Black Hills Investments, Inc. v. Albertson's, Inc.

53 Cal. Rptr. 3d 263, 146 Cal. App. 4th 883, 2007 Cal. Daily Op. Serv. 446, 2007 Daily Journal DAR 574, 2007 Cal. App. LEXIS 39
CourtCalifornia Court of Appeal
DecidedJanuary 12, 2007
DocketD047894
StatusPublished
Cited by11 cases

This text of 53 Cal. Rptr. 3d 263 (Black Hills Investments, Inc. v. Albertson's, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Black Hills Investments, Inc. v. Albertson's, Inc., 53 Cal. Rptr. 3d 263, 146 Cal. App. 4th 883, 2007 Cal. Daily Op. Serv. 446, 2007 Daily Journal DAR 574, 2007 Cal. App. LEXIS 39 (Cal. Ct. App. 2007).

Opinion

*886 Opinion

NARES, Acting P. J.

This case arose out of an alleged violation of section 66499.30, subdivision (b) (hereafter section 66499.30(b)) of the Subdivision Map Act (Gov. Code, 1 § 66410 et seq.) (the SMA), which generally prohibits the sale of real property for which a parcel map is required under the SMA until a parcel map is recorded in compliance with the SMA and any applicable local ordinance. In late 2004 Albertson’s, Inc. (Albertson’s), and Black Hills Investments, Inc. (Black Hills), entered into two nearly identical contracts (the contracts) under which Black Hills agreed to purchase from Albertson’s two parcels of then unsubdivided real property located in a shopping center development. Each of the contracts contained a provision that Albertson’s had the right to terminate the contracts unless Albertson’s obtained “all governmental approvals relating to any lot split [or] subdivision” prior to the closing date. A few weeks later, before the closing date, Albertson’s recorded a parcel map that subdivided the shopping center into four parcels, including the two that Black Hills had agreed to purchase. Later, however, Black Hills informed Albertson’s that it was terminating the contracts and requesting the return of its deposits. When Albertson’s refused to return the deposits, Black Hills brought suit against it seeking a determination that the contracts were void under the SMA because the parties entered into the contracts before Albertson’s recorded a parcel map for the shopping center. Both parties moved for summary judgment. The court denied Albertson’s summary judgment motion and granted summary judgment in favor of Black Hills.

Albertson’s appeals, contending (1) the court erred in determining that the contracts were not expressly conditioned upon the filing of a parcel map as required by section 66499.30, subdivision (e) (hereafter section 66499.30(e)) of the SMA, which codifies an exception to the prohibition set forth in section 66499.30(b) “where the sale ... is expressly conditioned upon the approval and filing of a . . . parcel map, as required under [the SMA]”; (2) Albertson’s recordation of the required parcel map prior to the closing date terminated any right Black Hills had to avoid the contracts under section 66499.32 of the SMA; and (3) Black Hills’s acts following Albertson’s recordation of the parcel map constituted ratification of the contracts.

We conclude under the undisputed facts of this case that (1) the contracts violated the prohibition codified in section 66499.30(b) because they were contracts to sell unsubdivided parcels of real property before the seller, Albertson’s, recorded a parcel map in compliance with the SMA; and (2) the contracts did not comply with the exception set forth in section 66499.30(e) *887 because they expressly permitted Albertson’s to waive the condition that a parcel map be recorded prior to the closing date, and were therefore void.

We also conclude that section 66499.32 is inapplicable on the facts of this case because that section expressly applies to a contract to sell real property that “has been divided, or which has resulted from a division, in violation of [the SMA]” (§ 66499.32, subd. (a)), and the contracts at issue here were for the sale of real property that had not yet been subdivided, thereby rendering the sale a violation of the prohibition set forth in section 66499.30(b). We also reject Albertson’s contention that Black Hills ratified the contracts. Accordingly, we affirm the summary judgment in favor of Black Hills.

FACTUAL BACKGROUND

On November 22, 2004, Black Hills entered into two contracts with Albertson’s to purchase two parcels of real property—pads “C” and “D”—in a shopping center development. At the time the parties executed the contracts, the two parcels had not yet been created through subdivision of the shopping center property (the property).

Black Hills deposited $133,000 in earnest money toward the purchase of the two parcels. The contracts provided that the earnest money was “absolutely non-refundable for any reason” except Albertson’s default under the contracts or the termination of the contracts pursuant to specified sections of the contracts.

A. Paragraph 8A of the Contracts

Paragraph 8A of each contract obligated Albertson’s to obtain and record a parcel map legally subdividing the property prior to the agreed-upon closing date. Paragraph 8A, however, made that obligation subject to an express condition that gave Albertson’s the right to terminate the contracts in the event Albertson’s failed to obtain governmental approval of the creation of the two parcels.

Under paragraph 9 of the contract, the closing date was subject to the satisfaction of a number of buyer and seller conditions, including the obligations and conditions set forth in paragraph 8A (discussed ante). The closing date was set for January 27, 2005.

B. Albertson’s Recordation of the Parcel Map

On December 10, 2004, Albertson’s, as it promised to do in paragraph 8A(b) of the contracts, recorded a parcel map that subdivided the property into four smaller parcels, including the two parcels that Black Hills agreed to purchase.

*888 C. Black Hills’s Election to Avoid the Contracts

In a letter dated January 26, 2005, one day before the closing date, Black Hills’s counsel sent a letter to Albertson’s stating that Black Hills wished to terminate the contracts and requesting that Albertson’s return the deposit money. The letter, which did not expressly refer to the SMA, asserted that Black Hills had not received a preliminary title report for the two parcels it contracted to purchase, that the only title report it had received was for the shopping center as a whole “in a pre-subdivided condition” and that as a result Black Hills “ha[d] not had an opportunity to perform due diligence, including but not limited to, conducting a survey on the parcels it contracted to buy.”

The letter also stated that Albertson’s “ha[d] attempted, without Black Hills’ consent, to materially alter the nature of the real property [Black Hills had] contracted to buy. In addition to imposition of an easement on Pad ‘D’ as a result of the subdivision map recorded, Albertson’s [was attempting] to place restrictions in the grant deed rather than recording a declaration of restrictions with respect to the entire subdivision. The import of this change is that it deprives [Black Hills] of the right to participate in the 90 [percent] vote that would have been necessary to change the declaration of restrictions.” The letter further stated that “by granting certain concessions to at least one purchaser of another lot in this subdivision, [Albertson’s] ha[d] materially altered the Common Area Maintenance burden which would have been placed on Pads ‘C’ and ‘D’ under the original contract of sale.” Albertson’s refused to return the deposit money to Black Hills.

PROCEDURAL BACKGROUND

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Cite This Page — Counsel Stack

Bluebook (online)
53 Cal. Rptr. 3d 263, 146 Cal. App. 4th 883, 2007 Cal. Daily Op. Serv. 446, 2007 Daily Journal DAR 574, 2007 Cal. App. LEXIS 39, Counsel Stack Legal Research, https://law.counselstack.com/opinion/black-hills-investments-inc-v-albertsons-inc-calctapp-2007.