Facts

Plaintiff Mehrdad Elie filed suit against defendant John Kallie in connection with the purchase and sale agreement of a high-rise condominium. The parties entered into a standard-form purchase and sale agreement to purchase a condominium in a Wilshire Boulevard high-rise at the full asking price of $449,000, all-cash. Per the standard provision in the form, removal of the tenant from the condominium unit five days before closing was a condition precedent to the close of escrow. Kallie's offer provided for closing by Oct. 15, 2013, or sooner. A hand-written provision in the agreement read that the "Seller will try to deliver the Property by October 15th. If due to legal issues he cannot, Buyer has the option to cancel the contract if not delivered by November 15, with no liability to Elie."

The tenant did not move out by the November 15 deadline.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that the language was inserted by the seller, and gave reciprocal rights to void the contract if the tenant was not removed by Nov. 15, which had not occurred. The parties had different understandings of what the inserted language meant, and therefore there was no meeting of the minds and no valid and enforceable contract was entered into.

Plaintiff also contended that Kallie could have paid the tenant and waived the alleged condition to deliver the property tenant free.

DEFENDANT'S CONTENTIONS:
Kallie argued that Elie, who has been a licensed California real estate broker since 1985, inserted the language, in his own hand and of his own volition. Defendant claimed there were no direct or indirect communications or contacts between the seller and Kallie as to what the language inserted by Elie meant.

All conditions were removed by the buyer. Elie hired counsel and learned that evicting the tenant by Nov. 15 would be difficult because the condominium was rent controlled and the tenant was demanding a relocation fee of $7,500. Rather than pay the fee, or reduce the purchase price and convey the condominium so that Kallie could pay the demanded relocation fee, Elie litigated "on principle" for months. Elie also attempted to raise the rent on the unit to force its abandonment by the tenant, and re-filed his unlawful detainer action twice. Elie then filed this lawsuit, claiming that the purchase and sale agreement was unfairly one-sided, that his broker had failed to reflect his intent in the language which he himself had drafted, and that he was entitled to walk away from his obligation to sell the condominium.

Kallie contended that a valid contract to sell the condominium was entered into, notwithstanding Elie's uncommunicated intent to permit himself to walk away from the sale if the cost of removing the tenant or the time required for removal, was greater than anticipated. Kallie contended that Elie was required to act reasonably, even if that meant paying the tenant's demanded relocation fee, which was less than 2 percent of the sales price. Specific performance of the purchase and sale agreement was entirely proper.

Settlement Discussions

Elie offered to sell the property to Kallie for a bonus over the agreed upon contract price if Kallie accepted the property with the tenant in place. Kallie did not agree. According to cross-defendant, Elie delivered the deed into escrow in July 2014 and requested Kallie deliver into escrow the purchase price. Kallie refused claiming he was not obligated to pay the purchase price unless the tenant was removed.

Result

Summary judgment for Kallie granting specific performance of the contract, but leaving the tenant in place.

Other Information

Summary adjudication in favor of Elie was denied. Elie's motion for leave to amend to assert a breach of contract claim was denied. Mediation on Jan. 09, 2015 before Hon. Alexander H. Williams, Jr. was unsuccessful. FILING DATE: Sept. 29, 2014.