Judge Elaine Lu, Case 21STCV23109 2023-04-07 Tentative Ruling

On June 22, 2021, Plaintiffs Isabel Ramirez (“Isabel”)[1] and Clara Ramirez (“Clara”) (jointly “Plaintiffs”) filed the instant quiet title action against Defendant Mary Anne Aparicio (“Defendant”) and Wells Fargo Bank N.A. On October 1, 2021, Defendant filed a demurrer and motion to strike the complaint. On March 10, 2022, the Court sustained Defendant’s demurrer and granted Defendant’s motion to strike with leave to amend. (Order 3/10/22.)

On April 7, 2022, Plaintiffs filed a First Amended Complaint against Defendant and Wells Fargo Bank N.A. On April 28, 2022, Defendant filed a demurrer and motion to strike the complaint. On September 30, 2022, the Court sustained Defendant’s demurrer and granted Defendant’s motion to strike with leave to amend. (Order 9/30/22.)

On October 28, 2023, Plaintiffs filed the operative Second Amended Complaint (“SAC”) against Defendant. The SAC asserts five causes of action for (1) Fraud, (2) Quiet Title, (3) Declaratory Relief, (4) Unjust Enrichment, and (5) Promissory Estoppel.

On November 28, 2022, Defendant filed the instant demurrer and motion to strike. On March 23, 2023, Plaintiffs filed an opposition to the demurrer and motion to strike. On March 30, 2023, Defendant filed a reply.

Plaintiffs are married and sought to purchase the single-family home at 6554 Northside Drive, Los Angeles, California 90022 (“Subject Property”). (SAC ¶¶ 12-16.) However, Plaintiffs were unable to qualify for a loan to purchase the Subject property; their credit score was too low because Plaintiffs were undocumented immigrants and unable to build a credit score until they obtained legal residency. (SAC ¶ 15.)

Plaintiffs asked Defendant – Plaintiff Isabel’s niece – if she would obtain a mortgage on Plaintiffs’ behalf so that Plaintiffs could purchase the Subject Property. (SAC ¶ 16.) Defendant agreed on the condition that Plaintiffs pay Defendant $5,000.00. (SAC ¶ 16.)

“Plaintiffs purchased the Property for $275,00.00. Plaintiffs paid 100% of the down payment for the Property and paid all other costs to acquire the Property. [Defendant] did not pay any money to acquire or maintain the Property. On September 10, 2012, escrow closed for the purchase of the Property.” (SAC ¶ 22.)

“A Grant Deed dated July 16, 2012 was executed by Armando Deolarte in which the Property was granted to ‘Mary Anne Aparicio, a single woman[.]’ The Grant Deed was recorded on September 10, 2012 as Instrument No. 20121347795 in the Los Angeles County Recorder’s Office.” (SAC ¶ 23, Exh. 1.) “A Deed of Trust dated August 28, 2012 to secure payment in the sum of $220.000.00 was executed by [Defendant]. The Deed of Trust was recorded on September 10, 2012 as Instrument No. 20121347796 in the Los Angeles County Recorder’s Office.” (SAC ¶ 24, Exh. 2.) The deed of trust names Defendant as the borrower. (SAC ¶ 24, Exh. 2.) “[Defendant] was named on the loan, and on title, for the sole purpose of allowing Plaintiffs to purchase the Property.” (SAC ¶ 25.)

On December 11, 2013, the Deed of Trust was assigned from the original lender to Defendant Wells Fargo Bank N.A. (SAC ¶ 26, Exh. 3.) Plaintiffs are informed and believe that there are no other outstanding liens on the Property. (SAC ¶ 27.)

“Plaintiffs have paid and continue to pay all mortgage payments and all other expenses relating to the Property.” (SAC ¶ 28.) Despite repeated requests to transfer title, Defendant has not transferred title to the Property to Plaintiffs but has claimed she was in the process of doing so. (SAC ¶ 28.) In late 2019 or early 2020, Defendant’s real estate agent visited the Property informing Plaintiffs that Defendant intended to sell the property. (SAC ¶ 28.) Days later, Defendant’s real estate agent told Plaintiffs that “[Defendant] would sign the transfer deed as agreed to by the parties when the Property was purchased by Plaintiffs.” (SAC ¶ 28.) “However, as of the date of this complaint, [Defendant] has failed and refused to honor the confirmation communicated through her [Real Estate Agent].” (SAC ¶ 28.)

“Plaintiffs are informed, believe, and thereon allege that [Defendant] is intending to sell the Property. Accordingly, Plaintiffs bring this action for quiet title in which Plaintiffs claim a 100% ownership interest in the Property as they have been approved for a mortgage whereby they would be able to pay off the loan (thereby removing [Defendant] from any liability on any loan,) transfer title to Plaintiffs and close escrow.” (SAC ¶ 29.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal 3d 311, 318.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.)

A demurrer for sufficiency tests whether the complaint states a cause of action. (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 Dep’t of Water & Power (2006) 144 Cal. App. 4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Ct. (1984) 153 Cal. App. 3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, 147 Cal.App.4th at 747.)

Motions to strike are used to reach defects or objections to pleadings that are not challengeable by demurrer (i.e., words, phrases, prayer for damages, etc.). (See CCP §§ 435-437.) A party may file a motion to strike in whole or in part within the time allowed to respond to a pleading. However, if a party serves and files a motion to strike without demurring to the complaint, the time to answer is extended. (CCP §§ 435(b)(1), 435(c).)

A motion to strike lies only where the pleading has irrelevant, false, or improper matter, or has not been drawn or filed in conformity with laws. (CCP § 436.) The grounds for moving to strike must appear on the face of the pleadings or by way of judicial notice. (CCP § 437.)

Code of Civil Procedure § 430.41, subdivision (a) requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer¿in person or by telephone¿with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” The parties are to meet and confer at least five days before the date the responsive pleading is due and if they are unable to meet the demurring party shall be granted an automatic 30-day extension. (CCP § 430.41(a)(2).) The demurring party must also file and serve a declaration detailing the meet and confer efforts. (Id.¿at (a)(3).)¿ If an amended pleading is filed, the parties must meet and confer again before a demurrer may be filed to the amended pleading. (Id.¿at (a).) There is a similar meet and confer requirement for motions to strike. (CCP § 435.5.)

Here, Defendant has fulfilled the meet and confer requirement. (Seyler Decl. ¶¶ 2-6.)[2]

Defendant asserts that the first cause of action for fraud fails because it is not pled with sufficient specificity. The allegations are near, if not identical, to those of the prior complaint to which the Court previously sustained demurrers. Moreover, Plaintiffs provides no opposition as to why a demurrer should not be sustained to this cause of action.

“The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)

“Fraud allegations ‘involve a serious attack on character’ and therefore are pleaded with specificity. [Citation.] General and conclusory allegations are insufficient. [Citation.] The particularity requirement demands that a plaintiff plead facts which ‘‘‘show how, when, where, to whom, and by what means the representations were tendered.’’’ [Citation.]” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469; accord Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Moreover, “each element must be pleaded with specificity. [Citations.]” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.)

Here, the SAC alleges in relevant part that “[Defendant] represented to Plaintiffs that [Defendant] would act as their agent in purchasing the Property in her name.” (SAC ¶ 31.) “[Defendant] represented that if Plaintiffs paid [Defendant] $5,000.00 she would procure a loan for the purchase of the Property, which Plaintiffs would pay over time, and allow title to be taken to the Property in Defendant-Mary’s name but that once the loan funded and escrow closed [Defendant] would transfer title to the Property to Plaintiffs.” (SAC ¶ 32.) In 2012, based on these representations, Plaintiffs paid Defendant the $5,000 and gave Defendant $60,000 for the down-payment which was used to purchase the Property in Defendant’s name. (SAC ¶ 33.) “[W]hile [Defendant] did not perform as agreed, she lulled Plaintiffs into believing that [Defendant] would perform by making excuses for the failure to perform stating that she would do as soon as she could.” (SAC ¶ 34.) However, these representations were false and made to induce Plaintiffs to pay funds to Defendant and delay them from seeking redress. (SAC ¶¶ 36-37.) Plaintiffs reasonably relied on these representations because Defendant is family. (SAC ¶ 38.) Plaintiffs did not discover the fraud until late 2019 or early 2020 when Plaintiff’s Real Estate Agent informed Plaintiffs that Defendant intended to sell the Property. (SAC ¶ 39.)

These allegations are not pled with sufficient specificity to state a claim for fraud. First, there is no indication of when, how, or where these representations were made. Further, there is no indication of what Defendant represented that Plaintiffs reasonably relied upon. This ambiguity is compounded as Plaintiffs themselves sought Defendant to obtain the loan and purchase the Property. (SAC ¶ 16.) Thus, absent clear and specific allegations, it is not clear what Defendant represented that Plaintiffs relied upon to induce Plaintiffs to enter into the agreement to purchase the Property.

Second, there is no allegation that Defendant has made a false statement to Plaintiffs or that Plaintiffs have incurred any damages. The SAC is extremely vague as to the specifics of the agreement between Plaintiffs and Defendant. The SAC alleges that Plaintiffs used Defendant as a “straw buyer” to purchase the Property for $5,000 because Plaintiffs were unable to obtain a loan themselves. (SAC ¶ 16.) Defendant purchased the Property using Plaintiffs’ funds and obtained the loan, both of which are in Defendant’s name. (SAC ¶¶ 22-24, Exhs. 1-2.) However, the SAC fails to allege what the parties’ agreement was as to exactly when Defendant was obligated to transfer title of the Property to Plaintiffs.

Throughout the SAC, Plaintiffs imply only that the agreement was for Defendant to transfer title to the Property to Plaintiffs at some nebulous point in time after escrow closed and the loan was secured. (SAC ¶ 28 [“After escrow closed for the purchase of the Property, Plaintiff Isabel contacted [Defendant] numerous times to request that she perform as promised by transferring title from [Defendant] to Plaintiffs on title …”] [italics added]; SAC ¶ 32, [“[Defendant] represented that if Plaintiffs paid [Defendant] $5,000.00 she would procure a loan for the purchase of the Property, which Plaintiffs would pay over time, and allow title to be taken to the Property in [Defendant]’s name but that once the loan funded and escrow closed [Defendant] would transfer title to the Property to Plaintiffs.”] [italics added].)

The most specific allegation regarding the parties’ agreement as to timing of when Defendant was obligated to transfer title to Plaintiffs is that “the parties agreed to the following: Plaintiffs would pay [Defendant] $5,000.00; Plaintiffs would tender to [Defendant] a deposit for the purchase of the Property; [Defendant] would open escrow and deposit Plaintiffs funds into Escrow as a down payment on the Property purchase; [Defendant] would obtain a mortgage for the Property; Plaintiffs would make all payments of the mortgage and maintenance payments for the Property; [Defendant] would be placed on title to be transferred to Plaintiffs when requested by them for [Defendant] to do so.” (FAC ¶ 69, [bold and italics added].) However, even this allegation that Defendant would transfer title “when requested” by Plaintiffs is vague because it does not indicate when Plaintiffs were entitled to demand that title be transferred. Plaintiffs fail to specify whether Plaintiffs could demand transfer of title at any time whatsoever in their sole, unfettered discretion or whether instead there was some constraint on when Plaintiffs could request Defendant to transfer title to them. Notably, Plaintiffs fail to make clear the timing of the parties’ respective obligations, i.e., whether the parties agreed that Plaintiffs had to complete all payments on the mortgage and maintenance payments before demanding transfer of title or whether Plaintiffs could demand transfer of title before paying off the mortgage and maintenance of the home. If the parties’ agreement was that Plaintiffs were entitled to demand transfer of title before paying off the mortgage, Plaintiffs fail to allege whether there was any limitation at all on when Plaintiffs could request Defendant to transfer title to them. For example, did the parties agree that Plaintiffs could demand transfer of title the day after escrow closed, and was Defendant nonetheless obligated to maintain the mortgage in Defendant’s name in perpetuity even after transferring title to Plaintiffs?

It would be unreasonable to construe the parties’ agreement to be that Plaintiffs could demand transfer of title any time Plaintiffs desired – even before Plaintiffs paid off the mortgage – because as Plaintiffs have previously acknowledged in open court, such a transfer of title from Defendant to Plaintiffs would have accelerated the mortgage, would have caused the entire amount of the mortgage to be due immediately, would likely have caused a foreclosure of the Property, and would have rendered Defendant immediately liable for the full balance of the mortgage. (SAC, Exh. 2 at ¶ 18.) Plaintiffs have failed to explain how any transfer of title prior to Plaintiffs’ paying off the entirety of the mortgage would not necessarily trigger an acceleration of the mortgage and foreclosure. Thus, no reasonable construction of the alleged agreement would presume that Defendant was obligated to transfer title to the property before Plaintiffs paid off the entirety of the mortgage. Plaintiffs do not allege that they have fully paid off the mortgage. Indeed, the SAC tacitly acknowledges that Plaintiffs have not yet fully paid the mortgage. (SAC ¶ 28, [“Plaintiffs have paid and continue to pay all mortgage payments and all other expenses relating to the Property.”, [italics added].)

In light of Plaintiffs’ failure to allege the terms of the parties’ agreement relating to the timing of the parties’ respective obligations (i.e., Defendant’s obligation to transfer title vis a vis Plaintiffs’ obligation to pay off the balance of the mortgage), it is unclear whether Defendants’ obligation to transfer title to Plaintiffs is even yet due. Plaintiffs have also failed to explain how they can have a valid claim for fraud or how they have suffered damages if Defendant’s obligation to transfer title has not yet arisen and there has not yet been a breach of the parties’ agreement. Moreover, the mortgage specifically prohibits the transfer of title, and thus, Plaintiffs have failed to allege how Defendant’s representation that Defendant was unable to transfer title is false. (SAC, Exh. 2 at ¶ 18.) The SAC is woefully inadequate and fails to plead fraud with sufficient specificity.

Accordingly, Defendant’s demurrer to the first cause of action is SUSTAINED on this basis.

“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. In order for the bar ... to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42, [internal citations omitted].) However, “[t]he statute of limitations usually commences when a cause of action ‘accrues,’ and it is generally said that ‘an action accrues on the date of injury.’” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 743, [internal citations omitted].)

As noted above, Plaintiffs’ claim is not yet ripe because Plaintiffs have not yet fully paid the mortgage, and Defendant has not yet failed to perform under the agreement between the parties. The limitations period has thus not yet begun to run, and the demurrer cannot be sustained on this ground.

Defendant asserts that the second cause of action for quiet title fails because (1) Plaintiffs are equitable owners and cannot quiet title against the legal owner, (2) it cannot be ascertained if the contract on which the claim is based is written, oral or implied by conduct, (3) the action is barred by the statute of frauds, and (4) the action is barred by the statute of limitations. The allegations are identical to those the Court previously sustained. Moreover, Plaintiffs provides no opposition as to why a demurrer should not be sustained to this cause of action.

It has long been held that “as a general matter an action to quiet title cannot be maintained by the owner of equitable title as against the holder of legal title.” (Warren v. Merrill (2006) 143 Cal.App.4th 96, 113; see G.R. Holcomb Estate Co. v. Burke (1935) 4 Cal.2d 289, 297 [“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.”]; see also Stafford v. Ballinger (1962) 199 Cal.App.2d 289, 294-295[ “It 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.”].) However, an exception to this rule exists where legal title was acquired through fraud. (See Strong v. Strong (1943) 22 Cal.2d 540, 546 [reversing a quiet title judgment on the grounds that prevailing party failed to allege fraud with specificity and was not the legal owner]; see also Warren, supra, 143 Cal.App.4th at p.113 [approving a quiet title judgment in favor of an equitable owner where the holder of legal title was a fiduciary who had fraudulently obtained title from the equitable owner].)

Pursuant to Code of Civil Procedure section 761.020, a complaint to quiet title must be verified and must include: (a) a description of the property including both its legal description and its street address or common designation; (b) plaintiff's title and the basis upon which it is asserted; (c) the adverse claims as against which a determination is sought; (d) the date as of which a determination is sought and, if other than the date the complaint is filed, a statement why the determination is sought as of that date; and (e) a prayer for determination of plaintiff's title against the adverse claims. (CCP § 761.020.) In addition, if the quiet title action is based on the defendant's fraud in obtaining record title, the plaintiff must plead the factual basis for the fraud specifically. (See Moss Estate Co. v. Adler (1953) 41 Cal.2d 581, 584; see also Strong supra, 22 Cal.2d at pp.545–546 [“the general rule that fraud must be specifically pleaded … applies particularly to quiet title actions.”].)

“Fraud allegations ‘involve a serious attack on character’ and therefore are pleaded with specificity. [Citation.] General and conclusory allegations are insufficient. [Citation.] The particularity requirement demands that a plaintiff plead facts which ‘‘‘show how, when, where, to whom, and by what means the representations were tendered.’’’ [Citation.]” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) Moreover, as a claim in fraud “each element must be pleaded with specificity. [Citations.]” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.)

Here, the complaint concedes that Defendant is the sole legal owner of the Subject Property. (SAC ¶¶ 20, 23, Exh. 1.) The only interest alleged by Plaintiffs in the Subject Property is equitable. Thus, absent a claim of fraud, Plaintiffs – as equitable owners – cannot bring this quiet title claim against Defendant – the legal owner of the Subject Property.

As noted above, Plaintiffs fail to allege fraud with sufficient specificity. Moreover, unlike in Warren – the only published case identified by the parties permitting an equitable owner to quiet title against a legal owner – Defendant is not alleged to be a fiduciary who abused her position of power to defraud a buyer.

Accordingly, Defendant’s demurrer to the second cause of action is SUSTAINED on this basis.

A demurrer may be sustained if “[i]n an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.” (CCP § 430.10(g).)

Here, the quiet title action is clearly founded upon contract. The only basis for any ownership interest in the Subject Property by Plaintiffs is through an agreement between Plaintiffs and Defendant where “the parties agreed to the following: Plaintiffs would pay [Defendant] $5,000.00; Plaintiffs would tender to [Defendant] a deposit for the purchase of the Property; [Defendant] would open escrow and deposit Plaintiffs funds into Escrow as a down payment on the Property purchase; [Defendant] would obtain a mortgage for the Property; Plaintiffs would make all payments of the mortgage and maintenance payments for the Property; [Defendant] would be placed on title to be transferred to Plaintiffs when requested by them for [Defendant] to do so.” (SAC ¶ 69.) The SAC fails to specify whether the agreement was oral, implied by conduct, or written.

Therefore, Defendant’s demurrer to the second cause of action is also SUSTAINED on this additional basis.

“A general demurrer may be interposed when the complaint shows on its face that the agreement sued on is within the statute of frauds and does not comply with its requirements.” (Parker v. Solomon (1959) 171 Cal.App.2d 125, 136.) “The statute of frauds declares several types of agreements ‘invalid’ unless ‘they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent.’ (§ 1624, subd. (a).)” (Westside Estate Agency, Inc. v. Randall (2016) 6 Cal.App.5th 317, 323.) “A court applying the statute of frauds is accordingly presented with two questions: (1) does the statute apply to the contract at issue?; and if so, (2) are the statute's requirements of a properly subscribed writing met?” (Ibid.)

Here, Defendant asserts that Civil Code section 1624(a)(3) requires that the agreement between Plaintiffs and Defendant alleged be subscribed by the party to be charged. The Court agrees. Pursuant to Civil Code section 1624(a)(3), to be valid “[a]n agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; such an agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent is in writing, subscribed by the party sought to be charged.” Though the terms of the alleged agreement are not entirely clear, the SAC seems to allege either a sale of real property – requiring Defendant to purchase the Subject Property with Plaintiffs’ funds and then sell the Subject Property to Plaintiffs upon their demand for the $5,000 fee that Plaintiffs paid Defendant– or an agency for Defendant to serve as the agent of Plaintiffs in the purchase of the Subject Property. Either way, to be valid, the agreement must have been in writing signed by sought to be charged – in this case Defendant. There is no allegation that the agreement is written and signed by Defendant.

“Part performance allows enforcement of a contract lacking a requisite writing in situations in which invoking the statute of frauds would cause unconscionable injury.” (Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 555.) “The doctrine most commonly applies in actions involving transfers of real property. [Citations.] Yet, part performance also has been used to enforce other contracts that violate the statute of frauds in Civil Code section 1624(a). [Citations.] In any event, to constitute part performance, the relevant acts either must ‘unequivocally refer[ ]’ to the contract [Citation], or ‘clearly relate’ to its terms. [Citations.] Such conduct satisfies the evidentiary function of the statute of frauds by confirming that a bargain was in fact reached.” (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1108–1109.) “In addition to having partially performed, the party seeking to enforce the contract must have changed position in reliance on the oral contract to such an extent that application of the statute of frauds would result in an unjust or unconscionable loss, amounting in effect to a fraud.” (Secrest, supra, 167 Cal.App.4th at p.555.)

Plaintiffs’ payment of the $5,000 to Defendant, payment of the down payment, payment of the mortgage payments, and payment of other expenses for the property clearly constitute partial performance. (See e.g., Warren, supra, 143 Cal.App.4th at p.113, [noting that the payment of the down payment despite there not being a written contract and a third party serving as the purchaser constituted partial performance).

Accordingly, the statute of frauds does not furnish an additional basis on which to sustain Defendant’s demurrer to the second cause of action.

The Legislature has not established a specific statute of limitations for actions to quiet title. (Muktarian v. Barmby (1965) 63 Cal.2d 558, 560.) Therefore, courts refer to the underlying theory of relief to determine the applicable period of limitations. (Ibid.; see 53 Cal.Jur.3d (2012) Quieting Title, § 34, pp. 412-413.) An inquiry into the underlying theory requires the court to identify the nature (i.e., the “gravamen”) of the cause of action. (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 22.)

Generally, the most likely time limits for a quiet title action are the five-year limitations period for adverse possession, the four-year limitations period for the cancellation of an instrument,or the three-year limitations period for claims based on fraud and mistake.

“The statute of limitations usually commences when a cause of action ‘accrues,’ and it is generally said that ‘an action accrues on the date of injury.’ [Citation.]” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 743.)

Here, the statute of limitations has not run because the agreement between the parties – which serves as the basis for this claim – has not yet been breached. As explained more fully above, the only outstanding acts remaining under the parties’ agreement are for Plaintiffs to pay off the mortgage and for Defendant to transfer title. (SAC ¶¶ 28-29.) As Plaintiffs have not fully paid the mortgage, Defendant’s obligation to subsequently transfer title has not yet been breached. Nothing in the SAC specifies the timing of when these obligations are due. To the contrary, the SAC indicates that Plaintiffs’ obligation to pay off the mortgage must precede transfer of title to Plaintiffs because any transfer by Defendant to Plaintiffs before pay off of the mortgage would immediately accelerate the mortgage and cause the entire amount of the mortgage to be due and cause the Property likely to be foreclosed upon. (SAC, Exh. 2 at ¶ 18.) Therefore, as the FAC fails to allege a breach of the parties’ agreement, the statute of limitations has not begun to run.

Accordingly, Defendant’s demurrer based on the statute of limitations to the second cause of action is overruled.

Defendant asserts that the fourth cause of action for unjust enrichment is insufficiently alleged. As noted above, the allegations are identical to those the Court previously sustained. Moreover, Plaintiffs provides no opposition as to why a demurrer should not be sustained to this cause of action.

Strictly speaking, “ ‘[t]here is no cause of action in California for unjust enrichment.’ [Citation.]” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370.) However, Courts have recognized that this is “ ‘an effect: the result of a failure to make restitution under circumstances where it is equitable to do so.’ [Citation.] ... It is synonymous with restitution.” (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793.) Ordinarily, restitution is required only if “ ‘the benefits were conferred by mistake, fraud, coercion or request.’ ” (Nibbi Brothers, Inc. v. Home Federal Sav. & Loan Assn. (1988) 205 Cal.App.3d 1415, 1422, [italics omitted].)

“An unjust enrichment or quasi-contract action in the form of a common count to recover money or other benefit obtained by mistake is governed by the three-year statute of limitations for actions based on fraud or mistake (i.e., § 338, subd. (d)).” (Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333, 348.)

Here, the SAC on its face notes that the claim is not ripe. The SAC alleges that Defendant paid no value for the Property which is now worth $750,000.00. (SAC ¶ 64.) “Should it be determined that Plaintiffs’ will be deprived of their Property by rejecting their title claim, as alleged herein, Defendant-Mary would be unjustly enriched in the approximate amount of $750,000.00.” (SAC ¶ 67, [italics added].) For the reasons stated above, the claim would arise upon the sale of the Property as only then would Defendant be unjustly enriched as alleged.

Defendant asserts that the fifth cause of action fails because the FAC fails to state a claim for promissory estoppel. As repeatedly noted, the claims are identical to those the Court previously sustained. Moreover, Plaintiffs provides no opposition as to why a demurrer should not be sustained to this cause of action.

“The elements of a promissory estoppel claim are ‘(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.’” (Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727, 734 [internal citations omitted].) “A cause of action for promissory estoppel is a claim in equity that substitutes reliance on a promise for consideration ‘in the usual sense of something bargained for and given in exchange.’” (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1412–1413 [internal citation omitted].)

“Before [promissory estoppel] can be invoked, however, there must be a promise that was relied upon.” (Southern California Acoustics Co. v. C. V. Holder, Inc. (1969) 71 Cal.2d 719, 723.) In a nearly identical definition to a contract, “[a] ‘promise’ is an assurance that a person will or will not do something.” (Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411, 417 [internal citation omitted] (‘Granadino’).) Moreover, “[t]o be enforceable, a promise need only be ‘definite enough that a court can determine the scope of the duty[,] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.’” (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1045 [internal citations omitted].) Further, “the fact that a promise is conditional does not render it unenforceable or ambiguous.” (Ibid.) However, “the doctrine of promissory estoppel will not come into operation where the act performed is one that has been bargained for.” (Aronowicz v. Nalley's, Inc. (1972) 30 Cal.App.3d 27, 41.)

Here, the fifth cause of action seeks to enforce the parties’ agreement to the following: “Plaintiffs would pay [Defendant] $5,000.00; Plaintiffs would tender to [Defendant] a deposit for the purchase of the Property; [Defendant] would open escrow and deposit Plaintiffs funds into Escrow as a down payment on the Property purchase; [Defendant] would obtain a mortgage for the Property; Plaintiffs would make all payments of the mortgage and maintenance payments for the Property; [Defendant] would be placed on title to be transferred to Plaintiffs when requested by them for [Defendant] to do so.” (SAC ¶ 69.)

For the reasons stated above, it is completely unclear what it is that Plaintiffs allege Defendant promised. The SAC alleges that “Plaintiffs would make all payments of the mortgage and maintenance payments for the Property; [Defendant] would be placed on title to be transferred to Plaintiffs when requested by them for [Defendant] to do so.” (SAC ¶ 69, [bold and italics added].) However, the SAC fails to allege whether Defendant promised to transfer title to Plaintiffs whenever Plaintiffs demanded it in Plaintiffs’ sole, unfettered discretion or whether instead there was some constraint on when Plaintiffs could request Defendant to transfer title to them. The SAC fails to make clear the timing of the parties’ respective obligations, i.e., whether Defendant promised to transfer title only after Plaintiffs completed all payments on the mortgage and maintenance before demanding transfer of title or whether Defendant promised to transfer title even before Plaintiffs paid off the mortgage and maintenance of the home. If Defendant promised to transfer title whenever Plaintiffs demanded such transfer, even before Plaintiffs paid off the mortgage Plaintiffs fail to allege whether there was any limitation at all on when Plaintiffs could demand transfer of title to them. For example, did Defendant promise to transfer title to Plaintiffs the day after escrow closed, and was Defendant nonetheless obligated to maintain the mortgage in Defendant’s name in perpetuity even after transferring title to Plaintiffs?

As discussed above, it would not make sense for Defendant to have promised to transfer title to Plaintiff any time Plaintiffs desired – without regard for whether Plaintiffs had paid off the mortgage – because as Plaintiffs have previously acknowledged, such a transfer of title from Defendant to Plaintiffs would have accelerated the mortgage, would have caused the entire amount of the mortgage to be due immediately, would likely have caused a foreclosure of the Property, and would have rendered Defendant immediately liable for the full balance of the mortgage. (SAC, Exh. 2 at ¶ 18.) Plaintiffs have failed to explain how any transfer of title prior to Plaintiffs’ paying off the entirety of the mortgage would not necessarily trigger an acceleration of the mortgage and foreclosure. Thus, the SAC fails to allege clear and unambiguous terms of Defendant’s promise, including whether such promise encompassed a term that Defendant would transfer title to the property even before Plaintiffs paid off the entirety of the mortgage. Plaintiffs do not allege that they have fully paid off the mortgage. Indeed, the SAC tacitly acknowledges that Plaintiffs have not yet fully paid the mortgage. (SAC ¶ 28, [“Plaintiffs have paid and continue to pay all mortgage payments and all other expenses relating to the Property.”, [italics added].) Accordingly, the SAC also fails to allege any injury from Plaintiffs’ reliance on Defendant’s promise, the performance of which has not yet become due.

Finally, as noted above, “the doctrine of promissory estoppel will not come into operation where the act performed is one that has been bargained for.” (Aronowicz v. Nalley's, Inc. (1972) 30 Cal.App.3d 27, 41.) Here, there is clearly bargained for consideration ($5000) for the act to be performed – transfer of title. Thus, a claim for promissory estoppel would not be applicable.

Defendant contends that the third cause of action is barred for the same reasons as the claim for quiet title.

The elements of declaratory relief are “‘(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to [Plaintiff’s] rights or obligations.... [Citation.]’” (Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1582.) Declaratory relief is proper “in cases of actual controversy relating to the legal rights and duties of the respective parties[.]” (CCP § 1060.) However, “[t]he court may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.” (CCP § 1061.) “The broad discretionary power of the trial court to deny declaratory relief may be invoked by general demurrer.” (General of America Ins. Co. v. Lilly (1968) 258 Cal.App.2d 465, 471.)

“ ‘ “The purpose of a declaratory judgment is to ‘serve some practical end in quieting or stabilizing an uncertain or disputed jural relation.’ ” [Citation.] “Another purpose is to liquidate doubts with respect to uncertainties or controversies which might otherwise result in subsequent litigation [citation].” [Citation.]' [Citation.] ‘ “One test of the right to institute proceedings for declaratory judgment is the necessity of present adjudication as a guide for plaintiff’s future conduct in order to preserve his legal rights.” ’ ” (Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 647.) “Code of Civil Procedure section 1060 does not require a breach of contract in order to obtain declaratory relief, only an ‘actual controversy.’ Declaratory relief pursuant to this section has frequently been used as a means of settling controversies between parties to a contract regarding the nature of their contractual rights and obligations.” (Ibid.)

“ ‘Declaratory relief operates prospectively, serving to set controversies at rest. If there is a controversy that calls for a declaration of rights, it is no objection that past wrongs are also to be redressed; but there is no basis for declaratory relief where only past wrongs are involved. Hence, where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may be denied.’ [Citation.]” (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366.)

“Where a trial court has concluded the plaintiff did not state sufficient facts to support a statutory claim and therefore sustained a demurrer as to that claim, a demurrer is also properly sustained as to a claim for declaratory relief which is ‘wholly derivative’ of the statutory claim.” (Ball v. FleetBoston Financial Corp. (2008) 164 Cal.App.4th 794, 800.)

Here, the claim for declaratory relief seeks a declaration that Plaintiff has 100% title to the property – i.e., a claim for quiet title. (SAC ¶ 57.) Thus, this portion of the claim for declaratory relief is derivative of the claim for quiet title and fails for the same reason as the claim for quiet title. However, a “demurrer does not lie as to a portion of a cause of action and if any part of a cause of action is properly pleaded, the demurrer will be overruled.” (Elder v. Pacific Bell Telephone Co. (2012) 205 Cal.App.4th 841, 856, Fn. 14.)

The SAC also seeks “a declaratory relief judgment awarding Plaintiffs all the funds expended in the purchase and maintenance of the Property since its purchase, plus 10% interest pursuant to California Civil Code §§3287, 3288 AND judgment awarding Plaintiffs the net proceeds of any sale of the Property by [Defendant].” (SAC ¶ 62.) Under the circumstances alleged here, this claim for declaratory relief does appear proper in part. As discussed above, Plaintiffs claims for unjust enrichment are not yet ripe as Defendant would only be unjustly enriched if and when Defendant sells the Property without any compensation to Plaintiffs. (SAC ¶ 66.) As the Complaint alleges that Defendant was intending to sell the property, (SAC ¶ 39), there is an actual controversy. Therefore, as there is an actual controversy, and Plaintiffs seek prospective relief, a claim for declaratory relief is proper.

The Court notes that Plaintiffs appear to request contradictory and mutually exclusive remedies; Plaintiffs would not be entitled to both purchase and maintenance costs and also net proceeds. Plaintiffs could only obtain the purchase and maintenance costs by rescinding the agreement between the parties, or Plaintiffs could obtain the net proceeds from the sale as damages. (See e.g., Wong v. Stoler (2015) 237 Cal.App.4th 1375, 1385 [“Rescission and damages are alternative remedies.”].) However, “[f]ailure to pray for the proper form of relief is not fatal to a complaint.” (Valdez v. Himmelfarb (2006) 144 Cal.App.4th 1261, 1276.)

In opposition, Plaintiffs claim that the Court must impose a constructive trust. However, there is no prayer for such relief in the SAC. (Embarcadero Mun. Improvement Dist. v. County of Santa Barbara (2001) 88 Cal.App.4th 781, 793, [“[a] constructive trust is not a substantive device but merely a remedy...”].) Regardless, as constructive trust is only a remedy. It is not a basis for sustaining or overruling a demurrer as noted above.

Accordingly, Defendant’s demurrer to the third cause of action for declaratory relief is OVERRULED.

Defendant moves to strike the prayer for punitive damages and the prayer for prejudgment interest.

California Civil Code section 3294 authorizes the recovery of punitive damages in non-contract cases where “the defendant has been guilty of oppression, fraud, or malice . . . .” (Civ. Code, § 3294(a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id. at (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id. at (c)(2).) “‘Fraud’ means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Id. at (c)(3).) Punitive damages thus require more than the mere commission of a tort. (See Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-95.)

The Court has sustained Defendant’s demurrer to all of Plaintiffs’ claims except for declaratory relief, which cannot serve as a basis for punitive damages. Moreover, as the Court has discussed in detail above, Plaintiffs have failed to allege fraud with sufficient specificity. Accordingly, Defendant’s motion to strike the prayer for punitive damages is GRANTED.

“Prejudgment interest is awarded to compensate a party for the loss of the use of his or her property.” (Bullis v. Security Pac. Nat. Bank (1978) 21 Cal.3d 801, 815.) “More specifically, it ‘provide[s] just compensation to the injured party for loss of use of the award during the prejudgment period—in other words, to make the plaintiff whole as of the date of the injury.’ [Citation.]” (Hewlett-Packard Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506, 574.) “Section 3287 authorizes the recovery of prejudgment interest on damage awards.” (Ibid.)

“Section 3287, subdivision (a), addresses the award of interest on liquidated claims. One who is ‘entitled to recover damages certain, or capable of being made certain by calculation ... is entitled also to recover interest thereon’ from the time the right to recover arises. [Citation.]” (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.) “Under subdivision (a) the court has no discretion, but must award prejudgment interest upon request, from the first day there exists both a breach and a liquidated claim.” (Ibid.) “ ‘ “[T]he test for recovery of prejudgment interest under [Civil Code] section 3287, subdivision (a) is whether defendant actually know[s] the amount owed or from reasonably available information could the defendant have computed that amount. [Citation.]” [Citations.] “The statute ... does not authorize prejudgment interest where the amount of damage, as opposed to the determination of liability, ‘depends upon a judicial determination based upon conflicting evidence and it is not ascertainable from truthful data supplied by the claimant to his debtor.’ [Citations.]” [Citation.] Thus, where the amount of damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate. [Citation.]' [Citation.]” (Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 729.)

“Section 3287, subdivision (b), addresses the award of interest on unliquidated contract claims: ‘Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed.’” (North Oakland Medical Clinic, supra, 65 Cal.App.4th at p.828.) “Under subdivision (b) the court has discretion to decide whether prejudgment interest should be awarded on an unliquidated contractual claim. It is up to the judge to determine the date from which interest runs, but in no event may the court fix a date earlier than the filing of the action.” (Id. at p.829.) However, a request for interest under section 3287(b) must be made by motion to the trial court. (Ibid.)

Civil Code section 3288 “permits discretionary prejudgment interest for unliquidated tort claims.” (Greater Westchester Homeowners Assn. v. City of Los Angeles (1979) 26 Cal.3d 86, 102.) “The award of such interest represents the accretion of wealth which money or particular property could have produced during a period of loss. Using recognized and established techniques a fact finder can usually compute with fair accuracy the interest on a specific sum of money, or on property subject to specific valuation. Furthermore, the date of loss of the property is usually ascertainable, thus permitting an accurate interest computation.” (Id. at pp.102–103.) Thus, prejudgment interest is awardable only for loss of use of funds or property. (Ibid.)

Here, if Plaintiffs seek and obtain restitutionary damages for the funds expended in the purchase and maintenance of the Property since its purchase, the interest on this specific sum of money – such as the $60,000.00 deposit amount – and the date of interest for such calculation are ascertainable.

Accordingly, Defendant’s motion to strike the prayers for prejudgment interest at this time is DENIED.

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Goodman v. Kennedy, supra, 18 Cal.3d at p.348; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.)

The Court has already previously sustained Defendant’s demurrer to the original complaint and first amended complaints on identical grounds. Plaintiffs have failed to cure the defects previously identified. The SAC is no more clear as to the terms of the parties’ alleged agreement, including whether there was any constraint on Plaintiffs’ discretion as to when Plaintiffs could have demanded transfer of title to their names and how they could have done so without triggering the acceleration clause of the mortgage and causing a foreclosure. Given the near complete lack of additional allegations or even argument in opposition as to how these claims could be successfully amended, the Court presumes that Plaintiffs are unable to successfully amend the complaint. Accordingly, leave to amend is DENIED.

Based on the foregoing, Defendant Mary Anne Aparicio’s demurrer is SUSTAINED IN PART WITHOUT LEAVE as to the first, second, fourth, and fifth causes of action. Defendant’s demurrer is otherwise OVERRULED.

Defendant Mary Anne Aparicio’s motion to strike the prayer for punitive damages is GRANTED WITHOUT LEAVE TO AMEND. Defendant’s motion to strike is otherwise DENIED.

Defendant Mary Anne Aparicio is to file an answer to the remaining claim within twenty (20) days.

[1] The complaint references the Plaintiffs by first name because both Plaintiffs have the same last name. The Court will similarly refer to Plaintiffs by first name.

[2] The declarations in support of the demurrer and motion to strike are identical.

County of Los Angeles

Department 26