California Court of Appeal Nov 13, 2014 No. E056412Unpublished
Filed 11/13/14 Shalikar v. Shalikar CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
FOURTH APPELLATE DISTRICT
DIVISION TWO
OLGA SHALIKAR et al.,
Plaintiffs and Appellants, E056412
v. (Super.Ct.No. RIC419394 & RIC419424) MOHAMMAD I. SHALIKAR et al., OPINION Defendants and Respondents.
MOHAMMAD I. SHALIKAR et al.,
Plaintiffs and Respondents,
v.
TOURYALAI SHALIKAR et al.,
Defendants and Appellants.
APPEAL from the Superior Court of Riverside County. John W. Vineyard, Judge.
Affirmed.
1
The Law Office of John Derrick and John Derrick for Plaintiffs, Defendants, and
Appellants.
Law Offices of Lawrence R. Bynum and Lawrence R. Bynum for Plaintiffs,
Defendants, and Respondents.
I. INTRODUCTION
Plaintiff, defendant, and appellant Touryalai Shalikar and plaintiff, defendant, and
respondent Mohammad Shalikar are brothers.1 They jointly owned certain businesses
and real property, including four parcels of land in Hesperia. They have been litigating
disputes regarding these properties and other matters since at least 2004.
In 2006, Touryalai and Mohammad entered into a settlement agreement. The
agreement called for Touryalai to transfer his interest in the four Hesperia parcels to
Mohammad and for Mohammad to transfer other property to Touryalai. For the next
three years, neither side performed their obligations under the agreement or demanded
that the other do so. In the meantime, they sold three of the four Hesperia parcels to the
City of Hesperia (the City) in response to the City’s threat of condemnation proceedings.
The proceeds for the parcels were split evenly between Touryalai and Mohammad. The
parties continued to jointly hold one Hesperia parcel.
1 Because Touryalai and Mohammad share the same last name, we will refer to them by their first names. Touryalai’s and Mohammad’s wives are also parties to the underlying litigation and this appeal. In their briefs on appeal, both sides refer only to the brothers’ names in the interests of brevity. Without meaning any disrespect for any party, we will abide by that convention for the sake of brevity as well as avoiding confusion.
2
In 2009, as the trial between them began, Mohammad moved to have judgment
entered on the settlement agreement pursuant to section 664.6 of the Code of Civil
Procedure.2 Over Touryalai’s opposition, the court granted the motion. Soon afterward,
both sides filed motions to interpret and enforce the agreement. In ruling on these
motions, the court concluded that the four jointly held Hesperia parcels were not covered
by the agreement. Mohammad appealed to this court and, in an unpublished opinion, we
We concluded that the agreement and judgment called for Touryalai to transfer his
interest in the four Hesperia parcels to Mohammad. We modified the court’s order to
direct Touryalai to transfer his interest in the one Hesperia parcel that remained jointly
held to Mohammad. As for the proceeds Touryalai obtained from the sale of the three
parcels to the City, we directed the trial court to consider that issue upon remand.
Following remand, an evidentiary hearing was held to consider the remaining
issues. The trial court ordered Touryalai to pay to Mohammad the amount he received in
exchange for the three sold parcels, plus prejudgment interest. Touryalai appealed.
2 All further statutory references are to the Code of Civil Procedure unless otherwise indicated. Section 664.6 provides: “If parties to pending litigation stipulate, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.”
3 We take judicial notice of our opinion in Shalikar I and of the record on appeal in that case. (Evid. Code, §§ 452, subd. (d), 459, subd. (a).)
3
We affirm.
II. SUMMARY OF FACTS AND PROCEDURAL HISTORY
A. Background: The Litigation, the Settlement Agreement, and the Judgment
Touryalai sued Mohammad, among others, in 2004. In August 2005, Touryalai
filed a first amended complaint alleging disputes concerning certain business and real
property transactions involving the parties. Touryalai sought a variety of remedies,
including rescission, specific performance, damages, quiet title, partition and accounting,
and declaratory relief.4 Among the properties Touryalai sought to partition were various
parcels he owned jointly with Mohammad in Hemet, Victorville, and Hesperia.
In August 2006, the parties entered into a written settlement agreement. The
agreement consisted of five numbered paragraphs. Under the first paragraph,
Mohammad was to transfer certain property in Hemet and Sun City to Touryalai. Under
the second paragraph, Touryalai was to transfer to Mohammad his interest in a parcel of
land in Victorville and an unspecified “4 parcels of land” in Hesperia. The third
paragraph required Touryalai to pay $150,000 to another family member; paragraph four
addressed restrictions on the parties’ abilities to compete against each other; and
paragraph five provided for the removal of liens on Mohammad’s properties in Hesperia
and Homeland.
4 The register of actions for the case indicates that Mohammad commenced a separate action against Touryalai, that the two actions were consolidated, and that Mohammad subsequently filed a cross-complaint in the consolidated case. The pleadings filed by Mohammad are not included in our record on appeal.
4
Despite the agreement, the litigation between the parties continued.5 Mohammad
did not transfer or tender the Hemet or Sun City properties to Touryalai, and Touryalai
did not transfer or tender the Hesperia or Victorville properties to Mohammad. In
February 2008, Touryalai filed a second amended complaint that included the claims
asserted in the first amended complaint and added additional claims. It did not mention
the settlement agreement.
In 2007 or 2008, the City of Hesperia contacted Touryalai about the City’s interest
in acquiring, by eminent domain if necessary, an easement over one of the jointly held
Hesperia parcels for a drainage project. Touryalai referred the City to Mohammad
because Mohammad “has experience in real estate.” Mohammad thereafter conducted
most of the negotiations with the City.
Although the City sought an easement over one parcel only, Mohammad
negotiated to have the City purchase three of the Hesperia parcels. The initial form of
escrow instructions called for the purchase money to be disbursed to Touryalai and
Mohammad jointly. The escrow instructions were thereafter modified to provide for
separate checks to each party. According to Touryalai, this was done because
Mohammad “was very broke at the time and . . . wanted to split the checks” so that each
5 Mohammad explains that shortly after the settlement agreement was signed, two nephews who had not signed the agreement intervened and joined in the action. Touryalai subsequently added other parties to the case. Because the new parties to the lawsuit were not parties to the settlement agreement, Mohammad was “prevented” from moving to enforce the settlement. In July 2009, the additional parties were dismissed from the lawsuit and, one week later, Mohammad moved to have judgment entered based on the settlement agreement.
5
received one-half of the proceeds. Mohammad testified that while he agreed to separate
checks, he believed their agreement was in effect at that time and that the proceeds did
not affect the agreement. The transaction closed in October 2008. They each received
$633,517.66. According to Touryalai, once they received their checks, they “never
talked about it.”
In July 2009, as trial in the case commenced, Mohammad filed a motion to have
judgment entered pursuant to the terms of the settlement agreement. In opposing the
motion, Touryalai’s counsel argued that “there are issues of enforcement that will
immediately pop up, and the parties would be obliged to file motions to deal with those
questions of interpretation and modification, whatever those issues are.” He further
asserted that granting the motion would “spark a whole series of issues that we’ll have to
deal with which will result in post ruling motions.”
After the court indicated it would grant the motion, the court asked Touryalai’s
counsel whether he would object to the court’s continuing jurisdiction. The attorney
responded: “I really do not, Your Honor, because it’s pretty clear to me that the Court
may be called upon to make further orders to carry out the judgment, whatever the
judgment is.” None of the parties personally requested or expressly stipulated to the
court’s continuing jurisdiction.
The judgment attached and incorporated the settlement agreement. The judgment
further provides: “Pursuant to the parties’ stipulation, the Riverside Superior Court
retains jurisdiction to enforce the judgment.”
6
B. Postjudgment Motions and Shalikar I
Within three months after the judgment was entered, both sides filed motions
calling for the interpretation and enforcement of the judgment. Mohammad filed a
motion to enforce the judgment in October 2009. According to Mohammad, Touryalai
was required under paragraph 2 of the settlement agreement to transfer his interest in a
certain Victorville parcel and four specific parcels in Hesperia that they had held jointly
when the agreement was made, including the three parcels that were sold to the City in
2008. Mohammad requested an order directing Touryalai to execute deeds to the
remaining Hesperia parcel and the Victorville parcel and, as to the three sold parcels, a
writ of execution covering Touryalai’s proceeds from the sale.
Touryalai opposed the motion and asserted that the “4 parcels of land” referenced
in paragraph 2 of the settlement agreement are not the jointly held Hesperia parcels
identified by Mohammad, but rather four different parcels held in Mohammad’s name
alone.
In November 2009, Touryalai filed a motion for an injunction to prevent
Mohammad from competing against Touryalai in violation of the settlement agreement.
According to Touryalai, the motion was made “in aid of enforcement of the judgment”
and recited that, “[p]ursuant to the stipulation of the parties, the court retained jurisdiction
to enforce the judgment.”
Mohammad’s motion to enforce the judgment and Touryalai’s motion for an
injunction were heard together in January 2010. The court granted Mohammad’s motion
7
in part and issued orders directing the transfer of certain properties among the parties.
However, the trial court agreed with Touryalai’s interpretation of paragraph 2 and,
consequently, made no order concerning the remaining jointly held Hesperia parcel or the
proceeds from the sale of the other three parcels. The court also granted Touryalai’s
motion in part and ordered Mohammad to close a certain business he was operating in
violation of the noncompetition provision of the agreement.
In February 2010, pursuant to the court’s January 2010 orders, Mohammad
transferred to Touryalai the Sun City and Hemet properties and Touryalai transferred to
Mohammad the Victorville property. Touryalai also paid the $150,000 payment required
under paragraph 3 of the agreement.6
Mohammad appealed. In Shalikar I, we agreed with Mohammad and construed
the “4 parcels of land” referenced in paragraph 2 to mean the four Hesperia parcels
identified by Mohammad. With respect to the parcel that was still held jointly by the
parties, we modified the court’s order to require that Touryalai transfer his interest in that
parcel to Mohammad. As for Mohammad’s request that Touryalai be ordered to turn
over his share of the proceeds for the sale of the other three parcels, we stated: “[W]e
think the appropriate remedy is to direct the trial court to consider that request following
remand. . . . [T]he trial court never reached the question of [Mohammad’s] right to the
proceeds. If it has jurisdiction to consider the question, its resolution may involve
6 The agreement called for this payment to be made to Najiba Faizy. After Faizy assigned her right to the payment to Mohammad, Touryalai made the payment to Mohammad.
8
equitable considerations, factual determinations, and the exercise of judicial discretion
that are more properly within the province of the trial court. The trial court should be
given the opportunity to address such issues.” Specifically, we concluded: “Upon
motion by [Mohammad] following remand, the court shall consider [Mohammad’s]
request to modify the judgment by providing for an order that [Touryalai] pay
[Mohammad his] share of proceeds from the sale of three jointly held parcels to the City
of Hesperia.”
C. Postremand Motion to Enforce the Judgment
Following remand, Mohammad filed the motion permitted by Shalikar I. He
sought $633,517.33 in principal plus $140,332.50 in prejudgment interest. After the
submission of opposing and reply papers and oral argument, the court ordered an
evidentiary hearing and further briefing.
The evidentiary hearing was held on February 24, 2012. In addition to testimony
from Touryalai and Mohammad, the court heard testimony from a representative of the
City who was involved in the negotiations for the sale of the three Hesperia parcels, the
escrow agent involved in the sale, and a nephew of the parties.
On May 22, 2012, the court issued an order and written findings. The court stated
that “[p]ursuant to the parties’ settlement, [Mohammad was] the equitable owner[] of the
three Hesperia parcels on the date of the sale. (Rogers v. Davis (1994) 28 Cal.App.4th
1215 [[Fourth Dist., Div. Two] (Rogers)].) Any other result would constitute a windfall
to [Touryalai] and would frustrate the intent of the parties as reflected in their settlement
9
agreement, now judgment. As a result, [Mohammad is] entitled to recover the proceeds
of that sale, less an offset of $59,403.60, along with prejudgment interest . . . plus 10%
post judgment interest . . . .” The offset was based on Touryalai’s payment of mortgage
payments and other expenses relating to the sold Hesperia parcels.
With respect to the issue of whether Mohammad waived his right to the proceeds
of the sale, the court found that Touryalai “did not meet [his] burden of proving that
[Mohammad] acted, voluntarily, in any manner so inconsistent with [his] rights as to
induce a reasonable belief that such rights had been relinquished.”
Touryalai appealed.
III. DISCUSSION
A. Jurisdiction
Touryalai contends that the trial court did not retain jurisdiction after the judgment
was entered. In particular, he asserts that the court’s purported retention of jurisdiction
was ineffective because section 664.6 authorizes the retention of jurisdiction only when
the parties (and not merely their counsel) request it, and the parties did not do so in this
case. As we explain below, we reject this argument because, regardless of whether the
parties must personally request the court to retain jurisdiction under section 664.6, the
court has the inherent power to retain jurisdiction to enforce and interpret the judgment
and to resolve remaining issues to avoid further litigation.
Ordinarily, a trial court’s “‘jurisdiction over the parties and the subject matter . . .
continues until a final judgment is entered . . . .’ [Citation.]” (Diamond Heights Village
10
Assn., Inc. v. Financial Freedom Senior Funding Corp. (2011) 196 Cal.App.4th 290,
305.) However, a court retains jurisdiction to “compel obedience to its judgments,
orders, and process . . . .” (§ 128, subd. (a)(4).) In cases involving equitable claims and
relief, such jurisdiction has been expressed in broad terms: “‘The jurisdiction of a court
of equity to enforce its decrees is coextensive with its jurisdiction to determine the rights
of the parties, and it has power to enforce its decrees as a necessary incident to its
jurisdiction. Except where the decree is self-executing, jurisdiction of the cause
continues for this purpose, or leave may be expressly reserved to reinstate the cause for
the purpose of enforcing the decree, or to make such further orders as may be necessary.
[Citations.] A court of equity can mold its decrees to suit the exigencies of the case.
[Citation.] Where equity has acquired jurisdiction for one purpose, it will retain that
jurisdiction to the final adjustment of all differences between the parties arising from the
causes of action alleged. [Citations.] Where a court has taken jurisdiction of a suit in
equity it may determine all legal as well as equitable issues in order to completely
dispose of the matters in controversy. [Citations.]’” (Day v. Sharp (1975) 50 Cal.App.3d
exquisite foresight” in retaining jurisdiction “to entertain and resolve [future
employment] benefits issues”]; see generally 2 Witkin, Cal. Procedure (5th ed. 2008)
Jurisdiction, § 420, pp. 1070-1071.) Indeed, even in the absence of an express
reservation of jurisdiction, “[a]n equity court has inherent power to make its decree
effective by additional orders affecting the details of performance . . . .” (Barnes v.
Chamberlain (1983) 147 Cal.App.3d 762, 767; accord, Palmco Corp. v. Superior Court
(1993) 16 Cal.App.4th 221, 225.)
The postjudgment exercise of jurisdiction in equity cases is supported by policies
favoring judicial economy and finality; by resolving issues that remain after judgment is
entered, the court is able “to do full and final justice between [the parties] without the
necessity of filing a new action.” (Day v. Sharp, supra, 50 Cal.App.3d at p. 912; see also
Pailhe v. Pailhe (1952) 113 Cal.App.2d 53, 64 [in exercising its equitable powers, the
court can, “‘in one action, grant all the relief to which the parties are entitled, although at
law such a result might strictly require several actions.’”].)
Here, there is no dispute that the parties’ claims and the remedies employed to
resolve them are predominately equitable in nature: Touryalai claims included rescission,
12
specific performance, quiet title, partition and accounting, and declaratory relief;7 the
judgment establishes the parties’ rights to real and personal property, requires transfers of
property to reflect those rights, and sets restrictions on the parties’ abilities to compete
against each other. Under the authorities cited above, the court had continuing
jurisdiction to make the “‘final adjustment of all differences between the parties’” and
“‘determine all legal as well as equitable issues in order to completely dispose of the
matters in controversy.’” (Day v. Sharp, supra, 50 Cal.App.3d at pp. 912-913.)
The court’s retention of jurisdiction was particularly appropriate in light of the
recognition by the parties and the court that the entry of judgment would not end the
matter. For example, at the hearing on Mohammad’s motion to have judgment entered,
Touryalai’s counsel argued that “there are issues of enforcement that will immediately
pop up, and the parties would be obliged to file motions to deal with those questions of
interpretation and modification . . . .” The remaining issues include the “interpretation of
the obviously ambiguous language of the document” and “the effect of one or more
parties disabling themselves from performing” under the agreement. When the court
inquired whether Touryalai’s counsel would object to the court’s continuing jurisdiction,
counsel said he would not “because it’s pretty clear . . . that the Court may be called upon
to make further orders to carry out the judgment . . . .”
7 Our record does not include Mohammad’s pleadings. However, in his October 2009 motion to enforce the judgment, Mohammad refers to his “Complaint for Partition of Real Property and Acctg.”
13
Indeed, soon after the judgment was entered both sides took advantage of the
court’s retained jurisdiction by filing motions calling for the court to interpret and enforce
different provisions of the settlement agreement: Mohammad filed his motion to enforce
the judgment, the ruling on which was the focus of Shalikar I, and Touryalai filed his
motion to enjoin Mohammad from certain competitive practices “in aid of enforcement of
the judgment . . . .” In support of his motion, Touryalai expressly relied on the parties’
stipulation to have the court retain jurisdiction.8
In light of the equitable nature of the claims and the remedies, the near-certainty of
postjudgment disputes, and the interest in avoiding new and multiple lawsuits, the court’s
express retention and exercise of jurisdiction was appropriate and amply supported by the
authorities cited above.
The primary focus of Touryalai’s argument is that the retention of jurisdiction
under section 664.6 is effective only if it was “requested by the parties.” (§ 664.6.)
Touryalai relies on the second sentence of section 664.6, which provides: “If requested
by the parties, the court may retain jurisdiction over the parties to enforce the settlement
until performance in full of the terms of the settlement.” This language was construed in
8 Touryalai’s reliance on the court’s retained jurisdiction to support his postjudgment motion for injunctive relief arguably supports an argument that he is judicially estopped from asserting that the court did not have jurisdiction to hear Mohammad’s motion. (See, e.g., Aguilar v. Lerner (2004) 32 Cal.4th 974, 986 [“‘“Judicial estoppel precludes a party from gaining an advantage by taking one position, and then seeking a second advantage by taking an incompatible position.”’”].) Because Mohammad does not explicitly rely on this theory and it is unnecessary to reach our decision, we do not decide this issue.
14
Wackeen v. Malis (2002) 97 Cal.App.4th 429, as requiring that the request to retain
jurisdiction “must be made by the parties, not by their attorneys, spouses or other such
agents.” (Id. at p. 433.) It does not, however, apply here.
The second sentence of section 664 was added to solve “the problem presented in
[one case], where the trial court lost jurisdiction of a case, and hence the ability to enforce
a settlement agreement, because the terms of the stipulated settlement required or
contemplated that the case would be dismissed.” (Wackeen v. Malis, supra, 97
Cal.App.4th at p. 439.) With the addition of the second sentence to section 664.6, even
after a settled case is dismissed, “the court may nevertheless retain jurisdiction to enforce
the terms of the settlement, until such time as all of its terms have been performed by the
parties, if the parties have requested this specific retention of jurisdiction.” (Ibid.; see
also Hines v. Lukes (2008) 167 Cal.App.4th 1174, 1182 [“The court retains jurisdiction to
enforce a settlement under the statute even after a dismissal, but only if the parties
requested such a retention of jurisdiction before the dismissal.”].)
Here, the court was never presented with the problem that the second sentence of
section 664.6 was intended to resolve. The settlement agreement did not call for the
dismissal of the case and the parties never dismissed the case. Nothing in section 664.6
or the authorities cited by Touryalai abrogates the principles regarding the retention of
jurisdiction discussed above. Thus, if the trial court could retain jurisdiction based on its
inherent powers to enforce the judgment, there was no need to resort to the jurisdiction
retention provision of section 664.6 or to require the personal request or stipulation of the
15
parties. As discussed above, there is ample authority for the court’s retention of
jurisdiction in this case, and it could do so without regard to whether the parties
personally requested it. We therefore reject Touryalai’s argument.
Under separate headings, Touryalai contends that even if the court had jurisdiction
to enforce the judgment, the court’s order to turn over the sale proceeds went beyond
mere enforcement and “changed the terms of the judgment.” There is, he asserts, “a big
difference between a judgment of specific performance and an order to pay money.”9
We conclude that the court’s order was within its jurisdiction. The settlement
agreement and judgment required Touryalai to transfer his interest in the four Hesperia
properties to Mohammad—an equitable remedy within the scope of the claims between
the parties. Because three of the four parcels had been sold, Touryalai could not comply
with the judgment or any order that he transfer his interest in those parcels. Yet
Mohammad had complied with his obligations to transfer the Sun City and Hemet
properties to Touryalai. Thus, if, as Touryalai argues, the court could do nothing further,
Mohammad would be deprived of a key benefit of the settlement agreement (the three
Hesperia parcels) and Touryalai would receive an undeserved windfall (the proceeds
9 We anticipated this issue in Shalikar I when we noted: “[I]t is not clear to us that the trial court’s retained jurisdiction to enforce the judgment includes the power to order [Touryalai] to pay money to [Mohammad]. The jurisdiction to enforce a judgment is ‘reserved to modify[ing] procedural provisions, not to materially change the adjudication of substantial issues.’ (7 Witkin, Cal. Procedure [(5th ed. 2008)] Judgment, § 80, p. 616.) Arguably, an order for the payment of money would be a substantive change to the judgment beyond a mere procedural modification.” (Shalikar I, supra, at pp. 19-20.) Because the issue had not been briefed, we declined to express any view concerning the merits of such an argument. (Id. at pp. 20-21.)
16
from the sale of the parcels). Clearly, “full and final justice” would not be achieved—at
least not without another lawsuit and further litigation. (See Day v. Sharp, supra, 50
Cal.App.3d at p. 912.)
Fortunately, the law does not require such inefficiency. As discussed above,
when, as here, “‘a court has taken jurisdiction of a suit in equity[,] it may determine all
legal as well as equitable issues in order to completely dispose of the matters in
controversy. [Citations.]’” (Day v. Sharp, supra, 50 Cal.App.3d at p. 913.) In Shalikar
I, we specifically directed the trial court to consider whether Touryalai should be ordered
to pay to Mohammad the proceeds Touryalai received from the sale of the three parcels.
That question is thus indisputably an issue that remains in this case, the resolution of
which is necessary for the complete disposition of the matter. The trial court, therefore,
had jurisdiction to determine that issue.
B. The Merits
Touryalai next contends that the court’s decision on the merits was erroneous.
More specifically, he asserts the court erred in applying the doctrine of equitable
conversion and in finding that Mohammad had not waived his right to the sale proceeds.
In addition, Touryalai contends that Mohammad is barred by the doctrine of judicial
estoppel from receiving the relief he sought. We reject these arguments.
1. The Standard of Review
Initially, we reject Touryalai’s argument that we should apply a de novo standard
of review with respect to the trial court’s conclusions. As Touryalai acknowledges, a trial
17
court’s exercise of its equitable powers is generally reviewed for abuse of discretion.
(See Ho v. Hsieh (2010) 181 Cal.App.4th 337, 345; De Anza Enterprises v. Johnson
(2002) 104 Cal.App.4th 1307, 1315.) However, Touryalai argues that the court’s order in
this case is analogous to a summary judgment based on equitable defenses, which is
reviewed under the de novo standard. (See, e.g., Johnson v. City of Loma Linda (2000)
24 Cal.4th 61, 67-68.) We disagree. Rulings on summary judgment motions are
reviewed under the de novo standard because the “‘motions raise only questions of law
regarding the construction and effect of the moving and opposing papers . . . .’
[Citations.]” (Hamburg v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497, 502-503.)
Here, by contrast, the proceeding involved live testimony where the court could observe
the demeanor of the witnesses and assess their credibility. The hearing on the motion
was more akin to a trial than a summary judgment motion. Accordingly, we reject the
contention that we should depart from the deferential standard of review generally
applicable to equitable determinations.10
In reviewing the court’s ruling under the abuse of discretion standard, we observe
that “‘“[t]he discretion of a trial judge is not a whimsical, uncontrolled power, but a legal
discretion, which is subject to the limitations of legal principles governing the subject of
its action, and to reversal on appeal where no reasonable basis for the action is shown.
10 A deferential standard of review is also implicit in Shalikar I, where we directed the parties to raise these issues in the trial court on remand because their resolution “may involve equitable considerations, factual determinations, and the exercise of judicial discretion that are more properly within the province of the trial court.” (Shalikar I, supra, at p. 21.)
18
[Citation.]”’ [Citations.] The scope of discretion always resides in the particular law
being applied, i.e., in the ‘legal principles governing the subject of [the] action . . . .’
Action that transgresses the confines of the applicable principles of law is outside the
scope of discretion and we call such action an ‘abuse’ of discretion.” (City of
Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297.)
2. Equitable Conversion
Mohammad’s claim to Touryalai’s sale proceeds and the court’s ruling were based
upon the doctrine of equitable conversion. Under this doctrine, “[w]hen a binding
executory contract for the sale of real property is entered into, an equitable conversion of
the property . . . occurs under which the purchaser is deemed to be the equitable owner of
the property and the seller the owner of the purchase money, with an equitable lien on the
property for the balance of the unpaid purchase price. The vendor is regarded as holding
the legal title in trust for the purchaser; the purchaser, in turn, is considered the trustee of
the purchase money for the benefit of the vendor.” (Mamula v. McCulloch (1969) 275
Cal.App.2d 184, 193-194; see generally Estate of Reid (1938) 26 Cal.App.2d 362, 367-
370.)
The equitable conversion doctrine “‘is a mere fiction resting upon the principle
that equity regards things which are directed to be done as having actually been
performed where nothing has intervened which ought to prevent such a performance.’
Even if the argument has not been forfeited, it is not persuasive. The merger
clause does not, as Tourylai asserts, expressly acknowledge that the 2006 settlement
agreement will have no further force or effect; indeed, it makes no mention whatsoever of
31
that agreement. Instead, it refers only vaguely to the understanding of the parties
“relating to the transaction contemplated hereby.” The contemplated transaction is the
sale of the three Hesperia parcels to the City, not the exchange of properties between
Touryalai and Mohammad called for in the 2006 agreement. Moreover, if Touryalai and
Mohammad intended to cancel or novate their 2006 agreement, it is unlikely they would
have used what appears to be a boilerplate merger clause within the
“MISCELLANEOUS” provisions of the City’s purchase and sale contract without
making any specific reference to the prior agreement. Reading the merger provision in
light of the entire purchase and sale contract, we do not believe the parties intended that it
render the 2006 agreement ineffective and unenforceable.
IV. DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
KING J.
We concur:
RAMIREZ P. J.
MILLER J.
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Holding. The court held that it possessed inherent equitable jurisdiction to enforce its judgment and resolve remaining issues, including ordering the payment of sale proceeds, regardless of whether the parties personally requested such jurisdiction under Code of Civil Procedure section 664.6.
Issues
Whether the trial court retained jurisdiction to enforce the judgment and resolve post-judgment disputes after the parties failed to personally request such retention under section 664.6.
Whether the trial court had the authority to order the payment of sale proceeds as a means of enforcing the judgment without impermissibly modifying its substantive terms.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“The power to retain and exercise postjudgment jurisdiction by a court in equity in order to interpret the judgment and determine unresolved issues and future problems is well settled.”
“Where equity has acquired jurisdiction for one purpose, it will retain that jurisdiction to the final adjustment of all differences between the parties arising from the causes of action alleged.”