Filed 9/12/13 Rideau v. Stewart Title of California CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE
STATE OF CALIFORNIA

EARL B. RIDEAU et al., Plaintiffs and Appellants,

v. STEWART TITLE OF CALIFORNIA, INC., Defendant and Respondent. D061497

(Super. Ct. No. 37-2010-00096274-CU-BC-CTL)

APPEAL from a judgment of the Supe rior Court of San Diego County, Jay Bloom, Judge. Revers ed; judgment directed.

Dennis R. Delahanty, a Prof. Corp. and Dennis R. Delahanty for Plaintiffs and Appellants. Best Best & Krieger LLP, Robert J. Hanna, Kira L. Klatchko and Shannon M. Erickson for Defendant and Respondent.2 I. INTRODUCTION Earl B. Rideau and Marina Rideau (the Rideaus) entered into an agreement with a developer, BGJB de Mexico, S. de R.L. de C.V. (BGJB), to purchase a condominium in a building to be constructed in Mexico. The Rideaus deposited $239,700 toward the purchase price with an escrow company, defe ndant Stewart Title of California (Stewart Title). The escrow instructions provide in relevant part: "ESCROW HOLDER is authorized an d instructed to release funds as instructed by SELLER . . . without further authorization from BUYERS; said funds to be disbur sed by California Fund Control to pay direct costs, commissions and construction costs only. California Fund Control and SELLER have in place, an agreement where California Fund Control in spects the project site and authorizes payment of construc tion costs to contractor, subcontractors and suppliers accordi ng to a pre-approved voucher control system." Stewart Title released the Rideaus' depos it, together with the deposits of other purchasers, to entities other th an California Fund Control, including to BGJB. BGJB failed to construct the condominium buildin g, and neither Stewart Title nor BGJB returned the Rid eaus' deposit. The Rideaus brought this action agains t Stewart Title. Among other claims, the Rideaus brought causes of acti on for breach of contract a nd negligence in which they alleged that Stewart Title had breached th e escrow instructions by releasing their deposited funds to entities other than Califor nia Fund Control. The trial court held a bench trial, interpreted the escrow instruc tions, and concluded that, "[Stewart Title] had3 no obligation to send funds to [California Fund Control]." The court entered a judgment in favor of Stewart Title on all of the Rideaus' claims. On appeal, the Rideaus claim that the trial court misinterpreted the escrow instructions and erred in failing to find that Stewart Title breached th e escrow instructions by releasing their funds to entities other than California Fund Control. With respect to their negligence claim, the Rideaus argue that Stewart Title breached its duty "to comply with the [Escrow Inst ructions]. . . ." We conclude that the most reasonable in terpretation of the escrow instructions is that they implicitly required St ewart Title to release the Ride aus' funds only to California Fund Control. In light of th is interpretation, we conclude that Stewart Title breached the escrow instructions by releasi ng the Rideaus' funds to entitie s other than California Fund Control and that the Rideaus were entitled to judgment in their favor on their breach of contract claim. However, we conclude that the Rideaus cannot prevail on their tort claim for negligence based on Stewart Title's breac h of contractual duties. We reverse the judgment and direct the trial court to ente r a new judgment in favor of the Rideaus on their breach of contract claim and in favor of Stewart Title on the Rideaus' remaining causes of action.4 II. FACTUAL AND PROCEDUR AL BACKGROUND
A. The first amended complaint In March 2011, the Rideaus filed a firs t amended complaint ag ainst Stewart Title and GJL, S. de R.L. de C.V ., a Mexican corporation (GJL). 1 In the operative complaint, the Rideaus alleged that on or about May 2, 2007, they entered in to a written agreement (Purchase Agreement) with BGJB, a Mexi can corporation, for the purchase of a condominium in a building to be constructe d, called "The Falls" (the Project). The Project was to be built in the city of Playas de Rosarito, Mexico. The Rideaus alleged that they entere d into this agreem ent based upon the assurances of Shane Delmer, a salesperson for the Project. According to the Rideaus, Delmer told them that their deposits for th e purchase of the condominium would be held in an escrow account with Stewart Title, in the Unite d States. The Rideaus further alleged that "Stewart Title w ould distribute the funds to a fund control company [that] would periodically inspect the project and rel ease the funds on an 'as work is done' basis utilizing a pre-approved v oucher system . . . ." The Rideaus claimed that a few days af ter entering in the Purchase Agreement, they delivered Sale Escrow Instructions (E scrow Instructions), toge ther with an initial deposit of $5,000, to Stewart T itle. According to the Rideaus, they read and reviewed the Escrow Instructions and concluded that the in structions were consistent with Delmer's representations concerning the manner by whic h their deposits would be released. The
1 GJL is not a party to this appeal.5 Rideaus alleged that on or about June 13, 2007, they wired $234 ,700—the balance of their required deposit toward the purchase of the condominium, to Stewart Title. The Rideaus further alleged that, "Alt hough [BGJB] failed to enter into an agreement with California Fund Control, de fendant Stewart Title failed to request and obtain further instructions from [the Rideaus] and [BGJB] as to the disposition of the deposited funds and instead released the depos ited funds to [BGJB] or its principals." The Rideaus also claimed that BGJB failed to commence construction of the Project and that BGJB would be unable to commence construction in the foreseeable future due to a lack of funding. In a negligence cause of action, the Ride aus alleged that Stewart Title negligently failed to: (1) determine whether BGJB had en tered into an agreement with California Fund Control; (2) to inform the Rideaus regarding the lack of a fund control agreement; (3) to release the deposited funds only to California Fund Control; and (4) to request further instructions from BGJB and the Ride aus concerning the release of the deposited funds if release of the fund s to California Fund Control wa s not possible. The Rideaus further alleged: "Plaintiffs were damaged in that they would not have deposited the funds into escrow or would have demanded the immediate return of the funds to them had they known no agr eement for the disbursement of the funds by Ca lifornia Fund Control had been consummated; the deposited funds were not paid over by Stewart Title to California Fund Control or a similar company that would ensure that the deposited funds we re used to pay 'direct costs, commissions and construction co sts only' as provided for in the . . . Escrow Instructions; and the Condominium would [ sic ] not be constructed and thus the deposite d funds will not be applied to the sale price of the Condominium."6 The Rideaus alleged that Stewart Title had refused to return their deposits and that they had suffered damages in the amount of $239,700 as a result of Stewart Title's negligence. In a breach of contract cause of action, the Rideaus incorporated by reference their previous allegations and conten ded that Stewart Title had faile d to perform its obligations as set forth in the Escrow Inst ructions. The Rideaus alleged th at Stewart Title's breach of the Escrow Instructions had damaged them in the amount of $239,700—the amount of their deposits. 2
B. The court trial After the parties waived their right to a ju ry trial, the trial court held a bench trial on the Rideaus' first amended complaint.
1. The Rideaus' evidence Section IV of the Escrow Instructions provides:

" RELEASE OF FUNDS : From BUYERS['] deposit in escrow, ESCROW HOLDER is authorized and instructed to release funds as instructed by SELLER, upon receipt of this signed instruction from all principals and clearance of BUYERS['] funds, without further authorization from BUYERS; said funds to be disbursed by California Fund Control to pay direct costs, commissions and construction costs only. Californi a Fund Control and SELLER have in place, an agreement where Ca lifornia Fund Control inspects the project site and authorizes pa yment of construction costs to
2 Although not at issue in th is appeal, the Rideaus also brought causes of action for fraud (third cause of action) and breach of fidu ciary duty (fourth cause of action) against Stewart Title, and a third party beneficiary breach of contract claim against Stewart Title and GJL (fifth cause of action) based on an alleged agreement between GJL and Stewart Title (the GJL Agreement). The Rideaus alleged that in the GJL Agreement, "Stewart Title agreed to pay . . . 50% of the [Rideaus'] depo sited funds to GJL, and GJL agreed to pay [the Rideaus] the total amount of the deposited funds . . . ."7 contractor, sub-contractors a nd suppliers according to a preapproved voucher control system . The undersigned BUYERS and SELLER hereby acknowledge that th ey are aware that Stewart Title, its officers and employees make no warranty or representation of any kind or nature, either express or implied, as to the ownership or condition of title to the pr operty described in this escrow, nor as to the conditions of this escrow will have been complied with nor will any document be filed for recording in connection therewith. We, the undersigned, hereby hold Stewart Title harmless from any loss or damage which may be sust ained by reason of the above disbursement instruction, and for the failure of any of the conditions of this escrow, and fo r the recovery of said money so released, and agree to defend you against any claims whatsoever arising from [ sic ] and [ sic ] any attorneys fee, expenses or costs incident thereto ." (Emphasis in original.) The Rideaus presented evidence that they deposited $239,700 with Stewart Title pursuant to the Escrow Instructions, that Stewart Title di stributed the Rideaus' funds to entities other than California Fund Control, a nd that Stewart Title had not returned the Rideaus' deposits. Earl Rideau also testified concerning his interpretation of the Escrow Instructions, as follows: "[I]t was my understanding that the seller . . . according to the [E]scrow [I]nstructions would instruct the escrow company to release funds. And then those funds were to be released to California Fund Control. California Fund Control was the only one mentioned in the escrow instructi ons who actually disburses funds. There's no mention . . . of the fu nds being disbursed by the escrow company to the seller or else the f und control is a moot point. [¶] You're not going to get the develope r to give the money back to the fund control so that they could in turn give the money back to the developer. That's irrational. That 's illogical. So I took it at face value."8 The Rideaus also offered in evidence Delmer's affidavit. 3 Delmer testified in relevant part: "During 2007, I was employed as an onsite salesperson for [the Project]. . . . [¶] Typically, during the sales process with a buyer I would explain how purc hases would be conduc ted. . . . I would specifically point out that the trans action would require that funds be placed into escrow with Stewart Title Company. I would then explain that there would be a vou cher system through California Fund Control to pay for the constr uction of the project and related costs of the project. I would explain these procedures to make the potential buyers feel more comfortable in purchasing real estate in a foreign country." The Rideaus offered in evidence the Purchase Agr eement between the Rideaus and BGJB, which provides in relevant part: "All deposits shall be ma de payable to Stewart Title. The deposits shall be withheld and released by Stewart Title in accordance with the terms of the Escrow Contract. "Also, the parties agree that the re lease of the payment of the PRICE by Stewart Title shall be made in accordance with the Construction Supervision and Resource Manageme nt Contract entered into by (in process) and [BGJB], through wh ich said company will instruct Stewart Title to release the PRIC E that the BUYERS progressively pays under this Contract and the progress of the construction of the Unit." The Rideaus also presented the expert te stimony of Judy Lydick, an escrow officer and consultant to escrow companies. Lydi ck offered her opinion concerning what the Escrow Instructions required of an escrow offi cer in order for the o fficer to comply with the standard of care in the escrow in dustry. Lydick testified in part:

3 The trial court admitted Delmar's affida vit without objection pursuant to an agreement between the parties.9 "The escrow instructions are creat ed in a format that an escrow officer really has to choose which portion of those escrow instructions they're going to abide by. [¶] If I were to receive this . . . instruction, the first thing I would do, [is] cease . . . sending out the money until it was clear as to whether the money is to be released to anyone the seller dele gated for the money to go to or whether the money's going to the California Fund Control." Lydick also stated that, in her opinion, the Escrow Instructions were "misleading" if the parties intended to permit Stewart T itle to release the de posited funds to BGJB. The Rideaus also presented the expert test imony of Jeff Katzer, a real estate broker and former chief executive officer of a bank that specialized in construction lending, who testified concerning the use of voucher an d fund control systems in the construction finance industry. Katzer testifie d in relevant part as follows: "One of the primary components to a construction loan which is tantamount [ sic ] to the success of the comp letion of the project is that [the] lender enters into a fund control . . . within their own bank, if they have the facilities to have that system in place, or [they] will contract with [a] third party inde pendent fund control company. That company then will evaluate fr om the cost breakdown and create stages of disbursements. Those stages of disbursements will be funded under a voucher system or completion of those stages by elements of, say, foundation, grading, electrical, things of that nature. "Once those agreements are in plac e and the voucher system is in place, the lender then will, upon reque st of the developer for specific funds to meet a specific line item, those funds will then be released to the fund control. Fund cont rol will inspect the property. Determine that they've met the line item component, where the money went to that contra ctor or subcontractor [ sic ] or material provider. And, in fact, lien releas es were in place. Without that happening, the moneys can go sideways. Developers can get ahead of the project. [The] project may not be finished on time or sufficient funds remaining in the loan account to complete the project."10 2. The defense Stewart Title presented the expert test imony of Donna Grosso, an escrow officer and manager of an escrow company. Grosso testified concerning whether Stewart Title had met the standard of care for performing es crow services. Grosso stated that she interpreted the Escrow Instructions as perm itting Stewart Title to release the buyers' funds upon the seller's in struction, without further limitation. Grosso further testified that language pertaining to Californi a Fund Control in the Escrow Instructions was "a thing between the buyer and the seller."
C. The trial court's statement of decision The trial court issued a statement of d ecision in which it found for Stewart Title on all of the Rideaus' causes of action. With resp ect to the Rideaus' bre ach of contract cause of action, the trial court noted that the Ri deaus claimed that Stewart Title had breached the Escrow Instructions in numerous ways, including "failing to release the [Rideaus] funds to California Fund Control. " With respect to the Rideaus' contention that Stewart Title was required to release th eir funds only to California Fund Control, the trial court stated: "[I]t is claimed the funds should ha ve been released to [California Fund Control]. However, without any mechanism for such funding, it is unclear to the court how this should have been done. In addition, as noted above,[ 4 ] the [Escrow Instructions] did not require
4 The trial court apparently was referring to a portion of its statement of decision in which it stated the following: "[The Rideaus'] argument assumes [S tewart Title] was to release the funds upon instruction by the seller and then disburse the funds to [California Fund Control] under the [Escrow Instructions]. . . .The11 [Stewart Title] to release funds to [C alifornia Fund Control]. It said the funds were to be disburse d by California Fund Control." With respect to the Rideaus' breach of contract claim, the trial court stated the following: "Also, if the [Escrow Instructions ar e] read with consideration of the language as well as the custom and practice in the industry as indicated by the defense expert, th ere is no breach of the [Escrow Instructions]. The first part of Section IV [of the Escrow Instructions] indicates the escrow hol der is authorized and instructed to release funds as instructed by seller upon receipt of the signed [Escrow Instructions] from all prin cipals and clearance of buyers' funds without further authorization from the buyers. This clause clearly required the escrow compa ny to release the funds upon order of the seller without any instructio n from the buyer. The next clause indicating said funds are to be disbursed by [California Fund Control] does not relate to the escr ow company. It states the funds are to be distributed by California Fund Control[.] "According to the uncontradicted testimony of the defense expert, this clause deals with the obligations betwee n the buyer, seller, and creditors. It has nothing to do with the es crow company." In addition to finding in fa vor of Stewart Title on the Ri deaus' breach of contract cause of action, the trial court found in favo r of Stewart Title on the Rideaus' causes of action for negligence, breach of fiduciary duty, and fraud. Th e court also found that the Rideaus were not entitled to prevail on their breach of contract claim premised on the GJL Agreement.

[Escrow Instructions] st ate[] that the funds are to be disbursed by [California Fund Control]. It doe s not state [Stewart Title] was to send the funds to Califor nia Fund Control. Thus , [Stewart Title] had no obligation to send funds to [California Fund Control]."12 D. The judgment and the appeal A few weeks after issuing its statemen t of decision, the trial court entered judgment in favor of Stewar t Title. The Rideaus timely a ppealed from the judgment.
III. DISCUSSION
A. Stewart Title breached the Es crow Instructions by releas ing the Rideaus' funds to entities other than Cal ifornia Fund Control The Rideaus claim that the trial court erred in failing to find that Stewart Title breached the Escrow Instructions by releasing their funds to entities other than California Fund Control. Resolution of the Rideaus' claim requires that we interpret the Escrow Instructions.
1. Standard of review We must first determine the appropria te standard of review to apply in interpreting the Escrow Instructions. In People v. Paredes (2008) 160 Cal.App.4th 496, 507, this court discussed the applicab le law governing th is determination: " '[T]he "interpretation of a contra ct is subject to de novo review where the interpretation does not tu rn on the credibility of extrinsic evidence." ' [Citations.] 'In contra st, "[i]f the parol evidence is in conflict, requiring the resolution of credibility issues, we would be guided by the substantial evidence te st. [Citation.]" [Citation.]' " ( Id . at p. 507.)13 In this case, both parties contend that this court should apply th e de novo standard of review on appeal. 5 We agree that, as Stewart Title st ates in its brief, the trial court's "conclusions, as expressed in the Statemen t of Decision, were based on the plain language of the [Escrow] Instru ctions," and that the de novo standard of review therefore applies on appeal. We acknowledge that the trial court stated that the testimony of Grosso, concerning the "custom and practice in the i ndustry," supported the court's interpretation of the Escrow Instructions. However, our re view of the record re veals that Grosso's testimony was not based on extrinsic evidence of the custom and practice in the escrow industry that might be "admissible to in terpret the written wo rds" of the Escrow Instructions. ( Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Cal.App.4th 1, 20.) Rather, Grosso's opinion was based on her own interpretation of the Escrow Instructions. Grosso stated that her opini on was based on her "read[ing] . . . of the escrow instructions," and a review of her testimony makes clear that such testimony was based on an examination of the language of the Escrow Instructions. (See e.g., "[w]e had a paragraph here that say's we're authorized a nd instructed to releas e funds as instructed by seller"; "[i]t says 'From bu yers' deposit in escrow, escr ow holder is authorized and instructed to release funds as instructed by the seller"; "i f the seller instructed us to
5 The Rideaus argue, "The interpretation of the . . . Escrow Instructions presents a question of law for the appellate court to determine anew." Stewart Title argues, "[I]nterpretation of a contract is reviewed independently on appeal . . . . .The [Escrow] Instructions here . . . are clear on their face, and it was not necessary for the trial court to admit, or rely on, nor did the trial court admit or rely on, ex trinsic or parole evidence to interpret them."14 disburse to California Fund Control, we would do so. But all the instructions state here [is] it comes from the seller"; "[y]ou have a semicolon after 'buyers' which starts a new thought process.") Even assuming that Grosso's testim ony was admissible for the purpose of interpreting the Escrow Instructions (but see Summers v. A.L. Gilbert Co. (1999) 69 Cal.App.4th 1155, 1180 [" [e]xpert opinion on the legal interp retation of contracts has . . . been found to be inadmissible"]), it is clea r that a proper interpretation of the Escrow Instructions does not turn on the credibility of Grosso's te stimony. Thus, we conclude that the parties are correct that the de novo standard of review applies. (See People v. Paredes , supra , 160 Cal.App.4th at p. 507.)
2. Governing law

a. The duties of an escrow holder
In Summit Financial Holdings, Ltd. v. Continental Lawyers Title Co. (2002) 27 Cal.4th 705 ( Summit ), the Supreme Court described the duties of an escrow holder as follows: " 'An escrow involves the deposit of documents and/or money with a third party to be delivered on th e occurrence of some condition.' [Citations.] An escrow holder is an agent and fiduciary of the parties to the escrow. [Citations.] The agency created by the escrow is limited—limited to the obligation of the escrow holder to carry out the instructions of each of the par ties to the escrow. [Citations.] If the escrow holder fails to carry out an instruction it has contracted to perform, the injured party has a cause of action for breach of contract. [Citation.]" ( Id . at p. 711.) "An escrow holder has an implied obligation to do all of the things normally done by an escrow agent which were not expressl y excluded by the escrow instructions.15 [Citation.] Upon the escrow ho lder's breach of an instruction that it has contracted to perform or of an implied promise arising ou t of the agreement with either party, the injured party acquires a cause of action for breach of contract. ([Citation]; Claussen v. First American Title Guaranty Co. (1986) 186 Cal. App.3d 429, 435 [( Claussen )].) As noted in Claussen , supra , at page 436, '. . . some escrow instructions may be implicit in the express instructions given. ( Gordon v. D & G Escrow Corp. (1975) 48 Cal.App.3d 616, 621-623 [( Gordon )]—escrow instructions implicitly re quired proceeds of sale to be paid to both sellers.) In the event of a conf lict or apparent error in instructions, the escrow holder is obliged to ta ke corrective steps before obeyi ng questionable instructions. [Citations.]' " ( Kirk Corp. v. First American Title Co. (1990) 220 Cal.App.3d 785, 807.) b. Principles of contract interpretation "Escrow instructions are interpreted unde r the rules applicable to contracts." ( Claussen , supra , 186 Cal.App.3d at p. 437.) The general principles of contract interpretation are well established: " ' "The fundamental rules of contr act interpretation are based on the premise that the interpretation of a contract must give effect to the 'mutual intention' of the parties. 'Under statutory rules of contract interpretation, the mutu al intention of the pa rties at the time the contract is formed governs interpreta tion. [Citation.] Such intent is to be inferred, if possible, solely from the written provisions of the contract. [Citation.] The "clear and explicit" meaning of these provisions, interpreted in their "o rdinary and popular sense," unless "used by the parties in a technica l sense or a special meaning is given to them by usage" [citation], controls judicial interpretation. [Citation.]' . . ." [Citati on.]' [Citation.]" ( Minich v. Allstate Ins. Co. (2011) 193 Cal.App.4th 477, 485.)16 In addition, and of particular relevance to this case, is the fo llowing statutory rule of contract interpretation: "The whole of a contract is to be ta ken together, so as to give effect to every part, if reasonably prac ticable, each clause helping to interpret the other." (Civ. Code, § 1641.) This principle is embodied in case law in numerous formulations, all of which guide our interpretation of the Es crow Instructions. (See e.g., Jones v. Jacobson (2011) 195 Cal.App.4th 1, 18 ["We must view the language of a contract as a whole, avoiding a piecemeal, strict cons truction approach"]; Sprinkles v. Associated Indem. Corp. (2010) 188 Cal.App.4th 69, 82 [" '[t]he character of a contract is not to be determined by isolating any single clause or group of clauses' "]; In re Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 799 [" [E]ven if one provision of a contract is clear and explicit, it does not fo llow 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"]; Advanced Network, Inc. v. Peerless Ins. Co. (2010) 190 Cal.App.4th 1054, 1063 ( Advanced Network ) [" 'We must give significance to every word of a contract, when possible . . .' "]); Hayden v. Robertson Stephens, Inc. (2007) 150 Cal.App.4th 360, 367 [" 'A construction rendering some word s surplusage is to be avoided' "].)
3. The Escrow Instructions implicitly re quired Stewart Title to release the Rideaus' funds only to California Fund Control

a. The Escrow Instructions The Escrow Instructions provide in relevant part:

" RELEASE OF FUNDS : From BUYERS['] deposit in escrow, ESCROW HOLDER is authorized and instructed to release funds as17 instructed by SELLER, upon receipt of this signed instruction from all principals and clearance of BUYERS['] funds without further authorization from BUYERS; said funds to be disbursed by California Fund Control to pay direct costs, commissions and construction costs only. Californi a Fund Control and SELLER have in place, an agreement where Ca lifornia Fund Control inspects the project site and authorizes pa yment of construction costs to contractor, sub-contractors a nd suppliers according to a preapproved voucher control system." b. The most reasonable interpretation of the Escrow Instructions is that they implicitly require that, upon in struction from seller, the escrow holder release the buyers' fund s to California Fu nd Control for disbursement by California Fund Control The signed Escrow Instructions clear ly and unambiguously permitted Stewart Title to release the Rideaus' funds upon an instruction from BGJB and clearance of the Rideaus' funds. Further, read ing the instruction as a whole, as we must (Civ. Code, § 1641), the Escrow Instructi ons implicitly authorized St ewart Title to release the Rideaus' funds to only one entity—California Fund Control. To begin with, in the same sentence in which the Escrow Instructions authorize Stewart Title to release the Rideaus' funds, th e instructions state that "said funds" would be disbursed by California Fund Contro l. California Fund Control could not disburse "said funds" without having received those funds. Further, the disbursement clause of the sentence pertaining to California Fund Contro l is separated from the remainder of the sentence pertaining to Stewart Title's releas e of the funds by only a semicolon. A semicolon is used to separate parts of a sent ence that "are too closely connected to be made into separate sentences." (Bryan A. Garner, A Dictionary of Modern Legal Usage (2d Ed. 1995) p. 717.) By us ing a semicolon and the phrase "said funds," the text and18 grammar of the Escrow Instructions indicat e that Stewart Title was authorized, upon BGJB's instruction, to re lease the Rideaus' funds to California Fund Control

. The structure of the Escrow Instructi ons supports this interpretation. The references to California Fund Control appear in Section IV of the Escrow Instructions, entitled "RELEASE OF FUNDS"—the portion of the instructi ons that expressly imposes duties on Stewart Title. Further, Stewart T itle's contention that it was authorized to "release funds as instructed by BGJB" wit hout any limitation, would render the bulk of this section surplusage because if Stewart T itle were authorized to release the funds to

any entity merely upon BGJB's instruction, there would be no reason to include any of the language in the Release of Funds sec tion pertaining to California Fund Control. An interpretation rendering such a large por tion of the Release of Funds section of the Escrow Instructi ons surplusage should be avoided. (See National City Police Officers' Assn. v. C ity of National City (2001) 87 Cal.App.4th 1274, 1279 ["An interpretation which renders part of the instrument to be su rplusage should be avoided"].) Rather, we should interpret th at portion of the Escrow Inst ructions authorizing Stewart Title to "release funds as instructed by SE LLER," in light of the remainder of the sentence, which provides, "said funds to be disburse d by California Fund Control. . . ." (See In re Quantification Settle ment Agreement Cases , supra , 201 Cal.App.4t h at p. 799.) Further, "In determining th e meaning of a written instrument, we are permitted to consider not only its language , but also ' "the circumstan ces under which [it] was made and the matter to which it relates." ' " (See PV Little Italy, LLC v. MetroWork Condominium Assn. (2012) 210 Cal.App.4th 132, 152.) Our interpretation of the Escrow19 Instructions fully comports with the purpos e for which the principals to an escrow agreement would use a fund cont rol agent. A fund control agen t is used to ensure that funds intended for the construction of real pr operty are actually and properly used by the owner-builder to construct that property. (See e.g., Summit , supra , 27 Cal.4th at p. 713 ["a lender agreed to fund an ow ner-builder's construction of hom es, and to ensure that the loan funds would actually be used to pay th e construction costs, the lender deposited the funds with the plaintiff fund control agent"].) The Escrow Instructions ex pressly provided that the fund control agent (California Fund Control) would "inspect[] the project site and authorize[] payment of construction costs to contractor, sub-contractors and su ppliers according to a pre-approved voucher control system." In order for a fund control ag ent to perform this function, it is essential that the fund control agent receive the funds that it is to di sburse for the payment of construction costs. The Rideaus' interpreta tion of the Escrow Instructions is fully consistent with this purpos e: upon instruction from BGJB , the escrow holder was authorized and instructed to release the Ri deaus' funds to California Fund Control for disbursement by California Fund Control to pay direct costs, commissions and construction costs. In contrast, Stewart Title's interpretation of the Escrow Instructions to the effect that, upon BGJB's instruction, it was authorized to release the funds to any entity that BGJB selected—including BGJB itself—is comp letely inconsistent with the purpose of having a funds control agent disburse the funds. We can think of no reason, and neither the trial court nor Stewart Title has offered any, as to why princi pals to an escrow20 agreement who intended to use a fund contro l agent to disburse funds for a construction project, would intend to permit the escrow holder to release funds directly to entities other than the fund control agent. As noted above, the entir e raison d'être of a fund control agent is to act as an intermediary between those funding a construction project and those building the project. To put it simply, a fund control agent cannot disburse a project's funds if the builder directs the disbursal of the funds instead. Stewart Title's contention that references in the Escrow Instructions pertaining to California Fund Control implicates only BGJB's duty to the Rideau s not only fails to make practical sense, it is also in conflict w ith the fact that this language appears in the
Escrow Instructions, which describe and control Stewart Title 's release of the funds deposited into escrow. 6

6 Although not material to our decision in light of the applicable de novo standard of review, we disagree with the trial cour t's statement that, "According to the uncontradicted testimony of the defense expert, th[e] clause [per taining to California fund Control in the Escrow Instructions] deals with the obligations between the buyer, seller and creditors." (Italics added.) The Rideaus' expert testifie d on this subject as follows: "If . . . the intent, was to release the money to the seller, then I would eliminate all verbiage regarding the California Fund Control because that is misleading. If the money was to be paid to the seller or someone the seller wanted, all that wording about California Fund Control would be out . . . and the [Escrow Instructions] would read that the moneys were to be paid to the seller or someone delegated by the seller. And then all the in formation about California Fund Control shouldn't be there. It's mi sleading. It gives [the Rideaus] a false feeling of security."21 Contrary to Stewart Title's contention, its interpretation finds no support in the Purchase Agreement. As noted previously, th e Purchase Agreement pr ovides in relevant part: "[T]he parties agree that the releas e of the payment of the PRICE by Stewart Title shall be made in accordance with the Construction Supervision and Resource Manageme nt Contract entered into by (in process) and [BGJB], through wh ich said company will instruct Stewart Title to release the PRIC E that the BUYERS progressively pays under this Contract and the progress of the construction of the Unit." We reject Stewart Title's suggestion that this provision "unequivocally stated that BGJB would instruct Stewart T itle to release funds." To begin with, the reference to "said company" in the provision is ambiguous, and may reasonably be read to refer to the company with which BGJB w ould enter into a Constructi on Supervision and Resource Management Contract, rather than to BGJB itse lf. In any event, ev en if "said company" is interpreted as referring to BGJB, the provision is fully consistent with our interpretation of the Escrow In structions that Stewart Title was authorized, upon BGJB's instruction, to releas e the Rideaus' funds to California Fund Control . Moreover, the provision expressly states that "the release of the payment of the PRICE by Stewart Title shall be made in accordance with the Construction Supe rvision and Resource Management Contract." (Italics added.) It is undisputed th at BGJB never entered into a Construction Supervision and Resource Management Contract (i.e. a fund control agreement). It is thus clear that Stewart Title did not release the Rideaus' deposits "in accordance with" a fund contro l agreement. This provisi on of the Purchase Agreement22 therefore does not support Stewart Title's contention that it comp lied with the Escrow Instructions.
3. Stewart Title breached the Escrow Instructions It is undisputed that Stewart Title rele ased the Rideaus' fu nds in the amount of $239,700 to entities other th an California Fund Control. 7 In light of our interpretation of the Escrow Instructions provided above, the release of the Ri deaus' funds to entities other than California Fund Control constitu ted a breach of the instructions. Accordingly, we conclude that the trial c ourt erred, as a matter of law, in entering judgment in favor of Stewart Title on the Rideaus' breach of contract cause of action.
B. The judgment may not be affir med on the basis of the exculp atory provisions in the Escrow Instructions Stewart Title contends that the judgment may be affirmed based on the following provisions in the Escrow Instructions: "The undersigned BUYERS and SE LLER hereby acknowledge that they are aware that Stewart Title, its officers and em ployees make no warranty or representati on of any kind or natu re, either express or implied, as to the ow nership or condition of title to the property described in this escrow, nor as to the conditions of this escrow will have been complied with nor will any doc ument be filed for recording in connection therewith. We, the undersigned, hereby hold Stewart Title harmless from any loss or damage which may be sustained by reason of the ab ove disbursement instruction,

7 For example, during his opening statement at trial, Stewart Title's counsel stated: "There were disbursements. We will show money was disbursed pursuant to the seller's instructions, and that those funds went to the contractor. Everyone, I think, a ssumed they would go to California Fund Control. They did not. And the developer later said that they were incapable of obtaining the lo an, and unfortunately, they had used the money."23 and for the failure of any of the conditions of this escrow, and for the recovery of said money so released, and agree to defend you against any claims whatsoever arising from [ sic ] and [ sic ] any attorneys fee, expenses or costs incident thereto. " (Emphasis in original.) Stewart Title argues that it contended in th e trial court that these provisions "stated that Stewart Title would be held harmless from any losses caused by distributing funds in accord with the [E scrow] Instructions ." (Italics added.) Sim ilarly, on appeal, Stewart Title contends that "the Rideau s agreed that Stewart Title w ould not be held liable for any 'loss or damage' for disbursing monies in accord with the [Escrow] Instructions ." (Italics added.) Stewart Title also c ontends, "The hold-harmless clause did not absolve Stewart Title from wrongdoing or neglig ence. Instead, the clause protected Stewart Title for complying with the [E scrow] Instructions . . . ." (Italics added.) We concluded in parts III.A.2 and III.A.3, that Stewart Title breached the Escrow Instructions in the manner by which it released the Rideaus' funds. In light of Stewart Title's acknowledgement that the exculpatory provisions in the Escrow Instructions do not "absolve Stewart Title from wrongdoing," and apply, if at all, only in the event that
Stewart " compl[ied] with the [Escrow] Instructions," and released funds " in accord with the [Escrow] Instructions" (italics added), th e judgment may not be affirmed on the basis of these provisions. 8

8 In its statement of decision, the trial c ourt expressed its view that the exculpatory provisions in the Escrow Instructions likely could not be enforced to insulate Stewart Title from liability: "[Stewart Title] also alleges that it is not liable be cause of the hold harmless clause in the escrow instru ctions. Although the court does24 C. The Rideaus are not entitled to reversal of the judgment on thei r negligence cause of action The Rideaus claim that the tr ial court erred in ruling in Stewart Title's favor on their negligence cause of action. In support of this contention, the Rideaus argue that Stewart Title breached its duty "to comply with the [Escrow Instructi ons] . . . ." This argument fails because a plaintiff may not prev ail on a tort cause of action for negligence based on the defendant's breach of contractua l duties, in the absence of an independent violation of tort law. ( Money Store Investment Corp. v. Southern California Bank (2002) 98 Cal.App.4th 722, 731 ( Money Store ).) As the Money Store court explained: "In essence, the Money Store alle ges the [escrow holder] breached a duty to it by failing to perform as specified in the Money Store's instructions.

not have to reach this issue here, it does not a ppear the hold harmless clause would insulate [Stewa rt Title] from liability. See Diaz v. United California Bank (1977) 71 Cal.App.3d 161, 171 [( Diaz )]; Akin v. Business Title Corp. (1968) 264 Cal.App.2d 153, 157 [(

Akin )]."
In Akin , the court applied Tunkl v. Regents of University of California (1963) 60 Cal.2d 92 ( Tunkl ), and concluded, on public policy gr ounds, that "that the exculpatory clause before us cannot relieve the escrow company from liability." ( Akin, supra , 264 Cal.App.2d at p. 159; see also Diaz, supra 71 Cal.App.3d at p. 171 [citing Akin and Tunkl and stating, "Where the public interest is affected the ex culpatory clause will be held invalid"].) We need not determine wh ether the exculpatory provis ions in this case could validly be enforced to exculpate Stewart Title for liability for breaching the Escrow Instructions, since Stewart Title does not contend that the provisions should be interpreted in such a fashion.25 " 'The Supreme Court has rejected the transmutation of contract actions into tort actions "in favor of a general rule precluding tort recovery for noninsurance contract breach, at least in the absence of violation of 'an independe nt duty arising from prin ciples of tort law' [citation] other than the bad faith denial of the existence of, or liability under, the breached contract ." [Citation.]' [Citation.] As alleged, the Money Store's cause of action for negligence would be subject to summary adjudication because it does not state a negligence cause of action apart from its contract cause of action." ( Id . at pp. 731-732.) In a separate one-sentence section of thei r brief, the Rideaus also contend that they are entitled to reversal of judgment on their negligence cause of action because Stewart Title "fail[ed] to disclose its on-going relatio nship with [BGJB], the fact that [BGJB]] was its client, that it met with [BGJB] on se veral occasions, yet never once spoke to the Rideaus." The Rideaus fail to present any legal argument or authority in support of this contention. Accordingly, we deem the contention forfeited. (See, e.g., People ex rel. Reisig v. Acuna (2010) 182 Cal.App.4th 866, 879 [" 'An appellate brief "should contain a legal argument with citation of authorities on th e points made. If none is furnished on a particular point, the court may treat it as [fo rfeited], and pass it without consideration.' [Citation.]" [Citation.]' "].)26 IV. DISPOSITION The judgment is reversed and the matte r is remanded to the trial court. On remand, the trial court shall enter a new judgme nt in favor of the Rideaus on their breach of contract cause of action and in favor of Stewart Title on the remaining causes of action in the first amended complaint, in a manner consistent with this opinion. The trial court may also conduct any further ancillary proceedings that it deems necessary in order to enter the judgment. The Rideau s are entitled to costs on appeal.

AARON, J. WE CONCUR:

McCONNELL, P. J.

O'ROURKE, J.