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SUPERIOR COURT OF STATE OF CALIFORNIA
FOR THE COUNTY OF BUTTE
EDWARD RICHARD MELINE, ct alv.,
Plaintiffs, CASE NO. 127180
vs. RULING ON OBJECTIONS
JACK MELINE and SHARON MELINE, et al.,
Defendants.
AND RELATED CROSS-ACTION(S)
In 1985, Edward Meline, Jack Meline, Stephen Meline HI and Dorothy Rabo (siblings)
owned adjoining almond orchards in Butte County. Upon advice om their joint attorney and
joint accountant, they leased their orchards to the Meline & Rabo Farms Corporation with each
owning a 25% interest in the Corporation and holding a position as a director.
The lease was for one year and provided that without a written notice of intent to
terminate by a specied date in each year that the lease would be extended for another year. The
lease has not been amended or modied since the original signing.
Edward and his wife, Charlene, and Jack still survive but Dorothy Rabo and Stephen
Meline III are deceased and their interests are owned respectively by the “Rabo Family” and
Stephen and Robert Meline.
Edward and Charlene, herein referred to as Edward, commenced a partition action which
is now nearing completion and the Referee has determined that Edward’s Notice of Intent to
[\J
Terminate the Lease was properly given and the lea'se, therefore, terminated. The Referee has
further ordered that upon completion of the required procedures by Butte County and the various
interested agencies, that the parties would commence separate farming. Stephen (again the
successor to the signatory Stephen) has since the commencement of the partition action, or at
least since the Referee has been involved, asserted that the Corporation is entitled to an owelty
from Edward. Specically, he contends that a large amount of Corporation income (hundreds of
thousands of dollars) has been spent in improving Edward’s ranch of 168 acres (known as the
10 Home Ranch). The improvements include buildings, land leveling, renovation, new orchards and
11 irrigation system. Edward denied any owelty and the matter was set for hearing on April 9, 2008.
12 Prior to the hearing, Edward submitted a written Obj ection asserting that any extrinsic
13 evidence by Stephen was barred by CCP, Section 1856, et seq. (Parol Evidence Rule).
14 Specically, Edward refers to that portion of Paragraph 5, which reads in part:
15 “...at the end ofthe term, or any extension thereof, or upon earlier
termination of this lease, lessee shall surrender the leased premises and its
16 appurtenances, including all improvements thereof made by Lessee, to
Lessor, in the same condition, reasonable use, wear and tear, damage by
17 re, act of God or the elements excepted...”
18 and further to Paragraph 21:
19 “The Lessee agrees that this instrument contains all of the provisions
of the agreement between the parties hereto and that no promise or agreement
20 not contained herein shall be binding on Lessor.”
21 Two earlier leases in 1980 and 1982 contain similar or identical language as the two
22 quoted portions.
23 After taking, over obj ection, some testimony, the Referee directed Counsel for Stephen to
24 make an offer of proof regarding all matters that would be offering in live testimony and
Counsel
25 by exhibits. The Referee ordered that for the purpose only of ruling on the pending Obj ection,
26 specically, parol evidence, that the offered evidence would be deemed to be true. The Referee
27 would additionally read and consider all Corporate minutes (as highlighted) and render a written
28 ruling on the Objection. Depending upon that ruling a further hearing may be set, i.e., if parol
2
evidence was to be received the Referee would hear the witnesses testify and not rely on the
assumption used in this ruling that the offer of prodf would be in fact their testimony. Edward
had a continuing line of obj ections to such parol evidence and at the completion of the offer of
proof, the Rabo interests joined in Edward’s objections and lrther objected as to hearsay, lack
of foundation, assumption of facts not in evidence, relevancy and various privileges. Jack has
not joined in the obj ection but submitted the matter for the Referee’s determination.
The Referee has reviewed all exhibits and considered the offered evidence and sustains
the objection as to the admissibility of parol evidence. Other objections are ruled on below.
The Referee nds the language of the Lease to be clear, unambiguous and set forth in a
fully integrated, written agreement prepared by Corporate Counsel.
The Agreement cannot be reasonably interpreted as contended by Stephen and the
evidence proffered is contrary to the expressed intent contained in the Lease at the time of its
execution by the then interested parties. This agreement was an arm’s length bargain by the
contracting parties and Stephen’s claim as to the meaning in the integrated document was not
raised until after the death of Stephen III and is based on his understanding of the statements of
the accountant and attorney several years before the lease was prepared and signed. The Referee
cannot rewrite the written, integrated document to give it the meaning advanced by Stephen.
Counsel for Stephen has emphasized the Referee’s duty to arrive at a decision that is not
“inequitable”. That is not the test to determine the admissibility of Parol Evidence and the
Referee cannot insert a new provision in the written Lease in order to perhaps make it “more
equitable” twenty-three years after its execution.
After consideration of all the proffered proof (assumed to be true) the Referee sustains the
parol evidence obj ection and further notes that much of the intended testimony may well be
inadmissible hearsay without foundation or based on an assumption of fact not in evidence. The
objection is sustained.
Dated: May 19, 2008. V
gogL éATKINS, REFEREE
PROOF OF SERVICE
The undersigned declares:
Iam a citizen of the United States, over the age of 18 years, and am not a party to this
proceeding. I am a resident of the County of Tehama, State of California. My business address
is P. O. Box 33, Red Bluff, CA 96080.
On May 19, 2008, at Red Bluff, Tehama County, California, I served the within
RULING 0N OBJECTIONS on the parties listed below:
William A. Ward, Esq. John Jeffery Carter, Esq.
A Professional Corporation Carter Wendell Law Oices, LLP
P. O. Box 3606
y—A
#9 Williamsburg Lane
O
Chico, CA 95926 Chico, CA 95927-3606
H
'—'
Nels A. Christensen, Jr., Esq. Charleton S. Pearse, Esq.
Christensen & Schwarz, LLP Slater & Pearse, LLP
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Lenahan, Lee,
One Governors Lane 1030 Fifteenth Street, Suite 300
CA 95926 Sacramento, CA 95814
r—h
u.)
Chico,
James B. Berglund, Esq.
r—I
Richard Crabtree, Esq.
1395 Ridgewood Drive, Suite 300 1838 Feather River Blvd.
CA 95973 Oroville, CA 95965
U1
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Chico,
by placing a copy ofthe above listed document in sealed envelopes, addressing one envelope as
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hereinabove indicated to each of said persons, sealing said envelopes and then depositing the
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same in the United States Mail with postage fully prepaid thereon; that there is a delivery service
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by United States mail at each of the places so addressed, or that there is a regular communication
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by mail between the said place of mailing and each ofthe said places so addressed.
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I declare under penalty of perjury of the laws of the State of California that the foregoing
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is true and correct. Executed on May 19, 2008, at Red Bluff, CA.
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Preview
F 3 guper'sorCourt g L 20 2883 E; W MAY E. ‘ D D By 3 "nan é) g St" landC’W’i puw SUPERIOR COURT OF STATE OF CALIFORNIA FOR THE COUNTY OF BUTTE EDWARD RICHARD MELINE, ct alv., Plaintiffs, CASE NO. 127180 vs. RULING ON OBJECTIONS JACK MELINE and SHARON MELINE, et al., Defendants. AND RELATED CROSS-ACTION(S) In 1985, Edward Meline, Jack Meline, Stephen Meline HI and Dorothy Rabo (siblings) owned adjoining almond orchards in Butte County. Upon advice om their joint attorney and joint accountant, they leased their orchards to the Meline & Rabo Farms Corporation with each owning a 25% interest in the Corporation and holding a position as a director. The lease was for one year and provided that without a written notice of intent to terminate by a specied date in each year that the lease would be extended for another year. The lease has not been amended or modied since the original signing. Edward and his wife, Charlene, and Jack still survive but Dorothy Rabo and Stephen Meline III are deceased and their interests are owned respectively by the “Rabo Family” and Stephen and Robert Meline. Edward and Charlene, herein referred to as Edward, commenced a partition action which is now nearing completion and the Referee has determined that Edward’s Notice of Intent to [\J Terminate the Lease was properly given and the lea'se, therefore, terminated. The Referee has further ordered that upon completion of the required procedures by Butte County and the various interested agencies, that the parties would commence separate farming. Stephen (again the successor to the signatory Stephen) has since the commencement of the partition action, or at least since the Referee has been involved, asserted that the Corporation is entitled to an owelty from Edward. Specically, he contends that a large amount of Corporation income (hundreds of thousands of dollars) has been spent in improving Edward’s ranch of 168 acres (known as the 10 Home Ranch). The improvements include buildings, land leveling, renovation, new orchards and 11 irrigation system. Edward denied any owelty and the matter was set for hearing on April 9, 2008. 12 Prior to the hearing, Edward submitted a written Obj ection asserting that any extrinsic 13 evidence by Stephen was barred by CCP, Section 1856, et seq. (Parol Evidence Rule). 14 Specically, Edward refers to that portion of Paragraph 5, which reads in part: 15 “...at the end ofthe term, or any extension thereof, or upon earlier termination of this lease, lessee shall surrender the leased premises and its 16 appurtenances, including all improvements thereof made by Lessee, to Lessor, in the same condition, reasonable use, wear and tear, damage by 17 re, act of God or the elements excepted...” 18 and further to Paragraph 21: 19 “The Lessee agrees that this instrument contains all of the provisions of the agreement between the parties hereto and that no promise or agreement 20 not contained herein shall be binding on Lessor.” 21 Two earlier leases in 1980 and 1982 contain similar or identical language as the two 22 quoted portions. 23 After taking, over obj ection, some testimony, the Referee directed Counsel for Stephen to 24 make an offer of proof regarding all matters that would be offering in live testimony and Counsel 25 by exhibits. The Referee ordered that for the purpose only of ruling on the pending Obj ection, 26 specically, parol evidence, that the offered evidence would be deemed to be true. The Referee 27 would additionally read and consider all Corporate minutes (as highlighted) and render a written 28 ruling on the Objection. Depending upon that ruling a further hearing may be set, i.e., if parol 2 evidence was to be received the Referee would hear the witnesses testify and not rely on the assumption used in this ruling that the offer of prodf would be in fact their testimony. Edward had a continuing line of obj ections to such parol evidence and at the completion of the offer of proof, the Rabo interests joined in Edward’s objections and lrther objected as to hearsay, lack of foundation, assumption of facts not in evidence, relevancy and various privileges. Jack has not joined in the obj ection but submitted the matter for the Referee’s determination. The Referee has reviewed all exhibits and considered the offered evidence and sustains the objection as to the admissibility of parol evidence. Other objections are ruled on below. The Referee nds the language of the Lease to be clear, unambiguous and set forth in a fully integrated, written agreement prepared by Corporate Counsel. The Agreement cannot be reasonably interpreted as contended by Stephen and the evidence proffered is contrary to the expressed intent contained in the Lease at the time of its execution by the then interested parties. This agreement was an arm’s length bargain by the contracting parties and Stephen’s claim as to the meaning in the integrated document was not raised until after the death of Stephen III and is based on his understanding of the statements of the accountant and attorney several years before the lease was prepared and signed. The Referee cannot rewrite the written, integrated document to give it the meaning advanced by Stephen. Counsel for Stephen has emphasized the Referee’s duty to arrive at a decision that is not “inequitable”. That is not the test to determine the admissibility of Parol Evidence and the Referee cannot insert a new provision in the written Lease in order to perhaps make it “more equitable” twenty-three years after its execution. After consideration of all the proffered proof (assumed to be true) the Referee sustains the parol evidence obj ection and further notes that much of the intended testimony may well be inadmissible hearsay without foundation or based on an assumption of fact not in evidence. The objection is sustained. Dated: May 19, 2008. V gogL éATKINS, REFEREE PROOF OF SERVICE The undersigned declares: Iam a citizen of the United States, over the age of 18 years, and am not a party to this proceeding. I am a resident of the County of Tehama, State of California. My business address is P. O. Box 33, Red Bluff, CA 96080. On May 19, 2008, at Red Bluff, Tehama County, California, I served the within RULING 0N OBJECTIONS on the parties listed below: William A. Ward, Esq. John Jeffery Carter, Esq. A Professional Corporation Carter Wendell Law Oices, LLP P. O. Box 3606 y—A #9 Williamsburg Lane O Chico, CA 95926 Chico, CA 95927-3606 H '—' Nels A. Christensen, Jr., Esq. Charleton S. Pearse, Esq. Christensen & Schwarz, LLP Slater & Pearse, LLP N H Lenahan, Lee, One Governors Lane 1030 Fifteenth Street, Suite 300 CA 95926 Sacramento, CA 95814 r—h u.) Chico, James B. Berglund, Esq. r—I Richard Crabtree, Esq. 1395 Ridgewood Drive, Suite 300 1838 Feather River Blvd. CA 95973 Oroville, CA 95965 U1 H Chico, by placing a copy ofthe above listed document in sealed envelopes, addressing one envelope as y—A Q hereinabove indicated to each of said persons, sealing said envelopes and then depositing the Q H same in the United States Mail with postage fully prepaid thereon; that there is a delivery service 00 H by United States mail at each of the places so addressed, or that there is a regular communication \O H by mail between the said place of mailing and each ofthe said places so addressed. N O I declare under penalty of perjury of the laws of the State of California that the foregoing N r— is true and correct. Executed on May 19, 2008, at Red Bluff, CA. N N [\J DJ QWA. N Butler eanine U] N O\ N N‘ Q N O