Opinion ID: 1388651
Heading Depth: 2
Heading Rank: 4

Heading: the red mountain ranch property

Text: Sato and Yamakoshi acquired the Red Mountain Ranch property early in their partnership. On 11 March 1968, Sato delivered to Yamakoshi a quit claim deed for the Red Mountain property. In November 1971, Yamakoshi sued to have the quit claim deed foreclosed as a real estate mortgage securing Sato's debt to Yamakoshi. In May 1973, Yamakoshi filed a separate quiet title and foreclosure action with respect to the Red Mountain property, which was later consolidated with a civil action. Apparently, there were some settlement discussions at this time. Yamakoshi's counsel secured an appraisal, which indicated that, as of October 1980, the Red Mountain property had an appraised value of $475,000, or approximately $3,000 per acre. It was proposed that the property be sold to respondent and his wife for the appraised value. The proposal expressly noted that respondent and Sato had signed a separate side agreement relating to the Red Mountain property. On 15 June 1981, the parties formally entered into a Compromise Settlement Agreement in Full and Final Release of All Claims. The agreement provided that UNI owned 66% of the Red Mountain Ranch property, Yamakoshi owned 24%, and Sato owned 10%. The property was then to be sold to respondent and his wife. As respondent testified: I discussed the letter and the escrow instructions in detail with Mr. and Mrs. Sato in my home. Mr. Sato expressed the opinion that the property was not worth the amount of the appraisal, that they had had it for many years and had never been able to sell it, and we discussed the transaction. Both of them fully understood the proposal. They consented to it knowing that I was the purchaser of it. They were anxious that it be  that the lawsuit be settled and if it could be settled on the basis proposed, they were thrilled with the idea. They therefore signed the escrow instructions and my wife and I signed the escrow instructions. The accompanying escrow instructions called for a total purchase price of $475,000 payable as follows: $10,000 earnest money in the form of a promissory note; $20,000 in cash at the close of escrow (which discharged the promissory note); and the deferred balance of $455,000 to be discharged through a subdivision trust agreement upon which no interest would run and no payments would commence for a period of two years. This transaction did not close until April 1982. Sato was never advised to seek separate counsel with respect to this transaction. Following extended negotiations, Sato signed escrow instructions on 14 June 1983 agreeing to sell 60 acres of the Red Mountain Ranch property to United Development, Inc. (UDI) for $720,000, or approximately $12,000 per acre. Sato apparently advised representatives of UDI that respondent held title to the property as his attorney and would cooperate in closing the transaction. Following the signing of the escrow, Sato and respondent held several meetings to discuss alternative proposals for defining or dividing their interest in the Red Mountain property that would permit the transaction to be completed. Respondent, however, rejected all deals and refused to join the transaction. As a result, UDI sued Sato and respondent, seeking specific performance of the escrow instructions. Sato and respondent filed third-party claims against each other. In November 1986, a superior court judge issued findings of fact and conclusions of law in the civil action and ruled that UDI had a valid contract for the purchase of a portion of the Red Mountain property and was entitled to specific performance. The court also ruled that respondent and his wife held the property in constructive trust for the Satos and ordered them to execute any conveyances necessary to effectuate the sale to UDI. Finally, the court ruled that a portion of the Red Mountain sales proceeds be applied to discharge any amounts respondent owed the Satos from sales of portions of the Home Ranch property. In January 1987, another superior court judge entered judgment on the third-party complaint and counterclaim in the same action, based upon a jury verdict. That judgment awarded Sato the sum of $61,984.30 as an accounting for sales of portions of the Home Ranch property, prejudgment interest from 28 December 1977, and attorneys fees and costs.