Judge Christopher K. Lui, Case Number: 23STCV08886, Date: 2024-10-24 Tentative Ruling

Plaintiff seeks to compel Defendant to remove a 12 to 15 sq. ft. tall and 107 sq. feet wide wall and structure which allegedly encroaches from Defendant’s property onto Plaintiff’s property and interferes with Plaintiff’s use and enjoyment thereof.

Defendant filed a Cross-Complaint alleging that the retaining wall was built to replace a failing retaining wall and the encroachment is de minimis. During construction of the wall, Defendant/Cross-Complainant negotiated certain points to appease Plaintiff/Cross-Defendant, which permitted the retaining wall to be completed until demanding that the wall be removed and rebuilt an inch in its entirety further back.

Cross-Defendants Michael J. Ulman, as Trustee for the Fred Gorda Trust dated April 13, 2018, Paul D. Mitchell, and Cross-Defendant Natalie Martinez demur to the Cross-Complaint.

Cross-Defendants Michael J. Ulman, as Trustee for the Fred Gorda Trust dated April 13, 2018, Paul D. Mitchell, and Cross-Defendant Natalie Martinez’s demurrer to the Cross-Complaint is SUSTAINED with leave to amend as to the entire Cross-Complaint as against Cross-Defendants Martinez and Mitchell, and OVERRULED as to the first and third causes of action as against the Trustee Cross-Defendant.

(1) Exhibit “A”: The California Secretary of State’s “Business Entity Search” portal, last visited March 4, 2024 and which is located at https://bizfileonline.sos.ca.gov/search/business; (2) Exhibit “B”: e-Certificate of Registration from Bolagsverket, The Swedish Companies Registration Office, located at https://www.government.se/government-agencies/swedish-companies-registration-office/

Requests Nos 1 and 2 are GRANTED. The Court may take judicial notice of a business entity’s corporate status as reflected in the Secretary of State’s records. (Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1286; Pedus Bldg. Servs. v. Allen (2002) 96 Cal.App.4th 152, 156 n.2.) As for the foreign registration office records, the Court may take judicial notice of “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid, Code § 452(h).)

The Declaration of Giandominic Vitiello reflects that Cross-Defendants’ counsel satisfied the meet and confer requirement set forth in Civ. Proc. Code, § 430.41.

Cross-Defendants Michael J. Ulman, as Trustee for the Fred Gorda Trust dated April 13, 2018, Paul D. Mitchell, and Cross-Defendant Natalie Martinez demur to the Cross-Complaint as follows:

Cross-Defendants argue that Cross-Complainant has no legal capacity to sue, and seeks relief against Cross-Defendants Mitchell and Martinez without stating a claim against them because they are not owners of the property with adverse claims to title of the subject property, only witnesses.

As to Pool and Palm AB, nothing precludes it from filing this Cross-Complaint to quiet title as owner of real property, which is the only capacity in which Pool and Palm is sued and in which it sues.

(c) A foreign corporation subject to the provisions of Chapter 21 (commencing with Section 2100) which transacts intrastate business without complying with Section 2105 shall not maintain any action or proceeding upon any intrastate business so transacted in any court of this state, commenced prior to compliance with Section 2105, until it has complied with the provisions thereof and has paid to the Secretary of State a penalty of two hundred fifty dollars ($250) in addition to the fees due for filing the statement and designation required by Section 2105 and has filed with the clerk of the court in which the action is pending receipts showing the payment of the fees and penalty and all franchise taxes and any other taxes on business or property in this state that should have been paid for the period during which it transacted intrastate business.

Under the doctrine of comity, the plaintiff, a foreign corporation, had the right to acquire and hold real property in the State of California. (23 Am. Jur., 161, sec. 164.) Neither the Constitution nor the statutes of Washington or California prohibit the holding of real property under the circumstances of this case. The plaintiff acquired title to the mining claims in California April 28, 1931. May 11th of that same year it duly qualified to transact intrastate mining business in California, as provided by section 405 of the Civil Code. Sections 405 et seq. (div. 1, part 4, title 1, ch. XVI) do not prohibit foreign corporations from owning or holding real property in this state. Chapter XVI purports only to regulate the circumstances under which a foreign corporation may be permitted to transact intrastate business. . . .

We are of the opinion the plaintiff may not be deemed to have transacted intrastate business in California by either collecting from its lessee rental for the property or by commencing or maintaining this suit to quiet title to the land. (Citations omitted.) …

(O’Connell Gold Mines, Ltd. v. Baker (1944) 63 Cal. App. 2d 384, 386-87 [bold emphasis added].)

Further, Pool & Palm is informed and believes and thereon alleges that Martinez and Mitchell were occupants of the Cross-Defendant Property since at least 2018, and despite gifting the Cross-Defendant Property to Ullman in April 2020, Martinez (and Mitchell) continue(s) to remain an occupant/occupants of the Cross-Defendant Property.

In the Opposition, Cross-Complainant alleges that Martinez[1] and Mitchell are properly named as parties as trust beneficiaries. Cross-Complainant must allege the equitable interests held by each and why each cause of action is properly asserted against them on this basis.

The demurrer to the entire Cross-Complaint as against Cross-Defendants Martinez and Mitchell is SUSTAINED with leave to amend.

Cross-Defendants argue that this cause of action fails because it actually seeks adverse possession without establishing the elements.

In the Opposition, Cross-Complainant cites Romero v. Shih (2022) 78 Cal. App. 5th 326, but the Supreme Court has granted review. Instead, the Court cites the following case, which is still binding authority:

The law on equitable easements is well explained in Shoen v. Zacarias (2015) 237 Cal.App.4th 16 [187 Cal. Rptr. 3d 560] (Shoen). There are three requirements, described in terms of the landowner and the trespasser. Judicial creation of an easement over a landowner’s property is permissible “provided that the trespasser shows that (1) her trespass was ‘“innocent”‘ rather than ‘“willful or negligent,”‘ (2) the public or the property owner will not be ‘“‘irreparabl[y] injur[ed]’”‘ by the easement, and (3) the hardship to the trespasser from having to cease the trespass is ‘“‘greatly disproportionate to the hardship caused [the owner] by the continuance of the encroachment.’”‘ [Citations.] Unless all three prerequisites are established, a court lacks the discretion to grant an equitable easement.” (Id. at p. 19; see id. at p. 21 [courts “resolve all doubts against their issuance”].)

Further, “the equitable nature of this doctrine does not give a court license to grant easements on the basis of ‘whatever [a court] deems important,’ even when [the] prerequisites are absent.” (Shoen, supra, 237 Cal.App.4th at p. 19.) Shoen also explains that “[a]lthough the equitable easement doctrine is sometimes called the doctrine of ‘balancing of conveniences’ or the doctrine of ‘relative hardships’ [citation], these labels are somewhat misleading. These labels suggest that an equitable easement may issue if the conveniences or hardships merely favor the trespasser, when the doctrine actually requires that they tip disproportionately in favor of the trespasser. These labels also suggest that the conveniences or hardships between the trespasser and property owner start out in equipoise, when the doctrine actually requires that they begin tipped in favor of the property owner due to the owner’s substantial interest in exclusive use of her property arising solely from her ownership of her land.” (Ibid.)

Shoen discusses at length the reasons for requiring the seeker of an equitable easement “to prove that she will suffer a greatly disproportionate hardship from denial of the easement than the presumptively heavy hardship the owner will suffer from its grant.” (Shoen, supra, 237 Cal.App.4th at p. 20; see id. at p. 21 [“additional weight is given to the owner’s loss of the exclusive use of the property arising from her ownership, independent of any hardship caused by the owner’s loss of specific uses in a given case”; “[t]o allow a court to reassign property rights on a lesser showing is to dilute the sanctity of property rights enshrined in our Constitutions”].)

And finally, the authorities state that the first factor—showing the trespass is innocent rather than willful or negligent—”is the most important.” (Hansen, supra, 22 Cal.App.5th at p. 1028; id. at p. 1029 [“‘If the [encroaching] party is willful, deliberate, or even negligent in his or her trespass, the court will enjoin the encroachment.’”].)

The Cross-Complaint sufficiently pleads the elements for an equitable easement at ¶¶ 26 – 31.

The demurrer to the first cause of action is OVERRULED as against the Trustee Cross-Defendant.

Cross-Defendants argue that this cause of action is duplicative of the other claims.

This argument is not persuasive, as declaratory relief is a cumulative remedy and may be based upon the same facts as other theories justifying additional relief.

The remedies provided by this chapter [pertaining to declaratory relief] are cumulative, and shall not be construed as restricting any remedy, provisional or otherwise, provided by law for the benefit of any party to such action, and no judgment under this chapter shall preclude any party from obtaining additional relief based upon the same facts.

The demurrer to the third cause of action is OVERRULED as against the Trustee Cross-Defendant.

[1] Although Martinez is alleged to be the sole beneficiary of the Fred Gorda Trust (Cross-Complaint, ¶ 3), the Cross-Complaint must clearly allege that this is the basis upon which Martinez is named in each cause of action.