SunCal La Quinta v. Eston CA4/3

FACTS AND PROCEDURAL BACKGROUND

In July 2003, Golden Acre Farms, Inc. (Golden Acre) and Peterson, as trustee of the Trust, signed escrow instructions (contract) to sell 628 acres of undeveloped land to Regal Development, LLC (Regal) for $12.6 million. The contract designated Stewart Title of California, Inc. (Stewart Title) as the escrow holder. Under the contract, the property was sold “‘as is’” but Regal had until February 19, 2004 to conduct its due diligence. After that date, Regal could obtain two 12-month extensions by making nonrefundable payments of $200,000 each on or before

2 February 19, 2004 and 2005. No change was effective “unless given in writing by all the parties affected thereby.” Regal subsequently assigned its rights under the contract to SCC Acquisitions, Inc. (SCC), plaintiff’s predecessor in interest. In early February 2004, SCC deposited $200,000 into escrow for a 12-month extension, with a letter from vice president of acquisitions Michael L. Canfield authorizing escrow officer Kathy Wenger to release those funds and the initial $10,000 deposit to the sellers on February 19. But on February 19, Canfield wrote to Wenger, requesting she “hold” the deposit…