Court Opinion

ID: 6342054
Source: CourtListenerOpinion
Date Created: 2022-05-18 22:01:29.88713+00
Date Added: 2024-06-11T09:16:49.709473
License: Public Domain

Filed 4/21/22; Certified for Partial Pub. 5/17/22 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                    SECOND APPELLATE DISTRICT

                               DIVISION THREE

 CANYON VINEYARD ESTATES I,                            B307176, B308607,
 LLC,                                                  B310861

         Plaintiff and Appellant,                      (Los Angeles County
                                                       Super. Ct. No. SC128181)
         v.

 JOHN PAUL DeJORIA et al.,

         Defendants and Respondents.

      APPEALS from judgments and orders of the Superior
Court of Los Angeles County, Mark A. Young, Judge. Affirmed in
part and reversed in part with directions.
      Garrett & Tully, Robert Garrett, Ryan C. Squire, Zi C. Lin,
Scott B. Mahler; McCormick, Barstow, Sheppard, Wayte &
Carruth and Scott M. Reddie for Plaintiff and Appellant.
      Gibson, Dunn & Crutcher, Heather L. Richardson,
Thomas F. Cochrane, Danielle Hesse and Virginia L. Smith for
Defendant and Respondent Mountains Restoration Trust.
       Ervin Cohen & Jessup, Peter S. Selvin and Pooja S. Nair
for Defendant and Respondent John Paul DeJoria.
       Rob Bonta, Attorney General, Tania M. Ibanez, Assistant
Attorney General, Joseph N. Zimring, Sandra I. Barrientos and
Caroline H. Hughes, Deputy Attorneys General, for Defendant
and Respondent California State Attorney General.
       Rodrigo A. Castro-Silva, County Counsel, Scott Kuhn,
Assistant County Counsel, and Sangkee Peter Lee, Deputy
County Counsel, for Defendant and Respondent County of Los
Angeles.
                        ——————————
       Canyon Vineyard Estates I, LLC (CVE) appeals from a
grant of summary judgment in favor of Mountains Restoration
Trust (MRT), John Paul DeJoria, the County of Los Angeles, and
the California State Attorney General. CVE also appeals from an
injunction in favor of MRT and from an award of attorney fees
and costs in favor of MRT and the Attorney General.
       This case concerns over 400 acres of undeveloped land
along the Pacific coastline in Malibu. The trial court, in a ruling
challenged on appeal by CVE, determined that the land is subject
to a conservation easement that prohibits development. The trial
court enjoined CVE from violating the easement.
       We conclude that there is no genuine issue of material fact
that the property is subject to a valid conservation easement and
therefore affirm the judgment. However, we conclude that the
injunction is overbroad in that it improperly bars CVE from filing
further litigation to challenge the conservation easement without
regard to the potential merits of a future claim. We therefore
reverse the injunction and remand the matter to the trial court to
enter a new injunction that is more narrowly tailored so that it

                                 2
does not enjoin future lawful actions by CVE. We affirm the
award of attorney fees and costs.
                         BACKGROUND
      A.     Tuna Canyon
      The property at issue on appeal consists of 417 acres of
undeveloped land along the southerly slope of the Santa Monica
Mountains and the Pacific coastline, located in the City of Malibu
and unincorporated areas of Los Angeles County (Tuna Canyon).
DeJoria purchased Tuna Canyon in 1990, intending to develop
the property into 12 or more 20-acre estates. However, after
walking the land, DeJoria changed course and decided to donate
Tuna Canyon to preserve it as open space for the enjoyment of
the public.
      B.     DeJoria’s transfer of Tuna Canyon to MRT
      In 2000, DeJoria approached MRT, a nonprofit land trust
dedicated to preserving land in the Santa Monica Mountains,
with a proposal to sell and gift Tuna Canyon to MRT. DeJoria
and MRT executed a purchase agreement that required Tuna
Canyon to “be held as [o]pen [s]pace in [p]erpetuity and that no
development of any kind shall take place on the [p]roperty.”
DeJoria agreed to sell Tuna Canyon to MRT for $1,060,000 and
donate the remainder of the appraised value of $13 million as
part of the purchase. For his charitable donation, DeJoria
received a tax deduction of $11,400,000.
      DeJoria executed a grant deed conveying Tuna Canyon to
MRT. The grant deed was subject to covenants, conditions,
restrictions, reservations, and easements of record. The grant
deed required that Tuna Canyon be held “in perpetuity as
natural open space” with the exception that the grantee or its
successors could “construct[ ] trails, trail heads, erosion control

                                 3
devices[,] and incidental buildings related to the use of the
property as natural open space.” The grant deed deemed this
condition a covenant running with the land and binding upon the
real property and any successive owners. If MRT or any of its
successors in interest breached the grant deed’s use restrictions,
DeJoria was entitled to specific performance, injunctive relief,
and return of the property. The grant deed also prohibited MRT
or any successor in interest from selling or transferring the
property for monetary profit or consideration of any type with the
exception that, in the event that Tuna Canyon reverted back to
DeJoria, he could transfer the property to a governmental agency
or another nonprofit and recoup the costs of facilitating the
transfer.
       C.    MRT’s loan from Centennial
       MRT took out a loan in the amount of $1,060,000 from
Centennial Bank (Centennial) that was secured by a deed of
trust. Centennial required a subordination agreement that its
deed of trust would remain a lien or charge upon the property
prior and superior to the deed restrictions, specifically identifying
DeJoria’s right to termination. Under the subordination
agreement, DeJoria waived his rights under the deed restrictions
set forth in the grant deed. Thus, if MRT defaulted on the loan,
Centennial would be able to foreclose on the property without the
risk that its collateral would revert to DeJoria. The grant deed,
deed of trust, and subordination agreement were recorded at the
same time.
       In 2006, Centennial sold the note securing the deed of trust
to Southern California Seconds, Inc. (SCS). SCS later initiated
foreclosure proceedings when MRT was unable to repay the
outstanding balance of the loan. Malibu Horizon Trust

                                  4
purchased the note securing the deed of trust from SCS for
approximately $1,300,000. CVE’s manager represented Malibu
Horizon Trust in connection with the foreclosure and purchase of
Tuna Canyon. CVE’s manager drafted the foreclosure statement
that was provided to potential bidders, which notified them that
Tuna Canyon was subject to “significant” deed restrictions,
including terms in the grant deed that the land was to be held in
perpetuity as natural open space. Malibu Horizon Trust acquired
Tuna Canyon at a trustee’s nonjudicial foreclosure sale for
approximately $1,300,000. CVE purchased Tuna Canyon from
Malibu Horizon.
      In 2008, CVE entered into preliminary agreements to sell
Tuna Canyon to developers. CVE also entertained two offers for
approximately $5 million and $7 million from prospective buyers
who were interested in preserving Tuna Canyon in its natural
open-space condition. However, CVE rejected these offers as too
low. In 2016, CVE entered into an exclusive authorization to sell
agreement with a company to market and sell Tuna Canyon. The
company marketed Tuna Canyon as an opportunity to develop
ultra-luxury residential estates situated on several acres of
private ocean view land. The marketing materials noted that
potential buyers could profit from donating excess land into a
conservation easement to reap federal and state tax benefits.
      D.     Proceedings in the trial court
      In 2017, CVE filed a quiet title action that sought to
extinguish the use restrictions contained in the grant deed. CVE
moved for judgment on the pleadings. The trial court denied the
motion, finding that the grant deed was sufficient to create a
conservation easement and that it conveyed two separate
interests to MRT—a fee title and a conservation easement. CVE

                               5
filed a motion for summary judgment on similar grounds, which
the trial court denied. The trial court found that the language in
the grant deed requiring Tuna Canyon to be held in perpetuity as
natural open space was sufficient to create a conservation
easement. However, the trial court concluded that there
remained triable issues of fact as to whether the parties intended
to create a conservation easement and subordinate that easement
to Centennial’s lien. Thereafter, MRT, the Attorney General, Los
Angeles County, and DeJoria filed a joint motion for summary
judgment, arguing that there was no triable issues of material
fact that the grant deed created a conservation easement that
continued to restrict the use of Tuna Canyon for the purpose of
keeping the property in its open-space condition in perpetuity.
       The trial court granted the summary judgment motion and
entered judgment against CVE, leaving the issue of attorney fees
and costs to be determined later. After further briefing, the trial
court issued a judgment that enjoined CVE from exploring,
pursuing, developing, or marketing any uses of Tuna Canyon
inconsistent with the terms of the conservation easement. This
judgment, too, left attorney fees and costs for later
determination. After motions on the fee and cost issues, the trial
court awarded MRT $1,371,962.20 in attorney fees and $5,424.55
in costs. The trial court awarded the Attorney General $189,675
in attorney fees and $5,552.88 in costs.
       CVE appealed the court’s grant of summary judgment, the
injunction, and the award of attorney fees and costs.1

      1 CVE  filed three separate appeals, challenging the grant of
summary judgment, the injunctive relief, and the award of
attorney fees and costs. We consolidated the appeals for purposes
of oral argument and decision.

                                6
                           DISCUSSION
I.     The trial court properly granted summary judgment
       because a valid conservation easement protects
       Tuna Canyon.
       A.     Applicable law concerning summary judgment
              and contract interpretation
       Summary judgment is proper when there are no triable
issues of material fact and the moving party is entitled to
judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)
“The purpose of the law of summary judgment is to provide
courts with a mechanism to cut through the parties’ pleadings in
order to determine whether, despite their allegations, trial is in
fact necessary to resolve their dispute.” (Aguilar v. Atlantic
Richfield Co. (2001) 25 Cal.4th 826, 843.)
       “A defendant who moves for summary judgment bears the
initial burden to show the action has no merit—that is, ‘one or
more elements of the cause of action, even if not separately
pleaded, cannot be established, or that there is a complete
defense to [that] cause of action.’ [Citation.] Once the defendant
meets this initial burden of production, the burden shifts to the
plaintiff to demonstrate the existence of a triable issue of
material fact. [Citation.] ‘From commencement to conclusion,
the moving party defendant bears the burden of persuasion that
there is no triable issue of material fact and that the defendant is
entitled to judgment as a matter of law.’ [Citation.] We review
the trial court’s ruling on a summary judgment motion de novo,
liberally construing the evidence in favor of the party opposing
the motion and resolving all doubts about the evidence in favor of
the opponent. [Citation.] We consider all of the evidence the
parties offered in connection with the motion, except that which

                                 7
the court properly excluded.” (Grotheer v. Escape Adventures,
Inc. (2017) 14 Cal.App.5th 1283, 1292–1293.)
       Contract interpretation is a question of law. (State Farm
Fire & Casualty Co. v. Lewis (1987) 191 Cal.App.3d 960, 963.)
We interpret grant deeds under the general rules of contract
interpretation. (Thoryk v. San Diego Gas & Electric Co. (2014)
225 Cal.App.4th 386, 397.) “The fundamental goal of contractual
interpretation is to give effect to the mutual intention of the
parties.” (Bank of the West v. Superior Court (1992) 2 Cal.4th
1254, 1264; Civ. Code,2 § 1636.) When language in a contract is
clear and explicit, that language governs interpretation. (§ 1638.)
“When an instrument is susceptible to two interpretations, the
court should give the construction that will make the instrument
lawful, operative, definite, reasonable and capable of being
carried into effect and avoid an interpretation which will make
the instrument extraordinary, harsh, unjust, inequitable or
which would result in absurdity.” (Ticor Title Ins. Co. v. Rancho
Santa Fe Assn. (1986) 177 Cal.App.3d 726, 730.) “ ‘Extrinsic
evidence is “admissible to interpret the instrument, but not to
give it a meaning to which it is not susceptible.” ’ ” (City of
Manhattan Beach v. Superior Court (1996) 13 Cal.4th 232, 238.)
       B.    Defendants met their burden to show that the
             grant deed created a conservation easement.
       MRT asserts that the plain language of the grant deed
demonstrates that DeJoria conveyed a conservation easement to
MRT. We agree.

      2 All   further undesignated statutory references are to the
Civil Code.

                                   8
       A “ ‘conservation easement’ ” is “any limitation in a deed,
will, or other instrument in the form of an easement, restriction,
covenant, or condition, which is or has been executed by or on
behalf of the owner of the land subject to such easement and is
binding upon successive owners of such land, and the purpose of
which is to retain land predominantly in its natural, scenic,
historical, agricultural, forested, or open-space condition.”
(§ 815.1.) Conservation easements are “perpetual in duration”
(§ 815.2, subd. (b)) and may only be acquired and held by “tax-
exempt nonprofit organization[s] qualified under Section 501,
[subdivision] (c)[(3)] of the Internal Revenue Code” (§ 815.3,
subd. (a)); local government entities; or Native American tribes
(§ 815.3, subds. (b), (c)).
       In enacting California’s conservation easement statutory
scheme, the Legislature declared that “the preservation of land in
its natural, scenic, agricultural, historical, forested, or open-space
condition is among the most important environmental assets of
California.” (§ 815.) To protect this invaluable asset and to
preserve its natural open spaces, courts liberally construe
conservation easement laws to encourage the voluntary
conveyance of conservation easements to qualified entities.
(§ 816.) If a conservation easement holder is the prevailing party,
courts may order injunctive relief and award money damages and
attorney fees. (§ 815.7, subds. (b), (c).)
       The grant deed from DeJoria to MRT explicitly creates a
conservation easement under the legal definition. The first
paragraph of the grant deed states that Tuna Canyon “shall be
held in perpetuity as natural open space.” Only minimal
development is permitted, and it is limited to the construction of
“trails, trail heads, erosion control devices[,] and incidental

                                  9
buildings related to the use of the property as natural open
space.” Thus, it is clear that the grant deed’s language is a
limitation on land the purpose of which is to retain Tuna Canyon
predominantly in its natural, scenic, or open-space condition.
(See § 815.1.) The restriction was perpetual in nature. The grant
deed makes this clear in its first paragraph, which states that
Tuna Canyon will be held as open land “in perpetuity” and in its
final paragraph, which states that the restrictions “shall be
deemed to be covenants running with the land, binding upon the
real property and each successive owner thereof.” The grant deed
further restricted MRT and its successors in interest, including
DeJoria, from selling or transferring the land for monetary profit
or consideration. It was also executed by DeJoria, the owner of
the land, and conveyed to MRT, an entity legally qualified to
acquire and hold a conservation easement. (See § 815.3.)
       Accordingly, the plain language of the grant deed meets the
statutory definition of a conservation easement and supports the
conclusion that DeJoria and MRT intended to create such an
easement restricting the use of Tuna Canyon in perpetuity.
Thus, the burden shifts to CVE to show that there is a triable
issue of material fact as to whether Tuna Canyon is not subject to
the conservation easement. (Aguilar v. Atlantic Richfield Co.,
supra, 25 Cal.4th at p. 845.)
       C.   CVE has not demonstrated a triable issue of fact
            as to whether Tuna Canyon remains subject to a
            conservation easement held by MRT.
       CVE advances several arguments that either MRT and
DeJoria failed to create a conservation easement at the time of
the conveyance or, alternatively, that the subsequent foreclosure

                               10
extinguished any easement. We do not agree with CVE’s
arguments.
              1.      Grant of a fee title subject to a condition
                      subsequent did not preclude the grant of a
                      conservation easement.
        CVE argues that the plain language of the grant deed
shows that DeJoria did not convey an easement to MRT. Rather,
to convey an easement to MRT, DeJoria needed to transfer
something less than fee title and, if DeJoria conveyed anything to
MRT, it was fee title subject to a condition subsequent with the
power of termination.
        CVE directs us to the fact that the grant deed did not
contain the word “easement” or any express provision for who
would own and hold such an easement. It is true that the grant
deed does not expressly refer to an easement. However, there is
no requirement that the word “easement” must appear in a deed
to create such an interest. (See City of Manhattan Beach v.
Superior Court, supra, 13 Cal.4th at p. 235.) The label of a
particular interest or lack of formal words of conveyance are not
determinative of the scope of the interest conveyed. (Golden West
Baseball Co. v. City of Anaheim (1994) 25 Cal.App.4th 11, 35–36.)
“Ultimately, the label given to [grantee]’s ‘interest’ is of little
importance. Arrangements between landowners and those who
conduct commercial operations upon their land are so varied that
it is increasingly difficult and correspondingly irrelevant to
attempt to pigeonhole these relationships as ‘leases,’ ‘easements,’
‘licenses,’ ‘profits,’ or some other obscure interest in land devised
by the common law in far simpler times.” (Id. at p. 36.) Each
instrument must be considered individually, keeping in mind

                                 11
“interpretive touchstone” of “the parties’ intent.” (City of
Manhattan Beach, at p. 243.)
       Although the use restriction in the grant deed was not
labeled a conservation easement, it nonetheless met the statutory
definition of a conservation easement under section 815.1 as a
limitation in a deed that restricted the use of Tuna Canyon by
MRT and successive owners to retain the land predominantly in
its natural or open-space condition. (See Building Industry Assn.
of Central California v. County of Stanislaus (2010)
190 Cal.App.4th 582, 595 [instrument need not reference
California’s conservation easement law to convey a conservation
easement].) Moreover, even if the language in the grant deed
were ambiguous as to whether DeJoria and MRT intended to
preserve Tuna Canyon as natural open space in perpetuity
through a conservation easement, the extrinsic evidence is
overwhelming that the parties intended just that. (City of
Manhattan Beach v. Superior Court, supra, 13 Cal.4th at p. 238
[primary goal of contract interpretation is to carry out intention
of parties].) DeJoria testified that he donated Tuna Canyon for
the sole purpose of preserving the land in its natural state as
open space in perpetuity as “a gift to the people—
something . . . families could enjoy together forever.” “My
intention was to transfer the land for the use of the people,
period, not to be developed in any way, shape or form, to be
transferred to the use of the people forever.” To accomplish his
goal that Tuna Canyon was “not to be developed,” DeJoria sought
out and conveyed Tuna Canyon to MRT, an entity whose purpose
is to preserve natural open spaces in the Santa Monica
Mountains and that is qualified under California law to acquire
and hold a conservation easement. Further, had DeJoria

                               12
exercised his power of termination, he was still prohibited from
selling the land for any monetary profit or consideration and
limited to transferring Tuna Canyon to a government entity or
another nonprofit corporation. Reading the terms of the grant
deed together, it unambiguously granted MRT a conservation
easement in Tuna Canyon that was perpetual and would
encumber the property even if the fee title was forfeited.
       CVE cites to several cases to argue that a conservation
easement can only be created where the fee owner conveys
something less than fee title to the conservation easement holder.
We find these authorities inapposite as they did not address
whether a deed conveyed a conservation easement or whether a
fee title and conservation easement could be conveyed in the
same transaction. (Concord & Bay Point Land Co. v. City of
Concord (1991) 229 Cal.App.3d 289 [deed included condition that
strip of land be used as railroad right-of-way conveyed fee title
subject to condition subsequent, not an easement]; Wooster v.
Department of Fish & Game (2012) 211 Cal.App.4th 1020 [public
entity’s failure to post signs as condition of holding conservation
easement did not require forfeiture of easement]; Johnston v.
Sonoma County Agricultural Preservation & Open Space Dist.
(2002) 100 Cal.App.4th 973 [conservation easement restricted
local government from using eminent domain to build water
pipeline through property].)
       CVE also relies on City of Palm Springs v. Living Desert
Reserve (1999) 70 Cal.App.4th 613. In that case, a foundation
conveyed land to the city in a grant deed that required the city
and its successors in interest to use the land as a desert preserve
forever. If the use restriction was breached, the city’s interest in
the land would pass to a public benefit corporation. (Id. at

                                13
pp. 617–618.) The city accepted the grant but decided that it
would rather build a golf course on the land. (Id. at p. 618.) The
corporation rejected the city’s offer to purchase its reversionary
interest in the land. The city filed an action in eminent domain.
The trial court granted the city’s eminent domain action and
issued an order for immediate possession. (Ibid.) The
corporation appealed, and the Attorney General appeared as an
amicus curiae. (Id. at p. 619.) The Attorney General argued that
the land was given to the city as a charitable trust and the trial
court lacked jurisdiction to terminate the trust. (Id. at pp. 619–
620.) The Court of Appeal concluded that the deed granted the
city fee title subject to a condition subsequent, the grantor’s
power to terminate, and did not create a charitable trust. (Id. at
p. 622.)
       City of Palm Springs v. Living Desert Reserve (1999)
70 Cal.App.4th 613 is inapposite. Although the case involved the
conveyance of land for the purpose of preserving it as open space,
it did not involve the issue of whether the land was subject to a
conservation easement. The case did not address easements at
all and did not discuss the statutory scheme governing
conservation easements or any case law related to those statutes.
Instead, it analyzed case law relating to charitable trusts. Nor
does the case stand for the proposition that an instrument cannot
simultaneously grant a conservation easement and fee title
subject to a condition subsequent. The primary issue in City of
Palm Springs was whether the city had to compensate a party
when it took possession of a reversionary interest in land through
eminent domain, an issue far afield from the one presented here.
(Id. at p. 619.) City of Palm Springs, at pages 621 and 622, also
determined whether a gift with a charitable purpose could

                               14
constitute something other than a charitable trust where the
donor clearly intended to make a conditional gift. Neither of
these issues are relevant to the case at bar.
       We conclude that regardless of whether DeJoria conveyed
to MRT fee title subject to a condition subsequent, this did not
preclude him from transferring a conservation easement as well.
             2.    The conservation easement did not merge
                   into the fee estate.
      CVE argues that, if DeJoria granted both a fee title and a
conservation easement to MRT, then that easement was
extinguished the moment of its creation under the doctrine of
merger.
      The merger doctrine on which CVE relies is codified by
sections 805 and 811. Section 811 provides, “A servitude is
extinguished: [¶] 1. By the vesting of the right to the servitude
and the right to the servient tenement in the same person”; while
section 805 provides: “A servitude thereon cannot be held by the
owner of the servient tenement.” Because an easement is the
right to use or prevent the use of the land of another, a person
cannot have an easement on his or her own land. (Wilson v.
Pacific Electric Ry. Co. (1917) 176 Cal. 248, 254.) The rationale
for the merger doctrine is “to avoid nonsensical easements—
where they are without doubt unnecessary because the owner
owns the estate.” (Beyer v. Tahoe Sands Resort (2005)
129 Cal.App.4th 1458, 1475.)
      The merger doctrine may apply in a typical case, for
example, where a landowner first grants another party an
easement to cross the property, and later sells the same property
to the easement holder. Because the easement has now become
nothing more than a right by the new owner to cross his or her

                               15
own land, the easement’s existence no longer makes sense, and it
merges into the new owner’s more comprehensive ownership
rights. (See Beyer v. Tahoe Sands Resort, supra, 129 Cal.App.4th
at p. 1475.)
      However, “merger does not always follow the union of a
greater and lesser estate in the same ownership. The question is
one of intention, actual or presumed, of the person in whom the
interests are united.” (Ito v. Schiller (1931) 213 Cal. 632, 635.)
Further, “ ‘[e]quity will prevent or permit a merger, as will best
subserve the purposes of justice, and the actual and just intent of
the parties.’ ” (Ibid.) “ ‘In the absence of an expression of
intention, if the interest of the person in whom the several
estates have united, as shown from all the circumstances, would
be best subserved by keeping them separate, the intent so to do
will ordinarily be implied.’ ” (Ibid.)
       Unlike a typical case involving the merger of an easement,
the merger of MRT’s fee title in Tuna Canyon and its
conservation easement would do violence to the parties’ intent
and serve no purpose. First, merging MRT’s interests would
contravene the primary purpose of the transfer of Tuna Canyon
from DeJoria, which was to preserve the land in its open-space
condition in perpetuity. Second, a merger would frustrate the
purpose of California’s conservation easement laws, which seek to
encourage the donation of land for the purpose of preserving it as
open space, which the Legislature has declared to be among the
most important environmental assets of California. (See § 815.)
Third, applying the merger doctrine would not avoid nonsensical
easements. To the contrary, the conservation easement here
remains necessary to ensure the preservation of Tuna Canyon in

                                16
its natural condition despite its location in a highly desirable
area along Southern California’s Pacific coastline.
      CVE’s attempt to rely on the merger doctrine conflates
conservation easements with general easements or general
servitudes. CVE’s incorrect equivalency disregards the
Legislature’s creation of a separate statutory scheme governing
conservation easements, which expressly makes them perpetual
in duration. In contrast, the statutes governing ordinary
servitudes expressly provide that they are subject to the merger
doctrine and may be extinguished “[b]y the vesting of the right to
the servitude and the right to the servient tenement in the same
person.” (§ 811; cf. § 816.54, subd. (b) [a “greenway easement
shall be perpetual in duration”].)
      Accordingly, we conclude that MRT’s fee title and
conservation easement did not merge. Nor has CVE met its
burden to show a triable issue of fact on this issue.
             3.    DeJoria’s power of termination did not
                   prevent the creation of a conservation
                   easement.
       By statute, as we have discussed above, conservation
easements must be perpetual in duration. CVE contends that—
notwithstanding the language in the grant deed stating that the
use restrictions are perpetual in duration—the use restrictions
were not perpetual because DeJoria retained the power to
terminate those restrictions
       The premise of CVE’s argument is incorrect: contrary to
CVE’s interpretation, the forfeiture clause did not give DeJoria
the right to terminate the use restriction. “A condition involving
a forfeiture must be strictly interpreted against the party for
whose benefit it is created.” (§ 1442.) “[R]ules of construction

                                17
require a much stricter interpretation against the grantee of a
condition subsequent involving a forfeiture than of an easement.”
(Tamalpais Land & Water Co. v. Northwestern Pac. R.R. Co.
(1946) 73 Cal.App.2d 917, 929.) Even where a deed contains
language that is normally used to grant a fee, and contains a
reversionary clause, courts will construe the instrument as
granting an easement if doing so would be consistent with the
purpose of the conveyance. (Ibid.) In contrast, we must liberally
construe the statutory scheme governing conservation easements
to effectuate the Legislature’s purpose of encouraging individuals
to voluntarily convey such interests to preserve California’s
natural open spaces. (§§ 815, 816.)
       CVE’s argument that DeJoria had the power to terminate
the use restriction is inconsistent with these principles.
Construing the forfeiture clause against DeJoria and liberally
construing those terms that create a conservation easement, the
grant deed conveys two separate interests, a fee title that would
be forfeited if the use restrictions were violated and a
conservation easement that remained with MRT as a qualified
holder. (See § 1641 [contract must be considered as a whole with
each clause helping to interpret the others].) Thus, even if
DeJoria’s power of termination was triggered by some future
event, that would mean that interest in the property would revert
to DeJoria still subject to the use restriction. The conservation
easement would endure.
             4.     The subordination agreement did not
                    prevent the creation of a conservation
                    easement.
       CVE also argues that no perpetual use restriction—and
thus no conservation easement—arose because of the terms of the

                               18
parties’ subordination agreement. According to CVE, the parties
agreed in the subordination agreement that the use restrictions
requiring Tuna Canyon to be kept in its natural state in
perpetuity would be extinguished upon foreclosure of the
property.
        CVE’s contention again proceeds from an incorrect premise:
contrary to CVE’s argument, the subordination agreement did
not grant any party, including Centennial upon foreclosure, the
right to nullify the use restrictions. While both DeJoria and MRT
signed the subordination agreement, the agreement is structured
and written to subordinate DeJoria’s rights—not MRT’s—to
Centennial’s lien. The subordination agreement makes clear that
it is concerned with ensuring that Dejoria’s right to recover title
is subordinated to Centennial’s ability to enforce its lien. Thus,
in the first paragraph, the subordination agreement states that
the grant deed contained “Deed Restrictions” and further
explains “which Deed Restrictions, inter alia, reserve to [DeJoria]
the right to recover title to the Real Property in the event that
[MRT] violates the use restrictions set forth in paragraph 1 of the
Deed Restrictions.”
        The subordination agreement thereafter concerns itself
only with the “Deed Restrictions,” which it has discussed as
DeJoria’s right to terminate if MRT violates the use restriction.
The subordination agreement has only DeJoria, and not MRT,
specifically declare that he “relinquishes and subordinates” his
rights under the “Deed Restrictions.” There is no parallel
operative language where MRT does the same. Nor is there any
language stating that the use restrictions promising to hold Tuna
Canyon as open land in perpetuity is subordinated to or
extinguished by Centennial’s lien.

                                19
       Further, the intent of Centennial in obtaining the
subordination agreement was to ensure that it could recover the
amount owed by MRT on the loan in the event of default. To
accomplish this goal, the agreement needed only to subordinate
DeJoria’s right of termination, not MRT’s rights to enforce a
conservation easement. Indeed, the unencumbered property was
worth significantly more than Centennial’s loan amount.
Centennial’s representative testified that the use restriction that
Tuna Canyon remain as open space would not have been an issue
for Centennial when it made the loan and that the purpose of the
subordination agreement was to ensure Centennial was in a
“first-lien position.”
       CVE attempts to interpret the subordination agreement to
mean that the use restrictions that the grant deed defined as
“perpetual” were not meant to be perpetual, and that the term in
the grant deed that this restriction would apply to every
subsequent owner did not actually apply to Centennial or its
successors. If that were the case, one would have expected to find
express language subordinating the land use restrictions to
Centennial’s lien rights. But there is no such language. CVE
attempts to rely on the phrase “inter alia,” Latin for “[a]mong
other things” (Black’s Law Dict. (6th ed. 1990) p. 811, col. 1), in
the discussion of the “Deed Restrictions” to mean that the
subordination agreement must have been concerned with
restrictions besides the right of DeJoria to recover the property.
This does not follow. The phrase “inter alia” is careful lawyerly
language ensuring that the full scope of DeJoria’s rights is
subordinated. For example, it eliminates ambiguity about
whether DeJoria’s entire right to “forfeiture and return of the
Property” (the language set forth in the grant deed) is

                                20
encompassed in the subordination agreement’s shorthand
reference to DeJoria’s “right to recover title.” Moreover, CVE
attempts to rely on the subordination agreement’s reference to
the “use restrictions set forth in paragraph 1 of the Deed
Restrictions.” But the subordination agreement references this
only to explain that it is their violation that serves as a condition
that allows DeJoria to recover the property.
       A Latin phrase and a passing reference do not undo the
specific language of the grant deed under which the property is
held in perpetuity for the benefit of the public. Interpreting the
subordination agreement and grant deed together demonstrates
that it was DeJoria’s right to termination that was subordinated
to Centennial’s deed of trust.
       Conversely, CVE also argues that, if MRT and DeJoria
intended for the conservation easement to be perpetual, they
were required to obtain an agreement from Centennial to
subordinate its mortgage rights to the easement. CVE cites to
several federal cases that enforced a federal regulation stating
that a taxpayer could not claim a charitable contribution
deduction based on the conveyance of a conservation easement if
it was not subordinated to a mortgage at the time of the donation.
(Mitchell v. Commissioner of Internal Revenue (10th Cir. 2015)
775 F.3d 1243, 1246 (Mitchell); Minnick v. Commissioner of
Internal Revenue (9th Cir. 2015) 796 F.3d 1156, 1157 (Minnick);
RP Golf v. Commissioner of Internal Revenue (8th Cir. 2017) 860
F.3d 1096, 1100 (RP Golf).)
       These cases are not persuasive. Each involved enforcement
of a particular federal regulation relating to a taxpayer’s
eligibility for a charitable deduction for land donations. (See
Mitchell, supra, 775 F.3d at p. 1248 [considering whether federal

                                 21
regulation was arbitrary and capricious or contrary to federal
statute]; RP Golf, supra, 860 F.3d at p. 1099 [same]; Minnick,
supra, 796 F.3d at pp. 1159–1160 [deferring to Internal Revenue
Service’s interpretation of regulation].) Tax deductions are
considered acts of legislative grace and are strictly construed
against the taxpayer. (Minnick, at p. 1159.) Courts will defer to
the Commissioner of Internal Revenue’s interpretation of its own
code, including its application of a bright line rule to determine
whether the conveyance of a conservation easement qualifies as a
charitable contribution for purposes of a deduction. (Id. at
pp. 1159–1160.)
       These cases do not purport to interpret California law,
including our Legislature’s express directive that the law of
conservation easements should be construed liberally to
encourage their creation and voluntary conveyance by
landowners. (§ 816.) These cases do not affect the result here.
       D.     Public policy considerations do not warrant a
              different result.
       CVE asserts that public policy “compels enforcing the plain
meaning of recorded documents so they can faithfully be relied
on, in order to promote and preserve the stability, predictability,
and free transferability of real property.” While this statement is
noncontroversial as far as it goes, it does not militate in favor of
any different result.
       First, while CVE champions certain policies, it ignores
others. CVE ignores the fundamental principle that an
agreement must be interpreted to give effect to the mutual
intention of the parties. The manifest intent of DeJoria and MRT
was to preserve Tuna Canyon in its natural open-space condition
in perpetuity. CVE also overlooks California’s interest in

                                22
preserving land in its natural open-space conditions and
encouraging conservation easements.
      More fundamentally, it is CVE whose arguments conflict
with the interests of stability and predictability. CVE’s
interpretations of the operative documents here, if accepted,
would grant CVE an unexpected real estate windfall through the
purchase for development of over 400 acres of prime coastland for
well under $2,000,000, a price that reflects the prohibition on
development. Moreover, CVE cannot claim that the result here is
unpredictable when CVE’s manager warned other potential
bidders at the foreclosure sale, after reviewing the operative
documents, of terms in the grant deed that Tuna Canyon “shall
be held in perpetuity as natural open space” which “shall be
deemed a covenants running with the land, binding upon the real
property and each successive owner.” Moreover, CVE’s
interpretation would deprive taxpayers, who have already paid
for Tuna Canyon to remain as natural open space by subsidizing
DeJoria’s nearly $12 million tax deduction, of the benefits they
obtained. Indeed, adopting CVE’s interpretation could result in
taxpayers paying twice to protect the same land as Tuna Canyon
has already been marketed as an opportunity to potential
purchasers to donate excess land for a conservation easement to
obtain tax benefits.3

      3 CVE’s  purported solution to this problem is to make
DeJoria pay the taxes now. However, that would contradict the
principle on which CVE relies—the stability and predictability of
real property transactions—as DeJoria would be assessed a tax
bill from a real property transaction that occurred nearly
20 years ago in which he donated land for public enjoyment only

                               23
      We conclude that MRT has established that there is no
dispute of material facts that MRT owns a conservation easement
over Tuna Canyon and the trial court properly granted summary
judgment in favor of respondents.4
II.    The trial court must ensure the injunction does not
       preclude CVE from exercising its right to seek relief
       in court
       CVE also contends that the trial court’s injunction is
overbroad. Among other things, the injunction states in relevant
part that CVE is enjoined from “exploring, pursuing, developing,
or marketing any uses” of the property inconsistent with and in
violation of the conservation easement’s terms including “taking
legal steps to rezone the [property] and/or extinguish the
conservation easement encumbering it; and . . . filing new
litigation to extinguish the conservation easement encumbering”
the property. CVE argues that this injunction, as phrased, is
unconstitutionally vague and overbroad and constitutes a prior
restraint. We agree with CVE as to portions of the injunction.

to find out later he must subsidize an unrelated third party’s
attempts to develop the land.
      4 CVE   requested judicial notice of legislative history reports
and analyses of Assembly Bill No. 1011 and Senate Bill No. 1360,
as well as the Internal Revenue Service’s 2020 instructions for
schedule D. Because legislative materials and instructions
provided by the Internal Revenue Service are generally proper
subjects for judicial notice, we grant the requests. (See Richman
v. Hartley (2014) 224 Cal.App.4th 1182, 1187, fn. 3 [legislative
histories]; Eith v. Ketelhut (2018) 31 Cal.App.5th 1, 7 [Internal
Revenue Service instructions].) However, nothing in these
materials changes our analysis.

                                 24
       An injunction that forbids speech before it has occurred is a
“ ‘prior restraint.’ ” (DVD Copy Control Assn., Inc. v. Bunner
(2003) 31 Cal.4th 864, 886.) Prior restraints are highly
disfavored and presumptively violate the First Amendment.
(Maggi v. Superior Court (2004) 119 Cal.App.4th 1218, 1225.) A
permissible prior restraint must be narrowly tailored so as not to
infringe on constitutionally protected activity. (Evans v. Evans
(2008) 162 Cal.App.4th 1157, 1167.) An injunction that interferes
with an individual’s right to petition by, for example, enjoining
him or her from presenting claims to government officials or
engaging in future litigation, may constitute an invalid prior
restraint. (Balboa Island Village Inn, Inc. v. Lemen (2007)
40 Cal.4th 1141, 1160–1161.) Further, an injunction is
unconstitutionally vague and overbroad if it does not clearly
define the persons protected and the conduct prohibited and
restricts lawful as well as unlawful activity. (California Retail
Liquor Dealers Institute v. United Farm Workers (1976)
57 Cal.App.3d 606, 610.)
       We review the trial court’s decision to grant an injunction
for abuse of discretion. (Shapiro v. San Diego City Council (2002)
96 Cal.App.4th 904, 912.) The burden is on the party challenging
the injunction to demonstrate the injunction exceeds the bounds
of reason. (Clear Lake Riviera Community Assn. v. Cramer
(2010) 182 Cal.App.4th 459, 471.) To establish an abuse, the
challenging party must show that there is no reasonable basis for
the trial court’s decision. (Antelope Valley Groundwater Cases
(2018) 30 Cal.App.5th 602, 615.) We afford considerable
deference to the trial court and presume that it properly applied
the law and acted within its discretion unless the appellant

                                25
affirmatively shows otherwise. (Espejo v. The Copley Press, Inc.
(2017) 13 Cal.App.5th 329, 378.)
       CVE contends that the bar on litigation is improper as it
enjoins CVE from exercising its right to free speech and petition
where existing legal doctrines such as issue and claim preclusion
would not bar CVE from doing so. We find that CVE’s concerns
have merit. The injunction seems to bar any future legal action
that CVE could take with respect to the conservation easement
even if those theoretical future legal actions were not barred by
issue and claim preclusion. As the holder of the conservation
easement, MRT may of course enforce its rights against CVE or
any subsequent owner of Tuna Canyon. However, by banning
any future litigation by CVE regarding the conservation
easement, the broad language of the injunction goes far beyond
that. For example, although MRT asserts that the injunction
would not prevent CVE from initiating cy pres proceedings to
extinguish or modify the easement, the injunction’s language by
its terms is broad enough to include such actions. Thus, there
does not seem to be any legal remedy that CVE can pursue with
respect to its rights, if any, related to the conservation easement.
       The injunction is also overbroad in one other respect: it
purports to prohibit CVE from “exploring” uses of the property
inconsistent with the easement. This term is not defined, and it
is not clear what the language prohibits. It thus runs afoul of the
rule that an injunction must clearly define prohibited conduct.
(Evans v. Evans, supra, 162 Cal.App.4th at p. 1167.)
       CVE raises several other objections to the terms of the
injunction, such as a concern that the injunction would prohibit
CVE from negotiating with MRT or the State about the
conservation easement. We find these concerns speculative and

                                26
without merit. The remaining terms of the injunction properly
enjoin “[a]ctual or threatened injury to or impairment of a
conservation easement or actual or threatened violation of its
terms.” (§ 815.7, subd. (b).) They do not violate any
constitutional prohibitions.
      Accordingly, we conclude that portion of the injunction that
enjoins CVE from filing new litigation or from “exploring” options
is unconstitutionally overbroad. Except with respect to those
issues, the injunction is legally appropriate.
III. The award of attorney fees and costs is appropriate.
      CVE separately appealed the orders awarding attorney fees
and costs. CVE argues that these fee and cost orders should be
reversed because the trial judge’s summary judgment and
injunction judgments should be reversed.
      Generally, an “order awarding costs falls with a reversal of
the judgment on which it is based.” (Merced County Taxpayers'
Assn. v. Cardella (1990) 218 Cal.App.3d 396, 402.) “But where,
as here, there is a limited reversal, we remand for the trial court
to consider anew the propriety of attorney fees unless we can say
with certainty the court would have exercised its discretion the
same way had the successful party not prevailed on the issue on
which we reverse.” (Boatworks, LLC v. City of Alameda (2019)
35 Cal.App.5th 290, 307.)
      Here, our reversal is limited to the overbroad language in
the injunction. It leaves intact the trial court’s ruling on the
merits and the other injunction terms. MRT and the Attorney
General have prevailed on the central issue in the case—whether
Tuna Canyon was subject to a conservation easement held by
MRT. They have successfully enforced the conservation
easement against CVE and are entitled to an injunction in

                                27
accordance with our ruling. Thus, our opinion does not change
the fact that MRT and the Attorney General are the prevailing
parties under section 815.7. Under these circumstances, we are
confident the trial court’s ruling as to attorney fees and costs
would not change as a result of our ruling on the scope of the
injunction.
      Accordingly, we affirm the attorney fee awards. (See
§ 815.7 [entitling prevailing part in any action under
conservation easement statutes an award of attorney fees].)
                           DISPOSITION
      The summary judgment is affirmed. The judgment
granting the injunction is reversed and the trial court is directed
to enter a new injunction that is narrowly tailored to permit
Canyon Vineyard Estates I, LLC to pursue available legal
remedies, if any, with respect to the conservation easement and
that does not prohibit exploration of its options. The orders
granting attorney fees and costs are affirmed. Mountains
Restoration Trust, John Paul DeJoria, the County of Los Angeles,
and the California Attorney General are awarded their costs on
appeal.

                                      LIPNER, J.*
We concur:

             EDMON, P. J.             LAVIN, J.

      * Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

                                 28
Filed 5/17/22
              CERTIFIED FOR PARTIAL PUBLICATION*

 IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                  SECOND APPELLATE DISTRICT

                          DIVISION THREE

 CANYON VINEYARD ESTATES I,                 B307176
 LLC,                                       (Los Angeles County
                                            Super. Ct. No. SC128181)
         Plaintiff and Appellant,
                                            CERTIFICATION AND
         v.                                 ORDER FOR PARTIAL
                                            PUBLICATION
 JOHN PAUL DeJORIA et al.,

         Defendants and Respondents.

 CANYON VINEYARD ESTATES I,                 B308607
 LLC,

         Plaintiff and Appellant,

         v.

 MOUNTAINS RESTORATION
 TRUST,

         Defendant and Respondent.

       * Pursuant to California Rules of Court, rules 8.1105 and
8.1110, this opinion is certified for publication with the exception of
parts II and III of the Discussion.
CANYON VINEYARD ESTATES I,                 B310861
LLC,

          Plaintiff and Appellant,

          v.

MOUNTAINS RESTORATION
TRUST et al.,

          Defendants and Respondents.

      The opinion in the above-entitled matter filed April 21, 2022,
was not certified for publication in the Official Reports. For good
cause it now appears that the opinion should be partially published
in the Official Reports and it is so ordered.

   LIPNER, J.*                  EDMON, P. J.           LAVIN, J.

      *Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

                                     2