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Filed 6/28/23 Benik v. 13290 Contractors Lane CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication 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

THIRD APPELLATE DISTRICT

(Butte)

----

ERIK BENIK et al.,

Plaintiffs and Appellants,

v.

13290 CONTRACTORS LANE, LLC et al.,

Defendants and Respondents.

C095469

(Super. Ct. No. 18CV03508)

Plaintiffs Erik Benik and Wishbone Ranch, LLC (Wishbone) and James Heath 

(collectively plaintiffs) entered into three successive leases for a warehouse property in 

Chico with defendant 13290 Contractors Lane, LLC (Contractors), managed by 

defendant Richard Bringgold (collectively defendants). The first lease gave Benik an 

option to purchase the property, but the two subsequent leases provided rights of first 

refusal. After the parties had entered into the third lease, Benik attempted to exercise the 

option to purchase the property and defendants refused to acknowledge the validity of the 

option. Plaintiffs filed a complaint alleging numerous causes of action related to the 
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alleged breach of the purchase option. After a court trial, the trial court ruled in favor of 

defendants, finding the final lease had an integration clause superseding the purchase 

option in favor of the right of first refusal.

On appeal, plaintiffs contend the trial court erred, arguing the subsequent leases 

did not supersede the purchase option. We affirm, finding the final lease was integrated 

as to all matters mentioned within, including the purchase of the property. This bars 

consideration of any prior agreement relating to the purchase of the property between the 

parties.

BACKGROUND

The facts are uncontested. Benik entered a lease with Contractors for the premises 

at 13290 Contractors Drive in Chico starting December 1, 2016, and ending 

November 30, 2018. The lease included an option to purchase as an addendum. The 

option permitted Benik to purchase the property for $2,990,000 if he exercised the option 

by written notice between December 1, 2016, and November 30, 2018. The purchase 

option also stated additional terms and conditions were provided in an additional 

addendum. This addendum stated: “In the event that the Lessee is not in default of any 

provisions of the lease, Lessee shall have Option to Purchase property at the twentyfourth (24th) month or sooner for the purchase price of $2,990,000.00. Lessee’s monthly 

rent in its entirety shall be applied to the down payment.”

The lease included an integration clause titled “No Prior or Other Agreements” 

stating, “[t]his Lease contains all agreements between the Parties with respect to any 

matter mentioned herein, and no other prior or contemporaneous agreement or 

understanding shall be effective.”

On December 5, 2016, Bringgold emailed Benik stating he had not yet received 

any of the money owed under the lease, was cancelling the contract, and stated it would 

be in the interest of all parties to renegotiate.
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Benik and Contractors entered a second lease for the same location starting 

December 1, 2016 to November 30, 2021, with an option to renew for three five-year 

periods. This lease did not include an option to purchase but it did include a “First Right 

of Refusal.” This term stated that, “[s]hould Lessor receive a valid Offer to Purchase said 

property, Lessee shall have thirty (30) days to meet or exceed said Offer to Purchase the 

property.” All other material terms in this lease were the same as the first lease, 

including the integration clause.

Contractors entered into a third lease with Wishbone, an entity owned and run by 

Benik and his wife. This lease was for the same location for the period from June 1, 2017 

to May 31, 2022, with three options to renew for five years. This third lease also had the 

same right of first refusal as the second lease without an option to purchase. Benik was a 

personal guarantor of this lease. All other material terms, including the integration 

clause, were the same as the first two leases.

On September 24, 2018, Benik sent a letter to Contractors giving notice he was 

exercising the purchase option and requesting confirmation on the remaining balance of 

the purchase price. On October 3, 2018, Contractors responded there was no option to 

purchase. On October 23, 2018, plaintiffs filed a complaint against defendants alleging 

breach of contract and other causes of action related to defendant’s refusal to honor 

Benik’s purchase option.

After a five-day court trial, the trial court found Benik was not entitled to the 

purchase option in the first lease and found in favor of defendants on all causes of action. 

The court found the third lease superseded the first two leases, including the purchase 

option in the first lease, because the third lease had an integration clause. The parol 

evidence rule prohibited the introduction of the purchase agreement to vary, alter, or

augment the third lease. Thus, the trial court found defendants “established by sufficient 

evidence that [the first lease] was superseded by” the second and third leases and the 

third lease “contained all terms intended by the parties to be part of the respective leases.” 
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The trial court also found defendants established the second lease was a novation of the 

first lease.

DISCUSSION

Plaintiffs contend the purchase option was enforceable when Benik sought to 

exercise it. They argue “neither the cancellation of [the first lease] nor the inclusion of 

the First Right of Refusal” in the second and third leases could revoke the “independent”

purchase option. We disagree.

The parol evidence rule generally prohibits the introduction of any extrinsic 

evidence to vary or contradict the terms of an integrated written instrument, including 

“evidence of a prior agreement.” (Code Civ. Proc., § 1856, subd. (a); Civ. Code, § 1625.) 

“When the parties to a written contract have agreed to it as an ‘integration’—a complete 

and final embodiment of the terms of an agreement—parol evidence cannot be used to 

add to or vary its terms. . . . The crucial issue in determining whether there has been an 

integration is whether the parties intended their writing to serve as the exclusive 

embodiment of their agreement.” (Masterson v. Sine (1968) 68 Cal.2d 222, 225.) 

“Generally, finality may be determined from the writing itself. If on its face the writing 

purports to be a complete and final expression of the agreement, parol evidence is 

excluded.” (Pollyanna Homes, Inc. v. Berney (1961) 56 Cal.2d 676, 679-680.) “An 

integration may be partial rather than complete: The parties may intend that a writing 

finally and completely express only certain terms of their agreement rather than the 

agreement in its entirety. [Citation.] If the agreement is partially integrated, the parol 

evidence rule applies to the integrated part.” (Founding Members of the Newport Beach 

Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 953.)

Interpretation of a contract, and its level of integration, is a question of law we 

review de novo. (DVD Copy Control Ass., Inc. v. Kaleidescape, Inc. (2009) 

176 Cal.App.4th 697, 713; EPA Real Estate Partnership v. Kang (1992) 12 Cal.App.4th 
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171, 176.) “The language of a contract is to govern its interpretation, if the language is 

clear and explicit, and does not involve an absurdity.” (Civ. Code, § 1638.)

The third lease contained an integration clause rendering ineffective any “prior 

agreement” dealing with “any matter mentioned” in the lease. The second and third 

leases included a right of first refusal, permitting plaintiffs to buy the property at or above 

any offer defendants received. The purchase option plaintiffs contend is effective was 

executed before the second and third leases and purports to permit them to purchase the 

same property but at an agreed price of $2,990,000. The purchase option is therefore 

prohibited by the integration clause because it deals with the same matter as the rights of 

first refusal: purchase of the property.

The purchase option and the right of first refusal are also inconsistent. If 

Contractors received an offer for more than $2,9990,000, the rights of the parties would 

be substantially different depending on which provision is applied.

1 Thus, the parol 

evidence rule is triggered as an evidentiary bar because the purchase option involves the 

same matter as, and is also inconsistent with, the right of first refusal contained in the 

subsequent integrated leases. (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 344 

[“terms contained in an integrated written agreement may not be contradicted by prior or 

contemporaneous agreements. In doing so, the rule necessarily bars consideration of 

extrinsic evidence of prior or contemporaneous negotiations or agreements at variance 

with the written agreement”].)

Plaintiffs contend the second and third leases “make no mention of the Purchase 

Option” so the purchase option is not a matter “mentioned in Lease 2 or Lease 3.” They 

argue this makes it a “partial integration clause.” It does not matter, however, whether 

we conclude it is partial or fully integrated because the parol evidence rule applies to any 

1 Though not determinative on this legal issue, there was testimony at trial the 

property was appraised at close to $6,000,000 in 2018.
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integrated portion. Here, the subsequent leases are integrated as to all matters mentioned 

within them. And plaintiffs’ asserted interpretation of this language requires adding a 

modifier limiting it to only agreements that deal with the same matters in the same way. 

Both the purchase option and the right of first refusal dealt with buying the property. 

That they were different methods, right to purchase at a fixed price versus at or above an 

offered amount, makes no difference under the language of the integration clause

covering all matters in the lease.

Plaintiffs assert Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 

243 Cal.App.4th 1 (Jenks), requires a different result; we disagree. In Jenks, an 

employee sued in superior court based on terms in a termination agreement. The 

employer petitioned to compel arbitration based on an arbitration provision in the

employee’s offer letter. (Id. at pp. 5-6.) The termination agreement did not have a 

dispute resolution provision but did have an integration clause stating: “ ‘This 

Agreement constitutes the entire agreement between the parties with respect to the 

subject matter hereof and supersedes all prior negotiations and agreements.’ ” (Id. at 

p. 15.) The appellate court found this integration clause did not supersede the arbitration 

provision in the offer letter because the termination agreement did not “mention 

arbitration at all, and contains no provisions regarding dispute resolution. Consequently, 

the identified forum for dispute resolution remains arbitration based on the original Offer 

Letter.” (Id. at pp. 15-16.)

Jenks supports our conclusion the purchase option is barred because it is a 

different method on the same matter as the right of first refusal. The integration clause in 

the Jenks plaintiff’s subsequent termination agreement had a similar integration clause to 

those in the leases here, disclaiming prior agreements on the same “subject matter.” 

(Jenks, supra, 243 Cal.App.4th at p. 15.) But the termination agreement was silent on the 

subject matter of dispute resolution generally and did not mention arbitration or any other 

forum as a specific method for dispute resolution. (Id. at pp. 5, 15-16.) The Jenks court 
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implied that a provision describing any method for dispute resolution in the termination 

agreement would have superseded the arbitration provision in the offer letter because it 

found the letter “contains no provisions regarding dispute resolution.” (Id. at pp.15-16.) 

Had the subsequent termination agreement specified a method for addressing the matter

of dispute resolution, such would likely have superseded the arbitration provision in the 

offer letter by operation of the integration clause. The Jenks court found support in Cione 

v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625, which similarly found a 

prior agreement with an arbitration provision (the method) was not superseded by a 

subsequent agreement without a dispute resolution provision (the matter). (Jenks, at 

pp. 16, 19-20 [“Since the written employment agreement was silent on the forum for 

dispute resolution, Cione’s . . . arbitration agreement with NASD was probative and 

admissible as not inconsistent with the terms of such employment agreement” (emphasis 

added)].) Jenks and its supporting cases are consistent with our finding here that two 

provisions regarding the purchase of the property cover the same matter even if they are 

different methods for dealing with that matter.

Plaintiffs also argue purchase options are distinct agreements reflecting an 

irrevocable offer that once made and accepted, cannot be revoked by the offeror. Here, 

the purchase agreement could be terminated only in a few specific circumstances and 

plaintiffs argue none were present when Benik sought to exercise the option. This 

argument relies on law that “[a]n option contained in a lease is itself a contract, distinct 

from the lease to which the option relates.” (Ripani v. Liberty Loan Corp. (1979) 

95 Cal.App.3d 603, 609.) Plaintiffs do not discuss the limits of this rule, as options are 

not always severable from their underlying leases. (Prichard v. Kimball (1923) 190 Cal. 

757, 764 [“The option thus formed a part of the lease, and was dependent on it.”]; Gatley 

v. Shockley (1932) 215 Cal. 604, 611 [“It is clear that the lease and option constituted but 

one contract, the provisions of which were interdependent”]; Wallace v. Imbertson (1961) 
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197 Cal.App.2d 392, 396 [“The existence of the option therefore depended on existence 

of the lease. If the lease fell, the option fell with it.”].)

But more fundamentally, even assuming the purchase option here was an 

irrevocable offer severable from the first lease, it would still be a contract. (Steiner v. 

Thexton (2010) 48 Cal.4th 411, 420 [“ ‘Manifestly, then, an irrevocable option based on 

consideration is a contract’ ”]; Rollins v. Stokes (1981) 123 Cal.App.3d 701, 711 [finding 

an option, from the lessor’s point of view, is “a contract to sell the property during the 

lease term”].) And contracts can be rescinded, abandoned, terminated, and superseded by 

mutual assent. (See Civ. Code, § 1689, subd. (a) [“A contract may be rescinded if all the 

parties thereto consent.”]; Kane v. Sklar (1954) 122 Cal.App.2d 480. 482 [“ ‘An 

executory contract may be rescinded, abandoned, or terminated, either wholly or in part, 

by the mutual consent of the respective parties at any stage of their performance.’ ”].)

Plaintiffs provide no law, and we are not aware of any, establishing an option is uniquely

immune to all future agreements between the same parties. Nor should there be, as this 

would impede the parties’ freedom to contract, a core tenant of contract law. (VL 

Systems, Inc. v. Unisen, Inc. (2007) 152 Cal.App.4th 708, 713 [“Freedom of contract is 

an important principle”].) Thus, like any other agreement, an option is subject to mutual 

abandonment, rescission, novation, or other mutual modification between the parties.

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2 The trial court found the second lease was a novation of the first lease, which 

requires a factual inquiry into the circumstances of the agreements. (Alexander v. Angel

(1951) 37 Cal.2d 856, 860 [“the evidence in support of a novation must be ‘clear and 

convincing’, [citation], the ‘whole question is one of fact and depends upon all the facts 

and circumstances of the particular case’ ”].) But it ultimately does not matter whether 

the subsequent leases constituted a novation, mutual recission, mutual abandonment, or 

any other means to withdraw a prior agreement and reengage in a new one. What matters 

is that whatever the parties discussed and agreed to was incorporated into an integrated 

written contract, disallowing consideration of any prior inconsistent agreements.
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(Lohn v. Fletcher Oil Co. (1940) 38 Cal.App.2d 26, 32 [affirming a “trial court’s 

conclusion that the option agreement was mutually abandoned”].)

This point is further highlighted by addressing plaintiffs’ final argument that 

“California law confirms that the First Right of Refusal ‘has no effect whatever’ on the 

Purchase Option and that the subsequent granting of the First Right of Refusal leaves 

‘unimpaired’ Benik’s pre-existing right to exercise the Purchase Option.” Plaintiffs cite

Green v. Sprague Ranches (1959) 170 Cal.App.2d 687 for this proposition, which 

analyzed a lease that was modified to include a right of first refusal and then modified 

again to include a purchase option. (Id. at pp. 688-689.) The court found “the intention 

of the parties would more reasonably appear to have been to create an independent and 

separate right [to purchase] not extinguishable by the exercise by plaintiffs of the first 

refusal clause.” (Id. at p. 691.) This is readily distinguishable from the present case 

because it dealt with modifications to the same agreement, whereas at issue here is a

subsequent agreement. (See 12 Witkin, Summary of Cal. Law (2023) (11th ed. 2023) 

Real Property, § 556(2)(b) [citing to Green for the proposition both purchase options and 

rights of first refusal “may be contained in the same agreement”].) Green did not bestow 

special powers on the option, but merely interpreted it as any other contractual term. Nor 

was the option being introduced to vary the terms of a subsequent agreement. And Green

noted similar cases have “been decided under the peculiar facts there present with slight 

differences in the wording in each instrument construed.” (Green, at p. 691.) So instead 

of announcing any broad rule that options can never be superseded by rights of first 

refusal, the ruling in Green was based “[u]nder the peculiar facts of the case at bar.” 

(Ibid.)

The parties constructed the contract at issue here to contain the entire agreement 

for the lease and purchase of the property, and any prior agreement on the matters was 

ineffective. Defendants did not unilaterally “cancel[]” the purchase option, as plaintiffs 

contend, but the parties together entered into entirely new agreements concerning the 
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same matters. As the Supreme Court said many years ago: “ ‘If the claimants had any 

objection to the provisions of the contract they signed, they should have refused to make 

it. Having made it and executed it, their mouths are closed against any denial that it 

superseded all previous arrangements.’ ” (United States ex rel. International Contracting 

Co. v. Lamont (1894) 155 U.S. 303, 310.) Therefore, the trial court correctly concluded 

the purchase option for the property was ineffective.

DISPOSITION

The judgment is affirmed. Costs are awarded to defendants. (Cal. Rules of Court, 

rule 8.278(a).)

 \s\ ,

McADAM, J.*

We concur:

 \s\ ,

MAURO, Acting P. J.

 \s\ ,

DUARTE, J.

*

Judge of the Yolo County Superior Court, assigned by the Chief Justice pursuant 

to article VI, section 6 of the California Constitution.