Real Property Case Summary Updates

By Monty McIntyre

California Case Summaries™ (https://cacasesummaries.com)

Monty A. McIntyre, Esq. is the publisher of California Case Summaries™ which provides short summaries, organized by legal topic, of every new published civil and family law case helping California lawyers easily keep up with the new case law in their practice areas. Monthly, quarterly and annual single-user and discounted multi-user subscriptions are available. Monty hasbeen a California civil trial lawyer since 1980, a member of ABOTA since 1995, and currently works as a full-time mediator, arbitrator and referee with ADR Services, Inc. (ADR) in ADR’s offices in San Diego, Irvine, and Los Angeles.  

California Supreme Court

Family Law

In re Brace (2020) _ Cal.5th _ , 2020 WL 4211750: Answering a question posed by the Ninth Circuit Court of Appeals, regarding whether real property acquired during marriage should be considered community or separate property when it is held in joint tenancy^[1], the Supreme Court of California ruled that Evidence Code section 662 does not apply to property acquired during marriage when it conflicts with Family Code section 760. For joint tenancy property acquired during marriage before 1975, each spouse’s interest is presumptively separate in character (Family Code, section 803; Siberell v. Siberell (1932) 214 Cal. 767). For joint tenancy property acquired with community funds on or after January 1, 1975, the property is presumptively community in character (Family Code, section 760). If the property was acquired before 1985, the parties can show a transmutation from community property to separate property by oral or written agreement or a common understanding (Family Code, section 852(e); Estate of Blair (1988) 199 Cal.App.3d 161). While a joint tenancy deed is insufficient to effect a transmutation, a court may consider the form of title in determining whether the parties had a common agreement or understanding under the pre-1985 rules. For joint tenancy property acquired with community funds on or after January 1, 1985, a valid transmutation from community property to separate property requires a written declaration that expressly states that the character or ownership of the property is being changed (Family Code, section 852(a); Estate of MacDonald (1990) 51 Cal. 3d 262). A joint tenancy deed, by itself, does not suffice. (July 23, 2020.)

^[1] The issue arose in a Chapter 7 bankruptcy proceeding, and in such a proceeding if the real property is community property the bankruptcy trustee has control of both the husband’s and wife’s interests in the real property and can use them to pay the debts of the bankruptcy estate. 

Real Property

Weiss v. P. ex rel. Dept. of Transportation (2020) _ Cal.5th _ , 2020 WL 4012230: The California Supreme Court affirmed the Court of Appeal’s decision reversing the trial court’s judgment in an inverse condemnation action based upon defendants “Motion for Legal Determination of Liability” that was modeled upon Code of Civil Procedure section 1260.040. The California Supreme Court declined defendants’ request for it to “judicially import” section 1260.040 into inverse condemnation procedure and ruled the trial court had erred in doing so. The procedure the trial court employed in the case was improper because it supplanted a motion for summary adjudication on plaintiffs’ inverse condemnation claim or, to the extent the trial court weighed the evidence, a bench trial on liability. (July 16, 2020.)

California Courts of Appeal

Real Property

Reeder v. Specialized Loan Servicing LLC (2020) _ Cal.App. 5th _ , 2020 WL 4345001: The Court of Appeal affirmed the trial court’s order sustaining a demurrer, without leave to amend, to plaintiff’s complaint alleging breach of contract, wrongful foreclosure and three fraud claims. Plaintiff lost an investment property to foreclosure after he failed to make the balloon payment due on a 2005 home equity line of credit that matured on April 1, 2015. Plaintiff alleged that, before the parties executed the credit agreement and deed of trust securing it in 2005, the lender made a verbal commitment that, at the end of the 10-year term, plaintiff could refinance or re-amortize the loan with a new 20-year repayment period. The trial court properly concluded the alleged oral agreement was barred by the statute of frauds and was too indefinite to be enforced, and this also meant there could be no wrongful foreclosure cause of action. The trial court also properly found no actionable fraud was alleged. (C.A. 2nd, July 29, 2020.)  

Rutgard v. City of L.A. (2020) _ Cal.App. 5th _ , 2020 WL 4361069: The Court of Appeal affirmed the trial court’s order requiring defendant to offer to sell previously condemned property back to its original owner under Code of Civil Procedure section 1245.245. That section provides that, when a property acquired by a public entity through eminent domain is not used for its intended public use within 10 years of adoption of the resolution of necessity, the entity must allow the property’s original owner an opportunity to buy it back unless the entity’s governing body adopts a new resolution reauthorizing the existing stated public use. The Court of Appeal held that a public entity desiring to retain condemned property under section 1245.245 has to adopt its initial and reauthorization resolutions within 10 years of each other; the 10-year deadline in section 1245.245 is the date of “final adoption;” local law fixes when a resolution is “finally adopted;” and a resolution is “finally adopted” once the city council has enacted the resolution and it has either been (1) approved by the mayor, or (2) vetoed by the mayor, but overridden by the city council. Because defendant finally adopted its initial and reauthorization resolutions 19 days past the 10-year deadline, section 1245.245 required the city to offer to sell the property back to its original owner. (C.A. 2nd, July 30, 2020.)          

Vasquez v. LBS Financial Credit Union (2020) _ Cal.App. 5th _ , 2020 WL 3263702: The Court of Appeal affirmed the trial court’s judgment, following a bench trial, finding that plaintiffs were bona fide purchasers of real property from Guillermo Guerrero and his wife, and were not subject to two judgments and recorded abstracts of judgment that defendant had obtained against Wilbert G. Guerrero, a name that did not appear in the chain of title for the property. While defendant conceded on appeal that plaintiffs lacked actual knowledge of the liens, they argued that plaintiffs had constructive notice of the liens  because they were on inquiry notice Guerrero used the name Wilbert G. Guerrero. The Court of Appeal ruled that substantial evidence supported the trial court’s finding to the contrary. (C.A. 2nd, filed June 17, 2020, published July 14, 2020.) 

WFG National Title Ins. v. Wells Fargo Bank etc. (2020) _ Cal.App. 5th _ , 2020 WL 3791521: The Court of Appeal affirmed the trial court’s order granting defendants’ motion for summary judgment in plaintiff’s action alleging that defendants, who held a valid deed of trust on real property that was recorded well before a fraudulent deed of trust was recorded, were required to immediately discover the forged deed and promptly record a rescission of it in order to protect unknown third parties such as plaintiff from the possibility of being defrauded. The trial court properly ruled that defendants had no legal obligation to maintain public title records, and that equity did not justify displacing defendant Wells Fargo Bank N.A. as the senior lienholder. (C.A. 2nd, filed June 12, 2020, published July 7, 2020.)