Filed 4/18/13 Svaco v. Fusina CA4/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA



ESTHER KEEFE SVACO as Trustee, etc.,                               D058954

         Plaintiff and Appellant,

         v.                                                        (Super. Ct. No.
                                                                    37-2009-00054498-CU-OR-NC)
JOSEPH FUSINA,

         Defendant and Respondent.

ESTHER KEEFE SVACO as Trustee etc.

         Plaintiff and Appellant,

         v.

JOSEPH FUSINA,

         Defendant and Respondent.



         APPEAL from a judgment of the Superior Court of San Diego County, Robert P.

Dahlquist, Judge. Affirmed as modified.
                                              I.

                                     INTRODUCTION

       Joseph Fusina purchased a five-acre parcel of undeveloped land (the Fusina Parcel

or Fusina's Parcel) from Eveline Bustillos (Eveline). At the time of the sale, Eveline also

owned a separate parcel (the Eveline Parcel or Eveline's Parcel) located in the same

general vicinity as the Fusina Parcel. Around the time of the sale of the Fusina Parcel,

Eveline transferred Eveline's Parcel to a trust, of which Esther Keefe Svaco is the trustee,

and Eveline and others are beneficiaries. Neither Fusina's Parcel nor Eveline's Parcel is

adjacent to a public road. Access to Fusina's Parcel and Eveline's Parcel is gained by way

of a private access road (Access Road) that traverses several parcels,1 including Eveline's

Parcel and Fusina's Parcel. The Access Road reaches Eveline's Parcel first, then splits

and continues on to Fusina's Parcel.

       Svaco filed this lawsuit in which she contended that a provision in the covenants,

conditions, and restrictions (CC&Rs) governing Fusina's Parcel and Eveline's Parcel

required Fusina to contribute one-third of the costs related to improvements to the Access

Road. Svaco sought to impose an equitable lien in the amount of $242,860.84 on

Fusina's Parcel, and also brought claims for breach of contract and declaratory relief

based on Fusina's alleged obligation to contribute to the costs of improving the Access



1       Although several maps depicting the parcels and the Access Road were offered as
exhibits at trial, appellants failed to transmit those exhibits to this court. We therefore
base our description of the physical location of the Access Road and the parcels on the
trial court's statement of decision. None of the parties has raised any challenge to the trial
court's statement of decision in this respect on appeal.
                                              2
Road. Fusina filed a cross-complaint in which he brought claims that included breach of

contract and fraudulent concealment against Eveline, and a claim for rescission against

Eveline and Svaco. Fusina's claims were based on his allegation that Eveline concealed

her plan to construct the improvements to the Access Road prior to selling him the Fusina

Parcel.

          After a bench trial, the trial court ruled in Fusina's favor on all of Svaco's causes of

action. The court noted that the CC&Rs required that those who used the Access Road to

pay equal shares of the "costs of construction, [and] mutually agreed upon costs of

improvements." The court determined that the costs that Svaco sought were for

"improvements" and that they were not chargeable to Fusina because they had not been

" 'mutually agreed upon.' " On Fusina's cross-complaint, the trial court found that

Eveline had concealed her plan to perform substantial and expensive work on the Access

Road and to charge Fusina one-third of the costs. Based on this concealment, the trial

court permitted Fusina to rescind the purchase agreement for the Fusina Parcel. The

court stated that if Fusina chose not to rescind the purchase agreement, he would receive

$1.00 in damages from Eveline and would retain the Fusina Parcel. Fusina subsequently

elected the rescission remedy. The court entered judgment awarding Fusina nominal

damages on his breach of contract and concealment claims, and specified the terms by

which Fusina could effectuate a rescission of the purchase agreement for the Fusina

Parcel. The court also awarded Fusina approximately $137,000 in fees and costs as the

prevailing party.



                                                 3
       Eveline and Svaco filed a joint notice of appeal. In their brief on appeal, with

respect to Fusina's cross-complaint, Eveline contends that the trial court erred in finding

that she fraudulently procured Fusina's consent to the purchase agreement for the Fusina

parcel. Specifically, Eveline contends that the trial court erred in finding that she

committed fraud by concealment in failing to disclose to Fusina her plan to improve the

Access Road. In addition, with respect to the claims in her complaint, Svaco contends

that the trial court erred in concluding that the costs related to constructing the Access

Road were not chargeable to Fusina. Eveline and Svaco also contend that we must strike

those portions of the judgment that grant Fusina affirmative relief on his breach of

contract and concealment causes of action, in light of Fusina's election to rescind the

agreement on which those causes of action are based.

       We conclude that the trial court did not err in permitting Fusina to rescind the

purchase agreement for Fusina's Parcel based on Eveline's fraudulent concealment of her

plan to improve the Access Road and to charge Fusina for one-third of the costs of the

improvements. In light of our affirmance of the trial court's judgment permitting Fusina

to rescind the purchase agreement for the Fusina Parcel, Fusina cannot be liable for

claims premised on the CC&Rs governing the Fusina Parcel since those CC&Rs are not

binding on him. Accordingly, we affirm the trial court's ruling in favor of Fusina on

Svaco's claims, all of which are premised on the CC&Rs. Finally, we strike those

portions of the judgment granting Fusina affirmative relief on Fusina's breach of contract

and concealment causes of action, because such relief is inconsistent with Fusina's

election to rescind the purchase agreement. As so modified, we affirm the judgment.

                                              4
                                             II.

                   FACTUAL AND PROCEDURAL BACKGROUND

A.     Svaco's complaint

       Svaco filed a complaint against Fusina in which she alleged that she was the legal

owner of Eveline's Parcel and that Fusina was the owner of Fusina's Parcel. Svaco

alleged that both Fusina's Parcel and Eveline's Parcel were bound by CC&Rs governing

the parcels. Svaco alleged that one of the terms of the CC&Rs stated, " 'All property

owners have to contribute to the construction, maintenance and improvement of the

private easements that access the Property.' "

       In a claim to impose an equitable lien on Fusina's Parcel, Svaco alleged that her

predecessor in interest had begun construction on the Access Road on or about March 1,

2004, and that Svaco had substantially completed construction of the road on September

1, 2008. Svaco further alleged that Fusina had refused to "contribute his one-third share

of the costs of construction of the road," and that the CC&Rs permitted Svaco to impose

an equitable lien on Fusina's Parcel to secure the payment of Fusina's share of these

costs.2 In a breach of contract cause of action, Svaco alleged that Fusina had breached a

provision in the CC&Rs that required him to contribute one-third of the costs of

construction of the improved Access Road. Svaco also brought a claim for declaratory

relief in which she requested that the court interpret the relevant provisions of the

CC&Rs.


2     Svaco did not identify which provision in the CC&Rs she contended required
Fusina to contribute a one-third share of the costs.
                                              5
B.        Fusina's cross-complaint

          Fusina filed a cross-complaint against Svaco and Eveline that contained claims for

breach of contract, breach of the implied covenant of good faith and fair dealing,

intentional misrepresentation, fraudulent concealment, rescission, declaratory relief, and a

claim to quiet title. Fusina alleged that on or about February 8, 2007, he entered into a

purchase agreement with Eveline for the Fusina Parcel and that escrow on the sale had

closed on or about June 11, 2007. Fusina further alleged that "during the sale" of the

Fusina parcel, Eveline and Svaco had begun to construct improvements to the Access

Road and that the improvements were substantially completed by September 1, 2008.

Fusina claimed that he "did not learn of the [i]mprovements until . . . September 23,

2008," and that he never consented to the improvements. Fusina alleged that Eveline had

"concealed material facts" concerning the improvements prior to selling him the Fusina

Parcel.

C.        The trial

          In August 2010, the trial court held a bench trial on the complaint and the cross-

complaint at which the parties presented evidence concerning the circumstances

surrounding the construction of the Access Road and Fusina's purchase of the Fusina

Parcel.

          The evidence established that in 2005, Eveline recorded CC&Rs burdening

Eveline's Parcel, the parcel that Fusina later purchased, and a nearby third parcel

(collectively "the Property"). The CC&Rs state in relevant part:



                                                6
            "All property owners have to contribute to the construction,
            maintenance and improvement of the private easements that access
            the Property. All persons who use the easements agree that:

            "1. The slope and grade and other conditions of the access roads
            must be satisfactory to the relevant fire departments.

            "2. The primary access roads are to have a six-foot trail on their side
            for horses and runners and walkers, but not for motorized vehicles.
            A lodgepole rail fence will be installed between the trail and the
            road. Native plants will be planted along the fence. A bonded DG
            surface will be placed on the trail.

            "3. The costs of construction, mutually agreed upon costs of
            improvements, and all necessary and reasonable repairs and
            maintenance, of the roads and trail will be equally shared by the
            property owners and others using the road.

            "4. Those property owners and others using the roads and trail who
            contribute to the costs of construction, improvements, repairs and
            maintenance will have equal access to the use, improvements and
            repairs to the road and trail.

            "5. Those people who fail to pay their share of costs of construction,
            mutually agreed upon costs of improvements, and all necessary and
            reasonable repairs and maintenance, agree to pay interest on the
            unpaid balance at the rate of twenty-five percent per annum, and
            agree to permit a lien for the unpaid balance to be placed on their
            real and personal properties. Interest and other payments collected
            under this paragraph will be used to reimburse those parties who
            have made their required contributions or (if appropriate) retained
            for future repairs and maintenance or mutually agreed upon
            improvements.

            "6. Costs of construction are required only for those portions of the
            access roads lying within [the Property]."

      In November 2005, Eveline hired Michael Smith, a civil engineer, to design the

Access Road. By late February 2007, Smith had completed approximately 75 percent of

his work.


                                               7
          On February 7, 2007, Fusina offered Eveline $570,000 to purchase the Fusina

Parcel.

          On or about February 9, Fusina and his real estate agent, Brian Cane, met with

Eveline's husband, Michael Bustillos (Michael), who showed them the Fusina Parcel.

Both Fusina and Cane testified that Michael did not disclose any plan to improve the

Access Road during the showing. Michael testified that he did tell Fusina and Cane

about the plan to improve the Access Road at the February 9 showing.

          On or about March 7, Eveline accepted Fusina's offer to purchase the Fusina

Parcel. In March and April 2007, Eveline and/or Michael received various bids for

performing portions of the work on the Access Road, including bids of $153,592 for

grading and drainage, $56,046 for asphalt paving, and $337,000 for concrete work.

Neither Michael nor Eveline disclosed the bids to Fusina.

          The bulk of the Access Road improvements were constructed between April and

September 2008, at a total cost of $655,073.51. Fusina first learned of the improvements

to the Access Road in September 2008, when Michael sent him a letter asking him to pay

$179,193.56. In the letter, Michael claimed that the CC&Rs required that Fusina pay this

amount for his share of the costs of the improvements to the Access Road.




                                               8
D.     The trial court's ruling

       On September 13, 2010, the trial court entered a statement of decision in which the

court ruled in favor of Fusina on all of the claims in Svaco's complaint. The court

interpreted the CC&Rs and determined that none of the costs of improving the Access

Road were chargeable to Fusina. The court therefore ruled that Svaco was not entitled to

prevail on her breach of contract and declaratory relief claims, which were based on the

CC&Rs, and that Svaco was not entitled to impose an equitable lien on the Fusina Parcel

to secure payment of these costs.3

       With respect to Fusina's cross-complaint, the trial court found that Eveline had

breached provisions in the purchase agreement for the Fusina Parcel that required her to

disclose "known material facts and defects affecting the property." The court found also

that Fusina was entitled to prevail on his claim for fraudulent concealment against

Eveline, based on her failure to disclose her plan to improve the Access Road, and that

Fusina was entitled to rescind the purchase agreement for the Fusina Parcel due to this

concealment. Finally, the court found that Fusina was the prevailing party in the action.4




3       The trial court also found that Fusina was entitled to prevail on his claim for quiet
title against Svaco, on the ground that Svaco was not entitled to impose a lien on the
Fusina Parcel.

4       Although not material to this appeal, the court also found that Fusina was not
entitled to recover on his claims for breach of the covenant of good faith and fair dealing
and intentional misrepresentation, that it was not necessary to award Fusina any
declaratory relief, and that Fusina was not entitled to recover punitive damages.
                                              9
        On September 23, Fusina filed a "Notice of Election of Rescission," notifying the

court and the other parties of his election to rescind the purchase agreement for the

Fusina Parcel, pursuant to the court's statement of decision.

        The trial court entered a judgment on November 12, 2010, in favor of Fusina

against Svaco on her claims for equitable lien, breach of contract, and declaratory relief.

The court granted judgment in favor of Fusina, against Eveline, on the claims in his

cross-complaint for breach of contract and fraudulent concealment, and awarded Fusina

damages in the amount of $1.00 on each claim. In addition, the court granted judgment

in favor of Fusina on his cause of action for rescission of the purchase agreement for the

Fusina Parcel, and specified the manner by which the rescission was to be effectuated.

Finally, the court found that Fusina was the prevailing party, and awarded him costs in

the amount of $6,918.11 and attorney fees in the amount of $129,852.50. The court

stated that Svaco and Eveline were jointly and severally liable for the costs and attorney

fees.

E.      The appeal

        Svaco and Eveline timely appealed the judgment.




                                             10
                                              III.

                                        DISCUSSION

A.     The trial court did not err in permitting Fusina to rescind the purchase agreement
       based on Eveline's fraudulent concealment of her plan to improve the Access Road

       Eveline contends that the trial court erred in finding that she fraudulently procured

Fusina's consent to the purchase agreement for the Fusina parcel by concealing her plan

to improve the Access Road.

       1.       Governing law

                a.     Fraudulent concealment

       In Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, at

pages 612 through 613, the court outlined the elements of a fraudulent concealment cause

of action:

             "(1) [T]he defendant must have concealed or suppressed a material
             fact, (2) the defendant must have been under a duty to disclose the
             fact to the plaintiff, (3) the defendant must have intentionally
             concealed or suppressed the fact with the intent to defraud the
             plaintiff, (4) the plaintiff must have been unaware of the fact and
             would not have acted as he did if he had known of the concealed or
             suppressed fact, and (5) as a result of the concealment or suppression
             of the fact, the plaintiff must have sustained damage."

       In Alfaro v. Community Housing Imp. System & Planning Assn., Inc. (2009) 171

Cal.App.4th 1356, the court discussed the tort of fraudulent concealment in the context of

a real estate transaction by stating, "A seller of real property has a common law duty to

disclose 'where the seller knows of facts materially affecting the value or desirability of

the property which are known or accessible only to him and also knows that such facts

are not known to, or within the reach of the diligent attention and observation of the

                                              11
buyer . . . .' [Citations.]" (Id. at p. 1382.) "This broad statement of duty has led one

commentator to conclude: 'The ancient maxim caveat emptor ("let the buyer beware")

has little or no application to California real estate transactions.' (1 Miller & Starr,

Current Law of Cal. Real Estate (rev. ed. 1975) § 1:80.)" (Reed v. King (1983) 145

Cal.App.3d 261, 265 [concluding buyer stated cause of action for rescission based on

seller's failure to disclose that a woman and her four children had been murdered on the

property 10 years earlier].)

       b.       Rescission based on fraudulent concealment

       Civil Code section 1689, subdivision (b) provides:

            "A party to a contract may rescind the contract in the following
            cases:

            "(1) If the consent of the party rescinding, or of any party jointly
            contracting with him, was given by . . . fraud . . . exercised by or
            with the connivance of the party as to whom he rescinds, or of any
            other party to the contract jointly interested with such party."

       Civil Code section 1572, provides in relevant part:

            "Actual fraud, within the meaning of this chapter, consists in any of
            the following acts, committed by a party to the contract, or with his
            connivance, with intent to deceive another party thereto, or to induce
            him to enter into the contract:

            "[¶] . . . . [¶]

            "3. The suppression of that which is true, by one having knowledge
            or belief of the fact[.]"

       In the context of real estate sales, "[b]reach of a seller's duty of disclosure is

grounds for rescission. [Citation.]" (Assilzadeh v. Cal. Fed. Bank (2000) 82 Cal.App.4th

399, 409 (Assilzadeh).)

                                              12
       2.      Factual and procedural background

       In its statement of decision, the trial court stated the following:

            "The court finds that Fusina's consent to the purchase agreement was
            procured by 'fraud' within the meaning of Civil Code section 1689.
            The 'fraud' consisted of the concealment of the following material
            facts: "(1) [Eveline] had plans to perform substantial work on the
            [Access Road]; (2) [Eveline] knew that the costs of the work would
            be significant – in the hundreds of thousands of dollars; (3) [Eveline]
            had received bids from contractors showing that the expected costs
            would be in the hundreds of thousands of dollars; and (4) [Eveline]
            planned to charge Fusina for a one-third share of those costs. [¶]
            Therefore, Fusina may, at his election, rescind the purchase of the
            Fusina Parcel."

       In addition to making these findings, the trial court determined that Eveline had

breached various provisions in the purchase agreement for the Fusina Parcel that required

her to disclose material facts affecting the property. In making this determination, the

trial court noted that Eveline had provided Fusina with a document entitled, "Seller

Vacant Land Questionnaire." That questionnaire states in relevant part, " 'Are you

(Seller) aware of . . . [a]ny Homeowner or Property Owner Association (OA) governing

the Property, or any pending or proposed due increases, special assessments, rule

changes, insurance, availability issues or litigation by or against the OA affecting the

Property?' " The trial court noted that Eveline had answered " 'Yes' " to this question and

that she had added, " 'Recorded CC&Rs requiring contribution to access and trails.' " The

court found that Eveline's "response was misleading and incomplete," reasoning:

            "At the time of the response, [Eveline] knew that she or others
            would be making a claim against the purchaser of the Fusina Parcel
            for one-third of hundreds of thousands of dollars of work to be
            performed on the [Access Road]. . . . [¶] In essence [Eveline] knew
            that Fusina was not only buying the Fusina Parcel for $570,000, he

                                              13
            was also buying a claim against him for more than a hundred
            thousand dollars. Even if the claim turned out to be legally invalid
            (as this Court believes to be the case), Fusina was unwittingly
            buying an obligation to defend against a claim that was known to
            [Eveline]. This was material to the transaction and should have been
            disclosed. The failure to disclose constitutes a breach of the
            purchase agreement. [¶] In this regard, the Court finds that the
            testimony of both [Eveline] and [Michael] concerning these
            important topics was not entirely credible."

       3.      Eveline's contentions in support of reversal are without merit

       Eveline raises several contentions in support of reversal of the trial court's ruling

permitting Fusina to rescind his purchase of the Fusina Parcel. None are persuasive.

               a.     There is substantial evidence to support the trial court's finding that
                      Eveline concealed her plan to perform extensive work on the
                      Access Road

       Eveline's contends that there is no substantial evidence to support the trial court's

finding that she failed to disclose to Fusina her plan to perform extensive work on the

Access Road.

                      i.     Standard of review

       "We review findings by the trier of fact under the substantial evidence

standard. . . ." (Faigin v. Signature Group Holdings, Inc. (2012) 211 Cal.App.4th 726,

736.) " 'Substantial evidence' is evidence of ponderable legal significance, evidence that

is reasonable, credible and of solid value. [Citation] . . . Inferences may constitute

substantial evidence, but they must be the product of logic and reason. Speculation or

conjecture alone is not substantial evidence. [Citations.] . . . [¶] The ultimate test is

whether it is reasonable for a trier of fact to make the ruling in question in light of the



                                              14
whole record. [Citation.]" (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634,

651-652.)

                      ii.     Application

      At trial, Fusina repeatedly testified that no one disclosed to him Eveline's plan to

perform extensive work on the road. For example, Fusina testified as follows:

            "I had no . . . idea that there was going to be a road or in the process
            of it. And if it started in 2004, even though it didn't get finished
            until 2008, you would think that I would have been told something.
            You would think that I would have been told something. You would
            think that the people selling this, knowing that, that they would tell
            me something that a road is coming in there. And it never
            happened."5

      Fusina's real estate agent, Brian Cane, also testified that no one disclosed to him

the plans to perform work on the Access Road:

            "[Fusina's attorney]: And no one ever told you that . . . that road was
            going to be built and Mr. Fusina was going to be expected to pay
            one-third of it; is that right?"

            "[Cane]: No."

            "[Fusina's attorney]: And had you known that, you certainly would
            have told Fusina; is that correct?

            "[Cane]: Correct."




5      Fusina also testified "Nothing was ever said to me about a road . . . . And nobody,
nobody said anything to me until it was 98 percent done a year later." In addition, when
asked, "Did anyone ever tell you that you needed to pay so much money for these
improvements?" Fusina responded, "Not until September of . . . 2008 when it was 98
percent completed. Previous to that, no."
                                              15
       Further, none of the various documents that Eveline provided to Fusina in

connection with the sale of the Fusina Parcel disclosed her plan to perform substantial

work on the Access Road.

       Eveline does not dispute that she had a duty to disclose her plan to perform

substantial work on the Access Road, and does not address any of the evidence discussed

above on which the trial court could have based a reasonable finding that she failed to

disclose such plan. Rather, Eveline's sole argument is that she adequately disclosed her

plan to perform substantial work on the Access Road by providing Fusina with a copy of

a "soils report"6 related to the Access Road. We are not persuaded. Most fundamentally,

Eveline does not identify any portion of the soils report that discloses an imminent plan

to improve the Access Road. Further, the trial court could have reasonably relied on the

following testimony concerning the soils report in finding that Eveline did not fulfill her

duty to disclose her plan to perform substantial work on the Access Road merely by

providing Fusina with a copy of the report.

       Engineer Smith testified as follows concerning the soils report:

          "[Fusina's attorney]: And the soils report, which we discussed
          earlier, was not intended to convey that a road was going to be built.
          It was intended to evaluate the soils in the area to subsequently
          design a road; is that right?

          "[Smith]: That's correct."




6      The report is formally entitled "Limited Geotechnical Investigation and Evaluation
Private Easement Road."
                                              16
       Cane, Fusina's real estate agent, testified as follows concerning the soils report:

          "[Fusina's attorney]: The soils report, Exhibit 12, what did the soils
          report tell you about the [Access Road]?

          "[Cane]: Tells me that the sellers had acquired—as to [sic] the
          feasibility of building a road, and gave factual information on that.

          "[Fusina's attorney]: And was that all it told you?

          "[Cane]: The feasibility of building a road, yes.

          "[Fusina's attorney]: It didn't . . . disclose to you, in your view, that
          anyone was planning to build a road, did it?

          "[Cane]: No, it was—it's my understanding of this record that they
          had [sic] as to feasibility of building a road on that."

       Cane also testified that he was under the impression that the soils report was "a

report that they were simply providing because they had a report." Fusina testified that

he did not understand the report.

       In light of the nature of the soils report and the testimony cited above, we conclude

that the trial court was not required to find that Eveline fulfilled her duty to disclose plans

to perform substantial work on the Access Road merely by providing Fusina with a copy

of the soils report. Accordingly, because the trial court could have reasonably found that

Eveline failed to disclose, either orally or in writing, her plan to have extensive work

done on the Access Road, we conclude that there is substantial evidence to support the

trial court's finding that Eveline concealed her plan from Fusina.




                                              17
              b.      There is substantial evidence to support the trial court's finding that
                      Eveline concealed her plan to charge Fusina one-third of the costs
                      of improving the Access Road

       Eveline contends that there is no substantial evidence to support the trial court's

finding that she concealed her plan to charge Fusina for one-third of the costs of

improving the Access Road. We apply the substantial evidence standard of review

described in part III.A.1.a., ante, to this claim.

       The evidence supporting this finding largely overlaps the evidence supporting the

trial court's finding that Eveline did not disclose her plan to perform substantial work on

the Access Road. Fusina and Cane both testified that no one disclosed to them the fact

that Eveline planned to charge Fusina one-third of the costs of improving the Access

Road. Nor did Eveline provide Fusina with any documentation disclosing in writing her

plan to charge him for one-third of the costs of improving the Access Road.

       Eveline does not dispute that she had a duty to disclose her plan to charge Fusina

one-third of the costs of the planned improvements. However, she contends that she

fulfilled this duty by providing Fusina with a copy of the CC&Rs. In making this

contention, Eveline demonstrates her misunderstanding of the crux of the trial court's

finding concerning her failure to disclose. Irrespective of whether the costs for

improving the Access Road were chargeable to Fusina under the terms of the CC&Rs,7




7      As noted in parts I. and II., ante, in rejecting Svaco's claims, the trial court
interpreted the CC&Rs and concluded that the costs of improving the Access Road were
not chargeable to Fusina. Although we need not address the merits of the trial court's
conclusion in this regard for the reasons explained in part I, ante, we emphasize that we
                                               18
the trial court found that Eveline failed to disclose that she intended to make a claim

against Fusina for these costs, and that she knew that these costs would be substantial,

i.e.," in the hundreds of thousands of dollars." As noted previously, in connection with

its finding that Eveline breached the purchase agreement by failing to provide all material

facts affecting the property, the court found:

          "[Eveline] knew that she or others would be making a claim against
          the purchaser of the Fusina Parcel for one-third of hundreds of
          thousands of dollars of work to be performed on the [Access
          Road]. . . . [¶] In essence [Eveline] knew that Fusina was not only
          buying the Fusina Parcel for $570,000, he was also buying a claim
          against him for more than a hundred thousand dollars. Even if the
          claim turned out to be legally invalid (as this Court believes to be the
          case), Fusina was unwittingly buying an obligation to defend against
          a claim that was known to [Eveline]."

       The evidence clearly supports the trial court's finding that at the time the parties

entered into the purchase agreement for the Fusina Parcel, Eveline knew that she intended

to make a claim against Fusina. Eveline, herself, testified that she knew, prior to entering

into the purchase agreement for the Fusina Parcel, that she would seek to charge Fusina

one-third of the costs of the improvements to the Access Road.8 Further, it cannot be

disputed that the CC&Rs did not put Fusina on notice that Eveline would be making a

claim pursuant to the CC&Rs. It was Eveline's failure to disclose her intention to make a



do not intend to suggest that the trial court erred in its interpretation of the CC&Rs. We
simply do not need to reach that issue in order to resolve this appeal.

8      Fusina's attorney asked Eveline, "But you knew before you sold [Fusina's parcel]
that you would be asking him for a third of the costs to the road; is that correct?" Eveline
responded, "Yes." Fusina's attorney continued, "Well, why not tell him or his agent?"
Eveline responded, "It was in the paperwork."
                                             19
claim for a substantial amount of money against Fusina, pursuant to the CC&Rs, that the

trial court found constituted a breach of Eveline's duty of disclosure. Eveline has failed

to make any persuasive argument that would undermine this finding. Accordingly, we

conclude that there is substantial evidence to support the trial court's finding that Eveline

concealed her plan to charge Fusina one-third of the costs of improving the Access Road.

              c.     Eveline's contentions concerning her failure to disclose her
                     knowledge of the costs and bids associated with improving the
                     Access Road are unpersuasive

       Eveline raises several contentions concerning the trial court's findings that she

knew that the costs of work on the Access Road would be significant, and that she had

received bids that demonstrated that the expected costs would be in the hundreds of

thousands of dollars. None of Eveline's contentions are persuasive. Most of her

contentions fail because they are based on the faulty premise that "there is no substantial

evidence to support the finding that [Eveline] concealed plans to perform substantial

work on the [Access Road]." (Italics added.) In fact, as discussed above, there is

substantial evidence to support the trial court's finding that Eveline concealed her plan to

perform substantial work on the Access Road. It is Eveline's failure to disclose both her

plan to improve the road and the costs and bids associated with that plan that the trial

court found constituted a breach of her to duty to disclose. Thus, we are not persuaded

by any of Eveline's numerous arguments that she had no duty to disclose her knowledge

of the costs and bids associated with the road improvements because she purportedly

adequately disclosed her plan to perform substantial work on the Access Road.



                                             20
       Citing Assilzadeh, supra, 82 Cal.App.4th 399, Eveline argues that she had no duty

to disclose her knowledge of the costs and bids associated with the road improvements

because a construction bid is a speculative opinion, and not a factual matter bearing upon

the quality of the property. In Assilzadeh, the Court of Appeal concluded that a seller of

a condominium unit had complied with its duty of disclosure by informing the buyer of

the settlement of construction defect litigation related to the condominium project, and

that the seller was not required to disclose its agent's opinion concerning the potential

future market value of units in the project. (Id. at pp. 410-412.)

       In this case, in contrast, there is substantial evidence to support the trial court's

finding that Eveline failed to disclose her plan to perform substantial work on the Access

Road. Further, the construction bids in this case constituted evidence that Eveline had

clear and specific plans to improve the Access Road, in contrast with the "vague and

general speculation concerning the possible market value of the unit at some unspecified

future time depending on factors that may never exist," that the Assilzadeh court held

failed to give rise to a duty of disclosure. (Assilzadeh, supra, 82 Cal.App.4th at p. 412.)

Thus, even assuming that there were authority to support the proposition that a seller does

not generally have a duty to disclose construction bids,9 in this case, as discussed above,

Eveline's failure to disclose the bids is a component of a larger breach of her duty to

disclose her plan to have extensive and costly work performed on the Access Road.



9       Assilzadeh, which, as discussed in the text, dealt with the disclosure of an opinion
as to the potential future market value of real estate (Assilzadeh, supra, 82 Cal.App.4th at
pp. 410-412), does not constitute authority for this proposition.
                                              21
       Next, citing Stevenson v. Baum (1998) 65 Cal.App.4th 159, 162 (Stevenson),

Eveline contends that she was not required to disclose the bids to perform work on the

Access Road because the bids were purportedly "merely further details regarding the

fundamental facts disclosed in the CC&Rs." This argument is similar to the argument

addressed above, and we reject it for a similar reason. In Stevenson, the buyers of a

mobilehome park claimed that the seller had breached his to duty of disclosure by failing

to inform the buyers that that in 1971, the seller had temporarily moved several

mobilehomes onto the property to permit an easement holder to work on a pipeline under

the property. (Id. at p. 165.) The Stevenson court rejected the buyers' argument that the

seller was required to disclose that 1971 incident, reasoning:

           "Although it would no doubt have interested the [buyers] to learn of
           the 1971 incident, the primary material fact which potentially
           affected the value of the property was the 'underlying' fact of the
           pipeline itself—a fact immediately ascertainable from the public
           records. A reasonable person in the [buyers'] position, knowing that
           the oil company's easement was for pipeline purposes, would have
           realized that the easement holder might exercise its right of access to
           the pipeline at any time. . . . [¶] By warning the [buyers] in the
           purchase contract that they took title subject to easements of record,
           [the seller] put them on notice of the above material facts, which
           satisfied his duty of disclosure under the express terms of the
           contract." (Id. at p. 166.)

       The seller in Stevenson disclosed the fundamental fact related to the property, i.e.,

the existence of the easement, but was not required to disclose additional facts related to

that fact. In this case, in contrast, there is substantial evidence to support the trial court's

finding that Eveline failed to disclose the fundamental fact related to the property at

issue, i.e., her plan to perform substantial work on the Access Road. Thus, even


                                               22
assuming that the construction bids were "merely further details" pertaining to a

fundamental fact related to the property, Eveline failed to disclose the fundamental fact

on which theses details were based.

       Citing Sweat v. Hollister (1995) 37 Cal.App.4th 603 (Sweat), Eveline similarly

contends that the bids were not disclosable because they were merely "practical

ramifications of the CC&Rs." In Sweat, this court concluded that a house seller's agent

was not required to disclose the legal and practical ramifications emanating from the fact

that the house was located in a floodplain. (Id. at p. 608.) The Sweat court reasoned:

          "The factual matter leading to the alleged defect in the house—that
          it was in a floodplain—was revealed to the plaintiffs. The legal and
          practical effects of this state of affairs do not rise to the status of a
          fact—they are conclusions as to value resulting from the fact of situs
          in a floodplain. The existence and effect of city ordinances
          regulating rebuilding or improvement of a house in a floodplain
          constitute information as readily available to the plaintiffs as to the
          defendants. Actionable nondisclosure relates to facts not
          discoverable by the plaintiffs." (Ibid.)

       Unlike in Sweat, the key factual matter related to the property at issue—Eveline's

plan to seek to recover from Fusina one-third of the costs of improving the Access

Road—was not revealed to Fusina. Further, as discussed above, there is substantial

evidence to support the trial court's finding that Eveline's disclosure of the CC&Rs did

not constitute an adequate disclosure of her plan to charge Fusina one-third of the costs of

improvements to the Access Road. Thus, contrary to Eveline's contention that the bids

were practical ramifications of the CC&Rs, in fact the bids were ramifications of

Eveline's plan to perform substantial work on the Access Road and charge Fusina one-

third of the costs. Finally, unlike in Sweat, Eveline's plan was not public information "as

                                             23
readily available to the plaintiffs as to the defendants." (Sweat, supra, 37 Cal.App.4th at

p. 608.) Accordingly, we reject Eveline's contentions that the bids were not disclosable

pursuant to Sweat because they were merely "practical ramifications of the CC&Rs."

       Eveline also contends that no duty to disclose the bids arose because there was "no

substantial evidence to prove that bids for the cost of bringing the road into compliance

with the fire department requirements were accessible only to [Eveline], and . . . there

was no substantial evidence that [Eveline] was aware that Fusina did not know how to get

such bids nor that [Eveline] knew that Fusina could not reasonably discover such bids."

This contention is entirely unpersuasive. In light of the trial court's finding that Eveline

failed to disclose her plan to have extensive work done on the Access Road, the trial

court also could have reasonably found that Fusina lacked the ability to discover the costs

of her undisclosed plan and the bids to perform such plan.

       Eveline also raises a series of arguments related to her contention that there is no

substantial evidence that Fusina would have acted differently if he had known about the

bids. Fusina testified that he would not have purchased the Fusina Parcel if he had

known of Eveline's plan to improve the Access Road and that she intended to make a

claim against him for several hundred thousand dollars in costs for improving the Access

Road. In fact, Fusina testified that he would not have bought the Fusina Parcel if he had

been told that the Access Road would cost him even $20,000.10 Accordingly, we

conclude that there is substantial evidence that Fusina would not have entered into the


10     As noted in part II., ante, appellants presented evidence that the "overall cost of
the road" was $655,073.51.
                                             24
purchase agreement for the Fusina Parcel if he had known of Eveline's plan to perform

substantial work on the Access Road and the bids to perform such work.

       Finally, Eveline argues that there is no substantial evidence that the work

performed on the Access Road was detrimental to the value of Fusina's Parcel. (Citing

Sweat, supra, 37 Cal.App.4th at p. 608 [seller has duty to disclose "all factual matters

bearing upon the quality of the property being sold which might be detrimental to

value"].) Eveline argues that the improvements to the Access Road "improved both the

value and quality of [Fusina's Parcel]" by making the land suitable for residential

construction. This argument overlooks the fact that Eveline's plan to charge Fusina more

than $225,000 for the improvements to the Access Road based on his ownership of the

Fusina Parcel—an amount equal to approximately 40 percent of cost of the parcel itself,

rendered the Fusina Parcel less desirable than represented. Further, in making this

argument, Eveline fails to address the detriment that Fusina suffered in having to defend

against a claim seeking to impose an equitable lien in the amount of more than $225,000

on the property to pay for the improvements.11 Accordingly, we conclude that Eveline

has not demonstrated that her failure to disclose her plan to perform substantial work on

the Access Road and charge Fusina one-third of the costs of that work was not

detrimental to the value of Fusina's Parcel.




11     We emphasize that Eveline makes no argument that the improvements to the
Access Road increased the fair market value of Fusina's parcel by more than the costs to
construct the improvements.
                                               25
B.     In light of Fusina's election to rescind the purchase agreement for the Fusina
       Parcel, the judgment must be modified by striking the judgment in Fusina's favor
       on his breach of contract and concealment causes of action based on that same
       agreement

       Appellants contend that because Fusina elected to rescind the purchase agreement,

the judgment must be modified by striking the judgment in Fusina's favor on his breach

of contract and concealment causes of action based on the same agreement. We agree.

       1.      Governing law

       The law is clear that a party may not both rescind a contract and obtain damages

for breach of that same contract.

            "When one party has been injured by a breach of contract and she
            either lacks the ability or the desire to keep the contract alive, she
            can choose between two different remedies. [Citation.] She can
            treat the contract as rescinded and recover damages resulting from
            the rescission. Or she can treat the contract as repudiated by the
            other party and recover damages to which she would have been
            entitled had the other party not breached the contract or prevented
            her performance. [Citation.] An action for rescission is based on the
            disaffirmance of the contract and an action for damages for breach of
            contract is based on its affirmance. [Citations.] An action for
            rescission and an action for breach of contract are alternative
            remedies. The election of one bars recovery under the other.
            [Citations.]" (Akin v. Certain Underwriters At Lloyd's
            London (2006) 140 Cal.App.4th 291, 296.)

       "Under California law, a defrauded party to a contract may elect to rescind the

contract and seek restitution, or stand on the contract and recover damages arising from

the fraud." (McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 793, fn. 1,

italics added (McClain).) More generally, any "cause of action having its origin in a

rescission of the contract is inconsistent with a cause of action for enforcement of the



                                             26
contract based upon its affirmance. [Citations.]" (City Bank of San Diego v.

Ramage (1968) 266 Cal.App.2d 570, 587.)

       2.      Factual and procedural background

       In its statement of decision, the trial court stated:

            "The court will enter a separate judgment with the following terms:
            [¶] . . . [¶] . . . if cross-complainant Joseph Fusina does not elect to
            rescind the purchase of the Fusina Parcel, then . . . Joseph Fusina
            shall recover $1 from cross-defendant Eveline Bustillos . . . . [¶] . . .
            Alternatively, if Joseph Fusina elects to rescind the purchase
            agreement, Fusina's purchase of the Fusina Parcel shall be rescinded
            and the parties shall be restored to their positions as they existed
            immediately prior to the execution of the purchase agreement."

       Ten days after the court issued its statement of decision, Fusina filed a "Notice of

Election of Rescission," indicating his intent to elect the rescission remedy and rescind

the purchase agreement for the Fusina Parcel.

       Approximately two months later, the court entered judgment in favor of Fusina on

his breach of contract and concealment causes of action, and awarded nominal damages

of $1.00 for each claim. The trial court also entered judgment in favor of Fusina on his

cause of action for rescission, permitting him to rescind the purchase agreement.

       3.      Application

       Fusina concedes that the "election of rescission is inconsistent with Judgment for

breach of contract," and agrees that the judgment for breach of contract must be stricken.

However, Fusina argues that numerous cases "hold that fraudulent concealment of a

material fact in connection with a real estate sales contract properly serves as the basis for

rescission of that contract." As made clear in their reply brief, appellants do not contend


                                               27
otherwise. Rather appellants object to the trial court entering judgment in favor of Fusina

on his claims for breach of contract and fraudulent concealment based on the purchase

agreement for the Fusina Parcel and awarding him affirmative relief (in the form of

nominal damages) on those claims, and at the same time permitting him to rescind the

purchase agreement. Appellants are correct that the judgment violates the election of

remedies doctrine discussed in McClain. (See McClain, supra, 159 Cal.App.4th at p.

793.) Having elected to rescind the purchase agreement based on the court's finding that

his consent to the purchase agreement was obtained by fraud, Fusina may not also

recover damages based on such fraud.

       Accordingly, we modify the judgment to reflect Fusina's election to rescind the

purchase agreement for the Fusina Parcel by striking the judgment in Fusina's favor on

his breach of contract and concealment causes of action based on the same agreement.12




12     As noted in the text, in its statement of decision, the trial court stated its intent to
enter a judgment awarding Fusina damages on his breach of contract and concealment
claims or rescission. The record indicates that the parties prepared a proposed judgment
that awarded nominal damages on Fusina's breach of contract and concealment claims
and rescission, which the trial court signed. Our modification of the judgment makes it
consistent with that which the trial court stated it intended to enter in its statement of
decision.
                                              28
                                           IV.

                                     DISPOSITION

      The November 12, 2010 judgment is modified to strike the judgment in favor of

Fusina on Fusina's breach of contract and concealment causes of action. As so modified,

the judgment is affirmed. Fusina shall recover costs on appeal.



                                                                            AARON, J.

WE CONCUR:



         O'ROURKE, Acting P. J.



                        IRION, J.




                                           29
