1

Filed 10/20/23 Smykla v. Mark CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

JAMES SMYKLA,

Plaintiff,

v.

JOHN MARK,

Defendant and Respondent;

BODHI MARK,

Intervenor and Appellant.

 

 A164211

 (Mendocino County Super. Ct. 

 No. SCUKCVPB201526465)

Four family members entered into a settlement agreement to resolve 

an intra-family dispute over a parcel of real property located in Mendocino 

County. After the litigation was dismissed, a dispute about the meaning of 

the settlement agreement arose, and two of the settling parties, respondent 

John Mark and his son appellant Bodhi Mark, filed dueling motions to 

enforce the settlement agreement pursuant to the court’s retained 

jurisdiction under Code of Civil Procedure section 664.6. Principally at issue 

was the meaning of a provision in the settlement agreement addressing two 

encumbrances on the property, both of which secured sizeable outstanding 

loans that respondent John Mark had taken out in his own name. 
2

Ruling on those cross post-judgment motions, the trial court 

interpreted the settlement agreement as relieving John Mark from making 

any further payments on the larger and more senior of the two loans, thereby 

placing the property in peril of foreclosure. Bodhi Mark now appeals, and we 

reverse. On de novo review of this issue, we conclude the court erred in its 

interpretation of the settlement agreement.

BACKGROUND

John Mark and his unmarried partner Narda Vicent jointly owned an 

undivided parcel of real property in Mendocino County, held in trust. When 

Narda died in 2001, her fifty percent interest in the property passed in trust 

to their two sons, Bodhi Mark (Bodhi) and Mabin Mark (Mabin), and to her 

oldest son and their half-brother, James Smykla (James). 

In 2015, James initiated proceedings against John over their late 

mother’s trust for breach of fiduciary duty and to compel an accounting. The 

central allegations were that rather than distributing their mother’s one-half 

interest in the real property to her sons as her trust beneficiaries, John had 

engaged in a series of acts of self-dealing by which he had deeded the entire 

property to himself, borrowed against the property, and then used the 

borrowed funds to engage in a construction venture in Southern California. 

The two other brothers, Mark and Mabin, subsequently joined in the case, 

and on March 30, 2017, all four parties reached a written settlement in the 

midst of trial. 

The undisputed extrinsic evidence established that, at the time of the 

settlement, the property was encumbered by two deeds of trust securing 

approximately $750,000 of indebtedness: a $550,000 mortgage referred to by 

the parties in the settlement agreement as the “First Mortgage,” and a 

$200,000 mortgage referred to as the “Second Mortgage.” The former was the 
3

approximate balance of a $650,000 loan John had obtained in his own name 

from CitiMortgage in March 2007, and the latter was a $200,000 home equity 

line of credit he had secured in his own name from Redwood Credit Union in 

May 2007. 

Under the settlement agreement, two of the children, James and 

Mabin, cashed out of the property, each for $110,000. James agreed to sell 

his entire interest in the property to Bodhi, partially payable by a five-year 

$90,000 promissory note secured by a deed of trust against the property, 

subject to the two senior lienholders. Mabin agreed to sell his interest to 

John, partially payable by a $100,000 promissory note secured by a deed of 

trust against the property, junior to all of the other lienholders including 

James. The result was that Bodhi would own approximately an undivided 

31.4 percent interest in the property and John would own approximately an 

undivided 68.6 percent interest. 

The settlement agreement addressed many subjects concerning the 

property on a prospective basis. As relevant here, Bodhi and John agreed to 

negotiate and cooperate in good faith to accomplish a subdivision of the 

property into two parcels, and the settlement agreement gave each the right 

to buy out part of the other’s interest in the property in the event of a 

subdivision, with the goal of allowing Bodhi to solely own the northern parcel 

and John the southern parcel upon the subdivision’s completion. 

The settlement agreement gave Bodhi and John the exclusive rights of 

use and possession of the northern and southern parcels, respectively, in the 

meantime. The agreement reflects that Bodhi had been living in a “duplex” 

located on John’s southern parcel, which Bodhi agreed to vacate in 90 days. 

It also reflects that located on Bodhi’s northern parcel was a three-bedroom 
4

residence that presently had rental tenants, and the settling parties agreed 

the lease would not be renewed at its expiration.

Section 12 of the settlement agreement waived John’s and Bodhi’s 

rights of partition for four years, and provided that at the expiration of the 

four-year period each had a right of first refusal “of any offer made” by the 

other, and further specified that if “the parties do not agree on a price, an 

agent under limited power of attorney . . . chosen by agreement between 

[them] from the list attached here as Exhibit ‘M’ will cause the Property to be 

listed and sold to the highest and best bidder.” 

Section 5 addressed the existing mortgages. It stated in relevant part:

“A. Payment of First Mortgage. Commencing upon the Effective 

Date and continuing for a period of four (4) years (the ‘Co-tenancy Period’), 

John agrees to assume all obligations under that certain encumbrance with a 

balance at present of approximately $550,000.00 payable to Select Portfolio 

Savings . . . (the ‘First Mortgage’), which loan is secured in first position by 

the Property. John personally warrants and guarantees that all payments on 

the First Mortgage will be made in a timely manner and that [his 

payments] . . . will at no time be in arrears. John is solely responsible for this 

encumbrance.

“B. Payment of Second Mortgage. During the Co-tenancy Period, 

Bodhi agrees to pay fifty percent of the monthly payments due on that certain 

Redwood Credit Union loan . . . (the ‘Second Mortgage’), or $700 a month, 

whichever is less. The Second Mortgage is secured by the Property in second 

position. Bodhi personally warrants and guarantees that all payments will 

be made in a timely manner, and that his payments will at no time be in 

arrears.
5

“Notwithstanding the foregoing, John agrees to reduce such amount of 

current principal on the Second Mortgage charged against it by John on or 

after March 8, 2017 within thirty (30) days of the Effective Date.

“In the event the Second Mortgage is not paid in full at the end of the 

Co-tenancy period, Bodhi agrees to continue to pay his portion until the 

mortgage is fully retired.” 

The settlement agreement provided that the action would be dismissed 

but that the court would retain jurisdiction to enforce it pursuant to Code of 

Civil Procedure section 664.6. 

The court subsequently dismissed the case with prejudice (on April 3, 

2017) but, as agreed by the settling parties, retained jurisdiction to enforce 

the settlement agreement. 

On August 3, 2021, four years and three months after the parties 

entered into the settlement agreement, John filed a motion to enforce it. He 

contended that Bodhi had breached the settlement agreement by refusing to 

cooperate in listing the property for sale after the four-year co-tenancy period 

ended on March 30, 2021, and sought an order of specific performance 

directing Bodhi to cooperate in the viewing, showing, listing and sale of the 

property. He also contended that he and Bodhi disputed the meaning of 

section 5 of the settlement agreement, with John taking the position he was 

no longer required to pay the First Mortgage because the four-year cotenancy period had expired and Bodhi taking the position John remained 

solely responsible to pay that mortgage. John asserted that Bodhi was using 

that dispute as a basis to delay or prevent a sale of the property, and asked 

the court to sever the First Mortgage provision from the contract pursuant to 

a severability clause contained in section 16 of the settlement agreement. He 

asserted that once that clause was deleted, “the remaining balance of the 
6

First Mortgage must be paid in accordance with the parties’ respective 

ownership interests,” citing to a portion of section 12 of the settlement 

agreement.1

Bodhi, who wanted either to buy his father’s interest in the property or 

subdivide the property and own just a portion, opposed the motion and filed a 

dueling motion of his own to enforce the settlement.2 As relevant here, he 

sought an order confirming that he has no responsibility for the First 

Mortgage or, in the alternative, a finding that there was a lack of meeting of 

the minds and an order vacating the settlement agreement and setting case 

for trial. 

The fundamental disagreement below was whether John was required 

to pay 100 percent of the remaining balance of the First Mortgage or whether 

Bodhi was required to pay a portion of the balance, based on his fractional 

ownership interest. And while the motions were pending, John allowed the 

property to go into default. 

In a December 3, 2021 minute order, the court ruled in pertinent part 

1 In relevant part, section 12 states: “In the event of a sale or 

partition, all net proceeds will be split between Bodhi and John based on 

their fractional ownership interests and both parties will waive any claims 

for reimbursement or any contribution made, even if paid after the Effective 

Date, including without limitation any claim based on reduction of principal 

of encumbrances, sweat equity, maintenance, improvements or the like.” 

2 Bodhi was in the process of trying to get approval from local planning 

officials to subdivide the property. One set of issues in the dueling motions to 

enforce the settlement agreement concerned Bodhi’s contention his father 

was sabotaging that process by opposing his subdivision application, and a 

dispute as to whether the settlement agreement imposed a four-year deadline 

to complete any subdivision. Bodhi asserted it did not (John disagreed) and 

asserted John should be ordered to cooperate with his subdivision 

application. The subdivision dispute is not at issue in this appeal.
7

that “[t]he four-year term set forth in the Agreement expired on March 30, 

2021,” “to date, [John] has stopped making any mortgage payments,” and 

that “pursuant to the agreement either party may make an offer to purchase 

the property in its entirety, or the property is to be listed for sale” but that 

“[n]either party has made an offer to purchase so the property must be listed 

for sale.” It also ruled that John “will no longer be responsible for the 

mortgage payments.” 

Bodhi then timely appealed the court’s order.3

DISCUSSION

Bodhi raises two issues. He argues the court erred in absolving John of 

responsibility for the First Mortgage under section 5 of the settlement 

agreement. He also argues in the alternative that the order is void, because 

James and Mabin were indispensable parties yet they were not served with 

the motion papers nor appeared at the hearing or filed any papers in 

connection with the motions. We do not reach the second issue, because we 

agree with the first.4

Both parties agree that resolution of the First Mortgage issue is a 

question of contractual interpretation, and presents a binary choice. Bodhi 

argues that under the principles of contractual interpretation, the language 

3 Neither party has addressed the issue, but we must consider whether 

the trial court’s order is an appealable judgment. While the trial court’s 

order granting John’s motion and denying Bodhi’s motion does not use the 

term “judgment,” its effect was “to finally determine the rights of the parties 

in this action by enforcing the settlement agreement.” (Critzer v. Enos (2010) 

187 Cal.App.4th 1242, 1252.) We therefore “will amend the order to include 

an appealable judgment so as to expedite appellate review.” (Ibid.)

4 Bodhi filed a request for judicial notice on November 10, 2022 in 

connection with the indispensable party issue, which John opposed and we 

previously took under submission. We now deny that motion as moot.
8

of settlement agreement must be interpreted as meaning that payment of the 

First Mortgage is solely John’s responsibility. John argues that he was not 

obligated to pay the First Mortgage “for all time” but only during the fouryear co-tenancy period. 

We review this question de novo, because the extrinsic evidence (of 

which there is very little) was not in conflict.5 “It is . . . solely a judicial 

function to interpret a written instrument unless the interpretation turns 

upon the credibility of extrinsic evidence. Accordingly, ‘An appellate court is 

not bound by a construction of the contract based solely upon the terms of the 

written instrument without the aid of evidence [citations], where there is no 

conflict in the evidence [citations] or a determination has been made upon 

incompetent evidence.” (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 

861, 865.)

5 John asserts “[c]onflicting evidence was submitted . . . in the form of 

declarations submitted to the court.” But he provides no record citations for 

that assertion and, moreover, we have reviewed the declarations submitted in 

connection with the cross-motions and disagree. We discuss the extrinsic 

evidence below. Equally without merit is his suggestion that the trial court’s 

familiarity with the case and recollection of having encouraged the

settlement negotiations is conflicting evidence that supports his 

interpretation of the settlement agreement’s meaning. He cites the trial 

court’s comment that “I was involved in trying to get this case settled” and 

the court’s recollection that “Bodhi really wanted to stay on the property and 

John wanted out as much as possible.” But the court’s recollection of the 

parties’ ultimate objectives is not in conflict with any of the extrinsic 

evidence. Furthermore, as Bodhi points out, nothing in the record indicates 

the trial court presided over the negotiations that yielded the written

agreement that was ultimately signed or that the court even saw the 

settlement agreement until four years later when it was asked to enforce it. 

The register of actions reflects only that the trial recessed and a few days a 

later a request for dismissal was filed. The register of actions does not

indicate that a judicially supervised settlement negotiations took place

during that recess.
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We begin with the principles of contractual interpretation. “A contract 

must be so interpreted as to give effect to the mutual intention of the parties 

as it existed at the time of contracting, so far as the same is ascertainable 

and lawful.” (Civ. Code, § 1636.) In interpretating a contract, “[o]ur initial 

inquiry is confined to the writing alone.” (Mountain Air Enterprises, LLC v. 

Sundowner Towers, LLC (2017) 3 Cal.5th 744, 752 (Mountain Air); Civ. Code, 

§ 1639.) Judicial interpretation is controlled by “ ‘ “[t]he ‘clear and explicit’ 

meaning” ’ ” of words, “ ‘ “interpreted in their ‘ordinary and popular sense,’ 

unless ‘used by the parties in a technical sense or a special meaning is given 

to them by usage.’ ” ’ ” (Mountain Air, at p. 752; Civ. Code, §§ 1638, 1644.) 

“The whole of a contract is to be taken together, so as to give effect to every 

part, if reasonably practicable, each clause helping to interpret the other.” 

(Civ. Code, § 1641.) Moreover, “ ‘a contract must be understood with 

reference to the circumstances under which it was made and the matter to 

which it relates. (Civ. Code, § 1647).’ ” (Mountain Air, at p. 752.) “ ‘Extrinsic 

or parol evidence may be used to explain ambiguity, context or related 

matter.’ ” (Hollingsworth v. Heavy Transport, Inc. (2021) 66 Cal.App.5th 

1157, 1177.) Moreover, “ ‘[i]f a contract is capable of two constructions courts 

are bound to give such an interpretation as will make it lawful, operative,

definite, reasonable, and capable of being carried into effect.’ ” (Edwards v. 

Arthur Andersen LLP (2008) 44 Cal.4th 937, 953–954; Civ. Code, § 1643.) 

As noted, the disputed language states:

“A. Payment of First Mortgage. Commencing upon the Effective 

Date and continuing for a period of four (4) years (the ‘Co-tenancy Period’), 

John agrees to assume all obligations under that certain encumbrance with a 

balance at present of approximately $550,000.00 payable to Select Portfolio 

Savings . . . (the ‘First Mortgage’), which loan is secured in first position by 
10

the Property. John personally warrants and guarantees that all payments on 

the First Mortgage will be made in a timely manner and that [his 

payments] . . . will at no time be in arrears. John is solely responsible for this 

encumbrance.”

This language is ambiguous. It does not expressly address whether 

John is responsible for the First Mortgage after expiration of the four-year 

period, and both parties posit differing interpretations of this provision. 

The parties introduced very little extrinsic evidence about its meaning. 

Bodhi stated in a declaration that at the time he signed the settlement 

agreement, “I understood that I would have no responsibility for the First 

Mortgage.” But that evidence is incompetent.6 Bodhi’s lawyer stated in a 

declaration that during settlement negotiations John “express[ed] a 

willingness to make concessions on the mortgages” to accomplish the goal of 

John keeping the property by cashing Bodhi out for an in-kind distribution. 

Bodhi corroborated this, stating in a declaration that “my father expressed 

that he was willing to make substantial concessions in handling the 

mortgages . . . if I would be willing to take an in-kind distribution.” Bodhi 

also introduced undisputed evidence, through his lawyer, that the final 

sentence of the First Mortgage clause stating that “John is solely responsible 

for this encumbrance” was added at the last minute during the settlement 

negotiations. 

6 California law follows the objective theory of contracts. (See 1 

Witkin, Summary of Cal. Law (11th ed. 2021 update) Contracts § 767; 

Gilkyson v. Disney Enterprises, Inc. (2021) 66 Cal.App.5th 900, 916.) Thus, 

“ ‘ “[t]he parties’ undisclosed intent or understanding is irrelevant to contract 

interpretation.” ’ ” (Zissler v. Saville (2018) 29 Cal.App.5th 630, 644.) 
11

There also is undisputed extrinsic evidence of the circumstances in 

which the settlement was made. Bodhi introduced copies of three deeds 

evidencing that John had conveyed the trust property to himself in full 

(rather than to the heirs) and then conveyed security interests in the 

property to two lenders to secure loans to himself in principal amounts 

totaling $850,000. John introduced no conflicting evidence nor, indeed, any 

extrinsic evidence about the circumstances of those transactions.

Considering the language of section 5 in context of the entire 

agreement, the parties’ purpose, and the surrounding circumstances, 

section 5 does not mean that John has no obligation to pay the First 

Mortgage after four years. That is an unreasonable construction.

Turning, first, to the “writing alone” (Mountain Air, supra, 3 Cal.5th at 

p. 752), Bodhi argues that both the text and structure of section 5 indicates 

that John’s obligation to pay the First Mortgage is not time-limited. He 

acknowledges, as do we, that at first blush there is superficial appeal to 

John’s contrary interpretation, because in the first sentence, John expressly 

agreed to “assume” all obligations under the First Mortgage “[c]ommencing 

upon the Effective Date and continuing for a period of four (4) years (the ‘CoTenancy Period’).” But, Bodhi points out that the final sentence stating that 

“John is solely responsible for this encumbrance” is unqualified, was added 

later in time and contains no time restriction. He also points out that the 

language addressing payment of the Second Mortgage (1) addresses time 

periods beyond the four-year co-tenancy period, which reflects the parties 

understood the property might not be sold within four years; and (2) is silent 

as to who is responsible for paying the portion of the Second Mortgage Bodhi 

did not agree to pay. He argues that even if the property were listed for sale 

at the end of the four-year co-tenancy period, any reasonable drafter would 
12

have recognized there could be a time delay in actually selling it, and that 

both mortgages would need to be paid in the meantime. He argues that, just 

as the parties understood and implicitly agreed that John would continue to 

pay that portion of the Second Mortgage Bodhi was not paying (both during 

and beyond the four year co-tenancy period) even though the contract does 

not expressly say so, so too did they understand and agree that John 

remained obligated to pay that portion of the First Mortgage Bodhi did not 

expressly agree to pay (i.e., all of it). Put another way, he asserts that silence 

as to who is responsible for paying that portion of the First Mortgage that 

Bodhi did not expressly agree to pay should be construed as an implied 

agreement that it remains John’s obligation. “The obligation was, after all, in 

John’s name.” 

We agree. The evidence is undisputed that John, and John alone, is the 

borrower who is contractually obligated on the two mortgages. Section 5 thus 

reflects a contractual agreement between two parties about how to satisfy one 

of the parties’ debts. It does not, and could not, relieve the debtor (John) of 

his obligations to the lender. 

John asserts that “the agreement does not specifically address who 

should pay the first mortgage after the four-year period because there was no 

need,” because it was “agreed that the property would be sold at that time.” 

The trial court found that a sale was required at the end of four years, and 

nobody has challenged that ruling on appeal. It thus is not before us. But 

John’s assumption the parties contemplated that the property would be sold 

immediately at the end of four years is refuted by the parties’ express 

agreement that Bodhi should continue paying the Second Mortgage after the 

four-year period expired, and the commercial realities just discussed.
13

Moreover, we do not agree with John that the prospect of a sale at the 

end of four years means the parties agreed to relieve him of the obligation to 

pay the First Mortgage. John’s interpretation of the contract is not 

reasonable because it would lead to results that are both absurd and

inequitable. (See West Pueblo Partners, LLC v. Stone Brewing Co., 

LLC (2023) 90 Cal.App.5th 1179, 1185 [“the court ‘should avoid an 

interpretation which will make the contract unusual, extraordinary, harsh, 

unjust or inequitable . . ., or which would result in an absurdity’ ”].) To begin 

with, it is implausible that the parties would have mutually agreed (at a 

minimum) to allow John to stop making payments on the First Mortgage and 

place the property in default; certainly, Bodhi had no incentive to allow that 

to happen—he was trying to get the property subdivided. Indeed, John 

agrees the First Mortgage provision must be construed in the manner in 

which John believed Bodhi would have understood it. (See Civ. Code, 

§ 1649.) Bodhi would have had no reason to give his father a green light to 

stop paying the mortgage after four years, which would mean essentially 

walking away from the property and leaving it to the senior creditor, when 

the entire structure and purpose of the settlement agreement was to 

facilitate either a subdivision that would enable them both to continue to own 

part of the property or, barring that, a private sale on the open market. Such 

a construction would render other provisions of the settlement agreement 

incapable of being carried out—namely, the provisions calling for either its 

subdivision or sale—because if John stopped paying the First Mortgage after 

four years, the lender would have the right to step in and foreclose on its 

security. “ ‘[E]ven if one provision of a contract is clear and explicit, it does 

not follow that that portion alone must govern its interpretation; the whole of 

the contract must be taken together so as to give effect to every part.’ ’ ”
14

(Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 799; 

accord, Legendary Investors Group No. 1, LLC v. Niemann (2014) 224 

Cal.App.4th 1407, 1413 [rejecting interpretation of isolated sentence in debt 

instrument that would render other provisions incapable of being given 

effect]; Civ. Code, § 1650 [“Particular clauses of a contract are subordinate to 

its general intent”].) 

Equally illogical and inequitable on this record is the idea that Bodhi 

agreed to assume any responsibility for helping his father retire a $650,000 

loan John had taken out for his own personal use. Bodhi explained in a 

declaration that it was alleged John had obtained the financing for a 

development project John was undertaking in Southern California. John 

neither denied nor purported to explain this evidence of the allegations in the 

complaint, and it is undisputed evidence of the context in which the 

settlement agreement was made. There is no evidence to suggest or imply 

that John somehow reinvested any portion of the borrowed funds back into 

the trust property or that the heirs in any way benefited from those funds.

There is no evidence whatsoever—neither in the language of the 

settlement agreement nor in the extrinsic evidence—that Bodhi agreed to

help John retire that debt ever, including out of Bodhi’s proportionate 

distribution from any sale proceeds if the property were eventually sold 

rather than subdivided. Bodhi clearly agreed to assume limited 

responsibility for paying down the smaller, Second Mortgage including after 

the four-year period. But that is explicit in the language of the settlement 

agreement: he agreed to pay up to $700/month toward that debt. And we can 

reasonably infer from the undisputed evidence that he agreed to do that

because for some period prior to the dispute, he had lived on the property and 

would live on it once the leasehold on the part of the property allocated to 
15

him expired. But to assume that he agreed to take any responsibility for 

funding the payoff of his father’s massive indebtedness on the First Mortgage 

when (a) the settlement agreement does not explicitly say that, (b) it 

explicitly says the opposite (“John is solely responsible for this 

encumbrance”), and (c) John has sole legal responsibility to the lender is an 

enormous leap. To limit John’s responsibility for his personal borrowing 

when there is no evidence his sons benefitted from it and he encumbered the 

property only in acts of alleged self-dealing would be inequitable. 

John argues an agreement that Bodhi would contribute toward the 

First Mortgage after four years is implicit in section 12 of the settlement 

agreement, which addresses how net proceeds from a sale would be divided. 

In relevant part it states: “In the event of a sale, all net proceeds will be split 

between Bodhi and John solely based on their fractional ownership interests 

and both parties will waive any claims for reimbursement or any contribution 

made, even if paid after the Effective Date, including without limitation any 

claims based on reduction of principal encumbrances, sweat equity, 

maintenance, improvements or the like.” John asserts that under this 

provision, “at the time of the sale . . . , all liens and mortgages [would be] paid 

‘off the top’ prior to a distribution to the parties of their respective 

proportional interests of the net proceeds,” because “net” proceeds are 

calculated by deducting from the gross sale price expenses including payment 

of outstanding mortgages or other liens. 

We do not agree. John offers no extrinsic evidence to support that 

construction of the phrase “net proceeds,” which is unreasonable when 

considered in light of the language, purpose, and circumstances of this 

settlement agreement. To infer an intent that Bodhi agreed to retire the debt 

incurred by his father for personal use unrelated to the property after four 
16

years, we require language more clear and explicit that an isolated phrase 

buried in a different section of the settlement agreement addressing a 

different subject. We cannot reasonably infer the parties intended to address 

that subject so vaguely and indirectly—particularly when it is undisputed 

Bodhi’s lawyer went to the trouble at the last minute of adding express 

language to the more directly applicable section of the settlement agreement 

(i.e., section 5) stating that “John is solely responsible for this encumbrance.”

Moreover, far from supporting John’s interpretation, section 12 states 

the parties “waive” any claims for reimbursement based upon reducing 

encumbrances after the agreement’s effective date (i.e., the mortgages). This 

reflects that both parties contemplated that the mortgages would continue to 

be paid after the effective date and that the party who paid them would have 

no recourse against the other for reimbursement. Since only John was legally 

obligated to the lenders to continue paying the mortgages, this clause 

prevented him from seeking reimbursement from Bodhi. Bodhi had no legal 

obligation to the lenders to pay anything, and thus would have had no reason 

to make a reimbursement claim against John. Thus, the waiver of 

reimbursement claims language further reflects the parties’ understanding 

and agreement that John was required to make all mortgage payments other 

than those Bodhi expressly agreed to assume under section 5 (i.e., a portion 

of the Second Mortgage). 

Finally, John’s interpretation is in conflict with the undisputed 

evidence Bodhi introduced that John communicated his willingness to make 

substantial concessions on the mortgages during the settlement negotiations. 

The reasonable inference is that he did so, agreeing to continue paying his 

obligations under the First Mortgage and avoid a default, in order to 
17

facilitate the parties’ goals regarding ultimate disposition of the property 

after the conclusion of the four-year co-tenancy period.

We infer that the parties specified expressly that John remained 

obligated to pay the First Mortgage during the four-year co-tenancy period 

solely to leave no room for doubt about that, because Bodhi agreed to 

contribute only toward the Second Mortgage unless and until the property 

were sold or subdivided. The provision making explicit John’s obligation to 

pay the First Mortgage also bound him to pay the mortgage on a timely basis, 

furthering the goal of maintaining the settling parties’ possession of the 

property in order to subdivide or sell it. Section 5 was not intended to limit

John’s obligation to pay the First Mortgage to only four years. The trial court 

erred in concluding that it was. 

DISPOSITION

The December 3, 2021 order is reversed and the matter is remanded 

with instructions for the trial court to enter a new and different order 

declaring that John is solely responsible for payment of the First Mortgage, 

directing him to pay the arrears on the First Mortgage and directing him to 

continue to timely pay the First Mortgage unless and until the property is 

sold. In all other respects the December 3, 2021 is affirmed. Appellant shall 

recover his costs. 

STEWART, P. J.

WE CONCUR:

RICHMAN, J. 

MARKMAN, J.*

* Judge of the Superior Court of California, County of Alameda, 

assigned by the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.