Court Opinion

ID: 2684730
Source: CourtListenerOpinion
Date Created: 2014-07-17 23:01:04.314222+00
Date Added: 2024-06-11T12:18:45.877107
License: Public Domain

Filed 7/17/14 Kirschenmann v. Bender CA5

                        NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                     FIFTH APPELLATE DISTRICT

CHARLES KIRSCHENMANN,

         Plaintiff and Appellant,                                                     F066714

                   v.                                                    (Super. Ct. No. CV-275232)

ROBERT BENDER et al.,                                                             OPINION

         Defendants and Respondents.

                                                   THE COURT
         APPEAL from the judgment of the Superior Court of Kern County. Sidney P.
Chapin, Judge.
         Darling & Wilson, Joshua G. Wilson; Thomas Anton & Associates, Thomas J.
Anton and Gina M. Cervantes for Plaintiff and Appellant.
         Kuhs & Parker, Bernard C. Barmann, Jr. and Keri L. Bland for Defendants and
Respondents.
                                                        -ooOoo-
         Appellant Charles Kirschenmann appeals from the judgment entered after the trial
court granted summary judgment for respondents Robert and Stacie Bender (Bender) on

        Before Levy, Acting P.J., Cornell, J., and Kane, J.
the ground that appellant’s complaint for breach of oral contract was barred by the two-
year limitations period in Code of Civil Procedure section 339.1 Kirschenmann contends
the trial court erred in granting summary judgment because Bender did not establish that
the complaint was barred by the statute of limitations. We will affirm.
                      FACTS AND PROCEDURAL HISTORY
       In 2004, Kirschenmann Farms, Inc. (KFI) was disassociating and selling its assets.
Kirschenmann, who was a member of KFI’s Board of Directors, proposed to purchase
KFI’s New Sabo Ranch and KFI agreed to the sale. At the time, Kirschenmann’s friend
and business associate, Bender, wanted to purchase farm property for a tax-deferred
exchange under 26 United States Code section 1031 (section 1031 exchange). Therefore,
when KFI agreed to allow Kirschenmann to purchase New Sabo Ranch in the summer of
2004, Bender asked Kirschenmann to sell him the ranch. As part of the agreement,
Bender asked that Sierra Farms, Inc., an entity in which Kirschenmann, his son Brian,
and Bender were involved, lease New Sabo and pay rent in an amount sufficient to pay
Bender’s interest expenses. Bender also agreed that “at a point in the future,” he and
Kirschenmann would both take title in the ranch and would share any profits derived
from its development. At the August 2004 KFI board meeting, the board approved the
sale of the New Sabo property to Bender for $500,000. Bender purchased the property in
October 2004 for that amount.
       According to Kirschenmann, in September 2004, he and Bender entered into an
oral agreement regarding the New Sabo property. Pursuant to the agreement,
Kirschenmann would allow Bender to purchase the property to accommodate Bender’s
section 1031 exchange tax deadline. But, at some point in time, Bender was to find other

1      All further statutory references are to the Code of Civil Procedure unless otherwise
indicated.

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property he wanted to purchase. Kirschenmann would purchase that property and Bender
and Kirschenmann would carry out another section 1031 exchange and Bender would
convey the New Sabo property to Kirschenmann at the price Bender paid for the
property. In addition, Bender agreed to lease the property to Sierra Farms, who owned
the adjacent “shed” property. Sierra Farms was owned 25 percent by Kirschenmann, 25
percent by his son Brian, and 50 percent by CSS. CSS was a “farming outfit from the
Midwest” in which Bender was a principal. The original lease was for three years and
expired on December 31, 2007. The five-year extension expired on December 31, 2012.
At some point, Sierra Farms subleased the property to KFI, which is owned 25 percent by
Kirschenmann, 25 percent by Brian, and 50 percent by Sierra Farms Corporation, which
is owned by Kirschenmann’s grandchildren.
       Kirschenmann did not pursue the New Sabo conveyance sooner because he was
waiting for Bender to tell him he had found another property so they could carry out the
exchange. He did not demand that Bender convey the property until the fall of 2011. In
his demand letter to Bender, Kirschenmann asked that Bender find new property and
return the New Sabo Ranch land to Kirschenmann pursuant to their agreement. While
the agricultural real estate property values were “stagnant” in 2004, by 2011 the New
Sabo property was worth over a million dollars. Bender did not respond to
Kirschenmann’s demand.
       At his deposition, Kirschenmann described the terms of the oral agreement he had
with Bender. There were no witnesses to the conversation that resulted in the oral
agreement and Kirschenmann could not recall anything Bender said or did during the
conversation. With regard to the time of performance term, Kirschenmann initially
testified that he expected Bender to convey the property sooner rather than later─that the
agreement was for a short term. Later, he testified that the time of performance was

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within the terms of the lease. Kirschenmann also testified that it was within his power at
all times to require Bender’s performance by making a demand.
       In November 2011, Kirschenmann sued alleging that Bender had breached the oral
agreement by refusing to convey the property to him and seeking specific performance.
Bender denied the allegations of the complaint and, as an affirmative defense, alleged
that the claim was barred by section 339’s two-year statute of limitations. Bender moved
for summary judgment on the ground that the oral contract between the parties did not
specify a time for performance. Therefore, the time for Kirschenmann to demand
Bender’s performance was limited to the two-year limitations period in section 339
applicable to breaches of oral contracts.2
       The trial court found that Bender had established his statute of limitations defense
and Kirschenmann’s proffered evidence failed to raise a triable issue of fact for two
reasons. First, the court sustained Bender’s objections to Kirschenmann’s evidence on
the ground that Kirschenmann had not authenticated any of the documents submitted in
support of his opposition. And second, the evidence was irrelevant because there was no
dispute that Kirschenmann had the power at all times to fix his right of action by making
demand on Bender. Therefore, Bender had established that the statute of limitations had
run on the breach of oral contract claim. Judgment was entered accordingly and
Kirschenmann appealed.

2      Bender also moved for summary judgment on the ground that Kirschenmann had
no evidence that Bender had assented to the oral contract, but the trial court found he had
not carried his burden to establish that fact. Bender asserts the trial court erred in that
regard, but we need not address that issue if we affirm the judgment on the alternative
ground.

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                                      DISCUSSION
Standard of Review
       A defendant may move for summary judgment if he contends the action has no
merit. (§ 437c, subd. (a).) A defendant moving for summary judgment has the initial
burden of showing a cause of action is without merit. One of the ways the defendant
meets that burden is by showing there is a complete defense to the cause of action. (Id.,
subd. (p)(2).) If the defendant makes such a showing, the burden shifts to the plaintiff to
produce evidence demonstrating the existence of a triable issue of material fact. (Hutton
v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 492 (Hutton).) ‘“A trial court
properly grants summary judgment where no triable issue of material fact exists and the
moving party is entitled to judgment as a matter of law.’ [Citation.]” (Conroy v. Regents
of University of California (2009) 45 Cal.4th 1244, 1250.)
       In reviewing an appeal from a summary judgment, our task is to determine de
novo whether an issue of material fact exists and whether the moving party is entitled to
summary judgment as a matter of law. We independently review the parties’ papers
supporting and opposing the motion, using the same rules and standards as the trial court.
First, we identify the issues framed by the pleadings. Second, we determine whether the
moving party’s showing has established facts which justify a judgment in the moving
party’s favor. Third, when a summary judgment motion prima facie justifies a judgment,
we determine whether the opposition demonstrates the existence of a triable issue of
material fact. In doing so, we liberally construe the opposing party’s evidence, except
that to which objections were made and sustained, we strictly construe the moving party’s
evidence, and we resolve all doubts in favor of the opposing party. (Hutton, supra, 213
Cal.App.4th at pp. 493-494; State Dept. of Health Services v. Superior Court (2003) 31
Cal.4th 1026, 1035.)

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Analysis
       1. Issues Framed by the Pleadings
       Kirschenmann alleged that he had an oral contract with Bender, that Bender would
find property financially equivalent to the New Sabo property, Kirschenmann would
purchase that property, and Kirschenmann and Bender would then exchange those
properties in a section 1031 exchange. As a result, Bender would convey the New Sabo
property to Kirschenmann at a later date. Consistent with the agreement, KFI permitted
Bender to purchase the New Sabo property in October 2004. Kirschenmann fully
performed his promises under the agreement, was able and willing to pay the agreed-
upon original sales price for the property, and in 2011, demanded that Bender convey the
property to him. Bender breached the agreement by refusing to transfer the property to
Kirschenmann as promised.
       In defense of that claim, Bender alleged, among other things, the breach of oral
contract claim was barred by the two-year statute of limitations pursuant to section 339.
       2. Bender’s Showing that Prima Facie Evidence Justified Judgment
       Bender contended he was entitled to summary judgment because, assuming an oral
agreement was formed in 2004 as alleged, section 339’s two-year statute of limitations,
asserted as his seventh affirmative defense, barred the 2011 claim for breach of an oral
agreement. Thus, Bender had a complete defense to Kirschenmann’s claims.
The Law
       Section 339 provides that a cause of action on an oral contract must be brought
within two years. A cause of action for breach of contract ordinarily accrues at the time
of the breach, and the statute of limitations begins to run then. (3 Witkin, Cal. Procedure
(5th ed. 2008) Actions, § 520, p. 664.) When a contract fails to specify the time for
performance of the promised act, a demand for performance is necessary to put the
promisor in default. That is, the promisor must be given the opportunity to perform

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before he can be found to have breached the agreement. (Caner v. Owners Realty Co.
(1917) 33 Cal.App. 479, 480 (Caner).)
       If the defendant’s obligation to perform arises when the plaintiff demands
performance, courts have held that the demand must be made within a reasonable time
and the statute of limitations will begin to run after that time has elapsed. (3 Witkin, Cal.
Procedure, supra, Actions, § 532, p. 683; Bass v. Hueter (1928) 205 Cal. 284, 287.) The
reason for this rule is that the plaintiff is not permitted to control and indefinitely suspend
the running of the statute of limitations by neglecting or deliberately refusing to assert his
right. (Williams v. Bergin (1897) 116 Cal. 56, 60-61; Phillis v. Santa Barbara (1964) 229
Cal.App.2d 45, 55.) Where a plaintiff has it in his power at all times to fix his right of
action by making a demand on defendant, the demand must be made within a reasonable
time after it can be lawfully made, and the demand must be made within the period of the
statute of limitations. (Stafford v. Oil Tool Corp. (1955) 133 Cal.App.2d 763, 766.)
       The “reasonable time” allowed to make the demand depends on the circumstances
of each case. But because this approach invites litigation of the issue and potentially
results in all sorts of contradictory decisions, courts have added the qualification that, in
the absence of peculiar circumstances, a period equal to that of the statute of limitations is
reasonable. Under this approach, the plaintiff has at most a double statutory period─two
years plus two years─on an oral contract. (3 Witkin, Cal. Procedure, supra, Actions,
§ 533, p. 683; Bass v. Hueter, supra, 205 Cal. at p. 287.)
       For example, in Jenkins v. Marsh (1913) 22 Cal.App. 8, the creditor sought to
recover on the debtor’s oral agreement to repurchase corporate stock from the creditor at
an agreed-upon sum at any time after the agreement date upon the creditor’s demand.
The creditor did not demand repurchase until more than five years later. The action was
time-barred by section 339. The creditor was obligated to make his demand within a
reasonable time. A “reasonable time” was equivalent to the statute of limitations barring

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the action. Thus, the creditor had two years from the date of the contract in which to
make his demand. His demand and this action─brought more than five years later─were
thus barred by the statute of limitations. (Jenkins v. Marsh, supra, 22 Cal.App. at pp. 9-
10; accord, Caner, supra, 33 Cal.App. at pp. 480-481 [buyer’s action for seller’s breach
of a written promise to grade streets at an unspecified time, made five to seven years
before suit was filed, was barred by the statute of limitations]; Ginther v. Tilton (1962)
206 Cal.App.2d 284, 286 [action for defendant’s breach of an oral agreement to help
build plaintiff’s house after plaintiff helped build defendant’s house was barred because
demand for performance was not made within period coincident with running of the
statute of limitations].)
       The reason for the rule disappears when the demand is not under the plaintiff’s
control, but depends upon the act of another. If the condition of the obligation to perform
is some other person’s act, and the plaintiff’s demand would merely bring pressure on
that person, failure to make the demand does not start the running of the statute. (3
Witkin, Cal. Procedure, supra, Actions, § 534, pp. 684-685.) For example, in Williams v.
Bergin, supra, 116 Cal. 56, the contract provided that the plaintiff contractors were
entitled to recover on a 1892 contract to provide street work for the county on the street
superintendent’s assessment and issuance of a warrant. The contractors timely completed
the work and the superintendent accepted the work but delayed issuing the warrant. In
1896, the contractors sued to collect on the contract. (Id. at pp. 58-59.) By way of
demurrer, the defendants contended that because the plaintiffs were entitled to demand
the assessment and warrant from the superintendent immediately upon his acceptance of
their work, their failure to do so for an unreasonable period of time barred their claim.
The court disagreed. Under the allegations, the plaintiffs’ right to be paid depended on
an official act of a public officer. The allegations of the complaint did not show that it

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was the plaintiffs, rather than the public officer, who were responsible for the delay in
issuing the warrant. (Id. at pp. 61-62.)
The Evidence
       In support of the motion for summary judgment on the ground that the causes of
action for breach of the oral agreement were barred by section 339, Bender presented
evidence that: the oral agreement whereby Bender would convey the New Sabo property
to Kirschenmann at a later date for $500,000 was made in September 2004. No date of
performance was specified, but Kirschenmann had the ability to demand Bender’s
performance at any time. Agricultural property values were stagnant when the agreement
was made, but the property had more than doubled in value by the time Kirschenmann
demanded it be conveyed to him. Kirschenmann first demanded performance in August
2011, almost seven years after the contract was made, and filed suit in November 2011
after Bender failed to respond to his demand for conveyance. The two-year statute of
limitations applied.
Analysis
       Under the case law set forth above, Bender’s evidence established that
Kirschenmann’s causes of action based on the alleged oral contract were barred by
section 339 and justified a judgment in Bender’s favor. The evidence established that the
oral agreement that Bender would convey the New Sabo property to Kirschenmann for
the same $500,000 price Bender paid for it in 2004 was made in September 2004;
Kirschenmann had the power at all times to fix his right of action by demanding that
Bender perform under the contract; Kirschenmann failed to demand performance or file
suit on Bender’s alleged breach of the oral agreement for seven years; by then, the
property had more than doubled in value. Accordingly, the evidence shows that
Kirschenmann failed to demand performance within a reasonable time and failed to file

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suit within two years after that. As such, his causes of action based on the oral contract
were barred. (Stafford v. Oil Tool Corp., supra, 133 Cal.App.2d at pp. 766-767.)
       3. Existence of a Triable Issue of Material Fact
       Kirschenmann asserts that triable issues of material fact exist as to the reasonable
time within which his demand had to be made. The only material fact he disputed
regarding this issue was whether he had it within his power at all times to fix his right of
action by making a demand on Bender. Kirschenmann asserted that Bender’s duty to
perform could be triggered by either his demand or Bender’s finding a suitable exchange
property.
       Kirschenmann asserts that the reasonable time in which a demand must be made is
not always dictated by the statute of limitations. Rather, the reasonable time depends on
the circumstances of each case. It is only in the absence of such circumstances that a
time coincident with the running of the statute of limitations will be deemed the
reasonable time. (Stafford v. Oil Tool Corp., supra, 133 Cal.App.2d at p. 766.)
       Kirschenmann contends his deposition testimony creates triable issues of fact as to
the reasonable time for performance. He testified that the terms of the contract provided:
       “The terms of the contract was [sic], at some point in time, [Bender] was going to
… get another piece of property… because I was just accommodating him for a short
term. And it was understood that it was for a length of time and I was just trying to help
him out.”
       “At some point in time, [Bender] was supposed to find other property to purchase
and we were going to do another 1031 exchange back.”
       “It was understood it was going to take place in a couple of years, within a year or
a couple …. [I]t had to take place at least a year after the first exchange. Actually, I
think the law says two years.”

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       “[Bender’s conveyance of the New Sabo property to him was] supposed to happen
sooner than later.”
       “There was an understanding he was supposed [to] do it as soon as convenient.”
       “I just assumed [the conveyance] was going to take place within the next two to
three years.”
       “[I]t was supposed to probably take place before the lease was up.”
       “[The agreement was] I’m trying to help a guy park money from paying taxes, so I
said, ‘Let’s just go ahead and put the New Sabo in your name, that solves the issue. And
at some point in time, we’re probably going to find some farmland that we need in our
business and you can go buy this farm ground and exchange back where the New Sabo
belongs back to the shed.”
       “The original lease was for three years and a five-year extension.”
       “Somewhere in that eight years … the land needs to go back in the shed.”
       Kirschenmann asserts that the reasonable inference from his testimony was that
the timing of the demand was related to Bender’s identification of new property. In
addition, the time of performance was during the eight-year extended lease term. Thus,
there are triable issues of fact with respect to Bender’s contractual responsibility to
identify suitable property to use in the second exchange transaction and with respect to
completing the transaction within the eight-year extended lease term.
       Bender responds that waiting seven years to demand performance under an oral
contract concerning real estate is “extraordinarily unreasonable.” Under Kirschenmann’s
view of the agreement, Bender invested in property for which he would never receive a
return on his investment. And, if land values appreciated in subsequent years, as they did
here, Kirschenmann was entitled to purchase the land for much less than its fair market
value and reap all the profit.

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       When opposition to a motion for summary judgment is based on inferences, those
inferences must be reasonably deducible from the evidence; they cannot be derived from
speculation, conjecture, or guesswork. (Annod Corp. v. Hamilton & Samuels (2002) 100
Cal.App.4th 1286, 1298-1299.) Moreover, the inference relied on must satisfy the “more
likely than not” evidentiary burden the plaintiff will carry at trial. (Leslie G. v. Perry &
Associates (1996) 43 Cal.App.4th 472, 487.) In this case, the only reasonable inference
from the evidence is that the oral agreement failed to specify a time for
performance─when Bender was obligated to find equivalent property for a section 1031
exchange so that the New Sabo property would be conveyed to Kirschenmann.
Kirschenmann’s deposition testimony demonstrated that he was uncertain about the date
when performance was due, probably because the parties never specified a date for
performance. Kirschenmann understood or assumed that the transaction could have
occurred as soon as “30 days after the fact” or as late as eight years after the fact, at the
termination of the extended lease. Accordingly, the only reasonable inference from
Kirschenmann’s testimony was that the date for performance was unspecified. As a
result, the oral agreement at issue is governed by the rules applicable to contracts that fail
to specify the time for performance of the promised act.
       Because the oral agreement failed to specify the time for performance,
Kirschenmann was obligated to demand performance before Bender could be liable for
breach of the agreement. (Caner, supra, 33 Cal.App. at p. 480.) Under settled law,
Kirschenmann’s demand had to be made within a reasonable time. (Civ. Code, § 1657;
Bass v. Hueter, supra, 205 Cal. at p. 287.) While the reasonable time allowed to assert
the demand depended on the circumstances of the case, absent peculiar circumstances, a
period equal to that of the statute of limitations was reasonable. Kirschenmann thus had
two years to demand performance and, if Bender failed to perform, an additional two
years to bring suit on Bender’s breach of the agreement. (Ibid.)

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       Kirschenmann’s inconsistent testimony did not raise a triable issue of material fact
as to the time to perform term of the oral agreement. Generally, reasonableness of time
for performance is a question of fact, which depends on the circumstances of the
particular case. (Eidsmore v. RBB, Inc. (1994) 25 Cal.App.4th 189, 198.) However,
given the circumstances of this case, which involved real property subject to fluctuating
values, Kirschenmann could not indefinitely suspend the running of the statute of
limitations by neglecting to assert his rights until property values had increased
substantially. (Slye v. Brock (1935) 3 Cal.App.2d 670, 675 [given the nature of the
mining property involved, even the four-year statute of limitations might be deemed to be
an unreasonable length of time to exercise the option to purchase the property on
unspecified date].)
       The court need not determine precisely what a reasonable time was in this case.
Here, Kirschenmann’s demand for performance under the oral agreement made seven
years after the agreement, was unreasonable as a matter of law under the circumstances.
As such, Kirschenmann’s right of action to sue on Bender’s failure to perform under the
agreement was barred by section 339 and the trial court properly granted summary
judgment for Bender.
                                      DISPOSITION
       The judgment is affirmed. Costs are awarded to respondent Bender.

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