P] In fact, all parties, including Fairbanks (Univest) have apparently agreed to the revised plans for the mall."
Defendant argued that the unambiguous terms of the contract as well as Judge Janavss ruling denying the preliminary injunction request established that plaintiff lacked standing to proceed with this action. Defendant contended that the demurrer should be sustained without leave to amend because plaintiff could not allege that it was a "party" to the October 1, 1985, agreement in that it had not pleaded it purchased or owned at least 70 percent of the Fairbanks tract. In addition, defendant argued: plaintiff alleged that Univest owned 82 percent of the Fairbanks tract; had designated plaintiff as its agent for purposes of enforcing the November 8, 1995, amendment to the agreement; and the November 8, 1995, amendment to the agreement did not authorize plaintiff to designate itself as the Fairbanks tract agent simply because Univest had not selected anyone else.
C. Opposition to the Demurrer
Plaintiff argued the demurrer should be overruled because: the allegation that plaintiff designated itself as an agent for the Fairbanks tract is sufficient to establish standing; the agency allegation is a properly pleaded ultimate fact which must be accepted as true; plaintiff is a "party" under the terms of the October 1, 1985, agreement which indicates that if a tract is divided "the Persons holding all of the interests in such Tract . . . are jointly considered a single Party"; and the October 1, 1985 agreement permits any party to designate an agent when no authorization was previously made. Plaintiff argued that the October 1, 1985, agreement should not be interpreted to mean that only the owner of 70 percent or more of a divided tract was permitted to designate an agent. Plaintiff contended the face of the complaint does not reveal that: plaintiff does not own 70 percent or more of the divided tract; Univest is the only party authorized to make the designation based on its percentage of ownership of the Fairbanks tract; nor has Univest designated plaintiff as the agent of the Fairbanks tract.
D. The Order Sustaining the Demurrer
On January 27, 2003, Judge Joseph R. Kalin, sustained the demurrers without leave to amend and stated: ". . . Ive read through everything here, and it seems to me that the bottom line is that if the Court does not sustain the demurrer in this matter, what we have is somebody that owns 18 of the property in question here and ending up with the tail wagging the dog, and what we have here that they go designate an agent and then control that agent and really take over the decisionmaking process here." Judge Kalin subsequently ruled: "In reading everything and going through the contract very thoroughly, the Court is going to sustain on the grounds stated without leave to amend. Theres no standing to sue by the Plaintiffs in this case, and theyre not a party to the contract, according to the Courts interpretation of the contract." Plaintiff filed a timely appeal from the judgment of dismissal.
III. DISCUSSION
E. Standard of Review
The Supreme Court has defined our task as follows, "Our only task in reviewing a ruling on a demurrer is to determine whether the complaint states a cause of action." (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300, 926 P.2d 1042; Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125, 271 Cal. Rptr. 146, 793 P.2d 479.) We assume the truth of allegations in the complaint which have been properly pleaded and gives it a reasonable interpretation by reading it as a whole and with all its parts in their context. (Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 558, 950 P.2d 1086; People ex rel. Lungren v. Superior Court, supra, 14 Cal.4th at p. 300;Aubry v . Tri-City Hospital Dist., supra, 2 Cal.4th at p. 967.) However, the assumption of truth does not apply to contentions, deductions, or conclusions of law and fact. (People ex rel. Lungren v. Superior Court, supra, 14 Cal.4th at pp. 300-301; Moore v. Regents of University of California, supra, 51 Cal.3d at p. 125.) Furthermore, any allegations that are contrary to the law or to a fact of which judicial notice may be taken will be treated as a nullity. (Interinsurance Exchange v. Narula (1995) 33 Cal.App.4th 1140, 1143; Fundin v. Chicago Pneumatic Tool Co. (1984) 152 Cal. App. 3d 951, 955, 199 Cal. Rptr. 789.) The Supreme Court has held: "On appeal from a judgment of dismissal entered after a demurrer has been sustained without leave to amend, unless failure to grant leave to amend was an abuse of discretion, the appellate court must affirm the judgment if it is correct on any theory. [Citations.] If there is a reasonable possibility that the defect in a complaint can be cured by amendment, it is an abuse of discretion to sustain a demurrer without leave to amend. [Citation.] The burden is on the plaintiff, however, to demonstrate the manner in which the complaint might be amended. [Citation.]" (Hendy v. Losse (1991) 54 Cal.3d 723, 742, 819 P.2d 1; Goodman v. Kennedy (1976) 18 Cal.3d 335, 349, 134 Cal. Rptr. 375, 556 P.2d 737.)
In ruling on a demurrer, the court must also consider matters which may or must be judicially noticed. (Code Civ. Proc., § 430.30, subd. (a); Dubin v. Robert Newhall Chesebrough Trust (2002) 96 Cal.App.4th 465, 471-472; Freis v. Soboroff (2000) 81 Cal.App.4th 1102, 1104.) The Court of Appeal has held, "We may consider matters that may be judicially noticed, including a partys admissions or concessions which cannot reasonably be controverted." (Pang v. Beverly Hospital, Inc. (2000) 79 Cal.App.4th 986, 989-990; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal. App. 3d 593, 604, 176 Cal. Rptr. 824.) A court may consider "judicial admissions" which are allegations, concessions, or stipulations by the plaintiff that are inconsistent with the allegations of the pleading before the court. (Smith v. Walter E. Heller & Co., Inc. (1978) 82 Cal. App. 3d 259, 269, 147 Cal. Rptr. 1; see 1 Witkin, Cal. Evidence (4th ed. 2000) Hearsay, § 97 , pp. 799-800.) The Court of Appeal has held, "Courts . . . will not close [its] eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts which are judicially noticed." (Del E. Webb Corp. v. Structural Materials Co. , supra, 123 Cal. App. 3d at p. 604; accord, Marina Tenants Assn. v. Deauville Marina Development Co. (1986) 181 Cal. App. 3d 122, 130, 226 Cal. Rptr. 321.) Therefore, even if a pleading is otherwise valid on its face, it is nevertheless subject to demurrer when a judicially noticed matter renders it defective. (Marina Tenants Assn. v. Deauville Marina Development Co. , supra, 181 Cal. App. 3d at p. 130; Del E. Webb Corp. v. Structural Materials Co., supra, 123 Cal. App. 3d at p. 605.) But, as a general rule, the Courts of Appeal have held, "The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of affidavits, declarations, depositions, and other such material which was filed on behalf of the adverse party and which purports to contradict the allegations and contentions of the plaintiff." (Del E. Webb Corp. v. Structural Materials Co., supra, 123 Cal. App. 3d at pp. 604-605; accord, Joslin v. H. A. S. Ins. Brokerage (1986) 184 Cal. App. 3d 369, 374-375, 228 Cal. Rptr. 878; Childs v. State of California (1983) 144 Cal. App. 3d 155, 162-163, 192 Cal. Rptr. 526.)
However, the allegations of a complaint must nevertheless yield to contrary allegations contained in matters which may or must be judicially noticed. (Vallejo Development Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 946; Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal. App. 3d 1624, 1627, 272 Cal. Rptr. 623.) When a document, such as a contract has been incorporated by reference into a complaint and is the foundation of a cause of action, the recitals of the agreement, if contrary to allegations in the pleading, are given precedence and plaintiffs inconsistent allegations as to the meaning and effect of an unambiguous document will be disregarded. (Mission Oaks Ranch, Ltd. v. County of Santa Barbara (1998) 65 Cal.App.4th 713, 720-721, disapproved on other grounds in Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1123, fn. 10, 969 P.2d 564; Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal.App.4th 472, 484.)
F. The Demurrer Was Properly Sustained Without Leave to Amend
First, the incorporated and unambiguous provisions of the October 1, 1985, agreement establish plaintiff has no standing to bring suit. Standing is the controlling issue in this case. Section 367 states, "Every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute." A party who is not the real party in interest lacks standing to sue because the claim belongs to someone else. (Charpentier v. Los Angeles Rams Football Co. (1999) 75 Cal.App.4th 301, 307; Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1004.) The Court of Appeal has held, "A real party in interest ordinarily is defined as the person possessing the right sued upon by reason of the substantive law." (Killian v. Millard (1991) 228 Cal. App. 3d 1601, 1605, 279 Cal. Rptr. 877; see also Gantman v. United Pacific Ins. Co. (1991) 232 Cal. App. 3d 1560, 1566, 284 Cal. Rptr. 188; Del Mar Beach Club Owners Assn. v. Imperial Contracting Co. (1981) 123 Cal. App. 3d 898, 906, 176 Cal. Rptr. 886.) Where someone other than the real party in interest files suit, the complaint is subject to a general demurrer. ( §§ 367, 430.10; Carsten v. Psychology Examining Com. (1980) 27 Cal.3d 793, 796, 166 Cal. Rptr. 844, 614 P.2d 276 [action filed by someone other than the real party in interest is subject to general demurrer on the ground that it fails to state a cause of action]; Parker v. Bowron (1953) 40 Cal.2d 344, 351, 254 P.2d 6 [the right to relief goes to the existence of cause of action]; Weinbaum v. Goldfarb, Whitman & Cohen (1996) 46 Cal.App.4th 1310, 1315, fn. 6 [demurrer properly sustained where person lacks standing to seek damages suffered by someone else]; Killian v. Millard, supra, 228 Cal. App. 3d at p. 1605 [complaint stating cause of action in someone but not in plaintiff is subject to general demurrer].) Plaintiff contends: the factual allegations of the complaint are deemed true for purposes of demurrer; the complaints allegations at most raised a factual issue about its standing to proceed as the "designated agent"; and the issue should not have been decided on a demurrer. We agree that the factual allegations of the complaint must be deemed true. But, plaintiffs contentions do not withstand a challenge to the deficiency of the contract action on standing grounds.
Section IV of the October 1, 1985, agreement clearly restricts the definition of parties to the agreement. The parties to the agreement are defined as the original five entities and their successors, as limited by subparagraphs 1, 2, 3, and 4 of paragraph V of article I. A successor becoming a party is limited, under article I, paragraph V of the October 1, 1985, agreement as pertinent to this action as follows: "The exceptions to a successor becoming a Party by reason of any transfer or conveyance of the whole or any part of the interest of any Party in and to such Partys Tract are . . .: [P] . . . [P] 4. The successor acquires by such transfer or conveyance: [P] (a) Less than all of a Partys Tract or if a Party has more than one Tract, less than all of the Partys Tracts; or [P] (b) An undivided interest, such as that of joint tenant, or tenant in common, in such Partys Tract or Tracts; or [P] (c) An undivided interest, legal or equitable, in the assets of any Party other than an individual, which interest is not also an interest in the Partys Tract or Tracts. [P] In the circumstances described in this subparagraph 4, the Persons holding all of the interests in such Tract or Tracts are to be jointly considered a single Party. In order that other Parties shall not be required with respect to said Tract or Tracts to obtain the action or agreement of, or to proceed against, more than one Person in carrying out or enforcing the terms, covenants, provisions and conditions of this [agreement], then in the circumstances described in subparagraph 4(a) above, the Persons holding the interest of the Party in and to not less than seventy percent (70%) of said Tract or Tracts in question, shall designate one of their number as such Partys agent to act on behalf of all of such Persons, and in the circumstances described in subparagraph 4(b) above, Persons holding not less than seventy percent (70%) in interest in such Party or the holders of undivided interests totaling not less than seventy percent (70%) of the entire estate in and to said Tract or Tracts in question, shall designate one of their number as such Partys Agent to act on behalf of all such Persons. If any Tract or Tracts is owned by Persons owning an undivided interest therein under any form of joint or common ownership, then in the determination of such seventy percent (70%) in interest, each such owner of such undivided interest shall be deemed to represent a percentage in interest of the whole of such Tract ownership equal to his fractional interest in such Tract or Tracts. . . ."
Under the express terms of the October 1, 1985, agreement, only a successor owner of a divided interest acquiring 70 percent or more of any one tract is a party to the agreement. The party who owns 70 percent of the tract is also the only successor that has the right to designate an agent to act on behalf of all the parties. The complaint does not allege that plaintiff owns 70 percent of the tract. Therefore, the complaint is defective on its face in that it does not allege that plaintiff is a 70 percent or more owner of the tract.
For that reason, we are not persuaded by plaintiffs contention that it is a party because the October 1, 1985, contract states in part: "In the circumstances described in subparagraph 4, the Persons holding all of the interests in such Tract or Tracts are to be jointly considered a single Party." This clause cannot be read in isolation and must be considered in the context of the whole contract. It is well established rule of contract interpretation that, "The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other." (Civ. Code, § 1641; see also § 1858; Truck Ins. Exchange v. County of Los Angeles (2002) 95 Cal.App.4th 13, 23-24; City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 473.) The agreements must be interpreted to give effect to the mutual intention of the parties as it existed at the time of contracting. (Civ. Code, § 1636; Safeco Ins. Co. v. Robert S. (2001) 26 Cal.4th 758, 766.)
Here, the parties intent at the time of contracting in 1985 is clearly expressed by referring to the additional clauses other than the one relied upon by plaintiff which provides that the joint owners of a tract are considered a "single party." The very next clause in the agreement specifically limits who the owners of the remaining tracts will be required to deal with in enforcing the agreement. The next clause unequivocally explains: "In order that other Parties shall not be required with respect to said Tract or Tracts to obtain the action or agreement of, or to proceed against, more than one Person in carrying out or enforcing the terms, covenants, provisions and conditions of this [agreement], then in the circumstances described in subparagraph 4(a) above, the Persons holding the interest of the Party in and to not less than seventy percent (70%) of said Tract or Tracts in question, shall designate one of their number as such Partys agent to act on behalf of all such Persons . . . ." Thus, by the express terms of the October 1, 1985, agreement, the only party the other owners are required to deal with are successors of a tract who have acquired 70 percent or more in the parcel. A successor entity acquiring less than 70 percent of the tract acquired is deemed to be not a party. Accordingly, such a person has no right to enforce the October 1, 1985, agreement. Plaintiff has not alleged it owns 70 percent or more in subject tract. Thus, by the express terms of the October 1, 1985, agreement, defendants are not required to deal with plaintiff.
Second, plaintiffs admissions establish it has no standing. Plaintiff has admitted that it owns only 18 percent of the tract and that Univest holds title to the remaining 82 percent. The admissions and concessions are contained in: plaintiffs memorandum of points and authorities in support of the preliminary injunction request; plaintiffs demurrer opposition; and the opening brief in this case. Moreover, plaintiffs counsel admitted at the hearing on the demurrer that Univest owned 82 percent of the Fairbanks tract. As a result, judicial notice may properly be taken of the fact that plaintiff lacks standing under the express terms of the October 1, 1985, agreement because plaintiff does not own 70 percent or more of the tract. These matters are inconsistent with the allegations of the complaint and constitute judicial admissions which can no longer reasonably be controverted. (Pang v. Beverly Hospital, Inc., supra, 79 Cal.App.4th at pp. 989-990; Del E. Webb Corp. v. Structural Materials Co., supra, 123 Cal. App. 3d at p. 604; Smith v. Walter E. Heller & Co., Inc., supra, 82 Cal. App. 3d at p. 269.) Plaintiffs admissions and concessions concerning the ownership of the Fairbanks tract must be considered truthful and pleadings to the contrary disregarded. (Joslin v. H. A. S. Brokerage, supra, 184 Cal. App. 3d at p. 375; Cruz v. County of Los Angeles (1985) 173 Cal. App. 3d 1131, 1134, 219 Cal. Rptr. 661.)
In addition, the October 1, 1985, agreement provides that only a successor owner who acquires a 70 percent or more interest in any tract has a right to designate an agent. Plaintiff (who has not alleged it is a 70 percent or more owner of the Fairbanks tract) has not alleged sufficient facts showing that it may designate itself to act as agent. Plaintiff further concedes that Univest (as the 70 percent or more owner of the Fairbanks tract) has either chosen not to or failed to designate an agent to act on behalf of the Fairbanks tract. The complaint does not allege facts to show that Univest (as the "party" to the agreement by virtue of its 70 percent ownership of the Fairbanks tract) has sought to enforce or has designated plaintiff to act as an agent. The October 1, 1985, agreement states: "Until such time as written notice of such designation is given to each of the other Parties and is recorded in the office of the County Recorder of the County and State in which said Tract or Tracts are located, and a copy thereof is served upon each of the other Parties, in accordance with the requirements of Article XXV-A hereof, the acts of the Party whose interest is so divided or held in undivided interests (whether or not he retains any interest in the Tract or Tracts in question) shall be binding upon all Persons having an interest in said Tract or Tracts in question . . . ." Plaintiff is bound by the actions or in this case the inaction of the 70 percent owner of the Fairbanks tract, Univest, which had a right to challenge the defendants decisions but for whatever reasons has chosen not to do so. Accordingly, the complaint fails to state a cause of action as a matter of law because both the October 1, 1985, agreement and the judicially noticed facts establish that plaintiff had no right to designate itself as an agent. (Carsten v. Psychology Examining Com. , supra, 27 Cal.3d at p. 796; Childs v. State of California, supra, 144 Cal. App. 3d at p. 161.)
Moreover, plaintiff has not met its burden in demonstrating Judge Kalin abused his discretion in denying leave to amend inasmuch as there is no reasonable possibility that the standing defect could be cured by amendment. (Hendy v. Losse, supra, 54 Cal.3d at p. 742; Goodman v. Kennedy, supra, 18 Cal.3d at p. 349; Friendly Village Community Assn., Inc. v. Silva & Hill Constr. Co. (1973) 31 Cal. App. 3d 220, 225-226, 107 Cal. Rptr. 123.) At most a cause of action rests with Univest, but not in plaintiff, who is not the real party in interest. ( § 367; Charpentier v. Los Angeles Rams Football Co., supra, 75 Cal.App.4th at p. 307; Cloud v. Northrop Grumman Corp., supra, 67 Cal.App.4th at p. 1004.) Plaintiff has not established that it could amend the complaint to state a cause of action on its own behalf. Accordingly, Judge Kalin properly sustained the demurrer without leave to amend.
IV. DISPOSITION
The judgment is affirmed. Defendants, Fallbrook Square Limited Partnership and GGP Limited Partnership, are to recover their costs on appeal from plaintiff, Horowitz/Wood-Victory & Fallbrook.
I concur: GRIGNON, J. --------------- Notes: All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
CONCUR:
MOSK, J., Concurring.
I concur. I recognize that when a plaintiff pleads its interpretation of a contract and the contract is reasonably susceptible to that interpretation, a demurrer should be overruled. (Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Cal.App.4th 1; Beck v. American Health Group Internat., Inc. (1989) 211 Cal. App. 3d 1555, 1561, 260 Cal. Rptr. 237; Southern Pacific Land Co. v. Westlake Farms, Inc. (1987) 188 Cal. App. 3d 807, 817, 233 Cal. Rptr. 794.)
Notwithstanding that it does seem unfair that an owner of property cannot enforce easements to protect its interests, the agreement to which plaintiff acceded, as reasonably interpreted, does just that. The actual language used is not reasonably susceptible to plaintiffs interpretation.
Under the agreement, if there is more than one successor to a tract, "the Persons holding all of the interests in such Tract or Tracts are to be jointly considered a single Party." The "Persons" who hold 70 percent or more of the tract shall designate "one of their member" the "Partys agent to act on behalf of all such Persons." Until such description of an agent is made, the acts of Party who had the undivided interest, i.e. the predecessor-in this case, Fairbanks Equity LTD-shall be binding on all Persons having an interest in the tract.
The agreement makes clear that these provisions are to insure that other "Parties shall not be required with respect to said tract or tracts to obtain the action or agreement of, or to proceed against, more than one Person per tract in carrying out or enforcing the terms, covenants, provisions and conditions [of the agreement]." The provisions of the agreement explicitly were for the benefit of the "Parties" and not any "third Person." Also, it was only "Parties" that could seek injunctive or declaratory relief.
It is true that normally when there are joint owners of property, either of them can act to protect the property from injury or loss. (See 5 Miller & Starr, Cal. Real Estate (3d ed. 2000) Holding Title, § 12:9, p. 17.) But here, by agreement, only certain persons may act for the parties with respect to the property. Plaintiff was not one of those authorized parties.
It might be argued that the provisions only relate to consents, certain rights to enforce terms and binding acts, but do not expressly preclude persons who comprise a "Party" from suing to enforce a term. The only fair way to interpret the complaint would be to preclude a person who cannot otherwise act alone, from being able to bring an action under the contract.
Thus, the only way plaintiff can assert its contractual claims is jointly with Univest through a properly designated agent. When plaintiff acquired its interest, it did so with the restrictions discussed and is therefore bound by them.