Xpo Logistics Freight, Inc. v. Hayward Prop., LLC

79 Cal.App.5th 1166

295 Cal.Rptr.3d 371

XPO LOGISTICS FREIGHT, INC., Plaintiff, Cross-defendant and Appellant,

v.HAYWARD PROPERTY, LLC, et al., Defendants, Cross-complainants and Appellants.

XPO Logistics Freight, Inc., Plaintiff, Cross-defendant and Appellant,

v.Hayward Property, LLC, et al., Defendants, Cross-complainants and Respondents.

A157687, A158291, A159299

Court of Appeal, First District, Division 4, California.

Filed June 17, 2022

As Modified on Denial of Rehearing July 12, 2022

Certified for Partial Publication.^*

Counsel for Plaintiff, Cross-defendant and Appellant: STUART KANE LLP, Donald J. Hamman, Newport Beach, McALPINE PC, Douglas W. Eyre, Mark L. McAlpine, BUCHALTER, APC, Glenn P. Zwang, San Francisco, Alexandra Grayner.

Counsel for Defendants, Cross-complainants and Appellants: GREENBERG TRAURIG, LLP, Eric V. Rowen, Scott D. Bertzyk, Los Angeles.

POLLAK, P. J.

These appeals arise from a dispute over title to one part of a property in the City of Hayward. As of 1979, the entire property was owned by one entity and divided into four parcels. In 1997, the owner reconfigured it into two parcels. In several transactions between 1998 and 2002, one reconfigured parcel was conveyed to XPO Logistics Freight, Inc. (XPO), and the other to Crown Enterprises, Inc., and Hayward Property, LLC (jointly Hayward). This case concerns which of the two parcels includes a certain part of the original property (the disputed area).

The dispute has two sources. One is the 1997 document reconfiguring the property into two parcels, which has an undisputed error in defining one of the parcels by its metes and bounds. The other is the fact that, sometime before 1997, the county assessor divided the property—for purposes of property taxes—into three assessor's parcels with distinct assessor's parcel numbers (APNs). When the property was reconfigured into two parcels, which later passed to different owners, the boundaries of the APNs were not changed. The parties’ dispute concerns the significance, if any, of references to those APNs in various title documents. The documents’ metes-and-bounds descriptions of parcels support XPO's claim to the disputed area; the APN references arguably support Hayward's claim.

In 2016, XPO sued to quiet title. Hayward cross-complained to quiet title in itself or else obtain restitution of two sums—the property taxes it had paid on the disputed area since 2002 and the purchase price it paid for its parcel.

In 2017, the court granted XPO's motion for judgment on the pleadings on the title claims. The parties continued to litigate Hayward's restitution claims. They ultimately stipulated to an estimated amount of real property taxes Hayward had paid with respect to the disputed area, in excess of the taxes that XPO had paid on a portion of Hayward's property. In 2019, the court entered judgment quieting title to the disputed area in XPO, denying Hayward's purchase-price restitution claim, and awarding relief on its tax restitution claim in the stipulated sum—plus prejudgment interest, over XPO's objection.

Hayward appeals the judgment quieting title, and XPO cross-appeals the award of prejudgment interest on the restitution award, though it does not challenge the restitution award itself (appeal No. A157687). In two consolidated appeals (Nos. A158291 and A159299), XPO also challenges postjudgment orders taxing its costs and declining to award it attorney fees as a sanction for Hayward's discovery abuses and alleged pursuit of a "knowingly false" claim.

In the published portion of this opinion, we conclude that the trial court correctly disregarded APN references in the deeds, and that its judgment must be affirmed insofar as it encompasses a declaration that Hayward did not acquire an interest in the disputed area. In the unpublished portion of this opinion, we address the remaining issues. We conclude that the award of prejudgment interest on Hayward's restitution award, which the trial court evidently considered as mandatory, must be reversed so the court can exercise its discretion in determining whether and from what date to award such interest and, if awarded, apply the correct interest rate. We also affirm the orders taxing XPO's costs and denying sanctions.

Factual History and Procedural History

In 1979, the entire property at issue was owned by CF Properties, Inc. and divided into four parcels—original parcels 1, 2, 3, and 4—as shown in recorded parcel map No. 3094 (the 1979 parcel map):

Some time before 1997, the Alameda County Assessor divided the property, for purposes of assessing property taxes, into three assessor's parcels, which were enumerated on an unrecorded assessor's map as APN 463-0025-040 (APN 40), APN 463-0025-043-01 (APN 43) and APN 463-0025-044 (APN 44):

As can be seen by comparing the maps, APN 40 comprised original parcel 1; APN 43 comprised all of original parcels 3 and 4 and most of original parcel 2; and APN 44 comprised the southeast corner of parcel 2. The following exhibit shows the parties’ claims about their parcels:

The parties agree that, after the transactions set out below, Hayward owns at least the polygon to the southwest outlined in blue (the Utah-shaped parcel) and XPO owns at least the unshaded part of the larger polygon to the north and east outlined in green. The highlighted area is the disputed area. It includes all of APN 44 and most of the eastern leg of APN 43.

In brief, events began in 1997 when CF Properties, owner of the entire property, recorded a "lot line adjustment" reconfiguring the four original parcels on the 1979 parcel map into two parcels. Hayward ultimately acquired part or all of reconfigured parcel one, and XPO acquired reconfigured parcel two. The question is which parcel includes the disputed area.

The 1997 lot line adjustment describes reconfigured parcel one—the basis of Hayward's claims—in three ways: (1) as "a portion of [original] parcel [1], a portion of [original] parcel 2, all of [original] parcel 3, and all of [original] parcel 4" as shown on the 1979 parcel map, (2) by metes and bounds, and (3) as "containing 16.42 acres more or less." The legal description of the reconfigured parcels in the 1997 lot line adjustment does not refer to APNs. The metes and bounds are flawed and do not close. They trace a gapped rectangle that does not include the disputed area, but has a gap bordering that area.

In 1998, the parties’ chains of title diverged. CF Properties’ successor CNF Properties, Inc., issued a deed transferring reconfigured parcel one to Consolidated Freightways Corporation (the 1998 deed). CNF retained reconfigured parcel two, which eventually passed to XPO.

The face page of the 1998 deed conveying reconfigured parcel one to Consolidated Freightways states that the parcel is described in "Attached Exhibit ‘A,’ " and below that phrase contains a notation: "Assessor's Parcel No. 463-25-43-1 & 44." The text of the attached exhibit A is identical to the text in the 1997 lot line adjustment describing reconfigured parcel one—with the same flawed metes and bounds and the same estimate of "16.42 acres more or less."

In 2000, a "correction grant deed" was recorded. Its face page is identical in relevant part to that of the 1998 deed. Exhibit A to the 2000 correction deed modifies exhibit A to the 1998 deed by fixing the metes and bounds so that the parcel closes and by changing the estimate of "16.42 acres more or less" to "7.9 acres more or less." The new description changes the parcel's boundaries to match the Utah-shaped parcel.

In September 2002, Consolidated Freightways declared bankruptcy, and CNF Properties executed a one-page quitclaim deed that transferred reconfigured parcel two to XPO's predecessor Con-Way Transportation Services (Con-Way). The deed purports to transfer the entire original property to Con-Way, but, as XPO acknowledges, CNF Properties could transfer only so much of the property as it had not already transferred to Consolidated Freightways in the 1998 deed. Con-Way thus received whatever was not conveyed by the 1998 deed.

Hayward acquired its parcel after the bankruptcy court issued an order in November 2002 authorizing a sale of real property. The order approves a sales contract between Consolidated Freightways and Hayward. The contract states that the parcel sold is "legally described in exhibit A attached hereto."

Exhibit A to the sales contract is a legal description in a form designed to be attached to a deed (the 2002 bankruptcy legal description). It defines the parcel sold to Hayward in two ways: (1) as comprising "a portion of parcel 1, a portion of parcel 2, all of parcel 3, and all of parcel 4" from the 1979 parcel map, and (2) by metes and bounds. It includes no acreage estimate. The metes and bounds are identical to those used in exhibit A to the 2000 correction deed defining the parcel conveyed to Consolidated Freightways as the Utah-shaped parcel. At the bottom of the 2002 bankruptcy legal description is a notation reading: "Assessor's Parcel No. 463-0025-043-1 [¶] Assessor's Parcel No. 463-0025-044."

In December 2002, a quitclaim deed from Consolidated Freightways to Hayward was recorded. It transfers "the following described real property in the City of Hayward .... [¶] See attached Exhibit A." The attached exhibit, however, describes unrelated land in Emeryville. In 2003, the bankruptcy trustee executed a correctory quitclaim deed with an attached exhibit A identical to the 2002 bankruptcy legal description. The correctory deed has not been recorded.¹

No transaction has occurred since 2003. The question is thus whether the parcel conveyed to Hayward by the 2003 correctory deed is, as Hayward contends, the Utah-shaped parcel plus the disputed area (i.e., all of APNs 43 and 44), or simply the Utah-shaped parcel, as the court found. This history gives rise to at least two subsidiary questions: Was the disputed area part of the parcel conveyed to Consolidated Freightways by the 1998 deed and, if...