Judge: Jon R. Takasugi, Case: 21STCV36897, Date: 2023-05-25 Tentative Ruling

Case Number: 21STCV36897    Hearing Date: May 25, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENATIVE RULING

            Plaintiff’s motion for summary adjudication is DENIED.

            On 10/6/2021, Plaintiffs Kamran Sadeghian and Shima Nikfarjam (collectively, Plaintiffs) filed suit against Arain Eghbali, Enrihc Financial, Inc., and Peak Foreclosure Services, Inc., alleging: (1) quiet title; (2) cancellation of written instrument based upon fraud; (3) cancellation of written instrument based upon non-delivery; (4) recission; (5) slander; (6) fraud; (7) violation of California Business and Professions Code; (8) declaratory relief; and (9) injunctive relief.

            Now, Plaintiff Shima Nikfarjam (Plaintiff) moves for summary adjudication of the third cause of action for cancellation of written instrument based upon non-delivery

Discussion

            Plaintiff argues that she is entitled to summary adjudication of her cause of action for cancellation of written instrument because she did not sign the grant deed conveyed to Defendant Eghbali, and the signature of both spouses is required to convey or encumber community real property.

            Family Code section1102(a) provides that “either spouse has the management and control of the community real property.” However, it qualifies this authority providing:

1102(a): Except as provided in Sections 761 and 1103, either spouse has the management and control of the community real property, whether acquired prior to or on or after January 1, 1975, but both spouses, either personally or by a duly authorized agent, must join in executing any instrument by which that community real property or any interest therein is leased for a longer period than one year, or is sold, conveyed, or encumbered.

(Ibid, emphasis added.)

Here, Plaintiff submitted evidence that her and her husband (and co-Plaintiff) Kamran Sadeghian took title to the underlying property as “HUSBAND AND WIFE AS JOINT TENANTS.” (See MSJ, Exhibit A.)

In In re Brace (2020) 9 Cal.5th  903, 938, the Court expressly held that for property acquired with community funds in or after 1985, the titling of a deed as a joint tenancy is not sufficient to transmute the property into separate property. Rather, for property acquired in or after 1975, the applied presumption is that property acquired during the marriage is community property. 

Here, Plaintiff submitted evidence that Plaintiffs here acquired the property with community funds on 11/26/2019, after nine years of marriage. (Shima Decl., ¶¶ 2, 3; Kamran Decl. at ¶¶ 2, 3.)

As such, the property here is presumed to be community property under Brace. Plaintiff submitted evidence that the deed of trust conveying legal title of the property to Defendant was only signed by Kamran Sadeghian, but not Plaintiff. Given the requirement under Family Code section 1102(a) that “both spouses… must join in executing any instrument by which that community real property or any interest therein is leased for a longer period than one year, or is sold, conveyed, or encumbered,” the lack of Plaintiff’s assent to the conveyance would render the deed of trust invalid under California law.

The Court agrees that Plaintiff’s evidence supports a reasonable inference that the deed of trust conveyed to Defendant is invalid under California law. Accordingly, the burden shifts to Defendant to disclose a triable issue of material fact.

However, in opposition, Defendants raised concerns that this motion is predicated on theories not pled in the third cause of action, the only cause of action being challenged here. More specifically, the third cause of action is for cancellation of written instruments based upon non-delivery.

The Court agrees. A review of the allegations indicates that the third cause of action, the only cause of action implicated by Plaintiff’s motion, is predicted on fraudulent inducement, a lack of understanding of what was being signed, and a lack of consideration for the promissory note and deed of trust. (Complaint ¶¶ 69,70.) Plaintiff’s burden in a motion for summary adjudication of the third cause of action is defined, and bound, by the pleadings of the third cause of action.  Plaintiff’s moving papers do not assert any argument or submit any evidence to address the allegations as to fraudulent inducement or lack of consideration. Rather, Plaintiff’s argument is limited to the issue of whether or not Plaintiff Shima was required to sign the deed of trust for it to be valid.

The pleadings serve as the “outer measure of materiality” in a summary judgment motion, and the motion may not be granted or denied on issues not raised by the pleadings. (Cal. Prac. Guide Civ. Pro. Before Trial Ch. 10-B, Section 10:51.1.)

Here, Plaintiff failed to address all elements of the third cause of action, and  “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (C.C.P., Section 437c(f)(1).) As such, the Court could not properly grant summary adjudication of the third cause of action.

However, it is important to note that, even setting aside this issue, the Court would still conclude a triable issue of material fact exists as to whether or not the grant deed was void. While it is generally true that the execution of both spouses is required for an encumbrance of real property, where one spouse has acted as the agent for the other spouse in the scope of authority, the requirement of both spouses’ signature is dispensed with. (32 Cal. Jur. 3d Family Law § 550 [“...If a spouse acts as the agent of the nonparticipating spouse, the statute requiring both spouses, either personally or by duly authorized agent, to join in executing any instrument encumbering community real property is not violated....”]

Here, Defendant submitted evidence to show that Shima was involved in the decision to execute the deed of trust, and that Plaintiff Kamran was acting on behalf of himself and as an agent on behalf of Plaintiff Shima when he signed. (See Arian Decl., ¶ 23; Shima Decl. ¶ 7.) Whether or not an agent relationship exists is primarily a question of fact, as is the question of whether or not Plaintiffs should be estopped from denying an agent’s authority (Associated Creditors' Agency v. Haley Land Co. (1966) 239 Cal.App.2d 610, 614 [49 Cal.Rptr. 1, 4; 1 Cal. Real Est. § 1:89 (4th ed.) [“An estoppel may arise when a party has changed his or her position or has parted with value in reliance on the oral promise of the other party and the promisor will be unjustly enriched or the promisee will suffer substantial hardship if the promise is not enforced. This defense may be available against a principal whose agent has executed a written document without written authorization.”]

Based on the foregoing, Plaintiff’s motion for summary adjudication of the third cause of action is denied.

It is so ordered.

Dated:  May    , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar. 

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