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 Post subject: FT - Nam v. Min (11/9/2004)
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Myung Woo Nam v. Hyung Do Min et al.,
No. G032269 (Cal.App. 11/09/2004)

COURT OF APPEAL OF CALIFORNIA, FOURTH APPELLATE DISTRICT,
DIVISION THREE

November 9, 2004, Filed

NOTICE: [*1] NOT TO BE PUBLISHED IN OFFICIAL REPORTS. CALIFORNIA RULES OF COURT, RULE 977(a), PROHIBIT 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 THIS OPINION HAS NOT BEEN CERTIFIED FOR PUBLICATION OR ORDERED PUBLISHED FOR THE PURPOSES OF RULE 977.

PRIOR HISTORY: Orange County Super. Ct. No. 02CC03707, Gregory H. Lewis, Judge.

DISPOSITION: Reversed and remanded.

COUNSEL: Law Offices of Richard A. Marcus and Richard A. Marcus for Plaintiff and Appellant Myung Woo Nam.

Galfin, Passon & Greely and Adam M. Greely for Third Party Claimants and Respondents Felipe and Monica Lopez.

JUDGES: MOORE, J.; RYLAARSDAM, ACTING P. J. FYBEL, J. concurred.

OPINIONBY: MOORE

OPINION: A judgment creditor sued a judgment debtor to set aside a purportedly fraudulent conveyance of real property. The day after he filed his complaint, the judgment creditor recorded a lis pendens against the property in question. Shortly thereafter, title to the property was conveyed to purchasers whose title insurer did not uncover the lis pendens in its title search and, consequently, did not inform the purchasers of the title defect.

The litigation proceedings continued [*2] and the judgment creditor and judgment debtor ultimately entered into a stipulated judgment, pursuant to which the fraudulent conveyance was set aside. The judgment creditor then sought an order for the sale of the property and the persons who had purchased the property opposed the motion. The application was denied and the judgment creditor appeals.

The judgment creditor contends the trial court erred on numerous grounds. We agree that the lis pendens was valid, the purchasers had constructive notice of the pending litigation and thus took subject to the judgment, and the court should have ordered the property sold, if the criteria of Code of Civil Procedure section 704.780, subdivision (b), and applicable procedural requirements, were met. We reverse the order and remand with instructions to conduct a hearing in accordance with section 704.780, subdivision (b), and address the doctrine of equitable subrogation.

I

FACTS

In December 2001, Myung Woo Nam (Nam) obtained a $ 100,192 judgment against Hyung Do Min. (Nam v. Min (Super. Ct. Los Angeles County, 2001, No. BC232709).) Nam says that the judgment was entered due to Hyung Do Min's fraud in business dealings with him. In [*3] addition, Nam contends that, in January 2002, his counsel informed Hyung Do Min that if the judgment were not paid, Nam would force a sale of certain La Habra real property that Hyung Do Min owned. Hyung Do Min quitclaimed the property to Jung Im Lee Min on January 28, 2002.

On March 4, 2002, Nam filed a complaint against Hyung Do Min and Jung Im Lee Min, seeking to set aside the property transfer. Nam claimed the transfer was a fraudulent transfer, intended to block his collection efforts.

On March 5, 2002, Nam recorded, against the La Habra property, a lis pendens pertaining to the set-aside action. The lis pendens was not indexed by the recorder's office until March 11, 2002. On March 14, 2002, Jung Im Lee Min conveyed the property to Felipe and Monica Lopez. Within the next two weeks, Nam's attorney contacted the Lopezes and provided them with a copy of the lis pendens and the complaint. He also contacted the Lopezes' title insurer, First American Title Insurance Company (First American), no later than April 15, 2002.

Nam and the Mins filed a stipulation for judgment in the set-aside action, on August 8, 2002. In that stipulation, the parties agreed that: (1) the court could [*4] order the transfer from Hyung Do Min to Jung Im Lee Min void as a fraudulent transfer and that Nam could immediately execute against the real property to satisfy the judgment to be entered in the pending matter; (2) judgment would be entered against the defendants in the amount of $ 100,192, plus interest in the amount of $ 4,802 and attorney fees in the amount of $ 5,000; and (3) the judgment to be so entered would be declared a lien on the property nunc pro tunc to January 28, 2002. Judgment was entered accordingly, also on August 8, 2002.

In February 2003, Nam filed an application, in the set-aside action, for an order for the sale of the property. In that application, Nam noted that Jung Im Lee Min had granted title to the property to the Lopezes nine days after the lis pendens was recorded. However, Nam claimed that the Lopezes had taken the property subject to the lis pendens and that, because of the August 8, 2002 judgment declaring the transfer from Hyung Do Min to Jung Im Lee Min void, Hyung Do Min was the rightful owner of the property.

The Lopezes opposed Nam's application. Among other things, they asserted that they had no actual notice of the lis pendens when they acquired [*5] the property. First American filed a declaration in opposition to the application for an order to sell. In that declaration, First American explained that when it ran both its initial title search on March 4, 2002 and its "date down" on March 14, 2002, the records of the title plant it used did not reflect the lis pendens.

By minute order entered April 14, 2003, the court denied Nam's application. The court explained its reasoning in its tentative ruling and at the hearing on the application. Among other things, the court expressed concern that the lis pendens might not be valid. It also stated that the Lopezes were bona fide purchasers for value. They had no actual notice of the lis pendens and, as the court saw it, they did not even have constructive notice of the lis pendens, inasmuch as the title company was not aware of the lis pendens. The court further stated that Nam's application was an inappropriate method of seeking relief, given the fact that the judgment debtor no longer owned the property. In addition, the court questioned whether it even had jurisdiction over the Lopezes.

Nam filed a notice of appeal from the order. n1

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n1 Nam also filed a petition for a writ of mandate and/or prohibition, seeking to overturn the order. This court, in an unpublished order, denied the petition on the basis that Nam had an adequate remedy at law. (Nam v. Superior Court (May 1, 2003, G032192).)

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II

DISCUSSION

A. Requests for Judicial Notice

At the outset, we observe that Nam has filed two requests for judicial notice. In one, he requests this court to take judicial notice of the trial court's tentative ruling on his application, citing Evidence Code section 452. In the other, he requests that this court take judicial notice of a document currently under seal by order of this court dated May 1, 2003, entered in the prior writ proceeding. Both requests for judicial notice are granted.

B. Arguments on Appeal

Nam makes numerous assertions of error. He argues, inter alia: (1) the court erred when it determined that he had no claim to the property and therefore had no right to record the lis pendens; (2) the Lopezes had constructive notice of the lis pendens and took subject to it, so the court erred in finding that they were bona fide purchasers for value; (3) the court erred in concerning itself with whether it had jurisdiction over the Lopezes, and it did have jurisdiction in any event; and (4) the court failed to comply with Code of Civil Procedure section 704.780. The Lopezes assert, inter alia, that even assuming they took title subject to the lis pendens: [*7] (1) there was insufficient equity in the property to order a sale; and (2) they should be equitably subrogated to the liens they paid off through escrow. We will address these arguments in turn.

(1) Validity of lis pendens

As previously indicated, the court, in making its ruling, remarked that the lis pendens might not be valid because Nam might not have had a claim to the property at the time the lis pendens was recorded. Nam says the court's determination was erroneous, because a creditor has a right to record a lis pendens at the time he or she files an action to set aside a fraudulent transfer.

The controversy centers around Code of Civil Procedure sections 405.20 and 405.4. Section 405.20 provides in pertinent part: "A party to an action who asserts a real property claim may record a notice of pendency of action in which that real property claim is alleged. . . ." Section 405.4, in turn, provides the definition of a "real property claim." Section 405.4 states: "'Real property claim' means the cause or causes of action in a pleading which would, if meritorious, affect . . . title to, or the right to possession of, specific real property . . . ." So the question is whether [*8] a fraudulent conveyance claim affects title to specific real property, within the meaning of section 405.4.

This issue was recently addressed by our Supreme Court in Kirkeby v. Superior Court (2004) 33 Cal.4th 642, and we gave the parties an opportunity to discuss this case through supplemental briefing. The court in Kirkeby specifically considered whether a fraudulent conveyance claim affects title to specific real property, within the meaning of Code of Civil Procedure section 405.4, and concluded that it did. (Id. at p. 648.) As the court plainly stated, "fraudulent conveyance claims may support a lis pendens where the plaintiff seeks to void a fraudulent transfer." (Id. at p. 651.) Therefore, to the extent that the trial court's ruling was based on its determination that the fraudulent conveyance lawsuit could not serve as the basis for a valid lis pendens, it was in error.

(2) Constructive notice and BFP status

(a) in general

The more complex issue is the effect of the lis pendens. "'A lis pendens is a recorded document giving constructive notice that an action has been filed affecting title or right to possession [*9] of the real property described in the notice.' [Citation.]" (Kirkeby v. Superior Court, supra, 33 Cal.4th at p. 647.) "The purpose of a lis pendens is to furnish a means of notifying all persons of the pendency of an action and thereby bind any person who may acquire an interest in property, subsequent to the institution of the action, by any judgment which may be secured in the action affecting the property. [Citation.]" (Knapp Development & Design v. Pal-Mal Properties, Ltd. (1987) 195 Cal. App. 3d 786, 789-790, 240 Cal. Rptr. 920.) A plaintiff who records a lis pendens "places himself in a position where his rights [cannot] be affected by the existence of subsequent purchasers, or the failure of the title company to report the existence of the action." (Stagen v. Stewart-West Coast Title Co. (1983) 149 Cal. App. 3d 114, 123, 196 Cal. Rptr. 732.)

(b) effect of indexing

Despite the foregoing authorities, the trial court in the matter before us concluded that the Lopezes did not take subject to the lis pendens. The court said: "The Lopezes, to this court's way of thinking, are bona fide purchasers for value. They had no [*10] actual notice of the lis pendens. They did not have constructive notice because even the title company did not know of the lis pendens; although, the title company arguably should have known." As we shall show, we disagree.

The lis pendens was indexed on March 11, 2002, three days before the March 14, 2002 close of escrow for the Lopezes' purchase of the property. However, First American did not pick up the recording when performing its title searches. As First American explained, on March 14, 2002, the records of the title plant it was using were current only as of March 1, 2002, four days before the lis pendens was recorded. Therefore, First American did not know of the recording of the lis pendens when the Lopezes' escrow closed. First American further explained its belief that all of the title insurance companies doing business in Orange County use one of two title plants, and do not check the recorder's records directly. It is not unusual, First American opined, for the recorder's office to take three to ten days to index recorded documents, and only after the documents are indexed are they subsequently posted to the title plants' computer databases. Several days may lapse between [*11] the date of indexing and the date of posting at the title plant, according to First American.

Given this information, the issue arises whether the Lopezes had constructive notice of the lis pendens which was recorded on March 5, 2002 and indexed on March 11, 2002, even though the title plant in question was, as of March 14, 2002, current only as to documents recorded on or before March 1, 2002. With respect to this issue, the Lopezes cite Lewis v. Superior Court (1994) 30 Cal.App.4th 1850. As the court stated therein: "It is a common misperception . . . that a recorded document imparts constructive notice from the moment it is recorded. That is not the law. The operative event is actually the indexing of the document . . . ." (Id. at p. 1866.) "'Before the constructive notice will be conclusively presumed, the document must be "recorded as prescribed by law." (Civ. Code, § 1213.) A document not indexed as required by statute (see Gov. Code, §§ 27230-27265), does not impart constructive notice because it has not been recorded "as prescribed by law."' [Citation.]" (Lewis v. Superior Court, supra, 30 Cal.App.4th at p. 1866.) So here, [*12] the lis pendens did not impart constructive notice as of March 5, 2002. However, it did impart constructive notice as of March 11, 2002, the date of indexing. Escrow having closed on March 14, 2002, the Lopezes had constructive notice of the lis pendens and took subject to it.

The Lopezes attempt to dissuade us from this conclusion. They emphasize that even though the lis pendens was indexed as of March 11, 2002, the title plant records, as of March 14, 2002, were only current for documents recorded no later than March 1, 2002. Therefore, they argue, on March 14, 2002 no title company could have discovered the existence of the lis pendens. They impliedly argue that the fiction of constructive notice should not be applied when the state of a title plant's records make it impossible for a title company to locate the lis pendens.

"'"The policy of the law [requiring recordation and indexing] is to afford facilities for intending purchasers . . . in examining the records for the purpose of ascertaining whether there are any claims against [the land], and for this purpose it has prescribed the mode in which the recorder shall keep the records of the several instruments, and an instrument [*13] must be recorded as herein directed in order that it may be recorded as prescribed by law. . . ." [Citation.] Thus, it is not sufficient merely to record the document. "California has an 'index system of recording,' and . . . correct indexing is essential to proper recordation. [Citations.]" [Citations.]' (Original italics.) [Citation.] [P] The reason for this rule is obvious. The courts have long recognized that constructive notice is a 'fiction' [citation], so if a recorded document is going to affect title there must at least be a way for interested parties to find it: 'The California courts have consistently reasoned that the conclusive imputation of notice of recorded documents depends upon proper indexing because a subsequent purchaser should be charged only with notice of those documents which are locatable by a search of the proper indexes.' (Italics added.) [Citation.]" (Lewis v. Superior Court, supra, 30 Cal.App.4th at pp. 1866-1867.)

As this makes clear, the purpose of requiring indexing as a prerequisite to the imputation of constructive knowledge is to make certain that it is possible for a purchaser to obtain actual notice of the [*14] title defect before charging him or her with constructive notice of the same. However, as Lewis v. Superior Court, supra, 30 Cal.App.4th at pages 1866-1867 also makes plain, the imputation of constructive knowledge runs from the date of indexing. The case says nothing about the date of subsequent posting at a given title plant. Even though a title company checking the state of title as reflected on title plant records may not obtain actual notice of the title defect, if actual knowledge of the defect is obtainable by reviewing the recorder's indices themselves, the requirements of the constructive notice laws are met.

Although the Lopezes maintain that they are bona fide purchasers to the extent that they made the purchase in good faith, for value, and without actual notice, they reluctantly acknowledge that if this court determines that constructive notice was imparted, then they cannot be characterized as bona fide purchasers. We do so determine. The Lopezes are not bona fide purchasers.

This being the case, the Lopezes took subject to the lis pendens. The lis pendens constructively imparted to them knowledge of the pending litigation, seeking to set aside the [*15] January 28, 2002 transfer from Hyung Do Min to Jung Im Lee Min as being fraudulent.

(3) Scope of complaint

The Lopezes argue that, to the extent they are held to have had constructive notice of the pending litigation, they only took subject to what a review of the pleadings would have disclosed. They insist that they take free of the judgment ultimately entered in the set-aside action, because the relief awarded thereunder was outside of the scope of the complaint. In support of this assertion, they analogize to cases providing that the relief afforded under a default judgment cannot exceed the relief sought in the complaint. (See Burtnett v. King (1949) 33 Cal.2d 805, 808; Looper v. Looper (1963) 222 Cal. App. 2d 247, 251, 34 Cal. Rptr. 912.)

We are not persuaded. A review of the complaint shows that Nam requested a judgment including, inter alia, the following provisions: (1) a declaration that the transfer from Hyung Do Min to Jung Im Lee Min is void; (2) an order that the property be attached; (3) a restraining order enjoining Jung Im Lee Min from transferring the property; (4) a declaration that the judgment is a lien on the property transferred; [*16] and (5) an award of general damages in the sum of $ 180,000, plus punitive damages and costs of suit. In the relief awarded, the judgment: (1) declared the transfer from Hyung Do Min to Jung Im Lee Min void as a fraudulent transfer; (2) ordered that Nam recover $ 109,994,00 from Hyung Do Min and Jung Im Lee Min; (3) declared itself to be a lien on the La Habra property nunc pro tunc, as of January 28, 2002; and (4) declared that Nam could immediately execute against the La Habra property to satisfy the judgment. This relief is within the scope of the relief sought in the complaint. Therefore, the Lopezes have no basis for complaint, with one possible exception.

The Lopezes assert that the judgment purportedly created a lien nunc pro tunc to January 28, 2002 and that this was not in the prayer contained in the complaint. While we might not necessarily agree that this relief exceeded that sought in the complaint, we observe that the Lopezes have pointed out what is in essence a possible difficulty with the interpretation of the judgment. The judgment, despite its wording, cannot be used to create a lien senior to the rights of persons who may have acquired interests in the property [*17] before the lis pendens was indexed on March 11, 2002. As stated in Stagen v. Stewart-West Coast Title Co., supra, 149 Cal. App. 3d at page 123, "A judgment favorable to the plaintiff relates to, and receives its priority from, the date the lis pendens is recorded, and is senior and prior to any interests in the property acquired after that date [citations]." As explained previously, the date of recordation is construed to mean the date of indexing. (Lewis v. Superior Court, supra, 30 Cal.App.4th at p. 1866.) Where the Lopezes are concerned, this still means that the judgment lien takes priority over their interest in the property, which they acquired after the date of recordation and indexing of the lis pendens.

The Lopezes dispute this result and offer other reasons why the judgment lien should not take priority. From their point of view, the stipulated judgment not only exceeded the scope of the complaint, it was also collusive. The Lopezes, perhaps postulating as to the possible content of a document under seal, allude to a "secret agreement" pursuant to which they surmise that Nam agreed to waive Hyung Do Min's personal liability for the judgment. [*18] However, the question at this point is whether the Lopezes had notice of the relief awarded as it affects their own title. Whether the judgment creditor or judgment debtor made a good or a bad deal in stipulating to the judgment is not pertinent. At the same time, as explained below, the trial court on remand must consider the doctrine of equitable subrogation; this consideration may include the issue of collusion.

The Lopezes contend that the stipulated judgment was collusive because Hyung Do Min agreed therein to set aside his own transfer of title, resulting in the restoration of title in himself, arguably free of liens which had been paid off by the Lopezes, and creating a windfall in the judgment debtor. To the extent this contention implies an argument that, under the circumstances, a judgment should not have been entered without a full trial, we observe the Lopezes cite no authority for the proposition that a judgment in a fraudulent conveyance action is unenforceable as against a purchaser with constructive knowledge of the pending litigation, if the judgment is entered without a trial. Such a rule would require defenseless defendants to undergo protracted litigation needlessly. [*19] Moreover, the judgment in this case, although entered pursuant to a stipulation, was not entered without court approval.

Where the potential windfall is concerned, the doctrine of equitable subrogation may also come into play, as we will discuss later in this opinion. If applied, the amount of equity in the property available to the judgment creditor may remain largely the same, so that no greater portion of the judgment would be satisfied on a present sale than would have been satisfied had the judgment creditor effectuated a sale of the property before the Lopezes purchased it. Thus, the amount of money potentially available to satisfy the judgment, and the amount remaining owing on the judgment, may remain about the same.

The bottom line is that the Lopezes had constructive notice of the fact that the fraudulent transfer action was pending and a judgment entered in that action could make the title of their transferor void. That is the decisive point in this case.

(4) Jurisdiction over the Lopezes

The trial court, in addition to being concerned as to the validity of the lis pendens and whether the Lopezes were bona fide purchasers for value, was concerned that it might not [*20] even have jurisdiction over the Lopezes. Nam argues that this concern was unfounded. First, he contends the court should not have been preoccupied with whether it had jurisdiction over the Lopezes, but should have simply determined whether they had constructive notice of the lis pendens. Second, he argues the court did have jurisdiction over the Lopezes in any event, because they each made a general appearance. We agree on both counts. As stated previously, the Lopezes had constructive notice of the proceedings and took subject to the judgment, which set aside the fraudulent transfer to their grantor. When it comes to Nam's application for an order to sell the property to satisfy the judgment, the Lopezes participated in the proceedings, filing various opposition papers and attending hearings through their counsel.

To the extent the court was concerned that it had no jurisdiction over the Lopezes, presumably on account of the fact that they were not named as parties to the fraudulent transfer lawsuit, it need not have been. Code of Civil Procedure section 410.50, subdivision (a) provides that "the court in which an action is pending has jurisdiction over a party from the time summons [*21] is served on him as provided by Chapter 4 (commencing with Section 413.10). A general appearance by a party is equivalent to personal service of summons on such party." "'An appearance is general if the party contests the merits of the case or raises other than jurisdictional objections. [Citations.]' [Citation.]" (Fireman's Fund Ins. Co. v. Sparks Construction, Inc. (2004) 114 Cal.App.4th 1135, 1145.) Moreover, "[a] general appearance can make up for a complete failure to serve a summons. [Citation.]" (Ibid.) Here, Nam served the Lopezes with notice of his application to sell the property. When they opposed the application, they each made a general appearance, so there is no question concerning the court's jurisdiction over them.

(5) Application of Code of Civil Procedure section 704.780

Nam complains that the court erred in failing to comply with certain provisions of the Code of Civil Procedure pertaining to the sale of property. Code of Civil Procedure section 704.740 et seq. sets forth the procedures for the sale of a dwelling to enforce a money judgment. After the judgment creditor files an application for an order for the sale of a dwelling [*22] conforming to the requirements of Code of Civil Procedure sections 704.750 and 704.760, the court, pursuant to Code of Civil Procedure section 704.770, sets the matter for hearing. Code of Civil Procedure section 704.780 addresses the conduct of the hearing.

According to Nam, it is Code of Civil Procedure section 704.780 with which the court failed to comply. Section 704.780, subdivision (b) provides: "The court shall determine whether the dwelling is exempt. If the court determines that the dwelling is exempt, the court shall determine the amount of the homestead exemption and the fair market value of the dwelling. The court shall make an order for sale of the dwelling subject to the homestead exemption, unless the court determines that the sale of the dwelling would not be likely to produce a bid sufficient to satisfy any part of the amount due on the judgment pursuant to Section 704.800. . . . If the court determines that the dwelling is not exempt, the court shall make an order for sale of the property . . . ."

Nam argues that the court failed with respect to each obligation enumerated in Code of Civil Procedure section 704.780, subdivision (b). That is to say, Nam correctly [*23] asserts that the court failed to (1) determine whether the property was exempt, (2) determine the amount of the exemption, (3) determine the fair market value of the property, (4) determine whether, given any exemption amount, the equity in the property, and the fair market value of the property, a sale would be likely to produce a bid sufficient to satisfy a portion of the judgment; and (5) assuming the answer to the last question was "yes," order the sale of the property.

The reason for this failure is that the court determined Code of Civil Procedure section 704.780 to be inapplicable. As it stated on the record at oral argument, "The context in which a judgment creditor brings this type of matter, OSC re sale of dwelling, simply doesn't seem to work under these facts. Neither does either side present any authorities on point. To this court's way of thinking, the whole context is that a judgment debtor's dwelling is sold in order to enforce the judgment. You are familiar with the code, CCP [section] 704.740. Here, however, the judgment debtor no longer owns the house so it cannot feasibly satisfy any judgment." n2

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n2 Code of Civil Procedure section 704.740, subdivision (a) provides in pertinent part that "the interest of a natural person in a dwelling may not be sold under this division to enforce a money judgment except pursuant to a court order for sale obtained under this article and the dwelling exemption shall be determined under this article."

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This conclusion ignores the court's own judgment. The judgment set aside the transfer from Hyung Do Min to Jung Im Lee Nim. The effect was to make Hyung Do Min the titleholder, at least vis-a-vis subsequent transferees with notice of the fraudulent transfer action, such as the Lopezes. That being the case, the court should have applied the provisions of Code of Civil Procedure section 704.780.

The Lopezes argue that, even if the court had ordered the property sold, Nam would not have received any proceeds from the sale. This, they argue, is because the property was so heavily encumbered that there was no equity available to satisfy the judgment. The Lopezes state that their purchase price was $ 321,800 and the liens totaled $ 323,139.35, as of close of escrow on March 14, 2002. Assuming that this information is correct, it does not answer the pertinent question as to the equity in the property at the time Nam sought an order for the sale of the property, in 2003.

Nam insists that the encumbrances affecting title to the property were such that, had the court entered an order for sale in April 2003, there would have been sufficient equity in the property to satisfy at least a portion [*25] of the judgment. He contends that there must have been equity in the property as of the date of the fraudulent transfer, because Jung Im Lee Min took out a $ 23,000 deed of trust on that date. So, he reasons, there must have been at least $ 23,000 in equity available to satisfy the debt. However, assuming the lender made a careful review of the equity in the property before making its loan, this only shows that there was at least $ 23,000 in equity in the property before January 28, 2002. However, as stated above, despite the language in the stipulated judgment to the effect that it created a judgment lien on the property effective January 28, 2002, the judgment lien could not take priority over the deed of trust recorded on January 28, 2002. The lis pendens not having been recorded until March 5, 2002 and not having been indexed until March 11, 2002, the lien of the $ 23,000 deed of trust recorded on January 28, 2002 had priority over the judgment lien arising out of the stipulated judgment. (See Stagen v. Stewart-West Coast Title Co., supra, 149 Cal. App. 3d at p. 123; Lewis v. Superior Court, supra, 30 Cal.App.4th at p. 1866.)

This is not Nam's [*26] only argument, however. He emphasizes that the court overlooked the fact he had provided evidence as to the current fair market value of the property as of the time his application for an order of sale of the property was pending. Indeed, the court stated both in its tentative ruling and at oral argument that there was no evidence of fair market value. However, we observe that in support of his application for an order for the sale of the property, Nam filed a declaration dated February 7, 2003, in which he stated his belief that the property was worth $ 357,000 and that there were only two senior liens, in the amounts of $ 40,500 and $ 27,303.31, respectively. In addition, his attorney filed a declaration dated March 18, 2003, to which was attached an appraisal showing a fair market value of $ 357,000 as of January 31, 2003.

The problem for this court is that the trial court made no findings as to the fair market value of the property or the equity in it, as of the time the court was ruling on Nam's application. n3 This court is not a trier of fact. (James B. v. Superior Court (1995) 35 Cal.App.4th 1014, 1021.) It is up to the trial court to determine the equity [*27] in the property, given current fair market value, and whether a sale of the property would likely yield sufficient proceeds to satisfy a portion of the judgment.

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n3 In its tentative ruling on Nam's application, the court said that that there was no equity in the property, but it was unclear as to the date in time the court was referencing. Taking the statement in context, it seems most likely the court was referring to either the time of the fraudulent conveyance or the date of the Lopezes' purchase. Furthermore, the court said that there was no evidence as to fair market value. This is an indication that the comment about equity pertained to a prior date in time, not the date of the tentative ruling, for the court could not have known there was no equity in the property unless it knew the fair market value of the property at the time the equity was being determined.

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Unfortunately, however, whether there was sufficient equity in the property to satisfy a portion of the judgment had the property been sold in April [*28] 2003, when the court denied Nam's application for sale, is an issue that is now moot. It would achieve nothing at this point for this court to order the trial court to determine the equity in, and fair market value of, the property as of April 2003. Neither this court nor the trial court can order a sale retroactive to April 2003 and superimpose a fair market value that is now a year and a half out of date. However, Nam may renew his application for an order for the sale of the property, providing current information concerning the points required to be addressed in Code of Civil Procedure section 740.780, subdivision (b), including current fair market value. On remand, we instruct the trial court to entertain any renewed application Nam may make, assuming he complies with all applicable procedural requirements. The court shall then address the provisions of section 740.780, subdivision (b) in light of current information.

(6) Equitable subrogation

In addressing any renewed application for sale, however, the court must address not only the provisions of Code of Civil Procedure section 740.780, subdivision (b), it must also take into consideration the doctrine of equitable subrogation. [*29] As the Lopezes note, "One who claims to be equitably subrogated to the rights of a secured creditor must satisfy certain prerequisites. These are: '(1) Payment must have been made by the subrogee to protect his own interest. (2) The subrogee must not have acted as a volunteer. (3) The debt paid must be one for which the subrogee was not primarily liable. (4) The entire debt must have been paid. (5) Subrogation must not work any injustice to the rights of others.' [Citations.] 'As now applied [the doctrine of equitable subrogation] is broad enough to include every instance in which one person, not acting as a mere volunteer or intruder, pays a debt for which another is primarily liable, and which in equity and good conscience should have been discharged by the latter.' [Citations.]" (Caito v. United California Bank (1978) 20 Cal.3d 694, 704, 144 Cal. Rptr. 751; accord, American Contractors Indemnity Co. v. Saladino (2004) 115 Cal.App.4th 1262, 1268; see also Darrough v. Herbert Kraft Co. Bank (1899) 125 Cal. 272; Lawyers Title Ins. Corp. v. Feldsher (1996) 42 Cal.App.4th 41, 48.)

The Lopezes argue that to the [*30] extent they are held to take subject to the judgment, they should be subrogated to the rights of the lienholders who were paid off through escrow. The doctrine of equitable subrogation is clearly appropriate for consideration in this matter. However, the trial court did not pass upon it. It made no findings as to the particular liens and the particular amounts as to which the doctrine should be applied. It made no determination as to whether the Lopezes, or their own mortgage lender, should be equitably subrogated to the interests of the paid off lienholders. It made no determination as to whether the application of the doctrine would work an injustice to others. These are matters the trial court must consider on remand, should Nam renew his application for a sale of the property.

III

DISPOSITION

Nam's requests for judicial notice are granted. The order is reversed. The matter is remanded to the trial court to entertain a renewed application for the sale of the property, should Nam choose to proceed. Upon a renewed application, the trial court shall also consider the doctrine of equitable subrogation. Nam shall recover his costs on appeal.

MOORE, J.

WE CONCUR:

RYLAARSDAM, ACTING [*31] P. J.

FYBEL, J.


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