Judge: Deirdre Hill, Case: 21TRCV00693, Date: 2023-01-27 Tentative Ruling

Case Number: 21TRCV00693    Hearing Date: January 27, 2023    Dept: M

Hearing Date:                         January 27, 2023

Moving Parties:                      Plaintiff Jean S. Young, trustee of the Living Trust of Jean S. Yang dated July 27, 2018

Responding Party:                  Defendant Deuk Lee

Motion for Summary Judgment

            The court considered the moving, opposition, reply, and supplemental papers.  On November 3, 2022, the court had continued the hearing to allow defendant to complete the depositions and to file a supplemental opposition in response to plaintiff’s evidence added in the reply.

RULING

            The court GRANTS plaintiff’s request to take judicial notice of the Los Angeles County Superior Court documents in cases 19STCV21302 and YD070083.  The motion for summary judgment is GRANTED.  Plaintiff is ordered to submit a proposed judgment.

BACKGROUND

On September 23, 2021, plaintiff Jean S. Yang, trustee of the Living Trust of Jean S. Yang, Dated July 27, 2018, filed a complaint against Deuk Lee and all persons unknown, claiming any legal or equitable right, title, estate, lien, or interest in the property for (1) quiet title, (2) cancellation of cloud on title, and (3) declaratory relief.

On December 3, 2021, Deuk Lee filed a cross-complaint against Mark Yang for indemnity, apportionment of fault, declaratory relief, and contribution.

On February 4, 2022, a default was entered against Mark Yang on the cross-complaint.

FACTS PRESENTED

            Jean Yang is the owner of the property located at 2409 Ives Lane, Redondo Beach, California (hereinafter “Property”). Decl. of Jean Yang.  On April 4, 2012, Mark Yang, the then spouse of plaintiff Jean Yang, as trustee, signed a “Promissory Note Secured by Deed of Trust” (hereinafter, “First Note”) dated March 15, 2012, wherein he promised to pay Deuk Lee $150,000 which was borrowed by Mark Yang on December 31, 2009. Exh. 1.  Shortly after the First Note was signed, a “Deed of Trust With Assignment of Rents” (hereinafter, “Deed of Trust”) was executed by plaintiff, Mark Yang, and defendant “for the purpose of securing (1) payment of the sum of $150,000 with interest thereon according to the terms of a promissory notes made by [Mark S. Yang and Jean Yang] payable to order of [Deuk Lee]. Exh. 2. 

            The marriage between Mark Yang and Jean Yang was dissolved on May 4, 2018.  Exh. 3.  A material term of the dissolution is that the Property was determined to be the sole asset of Jean Yang. Id.

In 2019, defendant filed an unlimited civil action (hereinafter, “Collection Action”) in case 19TRCV21302 in which he sought, and obtained, a money judgment against Mark Yang for a debt which accrued “on or about 3/30/2016.” Exh. 4.  Defendant ultimately obtained that judgment after Mark Yang’s default, in an amount of $240,162.21. Exh. 7.  In support of defendant’s default judgment, defendant produced a “Promissory Note” dated March 25, 2016 (hereinafter, “Second Note”) and signed by Mark Yang on March 20, 2016. Exh. 6..  The Second Note states: “WHEREAS Mark Yang (Borrower) borrowed $150,000 from Deuk Lee (Lender) on December 31, 2009…[and such] loan is secured by a Deed of Trust and Assignment of Rents executed by Borrower…in favor of Lender…and encumbering…2409 Ives Lane, Redondo Beach, CA 90278.” Id.  The Second Note expressly documents Mark Yang’s desire that defendant release the Property from the Deed of Trust and states that Mark Yang intends to refinance the Property in order that defendant may be repaid. Id.  Despite the money judgment, the Deed of Trust still encumbers the Property.  Decl. of Jean Yang.[1]

Plaintiff has filed suit for Quiet Title, Cancellation of Cloud on Title, and Declaratory Relief.  In each cause of action, plaintiff seeks an order by the court dissolving the Deed of Trust and declaring that defendant has no interest in the Property.

LEGAL AUTHORITY

1)     Motion for Summary Judgment

The purpose of a motion for summary judgment or summary adjudication “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.”  Aguilar v. Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 843.  “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  Adler v. Manor Healthcare Corp. (1992) 7 Cal. App. 4th 1110, 1119.

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.”  Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal. App. 4th 1510, 1519.  “A plaintiff or cross-complainant has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.  Once the plaintiff or cross-complainant has met that burden, the burden shifts to the defendant or cross-defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.  The defendant or cross-defendant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.”  CCP § 437c(p)(1).

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” Avivi, 159 Cal. App. 4th at 467; CCP §437c(c).

2)     Quiet Title

The elements for a quiet title claim are:  1) plaintiff claims that he/she is the owner of certain described real property; 2) defendant claims an interest therein adverse to plaintiff; and, 3) defendant’s claim is without right, estate, title or interest whatever in the property.  See Ephraim v. Metropolitan Trust Company of California (1946) 28 Cal. 2d 824, 833.  “The complaint shall be verified and shall include all of the following:

(a) A description of the property that is the subject of the action.  In the case of tangible personal property, the description shall include its usual location.  In the case of real property, the description shall include both its legal description and its street address or common designation, if any.

(b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title.  If the title is based upon adverse possession, the complaint shall allege the specific facts constituting the adverse possession.

(c) The adverse claims to the title of the plaintiff against which a determination is sought.

(d) The date as of which the determination is sought.  If the determination is sought as of a date other than the date the complaint is filed, the complaint shall include a statement of the reasons why a determination as of that date is sought.

(e) A prayer for the determination of the title of the plaintiff against the adverse claims.”  CCP §761.020.

An adverse claim constitutes a legal or equitable right, title, estate, lien, or interest in the property or a cloud on title.  CCP §760.010(a).

3)     Cancellation of Cloud of Title

Under Civil Code §3412, “[a] written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or cancelled.”  See also Robin v. Crowell (2020) 55 Cal. App. 5^th 727, 740 (“A separate type of action is authorized to obtain cancellation of an instrument that creates a cloud on the plaintiff’s title.  An action to remove a cloud on title is directed at a particular instrument, and may be brought by ‘a person against whom it is void or voidable’; if the plaintiff prevails, the court will order the instrument ‘to be delivered upon or canceled.’”) (citations omitted).

4)     Code of Civil Procedure Section 726

“There can be but one form of action for the recovery of any debt or the enforcement of any right secured by mortgage upon real property.” Code of Civil Procedure §726(a).  “[S]ince under section 726, ‘[t]here can be but one form of action for the recovery of any debt’ secured by a mortgage or deed of trust on real property, where the creditor sues on the obligation and seeks a personal money judgment against the debtor without seeking therein foreclosure of such mortgage or deed of trust, he makes an election of remedies, electing the single remedy of a personal action, and thereby waives his right to foreclose on the security or to sell the security under a power of sale.”  Walker v. Community Bank (1974) 10 Cal. 3d 729 at 734 (citation omitted).  “[W]hen the creditor recovers a personal money judgment against the debtor without first foreclosing all of the security, the sanctions of the ‘one action’ rule are applied, and the creditor loses the liens on all property not foreclosed in that action.”  Kirkpatrick v. Westamerica Bank (1998) 65 Cal. App. 4^th 982, 988 (citation omitted).  “An election of remedies . . . occurs at the point the judgment attains finality when the claim is merged in the judgment.”  Id. at 990. 

DISCUSSION

            Plaintiff Jean S. Yang, as trustee of the Living Trust of Jean S. Yang, dated July 27, 2018, requests summary judgment on the complaint on the ground that no triable issue of material fact exists and there is no defense and thus, plaintiff is entitled to judgment as a matter of law. 

In this case, plaintiff and defendant both assert a right to the property.  Although defendant asserts there is a material issue in dispute as to plaintiff’s ownership, the court finds plaintiff has proven by a preponderance of the evidence that she has an ownership interest in the property and that this is not a material issue in dispute.  Defendant can point to no evidence that suggests plaintiff is not entitled to bring this suit, and the dissolution of marriage documents which gives Jean Yang title to the Property support plaintiff’s assertion of ownership.  The only other material issue in dispute is whether there is there is any remaining legal effect of the Deed of Trust.

Although plaintiff asserts that the Second Note functioned to rob the Deed of Trust of any effect, as is explicitly was issued in the place of the First Note, the court disagrees.  Both the First Note and the Second Note were drafted in consideration of a loan between Mark Yang and defendant in 2009.  The Second Note did not extinguish the debt or the Deed of Trust, rather it set out only an agreed upon interest payment while noting Mark Yang’s desire that the Deed of Trust be removed by defendant.  Therefore, had defendant sought to enforce a lien against the Property through the Collection Action, he may have had a legal basis to do so.  However, because defendant chose not to proceed against the Property in the Collection Action, the court need not reach that question.

When defendant filed the Collection Action, the only reasonable inference from the evidence is that he did so to obtain a judgment for the non-payment of the loan made to Mark Yang on December 31, 2009.  That loan, and the subsequent debt, was the basis for the First Note and the Second Note.  Indeed, defendant relied upon the Second Note as the basis to prove his damages after Mark Yang failed to answer defendant’s Collection Action.  The Second Note, in turn, was predicated on the same debt documented in the First Note.  Therefore, when defendant obtained a money judgment in the Collection Action for the entire amount owed on the December 31, 2009 loan, there was nothing left to recover from the property.  Defendant therefore finds himself in precisely the situation described in Kirkpatrick; with a judgment but without the benefit of the lien.

Defendant’s various claims to the contrary are unavailing.  As this is a suit to quiet title, the fact that plaintiff was not a party to either the First Note or the Second Note is immaterial.  All the evidence suggests the Deed of Trust was recorded to provide collateral only as to the December 31, 2009 loan and both the First Note and the Second Note documented that debt.  Once judgment was entered on defendant’s behalf for that debt, the election of remedies had been made and foreclosure on the Deed of Trust was no longer available.  As to the other assertions made by defendant, the court finds none raise a material issue of fact that would alter this outcome.

The court rules as follows:  The court finds that plaintiff has met her burden of showing that there is no defense to the causes of action of quiet title, cancellation of cloud on title, and declaratory relief because she has proved each element based on the evidence cited above.  Defendant fails to present substantial evidence to raise a triable issue of material fact.

The court orders the Trust Deed extinguished as to Defendant as of March 11, 2020.

The motion for summary judgment is thus GRANTED. [2]

Plaintiff is ordered to give notice of ruling.