Judge: Daniel S. Murphy, Case: 23STCV09478, Date: 2023-08-09 Tentative Ruling

Case Number: 23STCV09478    Hearing Date: August 9, 2023    Dept: 32

BACKGROUND

            On April 28, 2023, Plaintiffs Paul Arthur Sandweiss and Abbie Sandweiss filed this action against Defendants Amercian First Credit Union (AFCU) and Yolanda D. Gonzales (Gonzales). The operative First Amended Complaint, filed June 15, 2023, asserts (1) quiet title, (2) declaratory relief, and (3) injunctive relief.

            Plaintiffs own a parcel of real property in Woodland Hills, California. In 2021, Plaintiffs acquired the property from the previous owner, Gonzales. AFCU has a money judgment against Gonzales from 2009, which AFCU plans on enforcing against the property, leading Plaintiffs to file this action. Plaintiffs allege that they own the property free and clear because they had no knowledge of the judgment against Gonzales.

            On June 16, 2023, AFCU filed the instant demurrer to the FAC. Plaintiffs filed their opposition on July 27, 2023. AFCU replied on July 28, 2023.

LEGAL STANDARD

A demurrer for sufficiency tests whether a pleading states a cause of action or defense. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the pleading, as it stands, unconnected with extraneous matters, states a cause of action or defense. (Hahn, supra, 147 Cal.App.4th at 747.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court notes that AFCU has complied with the meet and confer requirement. (See Anya Decl.)

DISCUSSION

I. Quiet Title

            “A quiet title action is a statutory action that seeks to declare the rights of the parties in realty . . . The object of the action is to finally settle and determine, as between the parties, all conflicting claims to the property in controversy, and to decree to each such interest or estate therein as he may be entitled to.” (Robin v. Crowell (2020) 55 Cal.App.5th 727, 740, internal citations omitted.)

            AFCU argues that there is no real controversy to settle because the judgment was indisputably recorded, as shown by the exhibits in the FAC. (FAC, Ex. A, D.) AFCU argues that the recordation provides constructive notice and that a dispute cannot be created simply because Plaintiffs’ title company missed the two recorded liens.

            However, Plaintiffs allege that the judgment was not recorded in a manner that provided constructive notice because Gonzales’s name was spelled slightly differently. (FAC ¶ 12.) The mere recordation of a document, by itself, does not impart constructive notice. (Lewis v. Superior Court (1994) 30 Cal.App.4th 1850, 1866.) “The operative event is actually the indexing of the document.” (Ibid.) “[I]f a recorded document is going to affect title there must at least be a way for interested parties to find it.” (Id. at p. 1867.) “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.” (Hochstein v. Romero (1990) 219 Cal.App.3d 447, 452.) Where the written name is material, even a slight misspelling on a recorded document will fail to provide constructive notice, because “requiring a title searcher to comb the records for other spellings of the same name would place an undue burden on the transfer of property.” (Orr v. Byers (1988) 198 Cal.App.3d 666, 671.)

            Here, the abstract of judgment listed Gonzales’s name as “Yolanda D. Gonzales.” (FAC, Ex. A.) The renewal of judgment did the same. (Id., Ex. D.) By contrast, the grant deed transferring the property to Plaintiffs listed Gonzales’s name as “Yolanda Davalos.” (Id., Ex. C.) Providing further diversity in the name, a quitclaim deed from 2006 uses the name “Yolanda Davalos” and “Yolanda Davalos-Gonzales.” (Id., Ex. B.)

            Because the name on the recorded judgments varies slightly from the names on other recorded documents, it can be reasonably inferred that the recorded judgments did not provide constructive notice of the debt owed by Gonzales. (See Orr, supra, 198 Cal.App.3d at p. 671; Hochstein, supra, 219 Cal.App.3d p. 452.) Assuming Plaintiffs had actual or constructive notice of the name “Yolanda Davalos-Gonzales,” that does not necessarily equate to constructive notice of “Yolanda D. Gonzales.” (See Orr, supra, 198 Cal.App.3d at pp. 668-69 [no constructive notice where the name “Elliott” was misspelled as “Eliot” or “Elliot”].) This could be considered an alternative spelling for which Plaintiffs should not have the burden of predicting. Whether the recorded judgments provided constructive notice is a factual issue that cannot be resolved on a demurrer. Therefore, there is an actual controversy, and the quiet title claim is adequately pled.

II. Declaratory Relief

“Any person interested under a written instrument . . . or under a contract . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties . . . arising under the instrument or contract.” (Code Civ. Proc., § 1060.)

AFCU argues that the declaratory relief claim fails along with the quiet title claim and that there is no actual controversy. However, as discussed above, the quiet title claim survives, and there is an actual controversy over title.

III. Injunctive Relief

            AFCU argues that the claim for injunctive relief cannot stand without an underlying cause of action. As discussed above, Plaintiffs’ other causes of action survive. AFCU further argues that Plaintiffs did not suffer any irreparable injury because both the abstract of judgment and renewal of judgment were recorded before Plaintiffs took title to the property. (Dem. 8:9-11.) However, the order of these events does not determine whether Plaintiffs would suffer irreparable harm. Rather, it is the threat of losing their home due to the cloud on title that poses the risk of irreparable harm. (See Civ. Code, § 3387 [loss of real property is considered irreparable harm].) Therefore, the Plaintiffs have adequately pled injunctive relief.

CONCLUSION

            AFCU’s demurrer is OVERRULED.