Preview
1 GATES EISENHART DAWSON
Steven D. McLellan (SBN 311395)
2 James L. Dawson (SBN 73521)
Marc A. Eisenhart (SBN 188518)
3 Claire A. Melehani (SBN 324763)
125 South Market Street, Suite 1200
4 San Jose, CA 95113-2288
Telephone: (408) 288-8100
5 Fax: (408) 288-9409
E-mail: sdm@gedlaw.com; jld@gedlaw.com; mae@gedlaw.com; cam@gedlaw.com
6
Janet Fogarty & Associates
7 Janet E. Fogarty (SBN 157460)
PO Box 1579
8 Millbrae, CA 94030
Telephone: (650) 652-5601
9 Email: jfogartylawfirm@yahoo.com
10 Attorneys for: King Plaza Center, LLC
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF SAN MATEO – UNLIMITED JURISDICTION
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15 DBP INVESTMENTS, a California General Lead Case No: CIV538897
Partnership (Consolidated with Case No. 19CIV07118)
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Plaintiff, KING PLAZA CENTER, LLC’S
17 CLOSING BRIEF
18
19 vs. Date: February 28, 2023
Time: 9:00 AM
20 Dept: 21
Judge: Hon. Robert D. Foiles
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KING PLAZA CENTER, LLC, a Delaware
22 Limited Liability Company, BUA-QUACH, an Trial Date: February 28, 2023
individual, SOVAN LIEN, an individual, Complaint Filed: June 1, 2016
23 DONG VUONG, an individual, THANH LAI,
and DOES 1 through 10
24
25 Defendants.
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King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 King Plaza Center, LLC (“King”) submits this closing brief to address the issues posed
2 by this Court after oral closing arguments: (1) the impact of Mr. Litke’s failure to sign the
3 second version of the REA (Exhibit 104); (2) the impact of Civil Code section 1217; (3)
4 whether estoppel applies with respect to the statute of frauds; and (4) the Court’s scope and
5 authority in a declaratory relief action.
6
7 1. The impact of Mr. Litke’s failure to sign the second version of the REA.
8 Mr. Litke did not sign the second version of the REA. Exhibit 103, the first version of
9 the REA, was signed January of 1997, as evidenced by the notarization. Exhibit 104, the second
10 version of the REA, added in the essential term of the property description, but Mr. Litke did
11 not sign it. The notarization for Mr. Litke’s signature in Exhibit 104 is the same as the one in
12 Exhibit 103. Plaintiff did not produce evidence of Mr. Litke’s signature for the second version
13 of the REA. So, Mr. Litke did not assent to the REA. “It is fundamental that every contract
14 requires mutual assent or consent.” (Russell v. Union Oil Co. (1970) 7 Cal.App.3d 110, 114.)
15 DBP may argue that assent exists because Mr. Litke accepted the REA’s benefits. Not
16 so. “While an assumption of obligations may be implied from the acceptance of benefits under a
17 contract, that is so only ‘so far as the facts are known, or ought to be known, to the person
18 accepting’.” (Unterberger v. Red Bull North America, Inc. (2008) 162 Cal.App.4th 414, 421
19 [citing Civ. Code § 1589].) The evidence adduced at trial shows no such acceptance occurred.
20 First, two different escrows were set up for the REA and the deeds, contrary to Mr.
21 Bocci’s testimony that the transaction would occur through one escrow. Additionally, Mr. Litke
22 signed the deed giving his half interest to DBP on November 1, 2000, after the REA had been
23 signed a second time by DBP. (Compare Ex. 108 [Litke’s signature] with Ex. 104 [DBP’s
24 signatures in January and February of 2000].) Further, Mr. Litke signed the deed before Kay
25 Lowrey, the notary who notarized DBP’s signatures on the REA. (See Ex. 104.) The fact that
26 Kay Lowrey told DBP to sign the REA a second time (that was not recorded) and had Mr. Litke
27 sign the deed (that was ultimately recorded) is proof that Mr. Litke did not intend by his actions
28 to accept the REA.
King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 Further, Mr. Litke did not follow the REA, such as rotating maintenance (Ex. 104 at §
2 6(a) [providing that maintenance and repair “shall be performance by DBP and KPP on a
3 rotating basis”]), meeting and conferring over a budget and determining what maintenance and
4 repair need to be done (id. at § 6(b)), and issuing certificates of insurance for the common area.
5 (Id. at § 7(a).) That Mr. Litke only split the CAM expenses 50/50 does not show that he
6 intended to accept the REA. Indeed, Mr. Bocci testified that he and Mr. Litke had a
7 conversation about Mr. Litke doing the ongoing maintenance, indicating that the parties had a
8 separate agreement. Further proof of a separate agreement comes from Mr. Steve DeVincenzi, a
9 partner at DBP and a signatory to the REA. In a conversation memorialized by Mr. Edmond Ho,
10 Mr. Steve DeVincenzi told Ms. Tammy Ho that DBP had a “verbal agreement” with Mr. Litke
11 “to share the parking lot, and to split the cost to maintain it.” (Ex. 122.) “Steve [DeVincenzi]
12 kept pushing the point that they had a verbal agreement…” (Ibid.) DBP did not call Mr. Steve
13 DeVincenzi to dispute this. The evidence shows that Mr. Litke never accepted the REA.
14 DBP may also argue that Mr. Litke’s failure to sign the second version of the REA does
15 not implicate the statute of frauds because he signed the first version. If DBP were to make that
16 argument, DBP would be wrong. “A memorandum satisfies the statute of frauds if it identifies
17 the subject of the parties’ agreement, shows that they made a contract, and states the essential
18 contract terms with reasonable certainty.” (Sterling v. Taylor (2007) 40 Cal.4th 757, 766
19 [emphasis added].) “Because the memorandum itself must include the essential contractual
20 terms, it is clear that extrinsic evidence cannot supply those required terms.” (Id. at p. 767
21 [emphasis in original].) “In order to grant an easement it is necessary to describe both the land
22 to be subjected to a use and the use to which the land is to be subjected.” (City of Glendora v.
23 Faus (1967) 148 Cal.App.2d 920, 926 [emphasis added].) “There can be no question but that an
24 easement containing of a right of way must contain a description of the land which is to be
25 subjected to the servitude with sufficient clearness to locate it.” (Pacific Gas & Elec. Co. v.
26 Crockett Land & Cattle Co. (1924) 70 Cal.App. 283, 293.)
27 The 1997 version of the REA lacks any property description. The APNs are blank, as are
28 the spaces defining the parcels. DBP argued that the definition of the DBP Common Area and
King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 KPP Common Area created a sufficient description, but that is not true. Both definitions refer
2 back to “DBP Parcel” and “KPP Parcel,” which are defined as “Parcel A” or “Parcel B,” which
3 are blank spaces. The 1997 version of the REA does not satisfy the statute.
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5 2. Does Civil Code section 1217 apply in the case of an unrecorded easement?
6 Civil Code section 1217 does not apply here because King did not have “notice” that the
7 easement was in effect. “An unrecorded instrument is valid as between the parties thereto and
8 those who have notice thereof.” (Civ. Code § 1217.) “A person generally has ‘notice’ of a
9 particular fact if that person has knowledge of circumstances which, upon reasonable inquiry,
10 would lead to that particular fact.” (First Fidelity Thrift & Loan Ass’n v. Alliance Bank (1998)
11 60 Cal.App.4th 1433, 1443 (“First Fidelity”).)
12 In First Fidelity, a borrower obtained a loan from First Fidelity secured by deeds of trust
13 on a commercial property and a residential property. (Id. at p. 1436.) The borrower paid a
14 capital reduction payment, such that the deed of trust on the residential property was to be
15 partially reconveyed. (Ibid.) However, mistakenly, the trustee partially reconveyed the deed of
16 trust on the commercial property. (Ibid.) The borrower then sought another loan from Alliance
17 Bank, and informed Alliance that there was “an encumbrance against this [commercial] property
18 in favor of First Fidelity.” (Ibid.) The borrower later obtained another loan from a third bank
19 secured by deed of trust on the commercial property. (Id. at p. 1437.) Alliance reviewed a title
20 report showing that First Fidelity did not have an encumbrance on the commercial property.
21 (Ibid.) Alliance discussed this with the borrower and the third bank, but not with First Fidelity.
22 (Id. at pp. 1437-1438.) Alliance funded the loan and recorded a deed of trust on the commercial
23 property. (Ibid.) A lawsuit arose, and Alliance brought a summary judgment motion arguing that
24 it lacked notice of First Fidelity’s deed of trust, and the court granted it. (Id. at pp. 1439-1440.)
25 The court of appeal affirmed. The issue turned on whether Alliance had “notice.” (Id. at
26 pp. 1440-1443.) The court held that “there is no authority for the proposition that a prospective
27 lender, learning that a prior deed of trust had been reconveyed, has a duty to investigate further
28 to determine whether that reconveyance was in error.” (Id. at pp. 1444-1445.) The court held
King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 that there was no “notice” of the deed of trust because “Alliance obtained further clarification
2 from the borrower, and further information from the non-party bank. Additionally, Alliance
3 consulted a title report. The information ultimately assembled by Alliance from these three
4 sources was both internally consistent and consistent with common secured lending procedures:
5 First Fidelity once had a deed of trust, but it had been reconveyed.” (Id. at p. 1445.)
6 Here, the REA needed to be recorded to be effective (a condition precedent), but it was
7 not recorded. (Stipulated Facts ¶¶ 16-17.) Though King received the REA before it purchased
8 the property, it also knew that the REA had not been recorded. (See Ex. 116.) King asked for
9 further information about whether the terms had been followed, and Ms. Stella Chu told King
10 that the parties did not follow the REA’s terms. (See Ex. 111.) Finally, Mr. Litke disclaimed the
11 REA’s validity to King: “King Plaza Partners will not be responsible for the validity of that
12 Agreement.” (Ex. 116.) These facts are similar to First Fidelity. King knew of the REA, just as
13 Alliance knew of a deed of trust on the commercial property. King conducted a reasonable
14 inquiry and learned that the REA was not in effect because (1) it had not been recorded, and (2)
15 the parties were not complying with its terms, just as Alliance contacted the borrower and the
16 third-party bank to determine what happened to First Fidelity’s deed of trust. Therefore, King
17 did not have “notice” that there was an effective easement between the parties.
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19 3. Do the facts support estoppel to apply as to the statute of frauds?
20 “A party may be estopped from asserting the statute of frauds as a defense to a contract
21 in order to prevent fraud that would result from refusal to enforce [an] oral contract[ ].” (Smyth
22 v. Berman (2019) 31 Cal.App.5th 183, 198 (“Smyth”) [internal quotation marks omitted].)
23 “Before estoppel applies, the party so pleading must allege that refusal to enforce the oral
24 contract will result in (1) ‘unconscionable injury’ because the party pleading estoppel ‘seriously
25 ... change[d] its position in reliance on the [oral] contract,’ or (2) the ‘unjust enrichment’ of the
26 party pleading the statute of frauds as a defense because that party ‘receiv[ed] the benefits of the
27 other’s performance’.” (Ibid.) “A party is estopped to assert the statute of frauds as a defense
28 ‘where [the] party, by words or conduct, represents that he will stand by his oral agreement, and
King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 the other party, in reliance upon that representation, changes his position, to his detriment’.”
2 (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1040 fn.10.)
3 Estoppel does not apply here for multiple reasons. First, DBP cannot show that its
4 performance was “unequivocally referable” to asserted agreement:
5 To remove an oral contract from the operation of the statute of
frauds, the acts of performance relied on for that purpose must be
6 unequivocally referable to the oral agreement alone. * * * The acts
relied on must clearly appear to have been performed in pursuance
7 of a particular contract itself and not because of the existence of
some other contractual relationship or for some other reason. It is
8 not enough, therefore, that the acts of part performance relied on
among to evidence of some contractual agreement. The acts in
9 question must constitute unequivocal and satisfactory evidence
only of the contract sought to be removed from the operation of the
10 statute.
11 (American Cas. Co. v. Curran Productions, Inc. (1963) 212 Cal.App.2d 386, 392-393; see also
12 Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 555
13 [“[T]o constitute part performance, the relevant acts either must ‘unequivocally refer[ ]’ to the
14 contract [citation], or ‘clearly relate’ to its terms. [Citation.] Such conduct satisfies the
15 evidentiary function of the statute of frauds by confirming that a bargain was in fact reached.”].)
16 It was uncontradicted that DBP did not talk to King about the REA until 2015, more
17 than eight years after King purchased the property. Further, King submitted evidence that the
18 CAM payments were based on a separate arrangement with DBP. (Ex. 227.) The parties did not
19 follow the other provisions of the REA. As Ms. Sabrina Ho testified, at no time did DBP bring
20 up the REA when the parties had disputes about what should be a CAM expense. Further, Mr.
21 Steve DeVincenzi, stated that it was a “verbal agreement” between Classic and the prior owner
22 to share parking and split the costs. (Ex. 122.) No evidence shows that King represented to DBP
23 that the REA was binding despite not being signed by Mr. Litke, and despite not being recorded,
24 or that DBP detrimentally relied upon such a representation. Estoppel is inapplicable.
25 Second, DBP’s payment of money, as a matter of law, is insufficient to show
26 “unconscionable injury” or that DBP changed its position. “The payment of money is not
27 ‘sufficient part performance to take an oral agreement out of the statute of frauds’.” (Smyth,
28 supra, 31 Cal.App.5th at p. 198.) “The payment money is not ‘sufficient part performance to
King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 take the oral agreement out of the * * * statute of frauds’, [Citation] for the party paying money
2 ‘under an invalid contract * * * has an adequate remedy at law’.” (Anderson v. Stansbury (1952)
3 38 Cal.2d 707, 716.) As such, DBP’s CAM payments are insufficient to support estoppel.
4 Third, there is no basis for “unconscionable injury.” The zoning requires that the parties
5 have shared parking (see Ex. 106), and DBP presented no evidence that King prevented anyone
6 from using the parking spots on King’s property. All King did was implement time restricted
7 parking, which the REA and the zoning do not prohibit. Indeed, DBP contemplated time
8 restricted parking being at the Center when it submitted a parking management plan that
9 included time restricted parking when its partners signed the first version of the REA. (See Exs.
10 217 & 218.) As both Ms. Jeanne Ho and Sabrina Ho testified, time restricted parking existed at
11 the Center since King purchased it. In short, DBP’s evidence does not show “unconscionable
12 injury” or “unjust enrichment” based upon any detrimental reliance to assert estoppel.
13 Nor does estoppel apply relating to King’s dismissed cross-complaint. That is judicial
14 estoppel. Judicial estoppel requires, at the very least, that the party taking a position “was
15 successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as
16 true).” (The Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 842.) No evidence shows
17 that the court considered the merits of King’s cross-complaint, or accepted its allegations.
18 In sum, estoppel does not apply to prevent King from asserting the statute of frauds.
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20 4. What is scope of the Court’s power and duty in granting declaratory relief?
21 A declaratory relief action has two elements: “(1) a proper subject of declaratory relief,
22 and (2) an actual controversy involving justiciable questions relating to the rights or obligations
23 of a party.” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546 [footnote and internal quotation
24 marks omitted].) Yet, “[i]t is not essential to entitle a plaintiff to seek declaratory relief, that he
25 should establish his right to a favorable declaration. The purpose of the declaratory judgment is
26 to ‘serve some practical end in quieting or stabilizing an uncertain or disputed jural relation’.”
27 (Columbia Pictures Corp. v. De Toth (1945) 26 Cal.2d 753, 760.) “Complainant’s relief may
28
King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 consist only of a declaration that he has no rights except an adjudication of that fact, but to that
2 much he is entitled in any event.” (Petersen v. Ridenour (1955) 135 Cal.App.2d 720, 728.)
3 Further, “[a]n action for declaratory relief is equitable, and a court of equity will
4 administer complete relief when it assumes jurisdiction of a controversy.” (Westerholm v. 20th
5 Century Ins. Co. (1976) 58 Cal.App.3d 628, 632 fn.1.) “In an action seeking declaratory relief
6 the court must do complete justice, even though it extend beyond the technical reach of the
7 pleadings.” (Bisno v. Sax (1959) 175 Cal.App.2d 714, 731.) “In an action for declaratory relief,
8 the proper function of the court is to make a full and complete declaration, disposing of all
9 questions of rights, status or other legal relations encountered in construing the instrument
10 before it.” (Petersen v. Ridenour (1955) 135 Cal.App.2d 720, 728.) Accordingly, “[i]t is the
11 duty of the court hearing an action for declaratory relief to make a complete determination of
12 the controversy.” (Abbott v. City of San Diego (1958) 165 Cal.App.2d 511, 525.) “There is […]
13 authority that in an action for declaratory relief the rights of the parties are to be determined
14 upon the facts found and are not limited by the […] issues joined or by the claims of
15 counse[l]. [Citations] But in order for the issue to be determined there must be evidence directed
16 to the issue.” (Birdsong v. Welch (1960) 181 Cal.App.2d 749, 754.) “[I]n actions for declaratory
17 relief, the court should attempt to do complete equity, resolving all questions actually involved
18 in the case as between all of the respective parties.” (Amerson v. Christman (1968) 261
19 Cal.App.2d 811, 823.) “[I]n an action for declaratory relief the rights of the parties are to be
20 determined upon the facts found and are not limited by the issues joined or by claims of
21 counsel.” (Id. at p. 824.)
22 Here, DBP has sought a declaration that the REA is and has been effective. It does not
23 limit the declaration to simply declaring an easement exists through the REA. A contract “is an
24 agreement to do or not to do a certain thing.” (Civ. Code § 1549.) “An easement, on the other
25 hand, creates an interest in the land. […] It is an incorporeal interest in the servient estate.”
26 (Elliott v. McCombs (1941) 17 Cal.2d 23, 30.) By seeking a declaration that the REA, a
27 contract, is effective, DBP seeks more than a declaration that an easement by grant exists. Also,
28 DBP’s complaint puts time restricted parking at issue by alleging that the dispute arose when
King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 King put up restrictions on its alleged easement (see complaint at ¶ 9), an issue that requires an
2 adjudication of the easement’s existence and scope. That does not mean that the Court needs to
3 determine the number and location of time-restricted parking spaces, an issue best left to the
4 City. The dispute concerns whether the REA prohibits time-limited parking restrictions.
5 The evidence shows that the parties dispute the easement’s existence, its scope, and
6 whether the other terms of the REA govern. This Court should adjudicate these issues.
7 GATES EISENHART DAWSON
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9 Dated: March 8, 2023 _______________________________
By: Steven D. McLellan
10 Attorneys for King Plaza Center, LLC
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King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897
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1 Case Name: DBP Investments v King Plaza Center, LLC, et al.
2 Court: San Mateo County Superior Court
Case No.: CIV538897 (Consolidated with Case# 19CIV07118)
3
PROOF OF SERVICE
4
I am a citizen of the United States and a resident of Santa Clara County. I am over
5
the age of eighteen years and not a party to the within action. My business address is 125
6
South Market Street, Suite 1200, San Jose, California, 95113-2288. On March 8, 2023, I
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served the following documents:
8
9 KING PLAZA CENTER, LLC’S CLOSING BRIEF
10 X BY ELECTRONIC MAIL, to the following party(ies) at the electronic mail address(es) as indicated
below:
11
12 Attorney for DBP Investments Attorney for DBP Investments
Steven B. Piser John L. Fitzgerald
13 Law Offices of Steven B. Piser Law Offices of John L. Fitzgerald
1970 Broadway, Suite 600 44 Montgomery St., Suite 3580
14 Oakland, CA 94612 San Francisco, CA 94104
15 E: esperanza@stevenpiser.com E: john@jlfitzgeraldlaw.com
16 Attorney for Bua-Quach, Sovan Lien, Co-Counsel for King Plaza, LLC
Dong Vuong, Thanh Lai Janet E. Fogarty
17 James M. Barrett Janet Fogarty & Associates
18 Law Office of James M. Barrett P.O. Box 1579
100 W. El Camino Real, Suite 81 Millbrae, CA 94030
19 Mountain View, CA 94040 E: jfogartylawfirm@yahoo.com
E: jb@jamesbarrettlaw.com
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I declare under penalty of perjury that the foregoing is true and correct, and that this
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declaration was executed in San Jose, California on March 8, 2023.
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________________________________
24 Sharlene Strabley
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Proof of Service
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Preview
1 GATES EISENHART DAWSON Steven D. McLellan (SBN 311395) 2 James L. Dawson (SBN 73521) Marc A. Eisenhart (SBN 188518) 3 Claire A. Melehani (SBN 324763) 125 South Market Street, Suite 1200 4 San Jose, CA 95113-2288 Telephone: (408) 288-8100 5 Fax: (408) 288-9409 E-mail: sdm@gedlaw.com; jld@gedlaw.com; mae@gedlaw.com; cam@gedlaw.com 6 Janet Fogarty & Associates 7 Janet E. Fogarty (SBN 157460) PO Box 1579 8 Millbrae, CA 94030 Telephone: (650) 652-5601 9 Email: jfogartylawfirm@yahoo.com 10 Attorneys for: King Plaza Center, LLC 11 12 SUPERIOR COURT OF THE STATE OF CALIFORNIA 13 COUNTY OF SAN MATEO – UNLIMITED JURISDICTION 14 15 DBP INVESTMENTS, a California General Lead Case No: CIV538897 Partnership (Consolidated with Case No. 19CIV07118) 16 Plaintiff, KING PLAZA CENTER, LLC’S 17 CLOSING BRIEF 18 19 vs. Date: February 28, 2023 Time: 9:00 AM 20 Dept: 21 Judge: Hon. Robert D. Foiles 21 KING PLAZA CENTER, LLC, a Delaware 22 Limited Liability Company, BUA-QUACH, an Trial Date: February 28, 2023 individual, SOVAN LIEN, an individual, Complaint Filed: June 1, 2016 23 DONG VUONG, an individual, THANH LAI, and DOES 1 through 10 24 25 Defendants. 26 27 28 King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 1 1 King Plaza Center, LLC (“King”) submits this closing brief to address the issues posed 2 by this Court after oral closing arguments: (1) the impact of Mr. Litke’s failure to sign the 3 second version of the REA (Exhibit 104); (2) the impact of Civil Code section 1217; (3) 4 whether estoppel applies with respect to the statute of frauds; and (4) the Court’s scope and 5 authority in a declaratory relief action. 6 7 1. The impact of Mr. Litke’s failure to sign the second version of the REA. 8 Mr. Litke did not sign the second version of the REA. Exhibit 103, the first version of 9 the REA, was signed January of 1997, as evidenced by the notarization. Exhibit 104, the second 10 version of the REA, added in the essential term of the property description, but Mr. Litke did 11 not sign it. The notarization for Mr. Litke’s signature in Exhibit 104 is the same as the one in 12 Exhibit 103. Plaintiff did not produce evidence of Mr. Litke’s signature for the second version 13 of the REA. So, Mr. Litke did not assent to the REA. “It is fundamental that every contract 14 requires mutual assent or consent.” (Russell v. Union Oil Co. (1970) 7 Cal.App.3d 110, 114.) 15 DBP may argue that assent exists because Mr. Litke accepted the REA’s benefits. Not 16 so. “While an assumption of obligations may be implied from the acceptance of benefits under a 17 contract, that is so only ‘so far as the facts are known, or ought to be known, to the person 18 accepting’.” (Unterberger v. Red Bull North America, Inc. (2008) 162 Cal.App.4th 414, 421 19 [citing Civ. Code § 1589].) The evidence adduced at trial shows no such acceptance occurred. 20 First, two different escrows were set up for the REA and the deeds, contrary to Mr. 21 Bocci’s testimony that the transaction would occur through one escrow. Additionally, Mr. Litke 22 signed the deed giving his half interest to DBP on November 1, 2000, after the REA had been 23 signed a second time by DBP. (Compare Ex. 108 [Litke’s signature] with Ex. 104 [DBP’s 24 signatures in January and February of 2000].) Further, Mr. Litke signed the deed before Kay 25 Lowrey, the notary who notarized DBP’s signatures on the REA. (See Ex. 104.) The fact that 26 Kay Lowrey told DBP to sign the REA a second time (that was not recorded) and had Mr. Litke 27 sign the deed (that was ultimately recorded) is proof that Mr. Litke did not intend by his actions 28 to accept the REA. King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 2 1 Further, Mr. Litke did not follow the REA, such as rotating maintenance (Ex. 104 at § 2 6(a) [providing that maintenance and repair “shall be performance by DBP and KPP on a 3 rotating basis”]), meeting and conferring over a budget and determining what maintenance and 4 repair need to be done (id. at § 6(b)), and issuing certificates of insurance for the common area. 5 (Id. at § 7(a).) That Mr. Litke only split the CAM expenses 50/50 does not show that he 6 intended to accept the REA. Indeed, Mr. Bocci testified that he and Mr. Litke had a 7 conversation about Mr. Litke doing the ongoing maintenance, indicating that the parties had a 8 separate agreement. Further proof of a separate agreement comes from Mr. Steve DeVincenzi, a 9 partner at DBP and a signatory to the REA. In a conversation memorialized by Mr. Edmond Ho, 10 Mr. Steve DeVincenzi told Ms. Tammy Ho that DBP had a “verbal agreement” with Mr. Litke 11 “to share the parking lot, and to split the cost to maintain it.” (Ex. 122.) “Steve [DeVincenzi] 12 kept pushing the point that they had a verbal agreement…” (Ibid.) DBP did not call Mr. Steve 13 DeVincenzi to dispute this. The evidence shows that Mr. Litke never accepted the REA. 14 DBP may also argue that Mr. Litke’s failure to sign the second version of the REA does 15 not implicate the statute of frauds because he signed the first version. If DBP were to make that 16 argument, DBP would be wrong. “A memorandum satisfies the statute of frauds if it identifies 17 the subject of the parties’ agreement, shows that they made a contract, and states the essential 18 contract terms with reasonable certainty.” (Sterling v. Taylor (2007) 40 Cal.4th 757, 766 19 [emphasis added].) “Because the memorandum itself must include the essential contractual 20 terms, it is clear that extrinsic evidence cannot supply those required terms.” (Id. at p. 767 21 [emphasis in original].) “In order to grant an easement it is necessary to describe both the land 22 to be subjected to a use and the use to which the land is to be subjected.” (City of Glendora v. 23 Faus (1967) 148 Cal.App.2d 920, 926 [emphasis added].) “There can be no question but that an 24 easement containing of a right of way must contain a description of the land which is to be 25 subjected to the servitude with sufficient clearness to locate it.” (Pacific Gas & Elec. Co. v. 26 Crockett Land & Cattle Co. (1924) 70 Cal.App. 283, 293.) 27 The 1997 version of the REA lacks any property description. The APNs are blank, as are 28 the spaces defining the parcels. DBP argued that the definition of the DBP Common Area and King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 3 1 KPP Common Area created a sufficient description, but that is not true. Both definitions refer 2 back to “DBP Parcel” and “KPP Parcel,” which are defined as “Parcel A” or “Parcel B,” which 3 are blank spaces. The 1997 version of the REA does not satisfy the statute. 4 5 2. Does Civil Code section 1217 apply in the case of an unrecorded easement? 6 Civil Code section 1217 does not apply here because King did not have “notice” that the 7 easement was in effect. “An unrecorded instrument is valid as between the parties thereto and 8 those who have notice thereof.” (Civ. Code § 1217.) “A person generally has ‘notice’ of a 9 particular fact if that person has knowledge of circumstances which, upon reasonable inquiry, 10 would lead to that particular fact.” (First Fidelity Thrift & Loan Ass’n v. Alliance Bank (1998) 11 60 Cal.App.4th 1433, 1443 (“First Fidelity”).) 12 In First Fidelity, a borrower obtained a loan from First Fidelity secured by deeds of trust 13 on a commercial property and a residential property. (Id. at p. 1436.) The borrower paid a 14 capital reduction payment, such that the deed of trust on the residential property was to be 15 partially reconveyed. (Ibid.) However, mistakenly, the trustee partially reconveyed the deed of 16 trust on the commercial property. (Ibid.) The borrower then sought another loan from Alliance 17 Bank, and informed Alliance that there was “an encumbrance against this [commercial] property 18 in favor of First Fidelity.” (Ibid.) The borrower later obtained another loan from a third bank 19 secured by deed of trust on the commercial property. (Id. at p. 1437.) Alliance reviewed a title 20 report showing that First Fidelity did not have an encumbrance on the commercial property. 21 (Ibid.) Alliance discussed this with the borrower and the third bank, but not with First Fidelity. 22 (Id. at pp. 1437-1438.) Alliance funded the loan and recorded a deed of trust on the commercial 23 property. (Ibid.) A lawsuit arose, and Alliance brought a summary judgment motion arguing that 24 it lacked notice of First Fidelity’s deed of trust, and the court granted it. (Id. at pp. 1439-1440.) 25 The court of appeal affirmed. The issue turned on whether Alliance had “notice.” (Id. at 26 pp. 1440-1443.) The court held that “there is no authority for the proposition that a prospective 27 lender, learning that a prior deed of trust had been reconveyed, has a duty to investigate further 28 to determine whether that reconveyance was in error.” (Id. at pp. 1444-1445.) The court held King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 4 1 that there was no “notice” of the deed of trust because “Alliance obtained further clarification 2 from the borrower, and further information from the non-party bank. Additionally, Alliance 3 consulted a title report. The information ultimately assembled by Alliance from these three 4 sources was both internally consistent and consistent with common secured lending procedures: 5 First Fidelity once had a deed of trust, but it had been reconveyed.” (Id. at p. 1445.) 6 Here, the REA needed to be recorded to be effective (a condition precedent), but it was 7 not recorded. (Stipulated Facts ¶¶ 16-17.) Though King received the REA before it purchased 8 the property, it also knew that the REA had not been recorded. (See Ex. 116.) King asked for 9 further information about whether the terms had been followed, and Ms. Stella Chu told King 10 that the parties did not follow the REA’s terms. (See Ex. 111.) Finally, Mr. Litke disclaimed the 11 REA’s validity to King: “King Plaza Partners will not be responsible for the validity of that 12 Agreement.” (Ex. 116.) These facts are similar to First Fidelity. King knew of the REA, just as 13 Alliance knew of a deed of trust on the commercial property. King conducted a reasonable 14 inquiry and learned that the REA was not in effect because (1) it had not been recorded, and (2) 15 the parties were not complying with its terms, just as Alliance contacted the borrower and the 16 third-party bank to determine what happened to First Fidelity’s deed of trust. Therefore, King 17 did not have “notice” that there was an effective easement between the parties. 18 19 3. Do the facts support estoppel to apply as to the statute of frauds? 20 “A party may be estopped from asserting the statute of frauds as a defense to a contract 21 in order to prevent fraud that would result from refusal to enforce [an] oral contract[ ].” (Smyth 22 v. Berman (2019) 31 Cal.App.5th 183, 198 (“Smyth”) [internal quotation marks omitted].) 23 “Before estoppel applies, the party so pleading must allege that refusal to enforce the oral 24 contract will result in (1) ‘unconscionable injury’ because the party pleading estoppel ‘seriously 25 ... change[d] its position in reliance on the [oral] contract,’ or (2) the ‘unjust enrichment’ of the 26 party pleading the statute of frauds as a defense because that party ‘receiv[ed] the benefits of the 27 other’s performance’.” (Ibid.) “A party is estopped to assert the statute of frauds as a defense 28 ‘where [the] party, by words or conduct, represents that he will stand by his oral agreement, and King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 5 1 the other party, in reliance upon that representation, changes his position, to his detriment’.” 2 (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1040 fn.10.) 3 Estoppel does not apply here for multiple reasons. First, DBP cannot show that its 4 performance was “unequivocally referable” to asserted agreement: 5 To remove an oral contract from the operation of the statute of frauds, the acts of performance relied on for that purpose must be 6 unequivocally referable to the oral agreement alone. * * * The acts relied on must clearly appear to have been performed in pursuance 7 of a particular contract itself and not because of the existence of some other contractual relationship or for some other reason. It is 8 not enough, therefore, that the acts of part performance relied on among to evidence of some contractual agreement. The acts in 9 question must constitute unequivocal and satisfactory evidence only of the contract sought to be removed from the operation of the 10 statute. 11 (American Cas. Co. v. Curran Productions, Inc. (1963) 212 Cal.App.2d 386, 392-393; see also 12 Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 555 13 [“[T]o constitute part performance, the relevant acts either must ‘unequivocally refer[ ]’ to the 14 contract [citation], or ‘clearly relate’ to its terms. [Citation.] Such conduct satisfies the 15 evidentiary function of the statute of frauds by confirming that a bargain was in fact reached.”].) 16 It was uncontradicted that DBP did not talk to King about the REA until 2015, more 17 than eight years after King purchased the property. Further, King submitted evidence that the 18 CAM payments were based on a separate arrangement with DBP. (Ex. 227.) The parties did not 19 follow the other provisions of the REA. As Ms. Sabrina Ho testified, at no time did DBP bring 20 up the REA when the parties had disputes about what should be a CAM expense. Further, Mr. 21 Steve DeVincenzi, stated that it was a “verbal agreement” between Classic and the prior owner 22 to share parking and split the costs. (Ex. 122.) No evidence shows that King represented to DBP 23 that the REA was binding despite not being signed by Mr. Litke, and despite not being recorded, 24 or that DBP detrimentally relied upon such a representation. Estoppel is inapplicable. 25 Second, DBP’s payment of money, as a matter of law, is insufficient to show 26 “unconscionable injury” or that DBP changed its position. “The payment of money is not 27 ‘sufficient part performance to take an oral agreement out of the statute of frauds’.” (Smyth, 28 supra, 31 Cal.App.5th at p. 198.) “The payment money is not ‘sufficient part performance to King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 6 1 take the oral agreement out of the * * * statute of frauds’, [Citation] for the party paying money 2 ‘under an invalid contract * * * has an adequate remedy at law’.” (Anderson v. Stansbury (1952) 3 38 Cal.2d 707, 716.) As such, DBP’s CAM payments are insufficient to support estoppel. 4 Third, there is no basis for “unconscionable injury.” The zoning requires that the parties 5 have shared parking (see Ex. 106), and DBP presented no evidence that King prevented anyone 6 from using the parking spots on King’s property. All King did was implement time restricted 7 parking, which the REA and the zoning do not prohibit. Indeed, DBP contemplated time 8 restricted parking being at the Center when it submitted a parking management plan that 9 included time restricted parking when its partners signed the first version of the REA. (See Exs. 10 217 & 218.) As both Ms. Jeanne Ho and Sabrina Ho testified, time restricted parking existed at 11 the Center since King purchased it. In short, DBP’s evidence does not show “unconscionable 12 injury” or “unjust enrichment” based upon any detrimental reliance to assert estoppel. 13 Nor does estoppel apply relating to King’s dismissed cross-complaint. That is judicial 14 estoppel. Judicial estoppel requires, at the very least, that the party taking a position “was 15 successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as 16 true).” (The Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 842.) No evidence shows 17 that the court considered the merits of King’s cross-complaint, or accepted its allegations. 18 In sum, estoppel does not apply to prevent King from asserting the statute of frauds. 19 20 4. What is scope of the Court’s power and duty in granting declaratory relief? 21 A declaratory relief action has two elements: “(1) a proper subject of declaratory relief, 22 and (2) an actual controversy involving justiciable questions relating to the rights or obligations 23 of a party.” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546 [footnote and internal quotation 24 marks omitted].) Yet, “[i]t is not essential to entitle a plaintiff to seek declaratory relief, that he 25 should establish his right to a favorable declaration. The purpose of the declaratory judgment is 26 to ‘serve some practical end in quieting or stabilizing an uncertain or disputed jural relation’.” 27 (Columbia Pictures Corp. v. De Toth (1945) 26 Cal.2d 753, 760.) “Complainant’s relief may 28 King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 7 1 consist only of a declaration that he has no rights except an adjudication of that fact, but to that 2 much he is entitled in any event.” (Petersen v. Ridenour (1955) 135 Cal.App.2d 720, 728.) 3 Further, “[a]n action for declaratory relief is equitable, and a court of equity will 4 administer complete relief when it assumes jurisdiction of a controversy.” (Westerholm v. 20th 5 Century Ins. Co. (1976) 58 Cal.App.3d 628, 632 fn.1.) “In an action seeking declaratory relief 6 the court must do complete justice, even though it extend beyond the technical reach of the 7 pleadings.” (Bisno v. Sax (1959) 175 Cal.App.2d 714, 731.) “In an action for declaratory relief, 8 the proper function of the court is to make a full and complete declaration, disposing of all 9 questions of rights, status or other legal relations encountered in construing the instrument 10 before it.” (Petersen v. Ridenour (1955) 135 Cal.App.2d 720, 728.) Accordingly, “[i]t is the 11 duty of the court hearing an action for declaratory relief to make a complete determination of 12 the controversy.” (Abbott v. City of San Diego (1958) 165 Cal.App.2d 511, 525.) “There is […] 13 authority that in an action for declaratory relief the rights of the parties are to be determined 14 upon the facts found and are not limited by the […] issues joined or by the claims of 15 counse[l]. [Citations] But in order for the issue to be determined there must be evidence directed 16 to the issue.” (Birdsong v. Welch (1960) 181 Cal.App.2d 749, 754.) “[I]n actions for declaratory 17 relief, the court should attempt to do complete equity, resolving all questions actually involved 18 in the case as between all of the respective parties.” (Amerson v. Christman (1968) 261 19 Cal.App.2d 811, 823.) “[I]n an action for declaratory relief the rights of the parties are to be 20 determined upon the facts found and are not limited by the issues joined or by claims of 21 counsel.” (Id. at p. 824.) 22 Here, DBP has sought a declaration that the REA is and has been effective. It does not 23 limit the declaration to simply declaring an easement exists through the REA. A contract “is an 24 agreement to do or not to do a certain thing.” (Civ. Code § 1549.) “An easement, on the other 25 hand, creates an interest in the land. […] It is an incorporeal interest in the servient estate.” 26 (Elliott v. McCombs (1941) 17 Cal.2d 23, 30.) By seeking a declaration that the REA, a 27 contract, is effective, DBP seeks more than a declaration that an easement by grant exists. Also, 28 DBP’s complaint puts time restricted parking at issue by alleging that the dispute arose when King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 8 1 King put up restrictions on its alleged easement (see complaint at ¶ 9), an issue that requires an 2 adjudication of the easement’s existence and scope. That does not mean that the Court needs to 3 determine the number and location of time-restricted parking spaces, an issue best left to the 4 City. The dispute concerns whether the REA prohibits time-limited parking restrictions. 5 The evidence shows that the parties dispute the easement’s existence, its scope, and 6 whether the other terms of the REA govern. This Court should adjudicate these issues. 7 GATES EISENHART DAWSON 8 9 Dated: March 8, 2023 _______________________________ By: Steven D. McLellan 10 Attorneys for King Plaza Center, LLC 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 King Plaza Center, LLC’s Closing Brief Lead Case No.: CIV538897 9 1 Case Name: DBP Investments v King Plaza Center, LLC, et al. 2 Court: San Mateo County Superior Court Case No.: CIV538897 (Consolidated with Case# 19CIV07118) 3 PROOF OF SERVICE 4 I am a citizen of the United States and a resident of Santa Clara County. I am over 5 the age of eighteen years and not a party to the within action. My business address is 125 6 South Market Street, Suite 1200, San Jose, California, 95113-2288. On March 8, 2023, I 7 served the following documents: 8 9 KING PLAZA CENTER, LLC’S CLOSING BRIEF 10 X BY ELECTRONIC MAIL, to the following party(ies) at the electronic mail address(es) as indicated below: 11 12 Attorney for DBP Investments Attorney for DBP Investments Steven B. Piser John L. Fitzgerald 13 Law Offices of Steven B. Piser Law Offices of John L. Fitzgerald 1970 Broadway, Suite 600 44 Montgomery St., Suite 3580 14 Oakland, CA 94612 San Francisco, CA 94104 15 E: esperanza@stevenpiser.com E: john@jlfitzgeraldlaw.com 16 Attorney for Bua-Quach, Sovan Lien, Co-Counsel for King Plaza, LLC Dong Vuong, Thanh Lai Janet E. Fogarty 17 James M. Barrett Janet Fogarty & Associates 18 Law Office of James M. Barrett P.O. Box 1579 100 W. El Camino Real, Suite 81 Millbrae, CA 94030 19 Mountain View, CA 94040 E: jfogartylawfirm@yahoo.com E: jb@jamesbarrettlaw.com 20 I declare under penalty of perjury that the foregoing is true and correct, and that this 21 declaration was executed in San Jose, California on March 8, 2023. 22 23 ________________________________ 24 Sharlene Strabley 25 26 27 28 Proof of Service 1