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 Post subject: FT - Hendren v. Goldberg (5/6/2004)
PostPosted: Thu Feb 26, 2009 3:48 pm 

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Hendren v. Goldberg,
2004.CA.0004063 (Cal.App. Dist.2 05/06/2004)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT DIVISION TWO

B164667

2004.CA.0004063

May 6, 2004

CAROLYN HENDREN, PLAINTIFF AND APPELLANT,
v.
SEYMOUR S. GOLDBERG, DEFENDANT AND RESPONDENT.

APPEAL from a judgment of the Superior Court of Los Angeles County. Michael J. Farrell, Judge. Reversed in part and affirmed in part. (Los Angeles County Super. Ct. No. PC 030001)

Pistone & Wolder, Thomas A. Pistone, Eric J. Medel; and Timothy M. Hoffman for Plaintiff and Appellant.

Seymour S. Goldberg Law Corporation and Martin J. Goldberg for Defendant and Respondent.

The opinion of the court was delivered by: Doi Todd, J.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

This is an appeal from a judgment of dismissal following the trial court's order sustaining a demurrer to a first amended complaint (FAC) without leave to amend. Appellant sought to quiet title to property in which respondent claims an interest through a United States Marshal's deed recorded in 1977, following a sale pursuant to a writ of execution issued by the District Court for the Central District of California.

Because the pleadings and the judicially noticed documents do not establish a cotenancy between appellant and respondent as a matter of law, we reverse the sustaining of the demurrer without leave to amend as to the causes of action for quiet title based on adverse possession, unjust enrichment and declaratory relief. We affirm the sustaining of the demurrer as to the cause of action for cancellation of instruments.

THE PLEADINGS

Original Complaint

On April 12, 2002, appellant Carolyn Hendren, who is also known as Carolyn Gentile, filed a verified complaint against respondent Seymour S. Goldberg and others claiming any interest in certain real property. She asserted five causes of action: cancellation of instruments, unjust enrichment, "laches," quiet title and declaratory relief. Respondent demurred to the complaint and on the day before the scheduled hearing on the demurrer, appellant filed the verified FAC.

The FAC

The FAC asserted four causes of action: quiet title based on adverse possession, cancellation of instruments, unjust enrichment and declaratory relief. In addition to respondent, the FAC named as defendants Robert Gentile, Leslie Kazarian *fn1 and the successors in interest of Arthur Sherman, "believed to be deceased."

We assume for purposes of review that the following facts as alleged in the FAC are true: In October 1966, Robert Gentile, Leslie Kazarian and Arthur Sherman filed a shareholder derivative action against appellant's former husband, Phillip John Gentile, and Brookside Import Company. In 1968, the plaintiffs in that case obtained a judgment against Phillip John Gentile in the amount of $30,000. *fn2

In 1971, appellant and her husband acquired the subject residential property at 16301 Knollwood Drive in Granada Hills, California (hereafter the property) by grant deed as joint tenants. The acquisition was financed by a promissory note in the amount of $45,200 at 7.25 percent interest in favor of Home Savings and Loan. In 1972 appellant and her husband transferred their interest in the property to appellant by grant deed as appellant's "sole and separate property." The grant deed attached to the FAC recites that for "valuable consideration . . . Phillip John Gentile and Carolyn Gentile, husband and wife, hereby grant to Carolyn Hendren" the property.

In 1975, respondent, who was the attorney of record for Robert Gentile, Kazarian and Sherman in their action against appellant's husband, caused the United States Marshal to file a notice of real estate attached, based on a writ of execution issued by the District Court for the Central District of California. The notice, which was included as an exhibit to the FAC, states that the Marshal had "levied upon and attached all of the right, title and interest of Philip John Gentile, Defendant, named in said Writ, in and to certain real property . . . standing in the name of Phillip John Gentile and Carolyn Gentile, husband and wife, recently conveyed to Carolyn Hendren, who is one and the same as Carolyn Gentile." Exhibits attached to the FAC also reflect that respondent purchased the husband's interest in the property for $5,000 as the highest bidder at a duly advertised public sale and recorded a certificate of purchase in January 1976. In August 1976, respondent recorded a second certificate of purchase clarifying that he had purchased the property as the agent for Robert Gentile, Kazarian and Sherman. In March 1977, a United States Marshal's deed transferring the husband's interest in the property to Robert Gentile, Kazarian and Sherman was recorded. In 1981, respondent recorded an individual quitclaim deed, which recited that "for a valuable consideration" Sherman and Kazarain quitclaimed their interest in the property to respondent.

The FAC alleged that appellant owns the fee simple title to the property and that she has lived on the property continuously since 1971. Appellant also alleged that she has paid and continues to pay all property taxes and encumbrances on the property and has maintained the property for 30 years.

The Demurrer

Respondent filed a general demurrer to the FAC, and requested that the court take judicial notice of the original complaint and its attached exhibits, which included an order giving notice to creditors that Phillip John Gentile had been adjudicated a bankrupt on February 20, 1974. *fn3 The demurrer was also based on all pleadings and papers in the court's file. As noted, in connection with the prior demurrer, respondent submitted the first page of the docket in the bankruptcy case, which stated that appellant's former husband filed for bankruptcy protection in February 1966, the bankruptcy was discharged in November 1974 and the case was closed in 1977.

The demurrer was based on the premise that the pleadings established that the grant deed between appellant and her husband purporting to transfer the property into appellant's name alone constituted a fraudulent conveyance because all of the husband's assets at the time were part of his bankruptcy estate. Respondent argued that the conveyance was null and void and that the husband retained his joint tenancy interest in the property. Respondent claimed that when he acquired the husband's interest, he became a cotenant with appellant. Respondent asserted that appellant had failed to sufficiently allege a cause of action for adverse possession against a cotenant. Respondent also asserted that appellant had no standing on the claim for cancellation of instruments, that her causes of action for cancellation of instruments, unjust enrichment and declaratory relief were barred by the applicable statutes of limitations and laches, and that she had failed to allege facts sufficient to state a claim for unjust enrichment.

The Order

In its written order, the court made the following findings: (1) appellant failed to allege facts sufficient to sustain any of her four causes of action; (2) the causes of action for cancellation of instruments and unjust enrichment had accrued no less than 21 years earlier and were barred by the applicable statutes of limitations and laches; (3) appellant had no standing on the claim for cancellation of instruments; (4) there was no reasonable possibility that appellant could state a cause of action against respondent; (5) appellant had not shown how the FAC could be further amended to cure the defects and change the legal effect of her pleading; and (6) the cause of action for declaratory relief was moot.

DISCUSSION

Standard of Review

A demurrer tests the legal sufficiency of the factual allegations in a complaint. (Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835, 841-842; Windham at Carmel Mountain Ranch Assn. v. Superior Court (2003) 109 Cal.App.4th 1162, 1168.) When a demurrer is sustained, we determine de novo whether the complaint states facts sufficient to constitute a cause of action on any legal theory. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Satten v. Webb (2002) 99 Cal.App.4th 365, 374-375; Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 43.) We must accept as true not only those facts alleged in the complaint but also facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; Friedland, supra, p. 842.) Other relevant matters which are properly the subject of judicial notice may also be treated as having been pled. (Friedland, supra, at p. 842.) But we do not assume the truth of contentions, deductions or conclusions of fact or law. (Windham, supra, at p. 1168.) Generally, when a demurrer is sustained without leave to amend, we decide whether there is a reasonable possibility the defect can be cured by amendment. If it can, the trial court abused its discretion and we reverse; if not, there was no abuse of discretion and we affirm. (Blank, supra, at p. 318.) The burden of showing that a defect can be cured by amendment rests with the plaintiff and may be made for the first time on appeal. (Rakestraw, supra, at p. 43; Ross v. Creel Printing & Publishing Co. (2002) 100 Cal.App.4th 736, 748.) Further, a demurrer on statute of limitations grounds will not lie where the action may be, but is not necessarily, barred. The defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred. (Marshall, supra, at p. 1403; Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881.)

First Cause of Action for Quiet Title Based on Adverse Possession

1. A Cotenancy Has Not Been Established

The demurrer to the first cause of action for quiet title based on adverse possession was premised on the existence of a cotenancy between appellant and respondent. The FAC alleged that in 1972, one year after appellant and her former husband acquired title to the property as joint tenants, they transferred all interest in the property to appellant. Appellant argues that when respondent recorded instruments after this date purporting to transfer her husband's interest in the property, there was no interest to transfer and respondent recorded a conveyance of no interest whatsoever and as such no cotenancy was created. In her opening brief, she offers to amend the FAC to "allege further specificity as to the status of Mr. Gentile's interest in the Property at the time of conveyance."

While respondent argues that the property was an asset of the husband's bankruptcy estate and that any attempted conveyance of the property without the bankruptcy court's permission was fraudulent, appellant correctly points out that there is nothing in the record that identifies the property acquired in 1971 as an asset of the bankruptcy estate.

As respondent notes, bankruptcy law in effect before 1978 could be summarized as follows: "The bankruptcy court has summary jurisdiction to determine claims against, title to, and liens upon property in the actual or constructive possession of the bankruptcy court by and through its officers, such as receivers and trustees, and by and through the bankrupt himself, whether that possession existed at the commencement of the bankruptcy proceeding or arose subsequently. This jurisdiction cannot be disturbed by the processes of other courts. All property in the actual or constructive possession of the bankrupt, in which he claims an interest, passes upon the filing of the petition in bankruptcy, into the custody of the bankruptcy court." (In re American Fidelity Corp., Ltd. (S.D. Cal. 1939) 28 F.Supp 462, 467.)

The pleadings and judicially noticed documents establish that appellant's husband filed for bankruptcy protection in 1966 and that his bankruptcy was not discharged until 1974. As such, it would appear that the federal bankruptcy court had exclusive jurisdiction to make determinations regarding the subject property in which appellant's husband had an interest during the pendency of the bankruptcy case. But that does not end our analysis. The documents attached to the FAC appear to show that respondent, as the agent for Robert Gentile, Kazarian and Sherman, acquired the husband's interest in the property in 1975 pursuant to the federal court's authority and direction. These documents, which were issued and recorded by the United States Marshal, recite that in 1975, "by virtue of" a writ of execution issued by the District Court for the Central District of California, *fn4 the husband's interest in the property was sold to respondent as the highest bidder at a duly advertised public sale. We note that respondent does not claim to have acquired sole ownership of the property, but rather the husband's one-half interest. While respondent seems to rely on the issuance of the writ of execution by the federal court as establishing the husband's interest in the property, there is nothing in the pleadings or the judicially noticed documents that establishes that the bankruptcy court in fact determined that the 1972 transfer to appellant was fraudulent and therefore null and void. Nor is there any evidence of the husband's actual interest in the property that was transferred by the United States Marshal's deed. Respondent argues that the language contained in the notice of real estate attached to the effect that the property was "standing in the name of Phillip John Gentile and Carolyn Gentile, husband and wife, recently conveyed to Carolyn Hendren, who is one and the same as Carolyn Gentile" evidences that the bankruptcy court determined the fraudulent nature of the conveyance. We disagree. There is nothing in the notice itself to indicate that the issue of fraud was ever adjudicated or that the conveyance to appellant as her separate property was set aside. We conclude that the pleadings and exhibits do not establish that a cotenancy was created in 1975.

2. A Cause of Action for Adverse Possession by a Cotenant Has Not Been Pled

Appellant claims that even assuming a cotenancy existed, she has pled facts demonstrating quiet title based on adverse possession by a cotenant sufficient to survive a demurrer. For the reasons discussed below, we disagree. But in light of our conclusion that respondent has not established a cotenancy, we also conclude that appellant has sufficiently pled facts demonstrating adverse possession sufficient to survive a demurrer.

Appellant first asserts that she need only allege ownership in fee without pleading all the elements of adverse possession to state a claim for quiet title. Appellant is mistaken. While quiet title actions were historically based entirely in equity, they are now the subject of statute. Although not raised by either party, we note that Code of Civil Procedure section 761.020, subdivision (b), provides that where title is sought by adverse possession, "the complaint shall allege the specific facts constituting the adverse possession." To establish title by adverse possession, the following elements must be proved: (1) possession must be held under either a claim of right or color of title, (2) there must be actual, open and notorious occupation of the premises in such a manner that constitutes reasonable notice to the record owner, (3) occupation must be both exclusive and hostile to the title of the true owner, (4) there must be uninterrupted and continuous possession for at least five years, and (5) the possessor must pay all of the taxes levied and assessed on the property during the five-year period. (Dimmick v. Dimmick (1962) 58 Cal.2d 417, 421-422; Sevier v. Locher (1990) 222 Cal.App.3d 1082, 1085; 6 Miller & Starr, Cal. Real Estate (3d ed. 2000) § 16:2.) A plaintiff has the burden of proof on each element. (Weller v. Chavarria (1965) 233 Cal.App.2d 234, 242.)

In addition to alleging ownership in fee, the FAC alleged that appellant's title was based on her "actual, open, notorious, exclusive, hostile, and adverse possession of the Property for five (5) years preceding the commencement of this action, together with Plaintiff's payment of all taxes assessed against the Property for the same five (5) years," that appellant has lived in the property continuously since 1971 and that she has paid and continues to pay all property taxes and encumbrances and has maintained the property during the ensuing 30 years. Such allegations are sufficient to plead a cause of action for quiet title based on adverse possession and overcome a demurrer.

Respondent correctly points out that in a cotenancy, however, the possession of property by one cotenant is presumed to be amicable and permissive and the payment of taxes by that cotenant is presumptively considered to be for the benefit of all. (Dimmick v. Dimmick, supra, 58 Cal.2d at p. 422.) In order for such a tenancy to be considered adverse, the occupying cotenant must give notice to the other cotenants of the adversity and exclude or oust the other cotenants, and the tenant out of possession must have actual or constructive notice that the possession is hostile to him. (Ibid.)

Here, the FAC is silent as to any actions taken by appellant that would constitute an ouster. Her conclusory allegations that her possession was "hostile and adverse" are insufficient for this purpose. So is the fact that she remained in possession of the property at all times and paid taxes on it. (Russell v. Lescalet (1967) 248 Cal.App.2d 310, 313; Hunter v. Schultz (1966) 240 Cal.App.2d 24, 28.) In her brief before us, appellant asserts that she can amend the FAC to add allegations as to "the manner in which appellant discovered that respondent was alleging an adverse interest." But even assuming she could do so, appellant does not offer to plead allegations showing what actions she took to oust respondent, as a cotenant, after learning of his claim to the property.

Respondent based his demurrer to the claim of adverse possession on his rights as a cotenant. In the case before us it would appear that a claim of co-ownership or tenancy in common would be an affirmative defense to appellant's claim. Should respondent establish that an actual interest in the property remained with appellant's husband which was subject to transfer by the United States Marshal's deed, respondent will have established that appellant's claim for adverse possession cannot be established without proof of notice and an ouster. But at this stage, respondent has not established the existence of such an interest. Accordingly, we reverse the trial court's order sustaining the demurrer to the first cause of action for quiet title based on adverse possession.

Second Cause of Action for Cancellation of Instruments

In her second cause of action, appellant seeks to have cancelled the individual quitclaim deed in which Kazarian and Sherman purportedly transferred their interests in the property to respondent on the ground that it is void because the signatures of Sherman and Kazarian are not genuine. The trial court sustained respondent's demurrer to this cause of action on several grounds, including that appellant was not the real party in interest and therefore lacked standing to bring this claim. In her opening brief on appeal, appellant failed to challenge this aspect of the court's ruling. She addresses the issue in her reply brief, and then does so only in a single paragraph with no citation to authority. "When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived." (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785.) Accordingly, we affirm the trial court's ruling sustaining the demurrer to the second cause of action.

Third Cause of Action for Unjust Enrichment

Appellant alleged in the FAC that had she suspected she was not the fee simple owner of the property, she would not have maintained and improved the property for over 25 years. She also alleged that respondent and the other defendants would be unjustly enriched if allowed to reap the benefits of her investment and toil and "to maintain their tenuous claims against the appreciated value of the Property." The trial court sustained the demurrer to the third cause of action on the grounds that the FAC failed to allege facts sufficient to constitute a claim for unjust enrichment, and that it was barred by the applicable statute of limitations and laches.

A person is enriched if he receives a benefit at another's expense. The fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it. (First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662-1663; California Medical Assn. v. Aetna U.S. Healthcare of California, Inc. (2001) 94 Cal.App.4th 151, 172; Rest., Restitution, § 1, com. c.)

Appellant alleges that she will be damaged if respondent is allowed to maintain his claim to the property. We cannot speculate as to whether respondent will be able to establish a valid interest in the property. But in the event that he is able to do so and given the allegations that appellant has maintained the property for more than 30 years at her own expense and that the property has appreciated in value, we cannot conclude as a matter of law that appellant has failed to state a claim for unjust enrichment. It may well be the case that if a cotenancy is established, appellant will only be entitled to contribution based on a partition action, but at this stage we cannot find that she has failed to state a claim for unjust enrichment.

The trial court also found that this claim was barred by the statute of limitations and by the doctrine of laches. In the original complaint, appellant alleged that in or about June 2000 she attempted to refinance the property to pull cash out to help finance her children's college education and learned that she no longer had clear title to the property. This allegation has been omitted from the FAC, which contains no allegations as to when appellant first learned of respondent's interest in the property. Respondent argues it is inconceivable that appellant would have been unaware of the "multitude of noticed hearings" with respect to the property, and that she was on constructive notice that her husband had lost his interest in the property more than two decades ago. We note that under Civil Code section 1213, respondent's recording of the United States Marshal's deed and the individual quitclaim deed would only constitute constructive notice to subsequent purchases of the property, not to prior claimants like appellant. Because the pleadings assert that appellant did not have actual notice of respondent's interest in the property until June 2000, we cannot conclude on demurrer that her claim for unjust enrichment is barred by either the statute of limitations or the doctrine of laches. A demurrer on statute of limitations grounds will not lie where the action may be, but is not necessarily, barred. (Marshall v. Gibson, Dunn & Crutcher, supra, 37 Cal.App.4th at p. 1403; Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort, supra, 91 Cal.App.4th at p. 881.) Accordingly, we reverse the trial court's sustaining of the demurrer to appellant's third cause of action for unjust enrichment.

Fourth Cause of Action for Declaratory Relief

The trial court concluded that in light of its determination that the demurrers to appellant's first three causes of action should be sustained without leave to amend, there remained no justifiable controversy between the parties and the fourth and final cause of action for declaratory relief was moot. Because we conclude that the demurrers to the first cause of action for quiet title based on adverse possession and the third cause of action for unjust enrichment should have been overruled, we also reverse the trial court's order sustaining the demurrer without leave to amend as to appellant's declaratory relief cause of action.

DISPOSITION

The order sustaining the demurrers without leave to amend as to the first cause of action to quiet title based on adverse possession, the third cause of action for unjust enrichment and the fourth cause of action for declaratory relief is reversed. The order sustaining the demurrer as to the second cause of action for cancellation of instruments is affirmed. The parties to bear their own costs on appeal.

NOT FOR PUBLICATION.

We concur:

BOREN, P.J.

ASHMANN-GERST, J.


Opinion Footnotes

*fn1 These defendants were not served with the FAC until after the demurrer had been filed. There is nothing in the record to indicate that they appeared.

*fn2 A copy of the first page of a bankruptcy docket filed in connection with respondent's demurrer to the original complaint indicates that in February 1966, eight months prior to the shareholder action, appellant's husband filed for bankruptcy protection under Chapter 11, his bankruptcy was discharged in November 1974 and his bankruptcy case was closed in September 1977.

*fn3 We grant respondent's request to take judicial notice of these documents. (Evid. Code, § 452, subd. (d).)

*fn4 The writ of execution itself is not part of the record. The certificates of purchase refer to a writ issued on January 10, 1968, but the United States Marshal's deed refers to a writ issued September 16, 1975. In his brief, respondent states that he and the other defendants first obtained a writ in 1968 that was "renewed" in 1975.


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