Opinion
G054542
11-21-2018
ZEPHYR EQUITIES & DEVELOPMENT, LLC et al., Plaintiffs and Respondents, v. BROOKFIELD SUNSET, LLC et al., Defendants and Appellants.
Corbett, Steelman & Specter, Bruce R. Corbett and Susan J. Ormsby for Defendants and Appellants. Donna Bader for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2012-00575381) OPINION Appeal from a judgment of the Superior Court of Orange County, Sheila Fell, Judge. Affirmed and remanded with directions. Corbett, Steelman & Specter, Bruce R. Corbett and Susan J. Ormsby for Defendants and Appellants. Donna Bader for Plaintiffs and Respondents.
This dispute concerns a consulting agreement between Steven P. Rosenblatt (Rosenblatt), the sole owner of Zephyr Equities & Development, LLC (Zephyr) and a real estate developer, Brookfield Sunset, LLC (Sunset). Following a bench trial, the trial court found in favor of Rosenblatt/Zephyr (hereafter referred to in the singular as Zephyr unless the context requires otherwise). On appeal, Sunset asserts there was reversible error because the consulting agreement was unenforceable for the following reasons: (1) Sunset did not expressly consent to its terms; (2) there was no evidence of estoppel in lieu of express consent; (3) there was no evidence of course of conduct in lieu of express consent; (4) there was insufficient evidence the contract provided for consideration to be enforceable; and (5) it was an illegal contract. In addition, Sunset challenges the sufficiency of the evidence supporting a judgment for the following causes of action: (1) anticipatory breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) quantum meruit; (4) fraud in the inducement; and (5) negligent misrepresentation. Sunset's final argument on appeal is that there was no basis for the court to incorporate into the judgment "Exhibit No. 1."
This is the second appeal we have considered regarding the enforcement of one of Zephyr's many land development consulting agreements. (See Zephyr Equities & Development, LLC v. Brookfield Natomas, LLC (Nov. 10, 2015, G050001) [nonpub. opn.] (Zephyr I).) As explained in our prior opinion, Zephyr filed lawsuits against various limited liability companies, each entity named after a particular Sacramento, California real estate development, i.e., Brookfield Natomas, LLC (Natomas), Brookfield Sunset, LLC, (Sunset); Brookfield Castle, LLC (Castle), and Brookfield Lincoln, LLC (Lincoln). The 2015 appeal concerned review of a trial court order confirming and modifying an arbitration award in litigation between Zephyr and Natomas. (Ibid.) We concluded the trial court erred in modifying the arbitration award entered in Zephyr's favor. (Ibid.) In the opinion, we considered and rejected the contention the consulting agreement was illegal, deciding it did not require Zephyr to perform activities that required a real estate license. (Ibid.)
In this appeal, we find meritless the numerous issues raised by Sunset regarding the court's declaratory relief judgment that concluded Zephyr's consulting agreement (and bonus payment provision) with Sunset was enforceable. However, we conclude the trial court's judgment concerning the remaining causes of action must be modified to say they are dismissed without prejudice as being premature. We therefore remand the matter with directions that the trial court modify the judgment to clearly state the second, third, fourth, and sixth causes of action are dismissed without prejudice as premature. In all other respects, the judgment is affirmed.
FACTS
The parties make no effort to explain the relationship between the different Brookfield entities, other than to say they are separate but "affiliated" legal entities. The list of entities is as follows: (1) a Canadian company called Brookfield Homes; (2) a California corporation called Brookfield Land Company, Inc. (BLC); (3) a California corporation called Brookfield California Land Holdings, Inc. (BCLH); and (4) four limited liability companies (LLCs) named after land development projects (Natomas, Sunset, Castle, and Lincoln).
Zephyr worked for Brookfield entities on several projects in the Sacramento area. Rosenblatt was hired in 1998 by John Stewart, president of BCLH, as a land acquisition specialist. His job was to locate undeveloped properties that may be suitable for development into master-planned large communities.
At first Rosenblatt's business relationship with Stewart and Brookfield was informal and he received compensation on an hourly basis. Rosenblatt was initially paid $100 an hour and this later changed to $10,000 per month. He was given business cards, containing Brookfield's contact information, suggesting Rosenblatt was one of Brookfield's representatives. The parties verbal agreement was later memorialized in a letter Steward gave to Rosenblatt.
Rosenblatt received help from real estate broker Steven Crosbie to look for land ripe for development by Brookfield. They found 527 acres owed by the "Amoruso Family." The Amoruso project was also called the "Sunset project" because Sunset was the name of one of the streets bordering the property. In 1999, BCLH secured an option agreement with the Amoruso family, and Crosbie found additional nearby "mitigation properties" to offset the environmental impact of such a large development. The mitigation properties were referred to as the Mourier and Skover properties. Stewart sent Rosenblatt a letter outlining a "schedule of commission compensation" relating to his efforts on the Sunset project. In addition, Stewart offered Rosenblatt four percent on the amount paid on "the purchase price from Amoruso."
In 2000, BCLH entered into a consulting agreement with Rosenblatt, individually. This agreement stated it would terminate in one year (October 1, 2000 to 2001). The parties agreed Rosenblatt would be paid $100 per hour.
Thereafter, Brookfield/Stewart hired a land use attorney, Karen Diepenbrock. She testified she worked with Rosenblatt and Stewart on the Natomas, Lincoln, Amoruso, and Castle land development projects. She submitted her bills to Stewart, and Rosenblatt received a copy to make sure they were accurate. Diepenbrock prepared the landowner agreements and pursuant to Stewart's request, she drafted the Brookfield entities' many consulting agreements with Zephyr. Brookfield's accounting office in Del Mar, California, paid Zephyr's monthly invoices for expenses regarding the various land development projects.
In January 2003, BLC entered into a written consulting agreement with Zephyr. (Exhibit No. 26.) Rosenblatt recalled Steward told him the reason Brookfield prepared the consulting agreement was because "he thought it would be a good idea if we had a consulting agreement on each property that I was working on."
Section 4 of Exhibit No. 26 set forth the terms of compensation. Section 4.1 provided the following monthly payment: "In consideration of all services rendered during the term of this Agreement, Brookfield shall pay Consultant a fee of $15,000 per month, payable in monthly installments." The monthly stipend was increased from $10,000 because Zephyr's workload had grown with the four land development projects.
Section 4.2 described a potential future bonus payment related to the sale of "Project Land" in the "Project Area." The "Project Area" was defined earlier in the agreement as being comprised of the Natomas land development project. Brookfield agreed to pay Zephyr four percent of the gross proceeds for each sale in the Natomas "Project Area." Brookfield later assigned this agreement to Natomas.
As mentioned earlier, this court in Zephyr I affirmed the arbitrator's ruling enforcing the BLC/Natomas consulting agreement. The arbitrator awarded Zephyr $519,000 for past due monthly payments and granted declaratory relief regarding the enforceability of the bonus payment provision. Specifically, the arbitrator declared BLC/Natomas must pay Zephyr four percent of the gross proceeds for each portion of the Natomas land sold. (Zephyr I, supra, G050001.)
In addition to the Natomas consulting agreement (Exhibit No. 26), Diepenbrock prepared nearly identical consulting agreements concerning the Lincoln, Sunset, and Castle projects. The agreements all contained the same description of Zephyr's duties with respect to the different land development projects. Rather than repeat the relevant terms, we incorporate by reference our detailed description of these agreed upon terms in Zephyr I, supra, G050001. The main distinction between the Natomas consulting agreement and the others was that only the Natomas consulting agreement contained the $15,000 monthly payment. At trial, Brookfield stipulated the parties intended this $15,000 payment would cover the services Zephyr provided on all four projects, not just the Natomas project. Like the Natomas consulting agreement, the three other consulting agreements contained the promise of a four percent bonus payment when the land was sold in those developments.
The three other consulting agreements were introduced at trial as Exhibit Nos. 33, 77, and 101. Exhibit No. 33's agreement, which was unsigned, concerned the Sunset project. Exhibit No. 77's agreement was signed and related to the Castle project. The alleged breach of these two consulting agreements (Exhibits Nos. 33 and 77) was the basis for the underlying lawsuit. Exhibit No. 101 concerned the Lincoln project, and was also unsigned. However, it did not generate any litigation because it was the only project to be completed and was fully performed by both parties. Brookfield paid Zephyr the four percent bonus of gross proceeds as set forth in the unsigned contract. (Exhibit No. 101.)
Castle is not a party to this appeal.
In the middle of 2004, Richard Whitney replaced Stewart. In addition, Rosenblatt, who was initially the project manager for the Sunset project, was supplanted by John Norman. Rosenblatt/Zephyr continued to work on the four land development projects.
After parcels of the Lincoln project began to sell in 2005, Zephyr began collecting bonus payments pursuant to the terms of the unsigned Lincoln consulting agreement (Exhibit No. 101). Soon thereafter, Zephyr was asked by Whitney and Ian Cockwell (chairman of Brookfield Homes) to consider changing his bonus compensation from gross to net on the other consulting agreements (Natomas, Sunset, and Castle). Rosenblatt recalled that when he signed the Natomas agreement, Steward explained that using gross proceeds, rather than "net," was "a cleaner way to calculate out a bonus for me and just be easier for Brookfield and easier for me."
In response to Whitney and Cockwell's complaints, Rosenblatt sent them a proposal in June 2005 to modify the Natomas consulting agreement. The proposal was not accepted. After Zephyr collected all the bonus payments on the Lincoln project, Whitney (on behalf of "Brookfield Homes") sent Rosenblatt a fax in April 2006, offering him terms of compensation regarding the Natomas, Castle, and Sunset projects. Whitney offered a bonus based on net proceeds for "the Natomas and Sunset project" plus a $3 million cash payment and a $250,000 cash payment "regarding the Castle" project. Whitney suggested the management fee would be reduced to $7,500 per month for 24 months, with an option to extend it for an additional two years. Zephyr refused to change the terms of the existing consulting agreements. Thereafter, Rosenblatt recalled nobody at Brookfield indicated he was not going to be paid, that he would be terminated, or that he should stop providing consulting services. He continued to provide services and collected his $15,000 monthly stipend.
Rosenblatt testified that in 2007 the economy entered a recession and the real estate market suffered, causing Brookfield to halt work on the Castle project. In July 2008, Brookfield stopped paying Zephyr $15,000 per month. Nevertheless, Zephyr continued working on the various land development projects because he believed Brookfield "was good for it" and he wanted to finish his duties so that he could eventually collect his four percent bonus. Brookfield and Zephyr continued to work together on the land development projects until late January 2011.
In March 2011, Zephyr made a demand for arbitration, alleging breach of the Natomas consulting agreement. He sought payment of the $15,000 consulting fee and a determination the four percent bonus provision was enforceable. (Zephyr I, supra, G050001.) In May 2011, BCLH filed a complaint against Rosenblatt, individually, that sought declaratory relief on the issue of whether money was owed to Rosenblatt on the Sunset project. It dismissed the action in June 2012.
That same month (June 2012) Zephyr filed a complaint against Sunset and Castle, alleging causes of action for declaratory relief, anticipatory breach of contract, tortious denial of contract, and quantum meruit. The bench trial took place in June 2015, where the court considered testimony, exhibits, and numerous trial briefs. It prepared a statement of decision, ruling the consulting agreements were valid and enforceable and that judgment would be entered in Zephyr's favor.
Before the trial court made its final ruling, this court (in November 2015) confirmed the arbitration award in Zephyr's favor regarding the Natomas consulting agreement, concluding it should not have been modified. (Zephyr I, supra, G050001.) We agreed with the arbitrator's decision that the consulting agreement, including the four percent bonus provision, was enforceable and BLC/Natomas owed Zephyr $519,000 for past due monthly commission payments. (Ibid.)
After considering our opinion, the trial court issued its final statement of decision regarding the Sunset and Castle consulting agreements, making the following factual and legal findings: First, it rejected the argument that the agreements contained in Exhibit Nos. 33 and 77 were illegal because Zephyr did not have a real estate license. The court acknowledged it was not bound by the ruling in Zephyr I, supra, G050001, regarding this issue. "Nonetheless, the [c]ourt finds that section 2 of the [c]onsulting [a]greements (Exhibit Nos. 33 and 77) does not require [Zephyr] to perform services that require a real estate license."
The court stated the next issue was whether Zephyr performed work delineated in the consulting agreements. It ruled the testimony and exhibits supported the conclusion Zephyr performed project management and entitlement work until sometime in 2011. It noted Rosenblatt's testimony was credible with respect to the work he performed on the Sunset and Castle projects.
The court determined the evidence also supported the conclusion Zephyr's work was "governed by a general course of conduct that was memorialized in the four consulting agreements (Exhibit Nos. 26, 33, 77, and 101.)" It reasoned the Lincoln consulting agreement (Exhibit No. 101), which was similar to the other three agreements, was not signed by any Brookfield entities, but was fully performed. The court stated Brookfield's corporate officer, Whitney, conceded he authorized the bonus payment to Zephyr pursuant to the terms of the Lincoln consulting agreement. It found relevant Whitney's testimony "acknowledged Brookfield's agreement to pay the four percent bonus" and this promise had "'no other conditions attached to it.'" The court ruled, "The testimony and exhibits demonstrated that the parties were operating under the assumption that the consulting agreements, whether signed or not, were the operative documents that governed the various Brookfield entities' relationship with [Zephyr]."
In addition, the court determined there was evidence the affiliated Brookfield entities ratified the consulting agreements "by fully performing under the unsigned Lincoln [c]onsulting [a]greement." It reasoned, "By this course of conduct, [they] communicated the idea to [Zephyr] that the signature was unnecessary for future agreements between Brookfield entities and [Zephyr]." The court acknowledged there were "a number of prior iterations of agreements regarding Sunset" and it was reasonable for Zephyr to rely upon Exhibit No. 33 because it contained essentially identical terms, conditions, and duties as the previously unsigned consulting agreements. The court determined there was no evidence the agreement was repudiated before Zephyr stopped working on the Sunset project in 2011. It cited evidence Brookfield's representatives attempted to renegotiate the agreement, which reinforced Zephyr's belief it was enforceable.
The court also noted Brookfield's legal counsel, Diepenbrock, drafted the agreements and her testimony was credible. Diepenbrock stated she verified the terms of the agreement with Stewart, and although, he did not sign the agreement, she could not recall anyone associated with Brookfield saying there was a problem with the terms of the agreement.
The court concluded, "[Zephyr] reasonably relied on the course of conduct amongst the parties, as well as [the parties'] statements and actions, and performed work, as required under Exhibit [Nos.] 33 and 77 through mid-2011. It would be wholly inequitable for [Sunset] to benefit from [Zephyr's] many years of service without paying [Zephyr] the consideration for which they bargained. [The Brookfield entities] are estopped by [their] conduct from denying the validity of Exhibit [No.] 33. Exhibit [No.] 77, the Castle [c]onsulting [a]greement, was fully executed."
Additionally, the court reasoned, "[the Brookfield entities] did not credibly explain why they continued to utilize [Zephyr's] services without a valid contract or why this [c]ourt should allow them to reap the benefit of such contract while simultaneously avoiding any obligations under the agreement, despite having fully performed on an unsigned agreement with nearly identical terms. This [c]ourt finds that a contract existed between the parties, and no credible evidence has been presented indicating a failure of performance by [Zephyr]. Under these agreements, the conditions triggering [Sunset's] obligations have occurred. [¶] This [c]ourt finds that valid contracts existed between the parties and, based on the evidence and testimony presented, the absence of a signature does not excuse [Sunset] from performing the terms and conditions under which the parties had continued to operate. [¶] The [c]ourt rules in favor of [Zephyr] and awards . . . the four percent additional compensation set forth in Exhibit [Nos.] 33 and 77 with respect to the properties referred to in such Exhibits."
The court's judgment stated Zephyr prevailed on all its causes of action alleged in the complaint. This portion of the judgment will be discussed in more detail anon. With respect to the declaratory relief claim, the court declared the bonus provision contained in section 4.2 of the Sunset consulting agreement was enforceable and Rosenblatt and Zephyr "shall be entitled, jointly and severally, to receive [four percent] of the [g]ross [p]roceeds of any sale by [Sunset] . . . of all or any portion of any of the real properties listed on Exhibit [No.] 1 hereto, which is incorporated herein by reference . . . ."
DISCUSSION OF DECLARATORY RELIEF
Sunset challenges the trial court's declaratory relief determination the unsigned contract was enforceable and Zephyr could collect the agreed upon four percent bonus when the land development properties were sold. Sunset correctly asserts there are two essential elements for an enforceable contract, (1) consent by both parties, and (2) sufficient cause or consideration. (Civ. Code, § 1550.) Many of Sunset's arguments on appeal can be grouped into these two general categories. First, Sunset raises several arguments challenging the sufficiency of the evidence regarding the element of consent. Second, Sunset questions whether the agreement (it drafted) had adequate consideration. Sunset's final argument is to assert the agreement cannot be enforced because it is illegal. We will address these complaints separately below, finding no reason to disturb the judgment.
I. Evidence of Consent
In its statement of decision, on the issue of consent, the trial court made the factual determination Sunset was "estopped" by its conduct from denying the validity of the consulting agreement. It concluded Zephyr relied on the parties' "course of conduct," Sunset's "statements and action," and the work performed. It ruled, "It would be wholly inequitable for [Sunset] to benefit from [Zephyr's] many years of service without paying . . . the consideration for which they bargained." It determined the parties had several valid contracts with each other and "the absence of a signature does not excuse [Brookfield] from performing the terms and conditions under which the parties had continued to operate."
The court correctly recognized that "[e]stoppel—whether judicial, equitable or promissory—can . . . be used to bind a party to what would otherwise be an unenforceable contract." (Blix Street Records, Inc. v. Cassidy (2010) 191 Cal.App.4th 39, 49-50 (Blix).) For this reason, we begin by reviewing Sunset's challenges to the court's application of equitable estoppel. An affirmance of this ruling renders moot Sunset's numerous other arguments addressing the reasons why the contract was technically unenforceable.
"The elements of equitable estoppel are '(1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel has a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury. [Citation.]' [Citation.]" (Schafer v. City of Los Angeles (2015) 237 Cal.App.4th 1250, 1261.) "The existence of equitable estoppel generally is a factual question for the trier of fact to decide, unless the facts are undisputed and can support only one reasonable conclusion as a matter of law. [Citations.] We review factual findings regarding the existence of equitable estoppel under the substantial evidence test. [Citation.]" (Id. at p. 1263.) Such is the case here because the essential facts are disputed.
"'Under the substantial evidence standard of review, our review begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the trial court's factual determinations. [Citations.] Substantial evidence is evidence of ponderable legal significance, reasonable in nature, credible, and of solid value. [Citation.] The substantial evidence standard of review applies to both express and implied findings of fact made by the court in its statement of decision. [Citation.]' [Citation.]" (Blix, supra, 191 Cal.App.4th at p. 47.)
We are mindful there is technically a second level of review in this case. If the necessary elements of equitable estoppel are found to be supported by substantial evidence, whether the doctrine should be applied was a matter of judicial discretion. (Blix, supra, 191 Cal.App.4th at pp. 48-49.) Accordingly, "The exercise of discretion for an equitable determination is reviewed under an abuse of discretion standard. [Citation.]" (Id. at p. 47.)
Sunset claims there was "no evidence" justifying application of equitable estoppel because the doctrine requires proof Sunset "intentionally and deliberately" led Rosenblatt to believe the unsigned consulting agreement was enforceable. This argument suggests there must be evidence proving actual fraudulent intent to support an estoppel. This is incorrect. The doctrine of estoppel has been codified in Evidence Code section 623, which provides, "Whenever a party has, by his own statement or conduct, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, in any litigation arising out of such statement or conduct, permitted to contradict it." Although the statute contains the phrase "intentionally and deliberately," estoppel focuses on a parties' inequitable conduct. There is no requirement of fraudulent intent or evidence of a specific deceitful misrepresentation.
As aptly explained in Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 162, "While the statutory formulation might suggest that equitable estoppel is limited to situations amounting to fraud (intentionally and deliberately misleading another), estoppel 'has not been so narrowly applied.' [Citations.] Equitable estoppel has been applied in a broader context, where the party to be estopped has engaged in inequitable conduct, induced another party to suffer a disadvantage, and then sought to exploit the disadvantage. [Citation.] 'Broadly speaking, "estoppel" refers less to a doctrine than to a conceptual pattern, first articulated in the courts of equity, which has come to pervade our law. When it is successfully invoked, the court in effect closes its ears to a point—a fact, argument, claim, or defense—on the ground that to permit its assertion would be intolerably unfair. It is commonly said that the party to be estopped, having conducted himself in manner X, will "not be heard" to assert Y.' [Citation.]" (See also City of Hollister v. Monterey Ins. Co. (2008) 165 Cal.App.4th 455, 487-488; accord Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 384 [estoppel may arise without fraud].)
In our case, the trial court determined Sunset conducted itself in a manner suggesting the four consulting agreements with Zephyr (signed and unsigned) were enforceable, and after receiving the benefit of Zephyr's services for many years, it cannot be heard to now assert there is no obligation to pay the bargained for consideration. In the statement of decision, the court offered several examples of Sunset's inequitable course of conduct. For example, Sunset paid Zephyr pursuant to the terms of a similar unsigned consulting agreement (Exhibit No. 101), leading Zephyr to believe the "consulting agreements, whether signed or not," were enforceable and governed the parties relationships. Stewart determined there would be a separate consulting agreement for each project because although the projects started out with one company (BCLH), separate limited liability companies were formed for each land development. The Natomas and Lincoln consulting agreements superseded earlier compensation agreements, and there was no reason for Zephyr to believe the Sunset consulting agreement was different. To the contrary, the court noted Sunset offered no credible explanation as to why it continued to use Zephyr's services for years without a valid contract, or why it should be allowed to "reap the benefit" from the contract "while simultaneously avoiding any obligations."
Rather than respond to the evidence supporting the court's conclusion there were inequitable dealings, Sunset repeats all the favorable evidence it presented at trial to argue there is insufficient evidence supporting the finding of estoppel. We noticed Sunset's discussion of many of these facts lack supporting record references.
As such, we conclude the sufficiency of the evidence argument is inadequate and we will treat it as waived. "An appealed judgment is presumed correct, and the appellant must affirmatively demonstrate error. [Citation.] An appellant challenging the sufficiency of the evidence to support the judgment must cite the evidence in the record supporting the judgment and explain why such evidence is insufficient as a matter of law. [Citations.] An appellant who fails to cite and discuss the evidence supporting the judgment cannot demonstrate that such evidence is insufficient. The fact that there was substantial evidence in the record to support a contrary finding does not compel the conclusion that there was no substantial evidence to support the judgment. An appellant . . . who cites and discusses only evidence in her favor fails to demonstrate any error and waives the contention that the evidence is insufficient to support the judgment. [Citations.]" (Rayii v. Gatica (2013) 218 Cal.App.4th 1402, 1408, italics added.)
In this case, Sunset discusses the evidence in the record that could support a contrary finding but does not explain why the evidence supporting the judgment is insufficient. For example, Sunset argues evidence Zephyr was paid the bonus agreed to in the unsigned Lincoln contract "should have no effect" on any other dealings because that payment was made by a separate entity (Lincoln). However, the record shows the trial court understood and rejected this argument. Although there were different limited liability companies formed for each project, Sunset stipulated these entities were "affiliated." In its briefing, Sunset does not mention the court also heard evidence the same handful of individuals operated and managed the affiliated LLCs from one office, the same CEO from the parent company signed the agreements, the nearly identical agreements were all prepared by the parent company's attorney. This evidence, and Rosenblatt's testimony, support the trial court's conclusion the parties treated the consulting agreement, whether signed or not, as governing their relationship. By failing to address the contrary evidence, some of which was specifically cited by the trial court in its written ruling, Sunset waived its challenges based on the sufficiency of the evidence.
II. Evidence of Consideration
Sunset argues the Sunset consulting agreement is unenforceable due to lack of consideration. It asserts Zephyr was obligated to perform its consulting work under the fully executed Natomas consulting agreement, and the Sunset consulting agreement did not add any additional obligations in consideration for the four percent bonus. The irony of this argument appears to be lost on Sunset. As just noted above, it is Sunset's contention that "Brookfield Lincoln's" payment under the terms of the Lincoln consulting agreement should have no effect on any other dealings because it was a separate entity. Turning now to Sunset's "consideration argument," we find it illogical for it to assert the Natomas consulting agreement covered all aspects of the Natomas and the Sunset projects, despite the fact Natomas and Sunset are separate entities. The argument is also defeated by evidence the Natomas consulting agreement had no effect on the bonus payment made for the Lincoln land development.
Moreover, the $15,000 monthly stipend described in the Natomas consulting agreement for Zephyr's overall consulting services did not specify this compensation was intended to be the exclusive method of payment. We recognize the Natomas consulting agreement provided for a four percent bonus for only the Natomas properties, but there was no language suggesting there was only one opportunity to earn a bonus payment for all four projects. Brookfield's representative's payment of the four percent bonus on the Lincoln project dispels the theory the parties intended to limit Zephyr's compensation to a monthly stipend on all the land development projects except Natomas.
III. Illegal Contract
Sunset raises a much repeated argument regarding the illegality of its consulting agreements with Zephyr. There is no dispute the four consulting agreements relating to the Natomas, Lincoln, Sunset, and Castle land development projects described the same duties and obligations. In Zephyr I, we considered and rejected Sunset's argument the Natomas consulting agreement illegally required Zephyr to perform activities that required a real estate license it did not possess (in violation of Business and Professions Code sections 10153 and 10136). (Zephyr I, supra, G050001.) Sunset points to no difference between the Natomas consulting agreement and the one we are reviewing now. We incorporate by reference our lengthy discussion in Zephyr I of the general rules regarding real estate licenses, the duties required by the consulting agreements, relevant public policy considerations, and legal analysis of relevant cases. (Ibid.) We concluded Zephyr's role in transferring land development rights to Sunset was akin to arranging for a licensing agreement, which did not require a real estate license. (Ibid.) The portion of the consulting agreement promising to compensate Zephyr for his efforts negotiating landowner agreements on Sunset's behalf was legal and enforceable. (Ibid.) The same legal analysis can be adopted and applied to this case because the contract terms are the same.
We find irrelevant Sunset's lengthy discussion of evidence proving that, contrary to Rosenblatt's testimony, Zephyr negotiated landowner agreements. As discussed, the landowner agreements at issue did not convey a tangible right in real estate, but was "more akin to a license." (Zephyr I, supra, G050001.) The landowners continued to hold full title to their properties and used the land for farming, and they merely agreed to give the Brookfield entities "a personal privilege to act on behalf of the landowners in obtaining development rights for the landowner's ultimate benefit." (Ibid.)
Finally, we reject Sunset's attempts to analogize this case to the circumstances described in Phillippe v. Shapell Industries (1987) 43 Cal.3d 1247, 1266. This same argument was raised and reviewed in Zephyr I, where we explained why the case was inapt. We incorporate by reference our discussion of the Phillippe case. It does not assist Sunset in proving its consulting agreement illegally contemplated payment to a party who was not a licensed real estate broker.
DISCUSSION OF JUDGMENT
Sunset, assuming it prevailed on the declaratory relief cause of action, asserts there was insufficient evidence to "support the judgment" on all the remaining causes of action. It complains the judgment also incorrectly holds Sunset and Castle jointly liable and improperly incorporated a list of properties (Exhibit No. 1) that was not discussed or adjudicated at trial. We conclude this portion of the judgment must be modified but not for the reasons offered by Sunset.
I. Declaratory Relief
Before discussing the remaining causes of action, it is helpful to first review the language of the trial court's entire ruling on the first cause of action seeking declaratory relief. The court entered a judgment of declaratory relief in Zephyr's favor as follows: "Having considered all evidence and argument . . . this [c]ourt now finds in favor of said plaintiffs and awards to them collectively and against said defendants collectively a judgment of declaratory relief and costs in the sum of $ ___." The court further clarified, "IT IS ALSO ADJUDGED that this [c]ourt declares that the [four percent] bonus provision contained in [s]ection 4.2 of the [c]onsulting [a]greement [between Zephyr and Sunset], is enforceable, and that Plaintiffs shall be entitled, jointly and severally, to receive [four percent] of the [g]ross [p]roceeds, as defined in said section 4.2 of that [c]onsulting [a]greement from [Sunset], when the [g]ross [p]roceeds of any sale by [Sunset] or any succeeding affiliate, assignee, successor, or transferee are received . . . of all or any portion of the real properties listed on Exhibit [No.] 1 hereto, which is incorporated by reference, subject only to the terms and restrictions contained in said section 4.2 . . . ." The next paragraph of the judgment contains an identical ruling, regarding the bonus provision contained in Castle/Zephyr consulting agreement, stating Castle must pay the four percent bonus for real property listed on Exhibit No. 1 sold by Castle.
Contrary to Sunset's contention, we do not read the judgment as holding Sunset and Castle jointly liable for all bonus payments owed. We recognize the court ruled against "defendants collectively a judgment of declaratory relief." (Italics added.) However, it was clearly referring to the fact the defendants' collectively lost their legal argument the consulting agreements were unenforceable. The court determined the affiliated Brookfield entities (Sunset and Castle) were both equitably estopped from asserting they need not fulfill their promise to pay the bonus provisions contained in the essentially identical consulting agreements. The court recognized each entity was separately liable for any bonus payments arising from those contracts. It expressly stated Sunset would be liable for bonus payments arising from the Sunset consulting agreement dated August 12, 2004, and Castle was liable for bonus payments arising from its consulting agreement dated March 5, 2004. When viewed in context we find no error in the court's reference to the defendants "collectively."
We turn next to Sunset's complaint about the court's decision to incorporate into the judgment by reference Exhibit No. 1, listing the properties subject to the bonus provisions in both consulting agreements. Sunset argues nothing in the pleadings or the evidence presented at trial contained descriptions of the properties subject to the bonus payment. It asserts there was no opportunity to address the issue of what property should apply to judgment.
Sunset did not object to the judgment as required by California Rules of court, rule 3.1590(j). We recognize it raised this issue in its motion to vacate the judgment. Indeed, this argument was cut and pasted into the opening brief. However, neither the motion below nor the appellate briefing explains what part of the description of properties was incorrect. It does not point to a mistake or explain which property on the list would have been challenged if given the opportunity at trial. Zephyr asserts the properties were mentioned in the "[r]ecitals" portion of the consulting agreements and within the various landowner agreements. By including accurate legal descriptions of the properties, the court made sure the parties would clearly understand the terms of the judgment. We conclude that because Sunset does not assert Exhibit No. 1 contains incorrect information, we find no reason to disturb the trial court's ruling.
II. The Remaining Causes of Action
The judgment with respect to the remaining causes of action is difficult to reconcile. The judgment provides the following statement: "[This c]ourt renders judgment in favor of [Zephyr] and against [Sunset and Castle] jointly and severally, on the first (declaratory relief), second (anticipatory breach of contract), third (breach of the covenant of good faith and fair dealing), and sixth (negligent misrepresentation) causes of action of [the operative] complaint . . . and against [Zephyr] on the fifth (fraud) cause of action . . . ." As mentioned above, with respect to the first cause of action for declaratory relief, the court provided the remedy of declaring the agreement enforceable and ruling the bonus may be paid in the future according to the terms of the two consulting agreements.
The court did not award damages with respect to the remaining causes of action. Instead, it stated the following: "The [c]ourt further finds that the monetary damages to which Plaintiffs are entitled under said second, third, and sixth causes of action are provided by the deferred and contingent payments required below pursuant to the first cause of action." (Italics added.) The court is clearly referring to the two paragraphs at the end of the judgment declaring the bonus provisions of the consulting agreements are enforceable and that Zephyr may collect the four percent bonus as defined in those agreements when the land is eventually sold.
After oral argument, we asked the parties to submit supplemental briefing addressing the correct disposition on the remaining causes of action, suggesting it may be appropriate to consider them subsumed into the first cause of action for declaratory relief. Without providing supporting case authority, Brookfield asserted the only option is to reverse and retry the case. It maintains the judgment is "fatally inconsistent and defective." It contends subsuming the causes of action seeking damages into the cause of action requesting declaratory relief would be "improper and unsustainable."
Brookfield filed a second letter brief asking for permission to modify its oral argument with a rebuttal to a point raised by Zephyr's appellate counsel. We deny the request, and in any event, the argument and rebuttal was not relevant to our opinion.
Zephyr's counsel explained the other causes of action were added to the complaint because it was unclear whether any of the real estate would be sold prior to trial. If there had been a sale, and if Brookfield refused to pay the bonus owed, the causes of action seeking monetary damages would have been litigated. Counsel acknowledges those causes of action were not ripe for adjudication because the real estate at issue has not been sold. The computation of damages would be premature at this time.
We agree. The judgment improperly deferred ruling on all the causes of action (except the first cause of action for declaratory relief). Recognizing those causes of action were premature, the appropriate ruling is to dismiss the claims without prejudice. When the property at issue sells, and if Brookfield refuses to honor the consulting agreement's bonus provision, Zephyr can file a lawsuit raising these types of claims seeking actual damages.
DISPOSITION
The judgment is affirmed on the first cause of action (declaratory relief), and we remand the matter with directions for the trial court to modify the judgment by dismissing the second, third, fourth, and sixth causes of action without prejudice as premature. We grant Respondents' motion for judicial notice. Respondents shall recover their costs on appeal.
O'LEARY, P. J. WE CONCUR: MOORE, J. FYBEL, J.