Opinion
NOT TO BE PUBLISHED
San Mateo County Super. Ct. No. CIV464951
Marchiano, P.J.
This is a dispute over ownership of a narrow strip of land between two contiguous parcels. The trial court quieted title to the disputed strip in favor of plaintiff Christine A. O’Keefe, the owner of one contiguous parcel, and against the claims of defendants Rosemary Gerboni-Barker and Rick Rogers, the former and present owner, respectively, of the other contiguous parcel. Defendants contend that the trial court erred by: (1) finding plaintiff to be a bona fide purchaser of the disputed strip; (2) concluding that defendants’ claim for specific performance of a 1978 agreement to convey was time-barred; and (3) finding that defendants failed to prove the necessary elements of adverse possession. We disagree because the record supports the factual findings and legal conclusions of the trial court. Accordingly, we affirm.
I. Facts
For the most part, we take the facts from the trial court’s statement of decision, which includes numerous findings of fact. Defendants do not directly address the trial court’s specific findings of fact, and do not explicitly argue the findings are unsupported by substantial evidence.
Plaintiff owns the real property located at 4601 La Honda Road in San Gregorio (the O’Keefe property). Defendant Rogers owns the parcel immediately adjacent to plaintiff’s property to the east (the Rogers property). Rogers acquired this property from defendant Gerboni-Barker immediately before the commencement of this litigation. At issue here is a strip of land lying between the two properties, over which Rogers has a 20-foot easement for ingress and egress and which contains a structure referred to as a “bull barn.” Although it is unclear, the disputed strip does not appear to be much wider than 20 feet.
It is necessary to discuss the chronology of ownership of the O’Keefe and Rogers properties, as set forth by the trial court.
In March 1976, the O’Keefe property was owned by Byron F. and Mildred Farrington. The Rogers property was owned by defendant Gerboni-Barker and Alfred J. Santos. On March 17, 1976, the respective owners recorded an agreement confirming the lot lines of the two properties and the easements thereon (March 1976 Agreement). The March 1976 Agreement confirmed that the disputed strip was not contained within the boundaries of the Rogers property.
In conjunction with the March 1976 Agreement, the parties recorded an option agreement (March 1976 Option Agreement) providing Gerboni and Santos an option to purchase the disputed strip. The March 1976 Option Agreement expired by its own terms on March 17, 1978, absent any exercise of the option.
The trial court found that the March 1976 Option Agreement was never exercised, and expired by its own terms in March 1978. Despite defendants’ argument to the contrary, substantial evidence—based on Gerboni’s own trial testimony—supports this finding.
Subsequently, the O’Keefe property was transferred from the Farringtons to Larry and Marvel Taylor. In November 1978, the Taylors executed an agreement with defendant Gerboni to transfer the disputed strip to her (1978 Agreement). It is undisputed, as the trial court found, that the 1978 Agreement was never recorded.
Plaintiff purchased the O’Keefe property in August 1991.
In 1996, defendant Gerboni hired a surveyor to survey the lot lines of the O’Keefe property. That survey showed the disputed strip to lie within the boundaries of the O’Keefe property.
In 1997 and 1998, defendant Gerboni was “advised that the 1978 Agreement was never finalized.” Despite this awareness, defendant Gerboni “did not take any action to finalize the 1978 Agreement until 2004 when she approached [p]laintiff to request that [p]laintiff transfer the [disputed strip] to Gerboni.” Gerboni “took no action from 1998-2004 to assert any rights in the [disputed strip] or to make any further attempts to have the [disputed strip] transferred to her.” At the time of her 2004 request, Gerboni did not assert any interests in the disputed strip adverse to plaintiff. After plaintiff refused the transfer request, Gerboni “decided to give up on any further efforts to obtain title” to the disputed strip.
The trial court noted that Gerboni testified the transfer request occurred in 2004, but plaintiff testified it was “in or about 2005-2006.”
Prior to Gerboni’s 2004 transfer request, plaintiff erroneously believed that the disputed strip was part of the Rogers property. After she refused Gerboni’s transfer request, plaintiff made several verbal demands that Gerboni and the occupants of the Rogers property stop using the disputed strip. In January 2007, a survey commissioned by plaintiff showed that the disputed strip was part of the O’Keefe property. Despite further demands from plaintiff, defendants continued to use the disputed strip.
Both the 1996 survey commissioned by Gerboni, and the 2007 survey commissioned by plaintiff, show that the disputed strip is within the property description defined in plaintiff’s grant deed for the O’Keefe property. The disputed strip remains subject to the easement for ingress and egress previously granted to owners of the Rogers property.
On August 3, 2007, plaintiff filed a complaint for trespass, quiet title, and ejectment. Defendants cross-complained for specific performance under the unrecorded 1978 Agreement, and later amended their cross-complaint to add a cause of action for adverse possession.
After a court trial, the court rendered a statement of decision including the findings of fact discussed above, and others discussed below. The court found that plaintiff took the O’Keefe property as a bona fide purchaser without actual or constructive notice of any of defendants’ alleged claims to the disputed strip. The court further ruled that defendants’ claim of specific performance was time-barred and defendants had failed to meet their burden to show adverse possession of the disputed strip.
The court entered judgment quieting title for plaintiff in the disputed strip, and awarding plaintiff immediate possession of the strip of land.
II. Discussion
Defendants challenge the trial court’s finding that plaintiff was a bona fide purchaser. They also contend the trial court erred by finding their claim for specific performance to be time-barred, and by finding they had failed to meet their burden to show adverse possession. We disagree with defendants for the reasons set forth below.
Bona Fide Purchaser
A bona fide purchaser (BFP) is a person who pays valuable consideration for an interest in real property in good faith and without notice of any prior outstanding adverse interest in the property. (Sieger v. Standard Oil Co. (1957) 155 Cal.App.2d 649, 656; see also Black’s Law Dict. (8th ed. 2004) p. 1271, col. 1.) A BFP who duly records her interest in the purchased property is protected against unrecorded adverse interests. (Chalmers v. Raras (1962) 200 Cal.App.2d 682, 686.)
The trial court made a factual finding that plaintiff purchased the O’Keefe property without actual or constructive notice of any adverse interest. First, the court found that plaintiff did have actual notice of the March 1976 Agreement—but the March 1976 Agreement did not provide notice of any claims against the O’Keefe property except the easement, which is not at issue here. “[T]he [March] 1976 Agreement only confirmed that the [disputed strip] was not on the [Rogers property] and identified an easement over the O’Keefe [p]roperty in favor of the occupants of the [Rogers property].” The March 1976 Agreement “provided no notice of any other adverse interests” claimed by defendants.
Second, the trial court found that plaintiff had no actual notice of the March 1976 Option Agreement. While she did have constructive notice of that recorded document, the mere recording of the option in 1976 provided no constructive notice that the option was in fact exercised before the March 1976 Option Agreement expired by its own terms in 1978. As we have seen, there is substantial evidence the option was never exercised. Thus, as the trial court concluded, “The [March] 1976 Option Agreement... expired in 1978 and therefore could not and did not provide [p]laintiff with constructive notice that the rights asserted therein continued post-1978.”
Third, the court found that plaintiff did not have actual or constructive notice of the 1978 Agreement. She was not a party thereto, and the 1978 Agreement was never recorded.
In challenging the trial court’s determination that plaintiff was a BFP, defendants make two arguments. First, they claim that plaintiff should have examined county records which would have shown the county’s approval of the 1978 Agreement. But the operative fact here is not county approval, but the lack of recordation of that agreement. In our system of real property conveyancing, it is recordation which gives the prospective buyer constructive notice.
Second, defendants rely on Gates Rubber Co. v. Ulman (1989) 214 Cal.App.3d 356 (Ulman) for the proposition that plaintiff, who apparently saw fences and improvements on, and defendants’ possession of, the disputed strip, was under a duty to investigate her rights in the property. But Ulman is distinguishable. That case did not involve owners of contiguous properties, but the rights of a tenant in possession versus a successor in interest to the property owner. (Id. at pp. 359-363.) The precise holding of that case is: “where a tenant’s possession is consistent with the terms of a recorded lease which does not refer to an additional unrecorded option to purchase, and there are no circumstances indicating the tenant has additional rights, the purchaser does not have a duty to inquire of the tenant as to any other rights the tenant may possess.” (Id. at p. 365.)
This holding is not pertinent here. At the time of her good faith purchase, plaintiff did not realize the disputed strip was in fact on her property. She knew of the easement, so it was perhaps reasonable for her to assume that defendants’ possession was consistent therewith. In any case, she had no actual or constructive notice of any adverse interest of defendants, and defendants fail to establish that plaintiff had a duty to further investigate beyond the realm of recorded documents.
The trial court properly found plaintiff to be a BFP of the O’Keefe property.
Specific Performance
A cause of action for specific performance of a written contract expires in four years. (Code Civ. Proc., § 337, subd. (1).) Where a party’s right to sue depends on a demand by him to put his adversary into default, he must make that demand within a reasonable time—he cannot defer such a demand in a way to indefinitely and unnecessarily extend the statute of limitations. (See Ocean Shore R.R. Co. v. S. V. W. Co. (1922) 60 Cal.App. 43, 47-48.) The trial court found that defendants’ cause of action for specific performance of the 1978 Agreement was time-barred because defendants failed to demand performance of that agreement within a reasonable time.
The trial court found that the 1978 Agreement, while unrecorded, was a valid contract. But the trial court found that after defendant Gerboni learned in 1997 and 1998 that the 1978 Agreement was never finalized, she did not take any action under that agreement—e.g., demanding transfer of the disputed strip to her from O’Keefe—until 2004.
The trial court ruled that, absent cause for delay, Gerboni should have made a demand for performance within the four-year limitations period. The court concluded that “[c]ertainly” Gerboni should have recorded the 1978 Agreement in 1978. Her “failure to act within four years of the date of the 1978 Agreement is unreasonable and very well could support a finding that the statute of limitations applicable to the enforcement of the 1978 Agreement expired in 1982.”
The trial court further ruled that even if the statute of limitations did not expire in 1982, it expired four years after Gerboni was put on actual notice in 1997 and 1998 that the 1978 Agreement was never finalized, i.e., no later than 2002. “Nonetheless, [d]efendants only took minimal actions in 1998 to complete the 1978 Agreement.... Rather than making an appropriate demand for the performance to be completed by the execution of a grant deed, [d]efendants slept on their rights for a decade, to the prejudice of [p]laintiff.”
The court concluded the statute of limitations for specific performance expired in 2002, and thus defendants’ claim was time-barred.
Defendants argue that their claim for specific performance was not time-barred because the statute of limitations did not commence to run until plaintiff “repudiated” the 1978 Agreement by attempting to “take back” the disputed strip—which she did not do until 2007, when her survey confirmed she owned the land. In other words, the statute of limitations did not commence to run, or so defendants argue, from 1978 to 2007 because no one, particularly plaintiff since 1991, “repudiate[d]” the 1978 Agreement by asserting a right to the disputed strip.
Defendants insist that plaintiff should have repudiated a claim she did not know existed, arising from an unrecorded contract to which she was not a party. To support this proposition defendants rely on inapposite authority. Kidd v. Kidd (1964) 61 Cal.2d 479 involved an arm’s length contract to convey; the court merely held that when the vendee had fully performed under the contract, the vendor had to repudiate the contract before the statute of limitations for specific performance began to run. (Id. at pp. 480-481.) Muktarian v. Barmby (1965) 63 Cal.2d 558 did not involve specific performance; it involved an action between a father and son to quiet title. The court simply stated the rule that no statute of limitations runs against a plaintiff seeking to quiet title while he is in possession of the property. (Id. at pp. 559-560.) Ankoanda v. Walker-Smith (1996) 44 Cal.App.4th 610, also involved an action to quiet title, and emphasized—contrary to defendants’ position here—that the plaintiff’s possession of the property must be exclusive and undisputed before the statute of limitations against him may be tolled. (Id. at pp. 612, 616-617.)
These cases do not support defendants. They took no action to speak of under the 1978 Agreement, and cannot now argue the statute of limitations was tolled on the ground that plaintiff did not repudiate a contract of which she was not aware and by which she was not bound. The quiet title cases do not help defendants. Apparently defendants, as cross-complainants for specific performance, cast themselves in the role of the plaintiffs in Muktarian and Ankoanda and contend that since they were in possession of the strip, no statute of limitations ran against their claim. But quiet title cases are not directly relevant to a claim for specific performance—and in any case defendants were not in exclusive and undisputed possession of the strip, which lay within the boundaries of the O’Keefe property as described in plaintiff’s grant deed.
The trial court properly found that defendants had slept on their rights and their action for specific performance was time-barred.
Adverse Possession
A party seeking to establish title by adverse possession must prove (1) payment of taxes and (2) occupation, which occupation is (3) open and notorious, (4) continuous, (5) hostile to the true owner, and (6) under a claim of title or claim of right. (Gilardi v. Hallam (1981) 30 Cal.3d 317, 321 (Gilardi); Dimmick v. Dimmick (1962) 58 Cal.2d 417, 421-422.) The parties agree that the factors here at issue are payment of taxes and hostility.
We need not discuss the factor of tax payment, because we may resolve the question on defendants’ failure to prove the necessary element of hostility.
For purposes of adverse possession, hostile possession means that the claimant’s possession of the property must be adverse to the interests of the owner of record. If one mistakenly occupies the property of another, such possession is not hostile if the possessor recognizes the record owner’s potential claim and shows an express or implied intent not to occupy the land if record title was in another. (Gilardi, supra, 30 Cal.3d at pp. 323-324.)
The trial court found that defendants’ possession of the disputed strip was not hostile. Prior to 1976, defendant Gerboni mistakenly believed the disputed strip was hers. In 1976 and 1978, Gerboni was made aware the disputed strip was not hers, but took no action to assert any right or title to it—but instead tried to purchase it from the record owners by the March 1976 Option Agreement (never exercised) and the 1978 Agreement (never recorded). In 1997 and 1998, Gerboni was made aware that the 1978 Agreement was never finalized, but took no action to assert any right or title in the disputed strip. She made a minimal unsuccessful effort to obtain the property, and then in 2004 asked plaintiff to convey the strip to her. When plaintiff refused, Gerboni took no further action to obtain title to the strip or seek its conveyance to her. The trial court found that, up to 2004, Gerboni occupied the disputed strip without any intent to claim the land if title was held by another—and thus had no hostile intent toward plaintiff.
The court found that Gerboni’s intent after 2004 was hostile, but such hostile use did not continue for the five-year period necessary for adverse possession.
Interestingly, in May 2007 Gerboni sent plaintiff a letter stating her tenants were in possession of the Rogers property and she had no control of their use of the bull barn or any properties “known at this time as your [i.e., plaintiff’s] property.”
Defendants’ attempt to distinguish Gilardi fails, and the trial court properly relied on that decision and concluded defendants did not prove their claim of adverse possession.
III. Disposition
The judgment is affirmed.
We concur: Margulies, J., Graham, J.
Retired judge of the Superior Court of Marin County assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.