ORDER GRANTING DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT
I. INTRODUCTION
Plaintiff Headlands Reserve LLC (“Headlands”) is the owner and developer of a multi-million dollar parcel of oceanfront property in Dana Point, California. Headlands is developing the property for both residential and commercial use. Before Headlands started developing the property, it obtained the necessary approval from the City of Dana Point (“the City”) and the California Coastal Commission (“CCC”), the state agency responsible for ensuring that all development of coastal land complies with the California Coastal Act, Cal. Pub. Res.Code § 30500 (West 1996). Headlands, the City and the CCC all agreed that the development would be subject to the condition that Headlands dedicate and preserve in perpetuity a portion of the property in its natural habitat. To satisfy that condition, Headlands negotiated a sale of a certain portion of the property (the “Conservation Park”) to Defendant Center for Natural Lands Management (“CNLM”), a non-profit organization founded to protect and preserve the natural environment. This lawsuit is the result of what transpired between Headlands and CNLM after that sale.
Approximately one year after the closing of the transaction, Headlands demanded that CNLM sigh Internal Revenue Service (“IRS”) Form 8283. Form 8283 is the document used by the IRS to verify a charitable donation by a taxpayer. By signing Form 8283, a charitable organization represents to the IRS that it has in fact received a charitable donation from a taxpayer. Headlands believed that it was entitled to a tax deduction in excess of $115 million for selling the Conservation Park to CNLM at a price that Headlands felt was far below the property’s fair market value. Uncomfortable with representing to the IRS that Headlands’ sale of the Conservation Park was a charitable donation, CNLM refused to sign Form 8283. Headlands subsequently filed this action alleging claims for declaratory relief, unjust enrichment, breach of contract and breach of the implied covenant of good faith and fair dealing. CNLM now moves for partial summary judgment on Headlands’ claims, contending that it has no contractual or legal obligation to sign Form 8283 for Headlands.
After considering all of the evidence presented by the parties and hearing the arguments of their counsel, the Court finds that CNLM has no obligation to sign Form 8283 for Headlands. The parties’ fully-integrated written agreements memorializing the transaction make no reference to Form 8283 and, more significantly, contain a provision explicitly providing that CNLM made no representation or warranty to Headlands regarding the tax treatment of the transaction. The Court simply cannot create a contract that one party did not and would not make with another party. Accordingly, CNLM’s motion for partial summary judgment is GRANTED.
II. FACTUAL BACKGROUND
1. The Parties
Headlands is a California limited liability company formed to acquire and develop a 121-acre piece of coastal property in the south Orange County town of Dana Point (the “Headlands Property”). (Declaration of Sanford Edward (“Edward Deck”) ¶¶ 1-2); (Declaration of Jeffrey G. Knowles (“Knowles Deck”) ¶ 2, Exh. A.) Headlands
CNLM is a nonprofit entity “founded to protect sensitive biological resources through professional, science-based stewardship of mitigation and conservations lands in perpetuity.” (Declaration of Sherry Teresa (“Teresa Decl.”) ¶ 2.) CNLM fulfills its mission in two ways. First, CNLM often acts as the steward for conservation lands owned by other parties. (Id.) Second, corporate entities often transfer a portion of their interest in conservation lands to CNLM, either in the form of fee simple title or a conservation easement, as part of a “development mitigation.” (Id.) “Development mitigation” occurs when a private party is required by a government entity to set aside certain property in exchange for obtaining development rights on other property, in order to alleviate the negative impact from a proposed development. (Id.)
2. The Steele Agreement
In late 1999, Headlands was interested in establishing a conservation park on the Headlands Property. (Edward Decl., ¶ 9.) The Harry & Grace Steele Foundation (“Steele Foundation”) approached Headlands and proposed to purchase some twenty-five (25) acres of the Headlands Property to preserve it in its natural state. (Edward Depo., 22:7-23:21, 24:18-25.) To further the negotiations between Headlands and the Steele Foundation, Headlands hired CNLM to prepare a Property Analysis Report for the Conservation Park estimating the projected cost for the ongoing management and conservation of the area. (Edward Decl., ¶ 10; Darnall Decl., ¶ 2, Exh. 19.) CNLM believed that Headlands’ intention in preserving the Conservation Park was based on governmentally-imposed mitigation obligations. (Teresa Decl., ¶¶ 8-9, Exh. A.)
Headlands and the Steele Foundation entered into a purchase and sale agreement on June 21, 2000 (the “Steele Agreement”). See Steele Agreement (Teresa Decl., ¶ 11, Exh. B; Layman Depo., 47:18-48:4.) The Steele Agreement contained the following language:
Seller maintains that the Purchase Price is considerably less than the fair market value of the Property. Buyer, having not yet obtained an appraisal, does not dispute Seller’s position in this regard.
(Teresa Deck, ¶ 11, Exh. B, § 11(e).) The Steele Agreement contained no provisions relating to tax treatment of the Agreement or tax deductions that Headlands might receive as a result of the transaction. Approximately one month after entering into the agreement with the Steele Foundation, Headlands had the property appraised. The appraisal stated that the value of the Conservation Park was $25.9 million dollars, or roughly $15.4 million more than the purchase price in the Steele Agreement. (Edward Decl., ¶ 12; Darnall Decl., ¶ 9, Exh. 6.)
3. The CNLM Purchase and Sale Agreements
In December 2004, Headlands and the Steele Foundation determined that CNLM should replace the Steele Foundation as the purchaser of the Conservation Park, although the Steele Foundation would still provide the funding for the transaction. (Edward Decl., ¶ 15.) Headlands believed that CNLM’s status as a public charitable organization under 501(c)(3) of the Internal Revenue Code would allow Headlands to receive a $115,491,520.00 deduction on the sale of the twenty-nine (29) acres,
1
in
On October 31, 2005, Headlands and CNLM entered into two separate purchase and sale agreements (“the CNLM Agreement”), resulting in the sale of twenty-nine and four-tenths (29.4) acres of property to CNLM for $11.9 million. (Teresa Deck, ¶ 17, Exhs. C, D.) During the negotiations and drafting of the CNLM Agreement, Headlands was represented by the national law firm Latham & Watkins, LLP, while CNLM relied on the advice of its general counsel, David Monroe, and Will Layman, the attorney for the Steele Foundation. (Monroe Decl., ¶ 3.) Mr. Layman prepared initial drafts of the CNLM Agreement, with CNLM and Headlands providing comments and revisions. (Darnall Depo., 32:4-21; Edward Depo., 81:3-7.)
Although the CNLM Agreement was modeled after the Steele Agreement, it differed from the Steele Agreement in two significant respects. First, unlike the provision quoted above from the Steele Agreement, the CNLM Agreement contained no language suggesting that the sale of the property was either a below-market transaction or a charitable donation. See Purchase and Sale Agreements 1 & 2 (Teresa Decl., ¶ 17, Exhs. C, D.) Second, the CNLM Agreement contained the following provision related to tax treatment:
NO TAX ADVICE. Each party hereto acknowledges and agrees that it has not received and is not relying upon tax or other advice from any other party hereto, and that it has and will continue to consult its own advisors. Buyer makes no representation or warranty whatsoever regarding the tax treatment to Seller of this Agreement.
(Teresa Decl., ¶ 17, Exhs. C, D, § 15.13 & § 14.13, respectively) (emphasis added). The CNLM Agreement also contained a standard cooperation provision regarding the required actions of Headlands and CNLM:
REQUIRED ACTIONS OF BUYER AND SELLER. Buyer and Seller agree to take such reasonable actions, including but not limited to acknowledging, delivering or executing instruments and documents, as may be required to effectuate the purposes of this Agreement or to consummate the purchase and sale of the Property as contemplated herein.
(Id., § 14.7.) Additionally, the CNLM Agreement contained an integration clause that provided as follows:
ENTIRE AGREEMENT. This agreement, including all Exhibits attached hereto, is the final expression and contains the entire agreement between, Buyer and Seller with respect to the subject matter hereof and supersedes and replaces any and all prior and contemporaneous agreements and understandings with respect thereto, including but not limited to those understandingsand agreements in letters, correspondence, memoranda or other expressions of intent from either party hereto or its agents that are prior or contemporaneous in time to this Agreement ...
(M, §§ 15.10 and 14.10, respectively.)
4. Proceedings Before the California Coastal Commission
While Headlands was negotiating the sale of the Conservation Park to CNLM, it was simultaneously seeking development entitlements from the City to develop the Headlands Property immediately adjacent to the Conservation Park. In order to develop the Headlands Property, Headlands needed the approval of both the City and the CCC. California’s Coastal Act provides that local governments may adopt Local Coastal Plans (“LCPs”) that will govern the development of coastal zone land in local governments’ jurisdiction. See Cal. Pub. Res.Code §§ 30512(a), 30514 (West 1996). In order for a new LCP or an amendment to an existing LCP to take effect, the LCP must be certified by the CCC. See § 30514. To gain certification of an LCP, the local government must accept any changes imposed by the CCC as a condition of approving the LCP. See 14 Cal.Code Regs. tit. 14, § 13544(a)(2007). 2 The local government may then issue development permits that are consistent with that LCP. See Cal. Pub. Res.Code §§ 30600(d); 30604(b) (West 1996). In 1986, the CCC approved and certified an LCP for the Headlands Property that included 15 acres of commercial development and 70 residential units on the property. (Edward Deck, ¶ 6, Exh. 2.) In 1989, the City adopted the LCP along with a General Plan approving a land use designation and zoning of residential and commercial development for twenty-two (22) acres of the Headlands Property. (Edward Deck, ¶ 7.)
Headlands had much grander plans than simply developing the twenty-two (22) acres covered by the prior LCP, however. Since 1998, before it undertook efforts to establish the Conservation Park, Headlands was contemplating a project that would encompass the entire 121 acres purchased. (Edward Depo., 20:18-24, 21:13-21.) By 2002, Headlands was negotiating with the City to enter a new agreement that would permit Headlands to develop up to 125 single-family residential lots, up to 110,750 square feet of visitor-serving commercial land use (including an inn with between sixty-five and ninety rooms), and a 35,000-square-foot commercial site (“the Project”). (CCC Findings, RJN Exh. C, p. 3, 11-12.)
3
In pursuit of
A significant portion of the homes that Headlands proposed to build were to be located in an area known as “the Strand.” (See Headlands Development & Conservation Plan (“HDCP”), RJN Exh. B, § 4.3 at 4-9-4-10, § 4.0 at 4-93-4-95; CCC Findings at 10.) A large portion of the Strand area, however, was not certified under any LCP. (HDCP, § 3.7(b)(2) at 3-50; CCC Findings at 10; Edward Depo., 50:20-51:2, 52:8-11.) Thus, Headlands needed an amendment to the existing LCP to pursue the Project. (Darnall Depo., 197:18-198:8; Layman Depo., 294:8-295:2, 338:2-339:10.) Consequently, Headlands and the City applied for such an amendment to permit Headlands to obtain the necessary entitlements. The amendment authorized:
[CJreation of a Planned Development District for the site that could allow development of up to 125 single family residential lots, a maximum of 110,750 square feet of visitor serving commercial land use including a 65-90 room inn, a 35,000 square foot commercial site with visitor information center and minimum 40-bed hostel and 68.5 acres of public parks, coastal trails, and open space and a funicular to serve Strand beach.
(See CCC Findings at 3, RJN Exh. C.) The CCC approved the LCP Amendment proposed by Headlands and Dana Point, subject to certain modifications. Among the modifications was a provision stating that a portion of the Headlands property would be dedicated and preserved in perpetuity as a Conservation Park. (CCC Findings at 65, RJN Exh. C.) The property sold by Headlands to CNLM was to be dedicated as this Conservation Park. (CCC Findings at 64, RJN Exh. C; Darnall Depo., 188:14-189:15.) The new amendment replaced the pre-existing 1986 LCP and covered the previously uncertified Strand area, removing the barrier to Headlands’ commercial development of that portion of the Headlands Property. In its approval, the CCC indicated that it was approving the LCP amendment only “in the context of an overall development plan that encompasses the entire 121-acre Headland site, retires any potential existing development rights, and secures the perpetual preservation and management of retained habitat areas ...” (CCC Findings at 164-65.) On November 29, 2004, the City adopted the CCC’s suggested modifications. On January 14, 2005, the CCC approved the City’s actions as sufficient to certify the amended LCP. (See 11/29/04 City Resolution, RJN, Exh. E); 12/16/04 CCC Staff Report, RJN Exh. F; 1/14/05 CCC Agenda, RJN, Exh. G.
5. The Dispute over the IRS Form 8283
Headlands admits that it did not learn of IRS Form 8283 until approximately September 2006, when Headlands received a copy of the form from its appraiser. (Dar-
“This charitable organization acknowledges that it is a qualified organization under section 170(c) and that it received the donated property as described ... above.”
(Teresa Deck, ¶ 19, Exh. F) (emphasis added). In completing Part IV, the charitable organization also acknowledges that it will file Form 8283 with the IRS in the event it sells, exchanges, or otherwise disposes of the property within two years. (Id.)
In August 2006, in connection with the preparation of its 2005 federal tax , return, Headlands presented CNLM with IRS Form 8283 for CNLM’s execution. (Id. at ¶ 19.) Sherry Teresa, CNLM’s director, did not believe that the transaction between CNLM and Headlands qualified as a “donation,” however, and therefore she refused to execute the form. (Id. at ¶¶ 21-22.) Ms. Teresa told Headlands that she did not believe the transaction was a donation because she thought that the property had not been sold for below market value and that the property’s dedication as open space was a condition for Headlands to obtain CCC approval for its proposed development. (Id. at ¶ 23.) Headlands vehemently disagreed with Ms. Teresa’s position.
On January 11, 2007, Headlands sued CNLM in Orange County Superior Court over CNLM’s refusal to execute Form 8283. Headlands asserted four causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) declaratory relief; and (4) unjust enrichment. 4 CNLM was served with the summons and complaint on January 17, 2007. (Notice of Removal, ¶ 5.) CNLM removed the action to this Court on February 16, 2007. On September 17, 2007, CNLM filed a motion for partial summary judgment. The critical issue raised by the motion is whether, under the parties’ agreement, CNLM is obligated to sign and execute Form 8283.
III. LEGAL STANDARD ON SUMMARY JUDGMENT
Summary judgment is proper if the evidence before the court “show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.CivP. 56(c);
see also Celotex Corp. v. Catrett,
A moving party without the ultimate burden of persuasion at trial may carry its burden of production on summary judgment by showing that the opposing party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial, i.e. it does not have enough evidence from which a jury could find an essential element of the opposing party’s claim or defense.
Celotex,
In considering a motion for summary judgment, the court must examine all the evidence in the light most favorable to the non-moving party.
United States v. Diebold, Inc.,
IV. LEGAL ANALYSIS
The Court grants CNLM partial summary judgment on Headlands’ claims. In ruling on CNLM’s motion, the Court reaches the following conclusions. First, the CNLM Agreement contains no express obligation to execute Form 8283. Second, requiring CNLM to execute Form 8283 would contradict the “No Tax Advice” provision of the CNLM Agreement. Third, the extrinsic evidence submitted by the parties proves that CNLM had no obligation to execute Form 8283. Finally, Headlands’ equitable estoppel argument has no application to this case.
A. The CNLM Agreement Contains No Express Obligation to Execute Form 8283
The Court begins its analysis with a brief overview of the fundamental principles of contract interpretation. “The basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contracting.”
Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc.,
This principle that courts shall not create new contract terms for the parties is well-demonstrated by the California appellate court’s ruling in
Ben-Zvi v. Edmar Company.
In
Ben-Zvi,
the defendant, a California company that produced embroidery products, entered into a contract with the plaintiff providing that the plaintiff would serve as the company’s exclusive
The appellate court reversed the trial court’s ruling, finding that it was error for the trial court to imply a residency requirement.
Id.
at 474,
In analyzing the CNLM Agreement to determine if the parties agreed that CNLM would execute IRS Form 8283, it is significant that the contract contains no express term requiring CNLM to execute Form 8283. Because of the lack of any express language, the only way that the CNLM Agreement can be read to require such an obligation is if this term is implied. Applying the analysis of Beiu-Zvi, however, the Court finds that no such requirement can be implied into the CNLM Agreement.
First, the “contract as a whole” does not indicate that “[the Form 8283 requirement] is so obvious that the parties had no reason to state the covenant.” Despite the fact that the CNLM Agreement is a comprehensive, detailed document comprised of over forty pages of terms, it does not make a single reference to Form 8283. Additionally, the parties presented no evidence indicating that CNLM and Headlands even discussed the execution of Form 8283 prior to or during the formation of the CNLM Agreement.
5
Because
Nor is there any language in the contract from which an obligation to execute Form 8283 can be implied. The contract fails to reference in any way CNLM’s purported obligation to help Headlands obtain a charitable tax deduction. On the contrary, the only provision in the agreement that relates to the issue of taxation is the section entitled “No Tax Advice,” which states that CNLM “makes no representation or warranty whatsoever regarding the tax treatment [to Headlands] of this Agreement.” (Teresa Deck, ¶ 17, Exhs C, D, §§ 15.13 and 14.13, respectively.) This sentence plainly means that CNLM is not required to assist Headlands in obtaining a tax benefit from the transaction.
Finally, there is no evidence that the execution of Form 8283 was “indispensable to effectuate the purpose of the contract.”
Ben-Zvi,
B. Requiring CNLM to Execute Form 8283 Contradicts the “No Tax Advice” Provision
Headlands’ interpretation of the CNLM Agreement is also fatally flawed because it contradicts the plain and clear language of the contract. When interpreting a contract to discern the parties’ mutual intent, courts look first to the plain language of the contract. “When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible.... ” Cal. Civ. Code § 1639. “The words of a contract are to be understood in their ordinary and popular sense.” Cal. Civ.Code § 1644.
The “No Tax Advice” provision is the only reference to taxes or tax treatment in the entire CNLM Agreement. The provision states that Headlands is not relying on any tax advice from CNLM and that CNLM is making “no representation or warranty whatsoever regarding the tax treatment to Seller of this Agreement.” Thus the sole, unambiguous expression of shared intent on the issue of taxation is that neither party bears any obligation to the other related to taxes. The use of the encompassing phrase “tax treatment” covers any situation in which the parties seek to characterize the transaction for tax purposes. Examples of situations that are covered under the provision are tax deductions, property taxes, or qualification of the transaction as a charitable donation. Headlands is now demanding that CNLM sign and verify the following statement contained within Form 8283:
This charitable organization acknowledges that it is a qualified organization under section 170(c) and that it received the donated property as described in Section B, Part I, above on the following date.
(Teresa Deck, ¶ 19, Exh. F) (emphasis added).
An executed Form 8283 therefore requires CNLM to certify that it received a charitable “donation” from Headlands so that Headlands can obtain a tax deduction. Undeniably, this assertion would be -made solely for the purpose of “tax treatment” of the CNLM Agreement. Consequently, the CNLM Agreement precludes CNLM from being required to play any part in that process.
Despite this conflict with the plain language of the CNLM Agreement, Headlands nevertheless makes two arguments for why CNLM should be forced to execute Form 8283. Headlands first argues that Form 8283 does not require CNLM to make any representation as to the fair market value of the Conservation Park. (Opp., pp. 19, 22.) Headlands misses the point. Were CNLM to assert through Form 8283 that it received a charitable donation from Headlands, the- IRS would use this information to determine that Headlands is entitled to a tax deduction. The IRS would then have to decide for itself the true value of the Conservation Park, relative to the price in the CNLM Agreement.' Although Form 8283 does not require a representation regarding the exact value of the Conservation Park, it still calls for a representation regarding the tax treatment of the transaction. Specifically, the form requires the assertion that a charitable donation has been made by the taxpayer, thereby entitling the taxpayer to a tax deduction. .
Headlands next argues that the second sentence of the “No Tax Advice” provision, stating “[b]uyer makes no representation or warranty whatsoever regarding the tax treatment to Seller of this Agreement” merely confirmed that the parties were not offering each other tax advice and has little independent meaning or significance. (Opp., p. 19.) Headlands ignores' basic principles of contract interpretation, particularly the principle that a contract must be read in its entirety.
See
Cal. Civ.Code § 1641 (“The whole of a contract is to be taken together, so as to give effect to every part.”). California courts have consistently enforced this principle of interpretation.
See Heaps v. Heaps,
The United States Supreme Court emphasized the significance of giving effect to as many contract terms as possible in
Mastrobuono v. Shearson Lehman Hutton, Inc.,
In arguing that the second sentence of the “No Tax Advice” provision merely confirms the first, Headlands seeks to render the language of the second sentence “nugatory, inoperative, or meaningless.” The second sentence of the “No Tax Advice” provision states that Headlands is not relying on any tax advice from CNLM and that CNLM is making “no representation
or warranty whatsoever regarding the tax treatment to Seller of this Agreement.” Rather than finding this sentence to be superfluous, the Court finds that it is the most relevant provision in the entire CNLM Agreement for purposes of determining the parties’ obligations with respect to Form 8283. The “No Tax Advice” provision is the only section of the CNLM Agreement that directly relates to the possible tax consequences of the agreement or to the obligations of the parties related to tax treatment. The Court will not overlook its significance to indulge Headlands in its creative interpretation of the contract. The Court is simply unwilling to create a contract that CNLM did not and would not make with Headlands.
C. The Extrinsic Evidence Proves CNLM Had No Obligation to Execute Form 8283
Headlands contends that certain extrinsic evidence of the parties’ negotiations and dealings should be considered when determining whether CNLM has an obligation under the CNLM Agreement to execute Form 8283. 6 Headlands’ extrinsic evidence, however, is not helpful to its cause. In fact, Headlands’ evidence proves that Headlands bargained away any right to obligate CNLM to execute Form 8283.
All of the evidence offered by Headlands demonstrates the subjective intent of CNLM rather than the mutual intent of CNLM and Headlands. Consequently, this evidence does not control the interpretation of the CNLM Agreement. In order to fulfill the mutual intent of contracting parties, California has adopted the objective theory of contracts. Under this theory, “[i]t is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation.”
Titan Group, Inc. v. Sonoma Valley County Sanitation Dist.,
The court relied heavily on the objective theory of contracts in the case
Winograd v. Am. Broad. Co.,
The appellate court affirmed the trial court’s decision, relying on the objective theory of contracts. The appellate court characterized the question before it as “what the parties’ objective manifestations of agreement or objective expressions of intent would lead a reasonable person to believe.”
Id.
at 632,
The email exchanges between CNLM and the Steele Foundation also do not establish an objective intent by the parties to jointly execute Form 8283. Rather, this evidence demonstrates that one party, CNLM, had a subjective awareness of the existence of Form 8283. The email communications also show that CNLM was concerned that Headlands might request that CNLM complete the Form. For this reason, CNLM explains, it specifically negotiated and included the “No Tax Advice” provision within the CNLM Agreement. This evidence does not prove that there was a mutual understanding between Headlands and CNLM that CNLM would execute Form 8283 — just the opposite. CNLM was concerned about being asked to sign Form 8283 and so it contractually protected itself from any such obligation by including the “No Tax Advice” provision in the CNLM Agreement. 7
Perhaps the most compelling extrinsic evidence related to whether CNLM agreed to execute Form 8283 is Headlands’ own admission that it was unaware of the existence of Form 8283 until almost a year after the execution of the CNLM Agreement. (Edward Decl., ¶ 29.) This admission is fatal to Headlands’ argument. Headlands could not have contracted for the execution of an IRS form of which it was unaware. For CNLM to have an obligation to execute Form 8283, there has to be a mutual intent between CNLM and Headlands with respect to the issue. Without such a shared intent, CNLM simply cannot be obligated under the CNLM Agreement to execute Form 8283.
D. Headlands’ Equitable Estoppel Argument
In its final stab at fending off partial summary judgment, Headlands argues that CNLM should be estopped from relying on the “No Tax Advice” provision because CNLM withheld material facts concerning “CNLM’s secret interpretation of this clause.” (Opp., p. 19.) Specifically, Headlands argues that because CNLM was aware of the existence of Form 8283
“Equitable estoppel is a doctrine adjusting the relative rights of parties based upon considerations of justice and good conscience.”
United States v. Georgia-Pacific Co.,
Therefore, the party invoking “estoppel by silence” must demonstrate that the party to be estopped had a duty to speak. A duty to speak may arise, for example, if a party seeks to invoke rights that it specifically waived in a contract.
See Skulnick v. Roberts Express, Inc.,
This case bears no resemblance to Skul-nick because Headlands did not stipulate that it would only sign the CNLM Agreement if CNLM agreed to execute Form 8283 or otherwise assist Headlands in obtaining a tax benefit. As discussed, there is no express or implied language in the CNLM Agreement that would obligate CNLM to execute Form 8283. Therefore, CNLM’s silence regarding Form 8283 could not have induced Headlands’ reasonable reliance and there is no basis for estoppel.
This duty to speak may also arise from statute.
See Spray, Gould & Bowers v. Associated Int’l Ins. Co.,
Headlands cannot locate a statutory or alternative source of authority that would impose a duty on CNLM because no such duty exists. A buyer in a real estate transaction has a duty to disclose material facts to a seller only under limited circumstances, such as if a fiduciary relationship exists, a misleading disclosure has been made, or the buyer knows that the seller would reasonably expect a disclosure to be made.
See Nussbaum v. Weeks,
In this case also, Headlands was not entitled to advice from CNLM regarding the law that governs tax deductions obtained from the sale of land to charitable organizations Nor was Headlands entitled to a tutorial regarding the existence and scope of Form 8283. Those responsibilities fell to Headlands and its team of lawyers. If Headlands entered into the CNLM Agreement without the knowledge of Form 8283 and the significance of having CNLM execute it, Headlands must now face the consequences of that mistake. As the court so aptly put it in
Hampton v. Paramount Pictures Corp.,
V. CONCLUSION
For the foregoing reasons, this Court finds that there is no genuine issue of material fact regarding whether CNLM was obligated to sign and execute IRS Form 8283. The Court finds that the plain language of the contract and the extrinsic evidence preclude the possibility that any such obligation was agreed upon by the parties. Given that the request for declaratory relief, the breach of contract claim and the breach of the implied covenant of good faith and fair dealing claim all hinge on the issue of whether CNLM was obligated to execute Form 8283, the Court grants partial summary judgment in CNLM’s favor with respect to all three claims. Because all of Headlands’ claims raising federal issues now have been dismissed, and in the interest of economy, efficiency, and comity, its remaining claims for unjust enrichment and breach of contract regarding improvements are remanded to state court. 10
Notes
. Section 13544(a) provides that "[t]he certification of a local coastal program [by the CCC] ... shall not be deemed final and effective until ... the local government ... acknowledges receipt of the Commission's resolution of certification including any terms or modifications which may have been suggested for final certification; accepts and agrees to any such terms and modifications and takes whatever formal action is required to satisfy the terms and modifications ... and agrees to .issue coastal development permits for the to|tal area included in the certified local coastal ■program.” Therefore, when the CCC makes a "suggested modification” to an LCP or LCP amendment, such modification actually serves as a necessary pre condition for the completion of the certification process. California’s Attorney General has strongly supported this notion that a city is subject to the authority of the CCC when the city authorizes the development of coastal land. The Attorney General stated that a "county or city, by ordinance, including those adopted by referendum or initiative, may not lawfully authorize a use of land in the coastal zone which is not permitted by a LCP or LUP certified by the Commission without approval of the Commission.” 70 Op. Cal. Att'y Gen. 220,
. The Court takes judicial notice of the eight documents submitted as exhibits to CNLM’s RJN. These documents reflect matters that are generally known within the jurisdiction of the Court and are capable of accurate and
. The unjust enrichment claim and a portion of the breach of contract claim arise out of CNLM's alleged breach of the Buyer Improvements provision of the CNLM Agreement. FAC ¶¶ 28, 31, 42. The Buyer Improvements provision required CNLM to make certain improvements to the property, such as the installation of a trail, fencing, benches, and signage no later than December 20, 2006. Id. at ¶ 28. The CNLM Agreement set aside $186,250 for the completion of these improve-merits. Id. Headlands alleges that CNLM has made no efforts to improve the property as required by the CNLM Agreement. Id. at ¶ 29. It is undisputed between the parties that the Buyer Improvements claim is a valid cause of action raising exclusively a question of state law. The parties' dispute on the instant motion focuses instead on the Form 8283 claims, and it is these claims that the remainder of this order shall address.
. As will be discussed in the extrinsic evidence section of this order,
infra,
Headlands
. California’s parol evidence rule provides: "Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.” Cal.Code Civ. Pro. § 1856(a) (West 1978). California Courts have interpreted the rule to mean that a court will only consider parol evidence "to prove a meaning to which the contract is reasonably susceptible.”
Powers v. Dickson, Carlson & Campillo,
. The drafting history of the CNLM Agreement provides further evidence that the parties made a conscious decision not to assist one another in obtaining tax benefits from the transaction. Contrary to Headlands’ assertion that the parties agreed that the transaction would be a "below market sale,” CNLM offers evidence that the "below market sale” provision that was included in the Steele Agreement was subsequently omitted from the CNLM Agreement. 7 Although the Steele Agreement served as the predecessor and model agreement from which the CNLM Agreement was crafted, the parties explicitly omitted this particular clause from the CNLM Agreement. Consequently, it appears that Headlands bargained away any right to a provision characterizing the transaction as a “below-market sale.”
. In order to establish equitable estoppel, it must be shown that (a) the party to be es-topped was apprised of the true facts; (b) the party to be estopped must intend that its conduct be acted upon or must act in such a manner that the party asserting estoppel had a right to believe it was intended; (c) the party asserting estoppel must be ignorant of the true facts; and (d) the party asserting estoppel must rely on the conduct to its injury.
Georgia-Pacific,
. Even if. CNLM had a duty to speak, it met any such obligation by including the "No Tax Advice” provision in the CNLM Agreement. When a party seeking equitable estoppel has been put on notice of the material facts relevant to his claim, his reliance is not reasonable and therefore he is not entitled to estop-pel. See
Hampton,
. In an order dated May 30, 2007, this Court dismissed Headlands' first two requests for declaratory relief because they were barred by the Declaratory Judgment Act, which prohibits the court from issuing any declarations with respect to Federal taxes. 28 U.S.C. § 2201(a).