Judge: Gary I. Micon, Case: 21CHCV00189, Date: 2024-03-28 Tentative Ruling
Case Number: 21CHCV00189 Hearing Date: March 28, 2024 Dept: F43
Dept. F43
Date: 3-28-24
Case # 21CHCV00189, Duda Adams vs. GG&C 1 LLC
Trial Date: N/A
DEMURRER TO THIRD AMENDED COMPLAINT
MOVING PARTY: Defendants GG&C LLC and David L. Adams
RESPONDING PARTIES: Plaintiff Duda Adams
RELIEF REQUESTED
Demurrer
·
Eighth Cause of Action for Quiet Title
·
Twelfth Cause of Action for Equitable Mortgage
RULING: Demurrer to Eighth Cause of Action is
overruled; demurrer to Twelfth Cause of Action is sustained without leave to
amend.
SUMMARY OF ACTION
The claims at issue both address the real property
located at 18834 Devonshire, Northridge, California 91324 that was purchased
entirely with funds earned by Plaintiff Duda Adams (Plaintiff). Based on
cultural norms of the Romani people, the property was not titled to Plaintiff
but, rather, to an entity (GG&C) by her domestic partner Blancy Uwnawich
(Blancy) for Plaintiff’s benefit during her lifetime. Defendant David Adams
(David), who is Blancy’s son, defied the cultural imperatives when Blancy
passed away. Rather than maintaining the cultural norms and permitting Plaintiff
to continue to conduct herself as the owner of the property, he excluded her
entirely and evicted her from the property.
The Court previously sustained a demurrer to the Second
Amended Complaint (SAC) on the basis that the SAC did not sufficiently allege
the cultural norms that would give Plaintiff a title interest in the property.
The Court also allowed Plaintiff to substitute a previous cause of action for
adverse possession for the new cause of action for equitable mortgage.
Plaintiff thereafter filed a Third Amended Complaint
(TAC) with the new cause of action and additional facts regarding the cultural
norms. Defendants demur to the TAC. Plaintiff opposes the demurrer.
ANALYSIS
Defendants demur to the Eighth and Twelfth Causes of Action
on the basis that they fail to allege facts sufficient to constitute causes of
action. Plaintiff argues in opposition that they are sufficiently pled. No
reply has been filed as of March 25, 2024.
A demurrer is an objection to a pleading, the grounds for
which are apparent from either the face of the complaint or a matter of which
the court may take judicial notice. (CCP § 430.30(a); see also Blank v. Kirwan (1985) 39 Cal.3d 311,
318.) The purpose of a demurrer is to challenge the sufficiency of a pleading
“by raising questions of law.” (Postley
v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a
pleading, for the purpose of determining its effect, its allegations must be
liberally construed, with a view to substantial justice between the parties.” (CCP
§ 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts
properly pleaded, but not contentions, deductions or conclusions of fact or law…”
’ ” (Berkley v. Dowds (2007) 152
Cal.App.4th 518, 525.) In applying these standards, the court liberally
construes the complaint to determine whether a cause of action has been stated.
(Picton v. Anderson Union High School
Dist. (1996) 50 Cal.App.4th 726, 733.)
Eighth Cause of Action
Defendants demur to the Eighth Cause of Action for Quiet
Title on the basis that it fails to allege facts sufficient to state a cause of
action.
California law recognizes a distinction between legal and
equitable ownership. In general, an equitable or beneficial ownership exists in
favor of the party or parties funding a purchase and delivery of the purchased
item. (See Finkbohner v. Glens Falls Insurance Company of Glens Falls, New
York (1907) 6 Cal.App. 379.) California law prioritizes the equitable or
beneficial ownership over issues of legal title. (See 926 North Ardmore Avenue,
LLC v. County of Los Angeles (2017) 3 Cal.5th 319, 343; Reilly v. City &
County of San Francisco (2006) 142 Cal.App.4th 480, 489.)
Defendants argue in their demurrer that except where title
was acquired through fraud, “…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. (22
Cal. Jur., p. 111; G. R. Holcomb Estate Co. v. Burke, 4 Cal. (2d) 289,
48 P. (2d) 669, 674; Booth v. Taylor, 135 Cal.App. 348, 26 P.(2d) 846…”
(Bacon v. Bacon (1937) 21 Cal.App.2d 540, 544.) Defendant argues that
Plaintiff does not sufficiently plead that fraud occurred and instead only alleges
a legal conclusion of fraud.
Plaintiff argues that she has an equitable interest in the
property due to her having funded the purchase of the property and because she has
paid to maintain the property since it was purchased in 2007. She alleges that
she has a total of $780,000 in equity in the property based on the monthly
payments that she made between the purchase of the house in 2007 and her ouster
in 2020.
Plaintiff also argues that she has sufficiently pled into
the financial and fraud exceptions for an equitable owner to challenge a titled
owner of real property. Plaintiff argues that she has sufficiently pled the
financial exception contemplated by G.R. Holcomb Estate Co. v. Burke
(1935) 4 Cal.2d 289 because she pled that her funds were used to buy and
maintain the property from its purchase in 2007 until her ouster after Blancy’s
death. (TAC, ¶ 59a.) She alleges that there was understanding between her and
Defendants that she was the true owner and that the legal title was merely for
appearances.
Plaintiff also argues that she has sufficiently pled the
fraud exception. As explained in Warren v. Merrill (2006) 143 Cal.App.4th
96, 114, the available “remedies include quieting title in the defrauded
equitable title holder’s name and making the legal title holder the
constructive trustee of the property for the benefit of the defrauded equitable
titleholder.”
Plaintiff’s TAC alleges that “it is apparent that David
Adams, individually and as the individual in control of GG&C, engaged in
fraud when representing he would abide by the arrangement that GG&C would
hold legal title to the Subject Property for Plaintiff’s benefit. David Adams’
fraudulent statements were made several and various times in conversations from
approximately the time the Subject Property was titled to GG&C until Blancy
Uwnawich’s death. He must have known his statements were fraudulent and were
made with the intent to gain control of the Subject Property to the exclusion
of Plaintiff. Plaintiff actually relied on David Adams’ representations to
allow the property to be titled to GG&C, and the reliance was justifiable
because of their relationship.” (TAC, ¶ 59b.)
Plaintiff argues that her allegations in paragraphs 59a and
59b of the TAC are sufficient to maintain a cause of action for quiet title
based on equitable title because she has pled that her funds were used to buy
and maintain the property and because she alleged that David Adams engaged in
fraud. Based on the cultural background given in the TAC, the Court finds, for
purposes of demurrer, that Plaintiff’s allegations for the Eighth Cause of
Action are sufficient to survive this stage of the proceedings.
Defendants’ demurrer to the Eighth Cause of Action for Quiet
Title is overruled.
Twelfth Cause of Action
Defendants demur to the Twelfth Cause of Action for Equitable
Mortgage on the basis that it fails to allege facts sufficient to a cause of
action.
“An ‘equitable mortgage’ is one that is created by a court
of equity rather than by the formal act of the parties. Under certain
circumstances, the court determines that equity, fairness, and justice warrant
enforcement of a security interest between the parties despite the fact that no
formal mortgage was created or that an attempted creation was defective.” (5
Cal. Real Est. § 13:31 (4th ed.).” Additionally, “[t]he equitable mortgage is a
security interest in the property according to the mutual intentions of the
parties.” (Id.) In order to create an equitable mortgage, there must be
evidence that the parties mutually intended to create such an interest. (See Kaiser
Industries Corp. v. Taylor (1971) 17 Cal.App.3d 346, 350.)
While Plaintiff may have pled that some kind of security
interest understanding existed with Blancy, she has not pled any facts that
would indicate that such an understanding existed with David. There are also no
facts pled indicating that a security interest would be formed based on Romani
cultural understandings. Plaintiff has also not pled any facts indicating that
she was in the role of a creditor such that a security interest would be
expected to form with David.
Plaintiff has not pled sufficient facts to maintain a cause
of action for equitable mortgage. Defendants’ demurrer to this cause of action
is sustained. Given that this was the Third Amended Complaint, the Court shall
not grant leave to amend for this cause of action. (See CCP § 430.41(e)(1).)
Conclusion
Defendants’ demurrer to Plaintiff’s Eighth Cause of Action
is overruled. Defendants’ demurrer to Plaintiff’s Twelfth Cause of Action is
sustained without leave to amend.
Defendants are given 20 days to file an answer to
Plaintiff’s Third Amended Complaint.
Moving party to give notice.