Court Opinion

ID: 4672489
Source: CourtListenerOpinion
Date Created: 2021-03-29 20:02:31.539172+00
Date Added: 2024-06-11T08:03:07.594964
License: Public Domain

Filed 3/29/21 Property Investors 2016 v. Anabo CA1/3
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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 THREE

 PROPERTY INVESTORS 2016, LLC,
           Plaintiff and Appellant,                                      A158290
 v.
 TONY ANABO et al.,                                                      (Alameda County
           Defendants and Respondents.                                   Super. Ct. No. RG18904262)

         Plaintiff Property Investors 2016, LLC (PI2016), appeals from a
judgment following an order sustaining without leave to amend the
demurrers of defendants Tony Anabo (Anabo) and Mansour Ghanbari and
Danny Leung (Ghanbari defendants) (collectively, defendants) to PI2016’s
third amended complaint. PI2016 sued for specific performance or,
alternatively, damages based on allegations that the defendants breached a
contract to sell real property to PI2016. The trial court concluded that
PI2016 was not entitled to relief because it failed to allege it had removed
certain contingencies, which the court found was a condition precedent to the
defendants’ performance. We agree and affirm.

                                                               1
                                    BACKGROUND
I.       The Purchase Agreement
         On April 3, 2018,1 Sukpran Gill,2 who is not a party in this case, and
PI2016 submitted a written offer to purchase a home in Oakland owned by
Anabo (the Property). The offer was submitted on a standard preprinted
form, “California Residential Purchase Agreement and Joint Escrow
Instructions (C.A.R. [California Association of Realtors] Form RPA-CA . . . ).”
(All caps omitted.)
         On April 4, Anabo made a counteroffer, which included the following
terms: (1) “Buyer is purchasing the property in its As-is Condition”;
(2) “Buyers acknowledge that the sale is subject to Bankruptcy Court
Approval”; and (3) “Buyer to close escrow within 10 days or fewer days from
receiving written evidence of court approval or confirmation of Bankruptcy
Sale.”
         On April 5, PI2016 accepted Anabo’s counteroffer. On April 6, Anabo
confirmed he personally received a copy of PI2016’s signed acceptance of the
counteroffer and PI2016 deposited $5,000 into escrow. PI2016’s offer and
Anabo’s counteroffer constitute the integrated purchase agreement
(Agreement).
         The Agreement defines “ ‘Acceptance’ ” as “the time the offer or final
counter offer is accepted in writing by a Party and is delivered to and
personally received by the other Party . . . .” The date of acceptance was thus
April 6. The Agreement also contains a “[t]ime is of the essence” provision.

         1   All further dates refer to the year 2018 unless otherwise stated.
       Gill appears to be an agent of PI2016, as the offer at times refers to
         2

Gill and PI2016 as one person or uses their names interchangeably.

                                            2
      In addition, the parties agreed that “the Property is sold (a) ‘AS-IS’ in
its PRESENT physical condition as of the date of Acceptance and (b) subject
to Buyer’s investigation rights.”
      The Agreement also contains the following provisions related to an
inspection contingency:
      “[Paragraph 12] A. Buyer’s acceptance of the condition of, and any
other matter affecting the Property, is a contingency of this Agreement as
specified in this paragraph and paragraph 14B. . . . [¶] . . . [¶]
      “[Paragraph] 14. TIME PERIODS; REMOVAL OF CONTINGENCIES;
CANCELLATION RIGHTS: The following time periods may only be
extended, altered, modified or changed by mutual written agreement. Any
removal of contingencies or cancellation under this paragraph by either
Buyer or Seller must be exercised in good faith and in writing [C.A.R. Form
CR or CC].
      “A. SELLER HAS: 7 . . . Days After Acceptance to deliver to Buyer all
Reports, disclosures and information for which Seller is responsible . . . .
      “B. (1) BUYER HAS: . . . 0 . . . Days After Acceptance . . . to:
(I) complete all Buyer Investigations; review all disclosures, reports . . . , and
other applicable information, which Buyer receives from Seller; and approve
all matters affecting the Property . . . .
      “(2) Within the time specified in paragraph 14B(1), Buyer may request
that Seller make repairs or take any other action regarding the Property . . . .
Seller has no obligation to agree to or respond to . . . Buyer’s requests.
      “(3) By the end of the time specified in paragraph 14B(1) . . . , Buyer
shall deliver to Seller a removal of the applicable contingency or cancellation
[C.A.R. Form CR or CC] of this Agreement. However, if any report,
disclosure or information for which Seller is responsible is not Delivered

                                             3
within the time specified in paragraph 14A, then Buyer has 5 . . . Days After
Delivery of any such items, or the time specified in paragraph 14(B(1),
whichever is later, to Deliver to Seller a removal of the applicable
contingency or cancellation of this Agreement.
      “(4) Continuation of Contingency: Even after the end of the time
specified in paragraph 14B(1) and before Seller cancels, if at all, pursuant to
paragraph 14D, Buyer retains the right, in writing, to either (I) remove
remaining contingencies, or (II) cancel this Agreement based on a remaining
contingency. Once Buyer’s written removal of all contingencies is Delivered
to Seller, Seller may not cancel this Agreement pursuant to
paragraph 14D(1).
      “(5) . . . Buyer shall have access to the Property to conduct inspections
and investigations for 17 . . . Days After Acceptance . . . .”
      Paragraph 14C provides a box to be checked off next to the term
“REMOVAL OF CONTINGENCIES WITH OFFER: Buyer removes the
contingencies specified in the attached Contingency Removal form (C.A.R.
Form CR). . . .” That box was not checked off.
      Paragraph 14D explains the seller’s right to cancel as follows:
“(1) . . . If, by the time specified in this Agreement, Buyer does not Deliver to
Seller a removal of the applicable contingency or cancellation of this
Agreement, then Seller, after first Delivering to Buyer a Notice to Buyer to
Perform (C.A.R. Form NBR), may cancel this Agreement. In such event,
Seller shall authorize the return of Buyer’s deposit, . . .”
      Paragraph 14G states, “Before . . . Seller may cancel this Agreement for
failure of the other Party to close escrow . . . Seller must first Deliver to the
other Party a demand to close escrow. . . . The [demand to close escrow]

                                         4
shall: (I) be signed by the applicable Buyer . . . ; and (II) give the other Party
as least 3 . . . Days After Delivery to close escrow.”
II.   Events During Escrow
      On April 5, Anabo, as debtor in a proceeding in bankruptcy court (In re
Anabo (Bankr. N.D.Cal. 2017, No. 17-42839 CN)), filed his “second motion for
order authorizing the sale of” the Property to PI2016. (All caps omitted.) The
bankruptcy court granted the motion on April 13 and entered the order on its
docket on April 16.
      On April 24, PI2016 received Anabo’s demand to close escrow. Anabo
demanded that PI2016 close escrow “[b]y April 26, 2018 . . . , which is at least
3 Days After receipt of this Demand to Close Escrow but no earlier than the
agreed upon Close of Escrow date.” It further stated that if PI2016 did not
close by then, “Seller may . . . immediately cancel the Agreement.”
      Also on April 24, PI2016 sent Anabo a notice to seller to perform,
requesting “[Anabo] to execute all necessary documents required by [escrow
company] for transfer of ownership from Tony Anabo to [PI2016].” (Boldface
and italics omitted.) The notice further provides, “If you do not take the
contractual actions specified above within 2 . . . Days After Delivery . . . of
this Notice to Seller to Perform, Buyer may cancel the Agreement.” (Boldface
omitted.) In addition, paragraph 2 of the notice refers to “Contingencies” and
provides boxes that can be marked off next to “Removal of Finding
Replacement Property Contingency,” “Removal of Close of Replacement
Property Contingency,” and “Other.” (All caps, boldface, and underscoring
omitted.) A space is also provided next to “Other.” PI2016 did not check off
any of the boxes or write any information in the space provided.
      On May 1, Anabo filed a third motion in the bankruptcy court for an
order approving the sale of the Property to the Ghanbari defendants,

                                         5
explaining that PI2016 “did not fulfill [its] end of the sale agreement” to close
escrow by April 27. On May 10, the bankruptcy court granted the motion.
On May 17, the grant deed transferring ownership of the Property to the
Ghanbari defendants was recorded.
III.   The Prior Complaints, Demurrers, and Rulings
       On May 10, PI2016 filed a complaint against Anabo for specific
performance, intentional misrepresentation, and fraudulent concealment.
PI2016 alleged that the listing of the Property represented that it “had a
finished basement that had two basement units that were lawful and rented
and that the basement units accounted for fifty percent (50%) of the total
building square footage . . . estimated to be 2347 square feet.” PI2016 sought
Anabo’s specific performance of conveying the Property “with two lawfully
occupied, permitted and code compliant basement units . . . .” As for the
fraud-based causes of action, PI2016 alleged that Anabo misrepresented that
the Property contained lawful basement units.
       On July 26, PI2016 added Ghanbari and Leung as Doe defendants.
       On August 9, Anabo filed a demurrer to the complaint, arguing PI2016
failed to allege facts sufficient to state each cause of action. The court
sustained the demurrer with leave to amend. It found the complaint failed to
allege a breach of contract cause of action giving rise to a right to specific
performance because PI2016 did not allege that the Agreement was approved
by the bankruptcy court, a condition precedent under the Agreement. The
court also found PI2016 failed to allege, with the required specificity, the
necessary element of damages to support the other causes of action based in
fraud. The court granted Anabo’s request for judicial notice of (1) the grant
deed transferring title of the Property to the Ghanbari defendants and (2) the

                                         6
bankruptcy court’s order granting Anabo’s second motion for an order
approving the sale of the Property.
      On September 24, PI2016 filed the first amended complaint (FAC),
adding allegations that PI2016 suffered damages from Anabo’s
misrepresentations through the loss of investment opportunities in other real
properties and inability to recover its deposit in escrow.
      The Ghanbari defendants filed an answer to the FAC. Anabo demurred
to the FAC on grounds similar to those raised in his demurrer to the original
complaint. Anabo asserted that the FAC failed to allege facts showing he
caused PI2016’s inability to recover its escrow deposit. Anabo further argued
that PI2016’s allegation it lost real estate investment opportunities was
speculative.
      The court sustained the demurrer to the FAC with leave to amend. It
found the FAC, once again, failed to allege that the bankruptcy court
approved the sale, a condition precedent to defendants’ performance under
the Agreement. The court further concluded that PI2016 failed to allege the
elements of its second and third causes of action with any specificity. It also
agreed with Anabo that PI2016’s alleged loss of investment opportunities was
speculative. The court further found there was no allegation that Anabo
prevented PI2016 from recovering its escrow deposit.
      On December 20, PI2016 filed the second amended complaint (SAC).
The SAC added allegations that the bankruptcy court granted Anabo’s
motion for order authorizing the sale of the Property to PI2016 and attached
the order. The SAC also alleged Anabo breached the Agreement, in part, by
not granting PI2016 “access to perform the necessary inspections” until
April 14 and failing to respond to PI2016’s request that Anabo verify the
downstairs area was “legal living space” and, if it was not, to repair the space.

                                        7
“[PI2016] request[ed] that the Defendants specific [sic] perform by
transferring the subject property to [PI2016] . . . with the downstairs units
permitted and code compliant.”
      The Ghanbari defendants filed an answer to the SAC. Anabo demurred
to the SAC. He argued that PI2016 “attempts to redefine an ‘As Is’ sale,
burdening it with warranties. . . . [T]his pleading definition is in
contradiction of the actual definition of ‘As Is’ in the actual [Agreement],”
which is based on the “PRESENT physical condition” of the Property. Anabo
also maintained PI2016 failed to allege it removed or waived the inspection
contingency contained in paragraph 12A of the Agreement.
      The court sustained the demurrer with leave to amend as to specific
performance. It agreed with Anabo that under the Agreement, the “as is”
condition of the Property is based on its condition as of the date of
acceptance. The court explained that the listing for the sale of the Property
never represented, as PI2016 alleged, that the basement units were lawful,
permitted, or code-complaint; the listing merely represented that the
basement units existed and were rented to relatives, and expressly noted that
the square footage in the listing was likely different from that provided in
public records.
      The court further concluded, “For Anabo to be obligated to transfer the
property to PI2016, PI2016 would have had to waive the contingencies
related to repairs that it requested [pursuant to paragraph 14F of the
Agreement]. [Citation.] PI2016 does not allege that it has done so.” The
court nonetheless granted PI2016 leave to amend, finding that it may be able
to support its claims with allegations of “further written agreements to repair
or a waiver of contingencies . . . .”

                                        8
      The court sustained the demurrer as to the remaining causes of action
for intentional misrepresentation and fraudulent concealment without leave
to amend. It explained that PI2016 still failed to plead the elements of its
claims with specificity and cure the defective allegations for damages.
      The court granted Anabo’s request for judicial notice of its third motion
for an order from the bankruptcy court approving the sale of the Property to
the Ghanbari defendants and the order granting the motion.
IV.   The Operative Third Amended Complaint
      On March 18, 2019, PI2016 filed the operative third amended
complaint (TAC) against Anabo and the Ghanbari defendants, alleging a
single cause of action for specific performance. In addition to repeating the
same allegations contained in the SAC, the TAC alleged that on April 24,
2018, PI2016 both received Anabo’s demand to close escrow and sent Anabo a
notice to seller to perform. The TAC attached and incorporated by reference
both documents, along with the Agreement. The notice to seller to perform
requested that Anabo execute all necessary documents required by the
escrow company for transfer of ownership of the Property to PI2016.
      PI2016 also alleged it “has offered, and continues to offer, to tender the
agreed upon purchase price of $840,000 . . . in exchange for title to said real
property with 2347 square feet, with two lawfully occupied, permitted and
code compliant basement units.”
      The TAC also included the same allegations of damages concerning
PI2016’s unreturned escrow deposit and lost business opportunities.
V.    The Demurrers to the TAC
      Anabo and the Ghanbari defendants filed separate demurrers to the
TAC. In his demurrer, Anabo argued PI2016 failed to cure the defects in the
SAC identified by the court concerning the removal of contingencies. Anabo

                                        9
also reiterated that PI2016’s alleged damages were speculative or were not
caused by Anabo.
      In the Ghanbari defendants’ demurrer, they argued the TAC was
uncertain and failed to allege they had any involvement with the Agreement
between PI2016 and Anabo.
      PI2016 opposed both demurrers. PI2016 also filed the declaration of its
attorney, which attached a copy of a notice of pending action (lis pendens)
that was recorded with the Alameda County Clerk-Recorder’s Office.3 In its
opposition to the Ghanbari defendants’ demurrer, PI2016 argued it could
enforce specific performance against them because they had constructive
notice of the instant lawsuit and were therefore not bona fide purchasers of
the Property.
      In its opposition to Anabo’s demurrer, PI2016 asserted the TAC alleged
facts supporting its breach of contract claim and entitlement to specific
performance, arguing that its notice to seller to perform and Anabo’s demand
to close escrow “establish a written agreement by [PI2016] to waive
contingencies.”
      Anabo replied to the opposition, contending that neither his demand to
close escrow nor PI2016’s notice to seller to perform “serve[s] to unilaterally
amend the contingent purchase agreement, nor do they serve to remove
[PI2016’s] contingencies, thereby requiring . . . Anabo’s performance. Nor is
it even alleged in the TAC that these documents would tend to have such an
effect. . . .” Anabo maintained, “There is no attachment or allegation
anywhere that contingencies were waived, or that [Anabo] accepted
[PI2016’s] demand for repairs.”

      3In part IV of the discussion, post, we address the lis pendens attached
to PI2016’s attorney’s declaration.

                                       10
      The Ghanbari defendants also replied to PI2016’s opposition. They
argued that PI2016 cannot assert specific performance against any of the
defendants. They explained, “If the contract is unenforceable as to Anabo, it
cannot be enforced against [them], who had no dealings with [PI2016] at all.”
VI.   The Ruling on the Demurrers to the TAC
      On June 17, 2019, the court, after conducting a hearing, sustained both
demurrers to the TAC without leave to amend. It first recounted that the
SAC failed to allege “that the agreement’s inspection and repair closing
contingencies had been satisfied or waived.” The court then explained, “The
TAC attempts to resolve this . . . deficiency by pleading and attaching
Anabo’s April 24, 2018 Demand to Close Escrow [citation] and PI2016’s
April 24, 2018 Notice to Seller to Perform [citation].” The court concluded,
“Neither of these forms can reasonably be understood as a waiver of the
buyer’s right to inspection and repair. Under both their own terms and the
terms of the Agreement, these forms do not purport to remove or waive
contingencies: they are the first steps toward each side cancelling the
Agreement for failure of the other to perform.” The court also observed that
“the Notice to Seller to Perform is on C.A.R. Form NSP, not the form specified
by the Agreement as the form by which the buyer removes contingencies,
C.A.R. Form CR.” It added that the allegations of the TAC “show that
[PI2016] remains unwilling to waive its requested repairs to the Property to
bring its basement units and bathrooms into compliance with the state and
local building codes.”
      The court also sustained the demurrer of the Ghanbari defendants
without leave to amend, on the grounds that “PI2016’s right to relief against
[them] is dependent on its ability to compel specific performance against
Anabo . . . .”

                                      11
      Finally, the court denied PI2016 leave to amend, noting that “PI2016
has now had four opportunities to plead its case” and that its “opposition
papers make no offer of additional facts that might be pleaded to avoid these
shortcomings.”
      On July 8, 2019, the court filed a judgment of dismissal. On
September 6, 2019, PI2016 filed its notice of appeal from the judgment.
                                DISCUSSION
I.    Threshold Issues
      Before we turn to the merits of PI2016’s appeal, we address two
threshold issues raised by the parties.4 First, we disagree with Anabo that
PI2016’s appeal is untimely. Anabo argues that the June 17, 2019 order
sustaining the demurrers, and not the subsequent judgment filed on July 8,
2019, triggered the 60-day time limit to appeal. (Cal. Rules of Court, rule
8.104(a)(1)(A).) Anabo is mistaken. An order sustaining a demurrer without
leave to amend is not appealable; the appeal must be taken from the
judgment on such order. (O’Grady v. Merchant Exchange Productions, Inc.
(2019) 41 Cal.App.5th 771, 776, fn. 3.) The notice of appeal, which is properly
taken from the judgment, was filed within 60 days after the court filed the
judgment and is therefore timely.
      Second, Anabo’s respondent’s brief does not provide citations to the
record on appeal but, rather, to documents filed in the trial court. (Cal. Rules
of Court, rule 8.204(a)(1)(C).) Anabo concedes the point but claims he
unsuccessfully attempted to obtain the record from the trial court’s clerk.
Although Anabo’s failure to provide proper record citations allows us to treat

      4As explained post, PI2016’s underlying action and thus this appeal
are mainly directed at Anabo; the claims against the Ghanbari defendants
are derivative of the action against Anabo.

                                      12
his arguments as waived (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246),
we decline to do so as the citations in his brief are to documents that are
included in the appellate record.
II.    Standard of Review
       “A decision to sustain a demurrer is a legal ruling, which we review
de novo. [Citation]. In doing so, we ‘must assume the truth of the
complaint’s properly pleaded or implied factual allegations.’ [Citation.] We
‘ “ ‘ “give the complaint a reasonable interpretation, reading it as a whole and
its parts in their context.” ’ ” ’ [Citation.] ‘We also consider the complaint’s
exhibits.’ [Citation.] Appellant bears the burden of demonstrating that the
trial court erred in sustaining the demurrer. [Citation.]” (Baldwin v. AAA
Northern California, Nevada & Utah Ins. Exchange (2016) 1 Cal.App.5th 545,
549.) We may “consider matters which may be judicially noticed. [Citation.]”
(Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Moreover, we “must affirm if the
trial court’s decision to sustain the demurrer was correct on any theory.”
(Kennedy v. Baxter Healthcare Corp. (1996) 43 Cal.App.4th 799, 808.)
       We now turn to the arguments related to the sustaining of Anabo’s
demurrer to the TAC without leave to amend.
III.   The Demurrer of Anabo
       The TAC alleged that Anabo breached the Agreement in various ways
and sought specific performance of the Agreement or, alternatively,
damages.5 “To prevail on a cause of action for breach of contract, the plaintiff

       5Anabo points out that the TAC’s single cause of action is labeled
“specific performance,” which is a remedy, not a cause of action. Technically,
PI2016 had one cause of action for breach of contract; specific performance
and damages are alternative remedies for it. (Rogers v. Davis (1994) 28
Cal.App.4th 1215, 1218, fn. 2.) Because the TAC allegations sufficiently
apprised the defendants “of the issues [they were] being asked to meet,” we
reject Anabo’s assertion that the TAC was subject to demurrer based on the

                                        13
must prove (1) the contract, (2) the plaintiff’s performance of the contract or
excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting
damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182,
1186.) Here, we conclude the trial court correctly found PI2016 failed to
allege facts to support the elements for breach of contract, thereby precluding
its right to specific performance or damages.
      A.      PI2016’s Failure to Perform
      In sustaining Anabo’s demurrer, the court mainly focused on the second
element of a breach of contract claim: PI2016’s performance under the
Agreement. The court found PI2016 failed to allege it had satisfied a
condition precedent to Anabo’s performance.
      “A condition precedent is one which is to be performed before some
right dependent thereon accrues, or some act dependent thereon is
performed.” (Civ. Code, § 1436.)6 “[A] plaintiff suing for breach of contract
must prove it has performed all conditions on its part or that it was excused
from performance. [Citation.] Similarly, where defendant’s duty to perform
under the contract is conditioned on the happening of some event, the
plaintiff must prove the event transpired. [Citation.]” (Consolidated World
Investments, Inc. v. Lido Preferred Ltd. (1992) 9 Cal.App.4th 373, 380;
§ 1439.) Thus, “a party’s failure to perform a condition precedent will
preclude an action for breach of contract.” (Richman v. Hartley, supra, 224
Cal.App.4th at p. 1192.) Moreover, “[s]pecific performance cannot be enforced
in favor of a party who has not fully and fairly performed all the conditions

incorrect labeling. (Williams v. Beechnut Nutrition Corp. (1986) 185
Cal.App.3d 135, 139, fn. 2.)
      6   All further statutory references are to the Civil Code.

                                         14
precedent on his part to the obligation of the other party . . . .” (§ 3392; see
Evarts v. Johnston (1949) 34 Cal.2d 6, 9.)
      In real estate contracts, “[b]oth buyer and seller may desire to have
certain conditions precedent (often referred to as ‘contingencies’ or
‘conditions’) to their respective obligations to buy and sell the property.”
(Greenwald & Bank, Cal. Practice Guide: Real Property Transactions (The
Rutter Group 2020) ¶ 4:385.) “[A] common form of real estate contract binds
both parties at the outset (rendering the transaction a bilateral contract)
while including a contingency, such as a loan or inspection contingency, that
allows one or both parties to withdraw should the contingency fail.” (Steiner
v. Thexton (2010) 48 Cal.4th 411, 419; see, e.g., Fogarty v. Saathoff (1982) 128
Cal.App.3d 780, 787 [failure of buyer to remove a lender approval
contingency justified cancelation on the part of seller].)
      At issue in this case is the inspection contingency set forth in
paragraphs 12 and 14 of the Agreement, which give PI2016 the right to
investigate or inspect the Property as a contingency of the Agreement. As
explained ante, the court found the TAC failed to allege that the contingency
had been satisfied or removed, which the court found was a condition
precedent to Anabo’s performance.
      PI2016 disputes the court’s conclusions. PI2016 argues, as it did below,
that Anabo’s April 24 demand to close escrow and PI2016’s April 24 notice to
seller to perform should be construed as removing contingencies. PI2016
contends that the notice to seller to perform “does not allege that [Anabo]
must complete any repairs nor does it allege any outstanding contingency
whatsoever.” PI2016 also argues that under paragraph 14F of the
Agreement, the demand to close escrow “ ‘removes any contingency or
cancellation rights’ and ‘Buyer shall conclusively be deemed to have

                                        15
completed all Buyer investigations . . . elected to proceed with the transaction
and . . . assumed all liability, responsibility and expenses for repairs or
correction . . . .”
       The trial court properly rejected these contentions. It concluded,
“Neither [the notice to seller to perform nor the demand to close escrow] can
reasonably be understood as a waiver of the buyer’s right to inspection and
repair. Under both their own terms and the terms of the Agreement, these
forms do not purport to remove or waive contingencies: they are the first
steps toward each side cancelling the Agreement for failure of the other to
perform.” We agree with the court’s interpretation, which PI2016 fails to
meaningfully address.
       The court’s analysis finds support in a California real estate law
treatise, which has interpreted the terms of the preprinted purchase
agreement form that the parties have used here. (Miller & Starr, Cal. Real
Estate Forms (2d ed. 2020) § 1:94.) The authors point to the opening caption
in paragraph 14, which states that the removal of contingencies or
cancelation must be in writing to be effective. (Ibid.) Based on this
provision, the authors explain, “The RPA applies the ‘active’ method of
contingency removal, NOT the ‘passive’ method.” (Ibid.) As such, they
conclude, “Silence does not make the contingency go away nor create a
cancellation.” (Ibid.) By the same token, “silence or no-action is not
approval, [and] the contract will remain in limbo unless seller takes
affirmative action.” (Ibid.)
       The authors’ analysis is persuasive. We agree that paragraph 14 of the
Agreement imposes an affirmative obligation on the buyer to remove
contingencies or cancel the Agreement in writing. We therefore reject
PI2016’s argument that either the demand to close escrow or the notice to

                                       16
seller to perform removed contingencies. Indeed, PI2016 left blank the
portion of the notice to seller to perform entitled “Contingencies,” which
provides space to insert information related to contingencies. (All caps,
boldface, and underscoring omitted.) Additionally, the court observed that
“the Notice to Seller to Perform is on C.A.R. Form NSP, not the form specified
by the Agreement as the form by which the buyer removes contingencies,
C.A.R. Form CR.”
      Moreover, PI2016 is simply incorrect when it argues that
paragraph 14F provides that “demand to close . . . ‘removes any contingency
or cancellation rights.’ ” Paragraph 14F does not state or suggest such a
proposition. Rather, it reiterates that the buyer’s removal of contingencies or
cancelation of the Agreement must be made in writing, before “Buyer shall
conclusively be deemed to have (I) completed all Buyer investigations . . . ;
(II) elected to proceed with the transaction; and (III) assumed all liability,
responsibility and expense for Repairs . . . .” As stated ante, nothing in the
demand to close escrow or notice to seller to perform indicates PI2016’s intent
to remove contingencies of the Agreement.
      In another attempt to establish “there were no contingencies,” PI2016
in its reply brief cites to Anabo’s declaration supporting his bankruptcy court
motion for an order approving the sale of the Property to PI2016. In the
declaration, Anabo stated that “the sale is not subject to any further
inspections or contingencies and the Property is being sold ‘as is’, subject to
Court Approval.” Because PI2016 did not raise this argument in the trial
court or in its opening brief, we may disregard it. (Keiffer v. Bechtel Corp.
(1998) 65 Cal.App.4th 893, 900.) In any event, PI2016’s reliance on Anabo’s
declaration is misplaced. In determining the sufficiency of a complaint
against a demurrer, we may “consider matters which may be judicially

                                       17
noticed. [Citation.]” (Serrano v. Priest, supra, 5 Cal.3d at p. 591.) While a
court may take judicial notice of the existence of court records (Evid. Code,
§ 452, subd. (d)), which includes affidavits or declarations, “[t]he truth of any
factual matters that might be deduced from official records is not the proper
subject of judicial notice. [Citation.]” (Lockley v. Law Office of Cantrell,
Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885; see id. at p.
882 [“The underlying theory of judicial notice is that the matter being
judicially noticed is a law or fact that is not reasonably subject to dispute”].)
Here, Anabo’s declaration’s statement that the sale of the Property to PI2016
was not “subject to further inspections or contingencies” is reasonably subject
to dispute. As such, the truth of that statement is not a matter that may be
judicially noticed, and it is improper for a court to use that statement as a
basis to rule on the demurrer. Further, the contention fails in any event
since, as explained ante, the Agreement provides that it is the buyer’s, not
the seller’s, obligation to remove any contingencies related to the buyer’s
inspections of the Property or request for repairs.
      Next, PI2016 asserts that although it alleged it had requested that
Anabo “restore the property into lawful and properly permitted units,” it did
so after the contingency period expired. According to PI2016, “the right to
assert contingencies or cancellation rights was waived after [the contingency
period] . . . .” After that date, PI2016 says, it “had no remaining contingency
rights under the terms of the [Agreement].” PI2016’s arguments are
problematic for several reasons.
      First, because PI2016 did not raise this argument in the trial court, it
has been forfeited on appeal. (See Thompson v. Ioane (2017) 11 Cal.App.5th
1180, 1191–1192 [forfeiture applied to plaintiff’s argument not raised in
opposition to demurrer]; Wittenberg v. Bornstein (2020) 51 Cal.App.5th 556,

                                        18
567–568 (Wittenberg) [finding courts are not required, and may properly
decline, to consider arguments not raised in demurrer even if based on purely
legal questions].) As explained in Wittenberg, supra, 51 Cal.App.5th at p.
567, “ ‘[F]airness is at the heart of a waiver claim. Appellate courts are loath
to reverse a judgment on grounds that the opposing party did not have an
opportunity to argue and the trial court did not have an opportunity to
consider. [Citation.] In our adversarial system, each party has the obligation
to raise any issue or infirmity that might subject the ensuing judgment to
attack. [Citation.] Bait and switch on appeal not only subjects the parties to
avoidable expense, but also wreaks havoc on a judicial system too burdened
to retry cases on theories that could have been raised earlier.’ ”
      These concerns resonate here. In the trial court, PI2016 asserted
breach of contract and sought specific performance based mainly on Anabo’s
alleged failure to address PI2016’s request for repairs to the Property’s
basement units, which it claimed were not code-compliant. Now on appeal,
PI2016 seeks to distance itself from that theory. It appears PI2016 is
arguing that if no request for repairs was made before the contingency period
in paragraph 14B(1) expired on April 6,7 then there were “no remaining
contingencies regarding the condition of the property” as of that date. In so
arguing, PI2016 suggests that we should consider only the actions it took
before April 6, which allegedly were none; thus, the fact it requested repairs
after April 6 is of no consequence. Indeed, PI2016 implies that we may

      7 The contingency period in paragraph 14B(1) expired on April 6, not
April 3 as PI2016 asserts. As noted ante, under paragraphs 14B(1) and (2),
PI2016 had “0 . . . Days After Acceptance” to complete inspections and
request repairs. The Agreement defines “ ‘Acceptance’ ” as “the time the offer
or final counter offer is accepted in writing by a Party and is delivered to and
personally received by the other Party . . . .” The date of acceptance was thus
April 6. Zero days after that date is, of course, April 6.

                                       19
disregard its allegation that it requested repairs altogether.8 Whereas
PI2016 affirmatively invoked its right to request repairs as a sword in the
trial court, PI2016 now sets it up as a shield from its obligations to perform
under the Agreement. PI2016 cannot have it both ways. As noted ante, a
party may not engage in a bait and switch with the courts by relying on one
theory at trial and asserting a different—and in this case inconsistent—
theory on appeal. (See Wittenberg, supra, 51 Cal.App.5th at p. 567.)
Applying the forfeiture rule is, therefore, appropriate here.
      Even if we were to overlook the forfeiture, PI2016’s assertions are
unpersuasive. For one, the premise of its arguments—that it had no right
under the Agreement to request repairs after April 6—is flawed. It is true
that PI2016 alleged it requested repairs after April 6, on or after April 14.
However, PI2016 also alleged that Anabo “prevented [PI2016] from
[conducting] any inspection until April 14,” after which PI2016 requested
repairs. This allegation supports a finding that Anabo’s conduct excused
PI2016’s delay in requesting repairs. (See Semas v. Bergman (1960) 178
Cal.App.2d 758, 762 [“A promisor’s delay in performance is excused to the
extent acts of the promisee caused such delay”]; § 1511, subd. 1.) As such, we
do not accept PI2016’s assumption that it had no right to request repairs at
the time it did.9

      8PI2016 states that the contents of the Agreement and other
documents attached to the TAC “will take precedence over and supersede any
inconsistent or contrary allegations set forth in the pleadings.” (Building
Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th 1400, 1409.)
PI2016 implies that its allegation it had requested repairs is subject to this
rule and thus superseded by the Agreement or other incorporated documents.
PI2016, however, fails to explain how any of the TAC allegations conflict with
those documents. In any event, we do not find such a conflict exists.
      9If, as PI2016 contends, it had no right to request repairs after the
contingency period, the allegation that it requested repairs nonetheless and

                                       20
      In any event, PI2016 fails to explain how its inaction during the
contingency period had the effect of satisfying or removing the inspection
contingency. As explained ante, a reasonable interpretation of paragraph 14
and its subparagraphs is that “silence or no-action is not approval, [and] the
contract will remain in limbo unless seller takes affirmative action.” (Miller
& Starr, supra, § 1:94.) We apply this reasoning here and reject PI2016’s
contention that its delay in requesting repairs nullified contingencies.
      In sum, we agree with the trial court that PI2016 failed to allege the
contingencies of the Agreement were removed or satisfied and Anabo
therefore had no obligation to transfer the Property to it. Because PI2016
failed to plead the elements of its breach of contract cause of action, its
request for specific performance and damages necessarily fail.
      Assuming PI2016 is correct that all contingencies of the Agreement had
been removed or satisfied, we would still affirm the judgment based on
PI2016’s failure to close escrow.

then insisted on Anabo’s sale of the Property to it with those repairs raises a
question whether PI2016 repudiated the Agreement—a question PI2016 does
not explain away and we do not resolve. (See 23 Williston on Contracts (4th
ed. 2020) § 63:47 [“party . . . commit[s] an anticipatory breach by making an
express demand for a performance to which the party is not entitled”];
Rest.2d Contracts, § 250, cmt. b [“language that under a fair reading
‘amounts to a statement of intention not to perform except on conditions
which go beyond the contract’ constitutes a repudiation”]; see also 23
Williston on Contracts, supra, § 63:48 [“It is an anticipatory breach to . . .
insist that [a contract’s] meaning or legal effect are different in a material
particular from the true meaning or effect, coupled with the assertion,
express or implied in fact, that performance will be made only according to
the erroneous interpretation”]; see, e.g., Freedman v. Rector, etc. of St.
Mathias Parish (1951) 37 Cal.2d 16, 19 [plaintiff repudiated land sale
contract by insisting on event he had no right to impose, precluding specific
performance or damages for breach of contract].)

                                        21
        In a contract for the sale of real property, the buyer’s obligation to
deposit the purchase price into escrow within the time specified in the
contract, and the contract’s provision that time is of the essence, are as
binding on the buyer as the promise to convey the land is on the seller.
(Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, 1337–1338; Pitt v.
Mallalieu (1948) 85 Cal.App.2d 77, 81.) “Thus, where the parties have made
time the essence of the contract, at the expiration of time without tender by
either party, both parties are discharged.” (Pittman v. Canham (1992) 2
Cal.App.4th 556, 560, citing 3A Corbin on Contracts (1960) § 663, p. 181.) In
this circumstance, a buyer’s failure to pay the money within the specified
time deprives it of the right to enforce performance of the seller, who holds
the privilege of terminating the sale contract. (Pitt, supra, 85 Cal.App.2d at
p. 81.)
        A contract’s timeliness provision, however, may be waived by the party
for whose benefit it was made. (Galdjie v. Darwish, supra, 113 Cal.App.4th
at p. 1339.) Courts generally find waiver when a party’s acts are so
inconsistent with an intent to enforce the right as to induce a reasonable
belief that he or she has relinquished the right. (Old Republic Ins. Co. v. FSR
Brokerage, Inc. (2000) 80 Cal.App.4th 666, 678.) But even if a party waives
the time of performance, it may reinstate the time conditions by giving
definite notice to the other party. (Gonzalez v. Hirose (1948) 33 Cal.2d 213,
216.)
        Here, the Agreement required concurrent performances by the
parties—PI2016’s deposit of full purchase price and Anabo’s conveyance of
deed—at the close of escrow. It also contained a “[t]ime is of the essence”
provision. The Agreement called for close of escrow on April 26—ten days
after receipt of the bankruptcy court’s order approving the sale to PI2016, the

                                         22
date of which was April 16, when that order was entered on its docket.
However, since PI2016 received Anabo’s demand to close escrow on April 24,
it had until April 27, three days later, to close escrow, pursuant to
paragraph 14G of the Agreement.10
      There is no allegation that this date was waived. Even assuming the
deadline related to the inspection contingency in paragraph 14B(1) had been
waived based on Anabo’s alleged delay in granting PI2016 access to the
Property, Anabo reestablished the time conditions by giving notice in his
demand to close escrow that the deal must still close within a specified time.
(Gonzalez v. Hirose, supra, 33 Cal.2d at p. 216.) Thus, PI2016 was required
to close escrow by April 27. It is undisputed that PI2016 did not tender
payment on that date, or ever. PI2016’s failure to pay the purchase price by
April 27 effectively discharged Anabo’s duty to perform its obligations under
the Agreement. (Pittman v. Canham, supra, 2 Cal.App.4th at p. 560.)
      In sum, we conclude the trial court properly sustained Anabo’s
demurrer to the TAC without leave to amend on the grounds that PI2016
failed to allege it had performed its obligations under the Agreement.

      10   Paragraph 14G states, “Before . . . Seller may cancel this Agreement
for failure of the other party to close escrow . . . Seller must first Deliver to
the other Party a demand to close escrow . . . . The [demand to close escrow]
shall . . . give the other Party at least 3 . . . Days After Delivery to close
escrow.” Under paragraph 30I, “ ‘Delivery’ . . . means and shall be effective
upon: personal receipt by Buyer or Seller . . . , regardless of the method used
(i.e., messenger, mail, email, fax, other).” Here, the demand was “delivered”
on April 24, when PI2016 received it. Three days after that date is April 27,
not April 26, which is the date Anabo wrote in the space provided in the
demand. Presumably, Anabo wrote April 26 either because that date was the
originally agreed upon closing date or he was counting three days from when
he signed the demand on April 23.

                                       23
      B.    Damages
      Even if PI2016 could otherwise allege Anabo breached the Agreement,
it failed to allege facts it suffered damages from the breach. The alleged
damages were (1) Anabo’s failure to return PI2016’s $5,000 deposit in escrow
and (2) the loss of real estate investment opportunities. These allegations
were also contained in the SAC, which the trial court rejected when it
sustained the demurrer to the SAC’s fraud-based causes of action. Rather
than address the court’s reasons why the SAC allegations were defective, the
TAC simply repeats the SAC’s allegations. Further, on appeal, PI2016
provides no meaningful analysis, but rather conclusory statements, as to why
its TAC allegations supported recovery of damages. PI2016’s failure to
support its arguments with cogent analysis and citations to authority forfeits
them on appeal. (Cahill v. San Diego Gas & Electric Co. (2011) 194
Cal.App.4th 939, 956.) In any event, we conclude the TAC does not plead
facts supporting PI2016’s recovery for damages from the alleged breach.
      First, with respect to its unreturned escrow deposit, the TAC fails to
establish a causal connection between the breach and the damages sought.
“For the breach of an obligation arising from contract, the measure of
damages . . . is the amount which will compensate the party aggrieved for all
the detriment proximately caused thereby, or which, in the ordinary course of
things, would be likely to result therefrom.” (§ 3300.) Under the Agreement,
PI2016 has the right to demand performance or cancel the Agreement and
demand the return of its deposit. Such a demand is binding on the escrow
holder 10 days after delivery unless the seller objects. PI2016 did not allege
it had made, or was prevented from making, a demand for return of its
deposit, let alone that Anabo had objected to such demand. It also does not

                                      24
allege it is prevented from making such a demand. PI2016 thus has failed to
show Anabo caused its claimed inability to recover its deposit.
      Second, PI2016’s allegation that it suffered damages by losing
investment opportunities in other real properties also fails. “No damages can
be recovered for a breach of contract which are not clearly ascertainable in
both their nature and origin.” (§ 3301; see Sargon Enterprises, Inc. v.
University of Southern California (2012) 55 Cal.4th 747, 773–774 [“Such
damages must ‘be proven to be certain both as to their occurrence and their
extent, albeit not with “mathematical precision” ’ ”].) We agree with the court
that PI2016’s allegations of lost investment opportunities are too speculative.
As the court observed, PI2016 “does not allege ‘what facts lead PI2016 to
believe that it could have profitably purchased the other properties.’ ” For
example, “[PI2016] does not allege that . . . the owners of those properties
would have sold to PI2016 instead of another buyer and that PI2016 could
have resold the properties for a profit without undertaking costly repairs or
improvements not alleged in the [TAC].”
      In sum, we conclude PI2016 failed to state a cause of action for breach
of contract and, therefore, it is not entitled to specific performance or
damages. Accordingly, the trial court properly sustained Anabo’s demurrer
to the TAC without leave to amend. In light of our conclusion, we need not
address Anabo’s additional arguments in support of affirmance. (See
Kennedy v. Baxter Healthcare Corp., supra, 43 Cal.App.4th at pp. 807–808.)
IV.   The Demurrer of the Ghanbari Defendants
      PI2016 also sought specific performance against or damages from the
Ghanbari defendants. The conveyance of title to a buyer can be ordered by a
specific performance decree against subsequent third party purchasers who
had knowledge of the previous buyer’s claimed interest before they purchased

                                        25
the property. (See § 3395.) PI2016 contends the Ghanbari defendants had
constructive notice of its claimed interest in the property because it recorded
a notice of lis pendens.11 The notice was attached to the declaration of
PI2016’s attorney in support of the opposition to the Ghanbari defendants’
demurrer. As explained ante, a court may consider matters that may be
judicially noticed on demurrer, and a law or fact that is not reasonably
subject to dispute is a proper subject of judicial notice. (Lockley v. Law Office
of Cantrell, Green, Pekich, Cruz & McCort, supra, 91 Cal.App.4th at p. 882.)
Here, whether the Ghanbari defendants had constructive notice of PI2016’s
claimed interest is reasonably subject to dispute in light of their contention
that the lis pendens was invalid for defective service. (See Rey Sanchez
Investments v. Superior Court (2016) 244 Cal.App.4th 259, 263 [a party may
allege a lis pendens is “ ‘void and invalid’ ” based on defective service and
may move to expunge the lis pendens on that basis], citing Code Civ. Proc.,
§§ 405.22–405.23, 405.31–405.33.) Accordingly, the legal effect of the
lis pendens proposed by PI2016 is not subject to judicial notice. In any event,
even assuming the Ghanbari defendants had constructive notice of PI2016’s
claimed interest in the Property and were therefore not bona fide purchasers
of the Property, PI2016 has failed to allege it is entitled to relief from the
Ghanbari defendants. As the court found, PI2016’s action against the
Ghanbari defendants depends upon its ability to prevail in its action against
Anabo. Because we have concluded PI2016 failed to plead cognizable claims

      11 Proper recordation of a lis pendens during litigation gives
constructive notice of the pendency of an action affecting title to or possession
of the described real property. (Kirkeby v. Superior Court (2004) 33 Cal.4th
642, 647.) PI2016’s lis pendens was recorded on May 10, before the deed
transferring the Property to the Ghanbari defendants was executed and
recorded.

                                        26
against Anabo, the court properly sustained the Ghanbari defendants’
demurrer to the TAC without leave to amend.
V.     Leave to Amend
       Finally, “ ‘[w]hen a demurrer is sustained without leave to amend, “we
decide whether there is a reasonable possibility that the defect can be cured
by amendment: if it can be, the trial court has abused its discretion and we
reverse; if not, there has been no abuse of discretion and we affirm.” ’ ”
(Dudek v. Dudek (2019) 34 Cal.App.5th 154, 163.) PI2016 shoulders the
burden to show a reasonable possibility the TAC can be amended to state a
cause of action. (Id. at pp. 163–164.) PI2016 has not met this burden.
PI2016 notes that the TAC contains allegations related to prior causes of
action based on fraud, which the court previously dismissed. PI2016 then
states that the TAC “could be cleaned-up with one final leave to amend.”
This, however, does not address how the defective breach of contract
allegations could be cured by amendment. “Where the appellant offers no
allegations to support the possibility of amendment and no legal authority
showing the viability of new causes of action, there is no basis for finding the
trial court abused its discretion when it sustained the demurrer without
leave to amend.” (Rakestraw v. California Physicians’ Service (2000) 81
Cal.App.4th 39, 44.) As such, the court properly denied leave to amend the
TAC.
                                DISPOSITION
       The judgment is affirmed. Defendants Anabo, Ghanbari, and Leung
are entitled to their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).)

                                       27
                                                     _________________________
                                                     Jackson, J.

WE CONCUR:

_________________________
Fujisaki, Acting P. J.

_________________________
Wiseman, J.*

A158290/Property Investors 2016, LLC v. Anabo

       *Retired Associate Justice of the Court of Appeal, Fifth Appellate
District, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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