Opinion
NOT TO BE PUBLISHED
Superior Court County of Ventura Super. Ct. No. CIV 230297 Henry J. Walsh, Judge
Malcolm Tator; Law Offices of Malcolm Tator, for Appellant.
Esther R. Sorkin, for Respondents.
YEGAN, J.
Jan "Gigi" Bennett-Cooper appeals from the summary judgment entered in favor of Susan Cooper (Cooper) and Arlene Goldman (Goldman), respondents. Appellant contends that (1) respondents made an unlawful motion for reconsideration of the trial court's initial ruling; (2) the trial court's initial ruling was binding when it was entered in the permanent minutes and could not be changed; and (3) the trial court erred in granting summary judgment. We reverse in part and affirm in part.
Respondents have requested that we take judicial notice of documents filed in this action after the granting of their motion for summary judgment. Because these documents are unnecessary to our decision, the request for judicial notice is denied.
Procedural Background
A. The Complaint
On November 3, 2004, appellant filed a complaint against respondents and their father, Henry Cooper (Henry). The complaint consisted of four causes of action. The first cause of action was against Henry alone. It sought damages for his breach of an express contract.
The second cause of action was also against Henry alone. Appellant sought damages for Henry's breach of an implied contract to pool the assets they had acquired during their relationship, including a residence at 3341 West Hemlock Street, Oxnard (hereafter the residence). The second cause of action alleged that, "between September 19, 1988 to June 18, 1991," Henry had given the residence to respondents.
The third cause of action was against Henry and respondents. It sought to impose a constructive trust on the residence.
The fourth cause of action was against Henry and respondents. It sought to quiet appellant's title to a one-half undivided interest in the residence.
Appellant has filed a separate appeal as to the causes of action involving Henry. (Bennett-Cooper v. Cooper, 2d Civil No. B192354.) We consider and decide that appeal concurrently with the appeal in the instant case.
B. Motion for Summary Judgment/Adjudication and Trial Court's Ruling
Henry and respondents jointly filed a motion for summary judgment or, in the alternative, summary adjudication. The trial court issued its ruling in a minute order dated October 4, 2005. The court granted summary adjudication on the first cause of action for breach of an express contract but denied it on the second cause of action for breach of an implied contract. As to the third cause of action, the court stated: "The third cause of action is for constructive trust. This is a remedy as opposed to a cause of action. Defendants' argument to grant their motion is a derivative one based on the lack of vitality of the first and second causes of action. The second cause of action has survived summary adjudication. At least as to that cause of action, the third cause of action as a remedy survives as well." As to the fourth cause of action to quiet title, the court granted respondents' motion for summary adjudication. It denied Henry's motion for summary adjudication except to the extent that the cause of action was based on a claim of adverse possession. The court directed "[c]ounsel for defendants . . . to prepare the necessary order."
On October 11, 2005, Henry and respondents' counsel wrote a letter to the court enclosing a proposed order of summary adjudication that incorporated the language of the minute order. In the letter counsel pointed out that, since the third cause of action to impose a constructive trust was a remedy for the second cause of action and respondents were not parties to the second cause of action, "it appears that [summary] judgment should be granted in favor of [respondents]." Counsel also enclosed an alternative order granting respondents' motion for summary adjudication on the third and fourth causes of action as well as their motion for summary judgment. The alternative order provided: "The third 'cause of action' for constructive trust survives summary adjudication as a remedy for the . . . second cause of action. However, because [respondents] are not parties to the second cause of action, the third 'cause of action' is summarily adjudicated in their favor." As to the fourth cause of action, the alternative order provides: "Summary adjudication is granted in favor of [respondents] . . . because [appellant's] purported equitable title is an insufficient basis for a quiet title action against Defendants' legal title." The alternative order continued: "All causes of action brought against [respondents] having been summarily adjudicated in their favor, [respondents] are entitled to judgment as a matter of law." On October 24, 2005, the trial court signed and filed the alternative order.
Respondents Did Not Make an Unlawful Motion for Reconsideration
Appellant contends that counsel's letter of October 11, 2005, "was an illegal motion for reconsideration" of the trial court's minute order, which "denied respondents['] . . . [motion for] summary judgment." The illegality allegedly arose from the letter's failure to comply with Code of Civil Procedure section 1008, which sets forth procedural requirements for motions for reconsideration. Appellant contends that the letter "was also unethical" because it was an ex parte communication.
All statutory references are to the Code of Civil Procedure.
Appellant's contentions are without merit. The letter was not an ex parte communication. The letter indicates that it was both hand delivered and mailed to appellant's counsel.
Nor was the letter "an illegal motion for reconsideration" because it failed to comply with section 1008. Section 1008, subdivision (a), provides: "When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown." (Italics added.)
By its language, section 1008 applies only after "entry of the order" sought to be modified. "[T]he rule is well settled that a judgment or order once regularly entered can be modified or vacated by the court which entered it only in the manner prescribed by statute . . . ." (Eisenberg v. Superior Court (1924) 193 Cal. 575, 581.)
"[W]hen a court enters a minute order which does not call for the preparation and filing of a formal order, the minute order is final and all legal consequences ensue therefrom. [Citations.]" (McHale v. State of California (1981) 125 Cal.App.3d 396, 399.) But "[w]hen preparation of a formal order is directed within the minute order, entry of the order does not occur until the signed formal order is filed. [Citations.]" (Barak v. Quisenberry Law Firm (2006) 135 Cal.App.4th 654, 658-659.) These principles are reflected in rule 8.104(d)(2) of the California Rules of Court: "The entry date of an appealable order that is entered in the minutes is the date it is entered in the permanent minutes. But if the minute order directs that a written order be prepared, the entry date is the date the signed order is filed . . . ."
Here the trial court's minute order stated, "Counsel for defendants is directed to prepare the necessary order." Thus, the court's order was not entered until the signed formal order prepared by counsel was filed on October 24, 2005. Section 1008, therefore, did not apply to counsel's letter of October 11, 2005.
The Trial Court's Initial Ruling Was Not Binding
We reject appellant's contention that the trial court's initial ruling of October 4, 2005, "was binding when entered" in the permanent minutes and could not be changed. As explained above, no effective order was in place until October 25, 2005, when the signed written order was filed.
Summary Judgment
A. Standard of Review
"The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citation.]" (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) A motion for summary judgment "shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (§ 437c, subd. (c).)
On appeal we conduct a de novo review, applying the same standard as the trial court. (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064.) We "must 'consider all of the evidence' and 'all' of the 'inferences' reasonably drawn therefrom [citation], and must view such evidence [citations] and such inferences [citations] in the light most favorable to the opposing party." (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 843.)
B. Constructive Trust
"A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. [Citations.] The essence of the theory of constructive trust is to prevent unjust enrichment and to prevent a person from taking advantage of his or her own wrongdoing. [Citations.] [¶] . . . [A] constructive trust may only be imposed where the following three conditions are satisfied: (1) the existence of a res (property or some interest in property); (2) the right of a complaining party to that res; and (3) some wrongful acquisition or detention of the res by another party who is not entitled to it. [Citations.]" (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990 -991.) "[T]he party attempting to establish the constructive trust must establish the claim by clear and convincing evidence. [Citation.]" (Taylor v. Fields (1986) 178 Cal.App.3d 653, 665.)
It is undisputed that, on June 18, 1991, Henry deeded his interest in the residence to respondents. Based on this allegedly wrongful conveyance, in the third cause of action appellant seeks a determination that respondents hold title to the residence as constructive trustees for her benefit. She also seeks to compel respondents to transfer an undivided one-half interest in the property to her.
At her deposition appellant testified that, before she married Henry in November 1991, she was informed of his conveyance of the residence to respondents. Appellant was "furious." Appellant further testified that she "consider[ed] [the conveyance] to be [Henry's] not keeping up his part of the bargain with [her]." After the conveyance, appellant "encouraged Henry . . . 'many times' to get the property 'deeded back' from [respondents]." But she waited approximately 13 years, until November 3, 2004, to file an action to impose a constructive trust on the residence.
In view of this extended delay, we asked the parties to file supplemental letter briefs on whether the constructive trust cause of action against respondents is barred by the statute of limitations. One of the grounds for the motion for summary judgment was that the statute of limitations had run. But the trial court did not grant the motion on this ground, and the parties did not discuss the statute of limitations issue in their original briefs.
"In the case of an involuntary [constructive] trust the statute of limitations begins to run . . . from the time when the wrongful or fraudulent acts are performed by the trustee, except that the statute is tolled as to the [equitable] owner of the property until he actually acquires knowledge of the wrongful acts, or, by the exercise of reasonable care, until he is charged with such notice. [Citation.]" (Truesdail v. Lewis (1941) 45 Cal.App.2d 718, 723; see also Bainbridge v. Stoner (1940) 16 Cal.2d 423, 429 [cause of action to impose constructive trust arose when defendant wrongfully acquired property, "and the statute commenced to run against the [plaintiffs] at least as soon as they knew, or should have known, what he had done"].)
Here the allegedly wrongful acts were performed when Henry deeded the residence to respondents. Appellant "had a right to proceed to enforce [her] claim to the trust property immediately that the title to the trust property vested in [respondents] . . . as . . . constructive trustee[s]." (Norton v. Bassett (1908) 154 Cal. 411, 419.) Appellant knew about the conveyance before she married Henry. Therefore, the statute of limitations on the constructive trust cause of action ordinarily would have begun to run no later than the date of appellant's marriage to Henry on November 11, 1991.
But this was not an ordinary case. After respondents acquired title to the residence, they permitted appellant to live there rent free until May 23, 2003, when they served her with a 60-day notice of termination of tenancy. The statute of limitations was tolled at least until May 23, 2003. In Berniker v. Berniker (1947) 30 Cal.2d 439, 448, our Supreme Court noted that, as a general rule, "[t]he statute of limitations never runs in favor of a trustee as against the beneficiary while the latter is in possession of the property. [Citations.]"
Respondents try to distinguish Berniker by pointing out that it concerned a voluntary resulting trust, while the instant case concerns an involuntary constructive trust. (Letter, 3-4) But in Stoll v. Selander (1947) 81 Cal.App.2d 286, 292-293, and Kaneda v. Kaneda (1965) 235 Cal.App.2d 404, 420-421, the appellate courts applied the Berniker rule to involuntary constructive trustees. The reason for applying the rule to constructive trustees is explained in Bogert's treatise on trust law: "If, after the wrongful acquisition or withholding of property which could be made the basis for a constructive trust, the acquirer or holder recognizes the equity of the wronged party and in substance asserts that he holds title in trust for such party, the authorities agree that the Statute of Limitations does not run against the beneficiary as long as the titleholder maintains this position. This is on the theory that the action of the trustee has induced the beneficiary to refrain from seeking enforcement in the courts, and not on the hypothesis that the titleholder has declared himself to be an express trustee. If later the constructive trustee changes his attitude and repudiates any obligation, the Statute will begin to run again. Permitting the beneficiary to have possession of the trust property is a recognition of an equitable obligation of the titleholder. In this class of cases fall those in which an agent takes title to property in his own name, but the principal remains in possession. Here, though the agent is guilty of disloyalty which might be made the basis of a constructive trust, yet allowing possession by the principal amounts to a recognition of the trust and prevents the statutory bar from being imposed." (Bogert, The Law of Trusts and Trustees (rev.2d ed.1995) § 953, pp. 669-671, fns. omitted, italics added.)
"Since 'A constructive trust is not a substantive device but merely a remedy to compel a person not justly entitled to property to transfer it to another who is entitled thereto' [citation], an action seeking to establish a constructive trust is subject to the limitation period of the underlying substantive right.' [Citations.]" (Davies v. Krasna (1975) 14 Cal.3d 502, 515.) In the instant case, the underlying substantive right arises from Henry's alleged breach of an implied contract to pool assets acquired by him and appellant during their relationship. The statute of limitations for such an unwritten contract is two years. (§ 339, subd. 1.) Because the statute of limitations was tolled at least until May 23, 2003, and the complaint was filed less than two years later on November 3, 2004, appellant's constructive trust cause of action is not barred by the statute of limitations.
The trial court granted summary adjudication on the constructive trust cause of action because it allegedly was a remedy for appellant's second cause of action for breach of an implied agreement. Since respondents had not been named as parties to the second cause of action, the trial court reasoned that the constructive trust cause of action cannot stand as to them.
The trial court's reasoning was erroneous. Respondents could not have been named as parties to the second cause of action because they had not been parties to the implied agreement to pool the assets of appellant and Henry. Since the second cause of action survived summary adjudication, the constructive trust cause of action could also have survived as a remedy not for the second cause of action, but for respondents' wrongful acquisition of title to the residence in violation of the implied agreement.
Respondents argue that the trial court properly granted summary adjudication on the constructive trust cause of action because appellant failed to produce admissible evidence in support of her claim. Respondents have misapplied the burden of producing evidence.
As the moving parties, respondents bore an "initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact[.]" (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850.) "A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]" (Id., at p. 851.) If respondents had carried this burden, the burden of production would have shifted to appellant "to make a prima facie showing of the existence of a triable issue of material fact." (Id., at p. 850.) If respondents had failed to carry their burden of production, appellant would not have been required to make any showing in opposition, and the trial court could not have granted summary adjudication. (Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468.) "A responding plaintiff has no evidentiary burden unless the moving defendant has first met its initial burden. [Citation.] Only after the moving defendant meets its initial burden does the burden shift to the plaintiff to demonstrate the existence of a triable issue. [Citation.]" (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 840.)
Respondents contend that they carried their burden of production by showing that they had legal title to the residence, since it is presumed that the owner of legal title to property is also "the owner of the full beneficial title." (Evid. Code, § 662.) (Letter filed 8/25/06) We disagree. The trial court found that the "moving papers" had failed to show the nonexistence of an implied agreement to pool the assets of appellant and Henry. It therefore denied the motion for summary adjudication on the second cause of action for breach of the implied agreement. We presume that the court's ruling is correct. (Rebney v. Wells Fargo Bank (1990) 220 Cal.App.3d 1117, 1143.) Respondents have failed to refer us to any evidence in the moving papers that would constitute a prima facie showing that such an implied agreement did not exist, or that the implied agreement was not breached when Henry conveyed the residence to respondents. Appellant, therefore, was not required to make any showing in opposition on these issues. (Consumer Cause, Inc. v. SmileCare, supra, 91 Cal.App.4th at p. 468.)
In such circumstances the remedy of a constructive trust would be appropriate if respondents were not bona fide purchasers. (See Pena v. Toney (1979) 98 Cal.App.3d 534, 542.) Respondents have not referred us to any evidence in the moving papers that would show that they were bona fide purchasers. In their statement of undisputed facts, respondents merely allege that Henry deeded the property to them. (5AA 937) "[W]here the grantee of property is the child or other natural object of the affections of the grantor, a presumption arises of a gift or advancement. [Citations.]" (Lloyds Bank California v. Wells Fargo Bank (1986) 187 Cal.App.3d 1038, 1043.) Appellant, consequently, was also not required to make any showing in opposition on the bona fide purchaser issue.
Respondents therefore failed to meet their initial burden of production to make a prima facie showing of the nonexistence of a triable issue of material fact. As a result, the burden of production never shifted to appellant to make a prima facie showing of the existence of a triable issue of material fact. Thus, the trial court erred in granting summary adjudication on the constructive trust cause of action.
C. Quiet Title
The evidence establishes that appellant is not the legal owner of the residence. She claims to be an equitable owner. Appellant contends that, as to the fourth cause of action to quiet title, she "can quiet title against the legal owners by specifically pleading the facts establishing the superiority of her equitable right." Appellant misconstrues the law on this issue: she cannot bring a quiet title against the legal owners of the residence when she claims only an equitable right to ownership of the property. In G.R. Holcomb Estate Co. v. Burke (1935) 4 Cal.2d 289, 297, our Supreme Court declared: "Both the pleadings and the evidence disclose the fact that the legal title to these lands stands in the name of the defendants. At most the plaintiff claims to be the equitable owner of said lands. It has been repeatedly held in this state that an action to quiet title will not lie in favor of the holder of an equitable title as against the holder of a legal title. [Citation.] Under this doctrine, plaintiff's action to quiet title to said lands must fail." (See also Lewis v. Superior Court (1994) 30 Cal.App.4th 1850, 1866 [party "never had standing to bring a quiet title action, because whatever interest it might have is only equitable, and the holder of equitable title cannot maintain a quiet title action against the legal owner"]; Stafford v. Ballinger (1962) 199 Cal.App.2d 289, 294 -295 [complaint does not state cause of action to quiet title because it "disclose[s] that appellant does not have legal title to the property in question" and "[i]t has been held consistently that the owner of an equitable interest cannot maintain an action to quiet title against the owner of the legal title"].)
Pellerito v. Dragna (1940) 41 Cal.App.2d 85, is of no assistance to appellant. The party (Dragna) seeking to quiet title in Pellerito did not claim only an equitable right to ownership of the property. The property had been conveyed to Dragna and her father as joint tenants. Dragna claimed that, upon her father's death, she was entitled to become the sole owner of the property since she was the surviving joint tenant. Furthermore, the appellate court in Pellerito did not consider whether Dragna's quiet title action was appropriate. It relied upon a constructive trust theory to afford her relief.
Accordingly, the trial court did not err in granting respondents' motion for summary adjudication on the fourth cause of action to quiet title.
Respondents have filed a motion requesting that appellant be sanctioned for filing a frivolous appeal and for violating the California Rules of Court. The motion is denied.
The judgment is reversed. The trial court is directed to vacate its order granting the motion for summary adjudication on the third cause of action to impose a constructive trust. The court shall enter a new order denying summary adjudication on this cause of action. We affirm the trial court's order granting summary adjudication on the fourth cause of action to quiet title. Appellant shall recover her costs on appeal.
We concur: GILBERT, P.J., COFFEE, J.