Judge: Richard J. Burdge, Case: 20STCV38914, Date: 2022-10-18 Tentative Ruling

Case Number: 20STCV38914    Hearing Date: October 18, 2022    Dept: 37

HEARING DATE:                 October 18, 2022   

CASE NUMBER:                  20STCV38914 

CASE NAME:                        Emsaffa Corporation, a Delaware Corporation v. Steven Powers, as trustee under Amended and Restated Trust Agreement for R.E.I. 401(k) Trust entered into December 29, 2009 and effective as of January 1, 2009, et al. 

MOTION:                               Motion for Summary Judgment or, in the alternative, Summary Adjudication  

MOVING PARTY:                Plaintiff Emsaffa Corporation 

OPPOSING PARTY:             Defendants, Steven Powers, as trustee under Amended and Restated Trust Agreement for R.E.I. 401(k) Trust entered into December 29, 2009 and effective as of January 1, 2009, et al.

OPPOSITION:                       September 12, 2022

REPLY:                                  September 21, 2022

TENTATIVE:                        Emsaffa’s motion is denied. Powers is to give notice.

Background

This is an action for quiet title arising in connection with four properties with APN numbers 4419-015-196, 4419-015-197, 4419-015-022 and 4419-015-026 (the “Properties”).  Plaintiff Emsaffa Corporation (“Emsaffa”) alleges that Defendants Steven Powers, as trustee under Amended and Restated Trust Agreement for R.E.I. 401(k) Trust entered into December 29, 2009, and effective as of January 1, 2009 (“Powers”), Marcos Vivian (“Vivian”) and Marquez Pacific View, LLC (“Marquez”), each claim an interest in the Properties. Emsaffa alleges that because it is the lender and beneficiary of the Properties, it holds a Deed of Trust secured by the Properties and now seeks to secure that interest.  

Emsaffa’s Complaint alleges two causes of action: (1) quiet title; and (2) declaratory relief.  

On January 20, 2021, Marquez filed a Cross-Complaint against Emsaffa and Cross-Defendants Ahmad M. Alomani (“Alomani”), Vicino Limited Partnership (“Vicino”), and Markab Capital Will, a Kuwait Company (“Markab”).  According to the Cross-Complaint, Cross-Defendants, who are lenders and investors, have allegedly implemented a scheme to obtain property owned by Marquez by preventing Marquez from redeeming on the loan, charging usurious interest, and conducting other improper lending practices.  

The Cross-Complaint alleges eleven causes of action: (1) declaratory relief as to the existence of usury and amount due on usurious contract against Emsaffa; (2) declaratory relief as to the 18% default interest rate against Emsaffa; (3) declaratory relief as to other amounts demanded by Emsaffa; (4) declaratory relief as to notice of default against Emsaffa; (5) cancellation of instrument against Emsaffa; (6) breach of contract against Emsaffa; (7) intentional interference with prospective economic relations against all cross-defendants; (8) intentional interference with economic relations against Alomani and Markab; (9) fraudulent concealment against all cross-defendants; (10) conspiracy against all cross-defendants; and (11) unfair, unlawful and fraudulent business acts and practices against all cross-defendants.  

On June 29, 2021, Emsaffa’s demurrer to the Cross-Complaint was sustained as to the eighth cause of action. On July 29, 2021, Marquez filed the operative First Amended Cross-Complaint (“FACC”).  

On August 23, 2021, Emsaffa filed a Request for Dismissal as to Vivian.  

On October 1, 2021, Emsaffa filed the operative Second Amended Complaint (“SAC”) alleging identical causes of action.

On June 8, 2022, Emsaffa filed its Motion for Summary Judgment or, in the alternative, Summary Adjudication. Defendant Powers opposes the motion.

EMSAFFA’S MOTION FOR SUMMARY JUDGMENT

Emsaffa moves for summary judgment or, in the alternative, summary adjudication as follows:

1.      Plaintiff is entitled to summary adjudication as to the Complaint’s first cause of action for quiet title.

2.      Plaintiff is entitled to summary adjudication as to the Complaint’s second cause of action for declaratory relief.

Evidentiary Objections

Powers’ Objections to Declarations of Ahmad Alomani and Noah Streit

Sustained: 1-3, each lacks foundation and personal knowledge.

Emsaffa’s Objections to Declaration of Tatiana Delogramatic

Objection 1: sustained. Lacks foundation and personal knowledge.

Objection 2: overruled. Not irrelevant as to title to Properties.

Objection 3 - 13: overruled. Not irrelevant as to the dispute.

Emsaffa’s Objections to Declaration of Steven Powers

Objections 1: sustained-in-part as to “breached the contract,” improper legal conclusion.

Objection 2-10: sustained, see objection 1.

Objection 11: sustained-in-part as to everything after “these agreements were...” See objection 1.

Objection 12-19: sustained, see objection 1.

Objection 20: sustained. Hearsay without exception, lacks foundation and personal knowledge.

Objection 21: sustained. Hearsay without exception, speculative.

Objection 22: sustained, see objection 20.

Objection 23: sustained, improperly authenticated document.

Objection 24-41: sustained, see objection 1 & 20.

Objection 42: sustained, see objection 23.

Objection 43-45: sustained, lacks foundation and personal knowledge.

Objection 46-118: sustained, see objection 1 & 20.

Request for Judicial Notice

Emsaffa requests judicial notice of the following in support of its motion:

1.      Exhibit 1: Fourth Amended Complaint, Steven Powers, etc. v. Marcos Vivian, et al., Superior Court of California, County of Los Angeles, Case No. 19STCV40987.

2.      Exhibit 2: Grant Deed, 11/13/13, Powers to Marquez (APN 196, 907 [197], 022), Los Angeles County Recorder’s Office Instr. No. 20131626155.

3.      Exhibit 3: Grant Deed, 11/13/13, Powers to Sunset Boulevard Land, LLC (APN 026), Los Angeles County Recorder’s Office Instr. No. 20131626154.

4.      Exhibit 4: Quitclaim Deed, 11/13/13, Los Angeles County Recorder’s Office Instr. No. 20131626153, transf. APN 026 from The Living Earth to Powers REI 401k Trust.

5.      Exhibit 5: Termination and Release Agreement, 12/18/14, APN 026, Los Angeles County Recorder’s Office Instr. No. 20141384025.

6.      Exhibit 6: Termination and Release Agreement, APN 196 and 907 (197), 12/18/14; Los Angeles County Recorder’s Office Instr. No. 20141384024.

7.      Exhibit 7: Subordination Agreement, 8/6/15, between MPV and Powers as trustee, APN 196, 197, 022, Los Angeles County Recorder’s Office Instr. No. 20150960498.

8.      Exhibit 8: Subordination Agreement, 4/11/16, APN 196, 197, 022, between MPV, Powers, Vivian. Los Angeles County Recorder’s Office Instr. No. 20160398801.

9.      Exhibit 9: Substitution of Trustee and Full Reconveyance, 11/08/16, Los Angeles County Recorder’s Office Instr. No. 20161389804.

10.  Exhibit 10: Deed of Trust securing Promissory Note to Marquez; Los Angeles County Recorder’s Office Instrument No. 20150960499.

11.  Exhibit 11: Voluntary Dismissal of Emsaffa Corp from Related Case Powers v. Vivian, Los Angeles Superior Court Case No. 19STCV40987 (9/14/2020).

12.  Exhibit 12: First Modification and Extension of Promissory Note Secured By Deed Of Trust Agreement recorded on April 11, 2016 as Los Angeles County Recorder’s Office Instrument No. 20160398800.

13.  Exhibit 13: Second Modification and Extension of Promissory Note Secured By Deed Of Trust Agreement recorded on March 6, 2017 as Los Angeles County Recorder’s Office Instrument No. 20170257441.

14.  Exhibit 14: Third Modification and Extension of Promissory Note Secured by Deed of Trust Agreement recorded on August 17, 2017 as Los Angeles County Recorder’s Office Instrument No. 20170933719.

15.  Exhibit 15: Assignment of Deed of Trust, Los Angeles County Recorder's Office Instrument 2 No. 20191147840, recorded on October 25, 2019.

16.  Exhibit 16: Certificate of Merger, Delaware Secretary of State, 12/29/14.

Emsaffa’s request is granted. The existence and legal significance of these documents are proper matters for judicial notice. (Evid. Code § 452(h).) However, the court may not take judicial notice of the truth of the contents of the documents.  (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)  Documents are only judicially noticeable to show their existence and what orders were made.  The truth of the facts and findings within the documents are not judicially noticeable.  (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885.)

Powers requests judicial notice of the following in support of his opposition:

1.      Exhibit 1: Subordination Agreement, dated 8/05/2015, recorded 8/06/2015, between MPV and Powers as trustee, APN 196, 197, 022, Los Angeles County Recorder’s Office Instr. No. 20150960498.

2.      Exhibit 2: Short Form Deed of Trust and Assignment of Rents, 11/05/2013, between MPV and Powers as a beneficiary, APN 196, 907, 022. Los Angeles County Recorder’s Office Instr. No. 20131626156.

3.      Exhibit 3: Assignment of Deed of Trust, Los Angeles County Recorder's Office Instrument No. 20191147840, recorded on October 25, 2019.

4.      Exhibit 4: Notice of Default and Election to Sell under Deed of Trust, 10/12/2018. APN 196, 197, 022, 026, Los Angeles County Recorder’s Office Instr. No. 20181268882.

Power’s request is granted. The existence and legal significance of these documents are proper matters for judicial notice. (Evid. Code § 452(h).) Again, the court may not take judicial notice of the truth of the contents of the documents.  (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)  Documents are only judicially noticeable to show their existence and what orders were made.  The truth of the facts and findings within the documents are not judicially noticeable.  (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885.)

Discussion

I.                   Legal Authority

“The purpose of the law of summary judgment 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.)  CCP § 437c(a) provides:

A party may move for summary judgment in any action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.  The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct….  The motion shall be heard no later than 30 days before the date of trial, unless the court for good cause orders otherwise.  The filing of the motion shall not extend the time within which a party must otherwise file a responsive pleading.

A motion for summary judgment may be granted “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”  (CCP § 437c(c).) 

“The motion shall be supported by affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken.  The supporting papers shall include a separate statement setting forth plainly and concisely all material facts that the moving party contends are undisputed.  Each of the material facts stated shall be followed by a reference to the supporting evidence.  The failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denial of the motion.”  (CCP § 437c(b)(1); see also Cal. Rules of Court, rule 3.1350(c)(2) & (d).) 

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294 (Hinesley).)  CCP § 437c(p)(2) provides:

A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.  Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.  The plaintiff or cross-complainant 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.

The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.”  (Hinesley, 135 Cal.App.4th at p. 294; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 [Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”].)  A motion for summary judgment must be denied where the moving party’s evidence does not prove all material facts, even in the absence of any opposition (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak (Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387). 

II.                Factual Summary

A.     Background

The parties here dispute the correct nature of the Properties as described. (MF 1-3.) However, the parties agree that the Properties in question were previously owned by Powers. In 2013, Marquez acquired the Properties from Powers. (MF 8.) Powers disputes the contention he has disclaimed ownership interests of the Properties at issue here. (MF 6.) In August 2015, Vicino loaned Marquez $1.6 million dollars secured by the Properties through a Deed of Trust, Assignment of Leases and Rents, Fixture Filing and Security, which were recorded August 6, 2015. (MF 10.) Following that loan, Marquez received additional advances from Vicino through several modifications of the promissory note and deed of trust, with the principal loan balance totaling $3.1 million after the modifications.  (MF 11-12.)

The parties also agree Powers and Marquez entered into a Subordination Agreement providing that the Deed of Trust became the “prior and superior lien or charge” against the Property, including being superior to the 2013 Short Form Deed of Trust and Assignment of Rents in which Defendant Powers was a beneficiary. (MF 13.) As part of Vicino’s advancement of an additional $400,000.00 to Marquez and the First Modification Agreement, Vicino, Marquez, and Powers entered into a Second Subordination Agreement providing that the Deed of Trust “and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the [Properties] prior and superior to the lien or charge of” the 2013 Short Form Deed of Trust and Assignment of Rents in which Defendant Powers was a beneficiary. (MF 14.)

The parties disagree regarding the nature of any 2016 reconveyance of interests Powers made, where Powers contends the reconveyance was never delivered. (MF 15-16, RJN Exh. 9.)

The reconveyance signed in 2016 states in relevant part,

“This SUBSTITUTION OF TRUSTEE AND FULL RECONVEYANCE is made as of July_, 2016, by STEVEN POWERS, as trustee under Amended and Restated Trust Agreement for R.E.I. 401(k) Trust entered into December 29, 2009 and effective as of January 1, 2009 ("Powers"), and Marcos Tomas Vivian De La Pedrosa ("Vivian" and together with Powers collectively, "Beneficiaries"), with reference to the following Recitals:

A. Beneficiaries are the beneficiaries under that certain Short Form Deed of Trust and Assignment of Rents dated as of November 5, 2013 and recorded as Instrument No.20131626156 in the office of the County Recorder of Los Angeles County, California (the "Official Records"), made by Marquez Pacific View, LLC, a Delaware limited liability company ("Property Owner"), as trustee to Pacific Coast Title Company, a California corporation ("Original Trustee"), as trustee, for the benefit of Powers, a portion of the beneficial interest under which was assigned to Vivian by that certain Partial Assignment of Assigned Rights and Beneficial Interest Under Deed of Trust and Limited Power of Attorney dated as of March 1, 2016 and recorded as Instrument No. 20160398799 in the Official Records (as amended and assigned, the "Deed of Trust").

B. All obligations of Property Owner under that certain Earnout Agreement dated as of November 5, 2013, by and between Powers and Property Owner, as amended by that certain First Amendment to Earnout Agreement dated as of November 1 l, 2014, and that certain Second Amendment to Earnout Agreement dated as of August 5, 2015, and that certain Third Amendment to Earnout Agreement dated as of March 1, 2016 (as so amended the "Earnout Agreement"), secured by the Deed of Trust having been fully satisfied, Beneficiaries desire to (i) terminate the Earnout Agreement and that certain Partial Loan Sale and Assignment Agreement dated as of March 1, 2016, by and between Powers, as "Seller", and Marcos, as "Buyer", with respect to the Deed of Trust (the "Loan Sale Agreement"), (ii) substitute Vivian as the new trustee under the Deed of Trust, in place and stead of Original Trustee, and (iii) reconvey the lien of the Deed of Trust.

NOW, THEREFORE, in consideration of the foregoing Recitals (which are incorporated herein by this reference) and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged:

1. Termination of Earnout Agreement and Loan Sale Agreement. The Earnout Agreement and the Loan Sale Agreement are hereby terminated and of no further force and effect.

2. Substitution and Reconveyance. Beneficiaries hereby substitute Vivian as trustee under the Deed of Trust, and Vivian as trustee under the Deed of Trust, does hereby grant and reconvey to the person or persons legally entitled thereto, without warranty, all the estate and interest held by Beneficiaries in and to the Property described in the Deed of Trust.”

(RJN, Exh. 9, dated July 18, 2016.)

In October 2019, Emsaffa purchased Vicino’s loan and security interests for $3.437 million, and Vicino assigned the Deed of Trust to Emsaffa. (MF 18.)

The parties dispute whether Emsaffa had actual knowledge of Powers claiming any interest in the Properties when purchasing the loan and deed of trust from Vicino. (MF 19-20.) The parties further dispute whether Emsaffa acted fraudulently with the intent of harming Powers’ interests in the Properties. (Id.)

III.             Analysis

A claim for quiet title should state (1) the legal description of the property and its street address or common designation, (2) the title of the plaintiff and the basis of the title, (3) the adverse claims to plaintiff’s title, (4) the date as of which the determination is sought, and (5) a prayer for determination of plaintiff against adverse claims.  (CCP § 760.020.) “Such an action is brought, as authorized by the statute, for the purpose of determining' any adverse claim that may be asserted therein by a defendant to the land in controversy; and this does not mean that the court is simply to ascertain, as against a plaintiff shown to have a legal interest, whether or not such defendant has some interest, but also that the court shall declare and define the interest held by the defendant, if any, so that the plaintiff may have a decree finally adjudicating the extent of his own interest in the property in controversy.”  (Lechuza Villas West v. California Coastal Com’n (1997) 60 Cal.App.4th 218, 242.)“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.” (Id.)  “Of course, if the plaintiff fails to show any legal interest in the property in controversy, and as to which he asserts title, he must fail altogether, and could not complain of a judgment of nonsuit, but where he shows any legal interest, he is entitled to have that interest declared by the court.” (Id.)

California courts have recognized that “[t]he existence of an ‘actual controversy relating to the legal rights and duties of the respective parties,’ suffices to maintain an action for declaratory relief.”¿ (Ludgate Ins. Co. v. Lockheed Martin Corp.¿(2000) 82 Cal.App.4th 592, 605 (Ludgate).)¿ “Any person interested under a written instrument, ... or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property,¿ ... 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 in the premises, including a determination of any question of construction or validity arising under the instrument or contract."¿ (Ibid., quoting Code Civ. Proc., § 1060.)¿¿¿ 

The elements of a bona fide purchaser are “payment of value, in good faith, and without actual or constructive notice of another’s rights.” (Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 1251.) “ ‘[A] bona fide purchaser for value who acquires his interest in real property without notice of another’s asserted rights in the property takes the property free of such unknown rights.’ ” (Deutsche Bank National Trust Co. v. Pyle (2017) 13 Cal.App.5th 513, 521.) Actual notice is “express information of a fact.” (612 South LLC v. Laconic Limited Partnership (2010) 184 Cal.App.4th 1270, 1278 (citing Civil Code § 18). Conversely, constructive notice is a “legal fiction.” (First Bank v. East West Bank (First Bank) (2011) 199 Cal.App.4th 1309, 1314-15.) “To have constructive notice, a person must have notice or knowledge of the circumstances, ‘which, upon reasonable inquiry, would lead to that particular fact.’ ” (612 South LLC, supra, 184 Cal.App.4th at 1278.)  “The act of recording creates a conclusive presumption that a subsequent purchaser has constructive notice of the contents of the previously recorded document.” (Ibid.) The recording prescribed by law requires the instrument to be indexed for the obvious reason that “a subsequent purchaser should be charged only with notice of those documents which are locatable by a search of the proper indexes.” (Lewis v. Superior Court (Lewis) (1994) 30 Cal.App.4th 1850, 1867; see also Citizens for Covenant Compliance v. Anderson (1995) 12 Cal.4th 345, 355 (noting that “[r]ecording consists of copying the instrument in the record book and indexing it under the names of the parties”).

Emsaffa asserts summary adjudication is merited as to the first cause of action because Emsaffa “is a bona fide encumbrancer whose deed of trust is a valid encumbrance against the Property regardless of whether Powers claims Marquez defrauded him.” (Motion, 7-8.) Emsaffa explains it holds a bona fide encumbrance against the Property “because they meet the two essential criteria: (1) Vicino provided a loan in exchange for the Deed of Trust, and Emsaffa paid money for the deed of trust; and (2) Vicino and Emsaffa had no actual or constructive knowledge of Powers’ claim to the Property” (Motion, 8; citing Caito v. United California Bank, (1978) 20 Cal. 3d 694, 702.) “Vicino and Emsaffa had no constructive knowledge of Powers’ claim to the Property, because Powers had no recorded interest in the Property when Vicino obtained the Deed of Trust and when Emsaffa acquired the Deed of Trust from Vicino.” (Id.) Emsaffa explains it paid Vicino monies in exchange for the note and Deed of Trust, and “there was nothing in the chain of title for the Property that revealed or suggested that Powers, instead of Marquez owned or claimed to own an interest in the Property.” (Motion, 9.) As such, Emsaffa contends “even if Powers was induced by fraud to convey the Property to Marquez, Emsaffa, as a bona fide encumbrancer, is entitled to enforce its lien on the Property.” (Id.; citing Fallon v. Triangle Management Services, Inc., (1985) 169 Cal.App.3d 1103, 1106.)

In opposition, Powers explains he conveyed the Properties to Marquez in reliance on their assurances of “with respect to the 2013 Short Form Deed of Trust recorded on November 15, 2013, which guaranteed payments to Powers, and which served as notice to all purchasers that Powers’ interest was recorded with the County first in time.” (Opposition, 2.) Powers further explains that his interests in the Properties “were further documented in a bankruptcy Settlement Agreement,” which included express conditions regarding the “Earnout Agreement” which was signed by both Marquez and Powers. (Id.) Powers also contends

“Vicino’s 2015 Deed of Trust again expressly acknowledged Powers’ 2013 Deed of Trust, thus Vicino had actual knowledge of Powers’ ownership of the real property albeit a junior interest... Vicino, through its principal Noah Streit, and through their attorney Alexandre Cornelius, also had actual knowledge of Powers’ real estate interests as they had negotiated the Bankruptcy settlement agreement, were privy to the contractual negotiations with Powers, including the Second Amendment to Earnout Agreement, which was part of the 8/6/15 Subordination of the Deed of Trust.” (Opp., 3.)

Powers further argues that he and Marquez agreed that the Reconveyance agreement “made delivery of the Reconveyance of the 2013 Deed of Trust by Powers to the MPV Parties to be expressly conditioned on Powers first receiving the Closing Payment.” (Opp., 3-4.) Powers further contends that the issue of Emsaffa being a bona fide purchaser is a disputed issue of fact, given the alleged privities between Vicino and Emsaffa. (Opp., 4-8.) Specifically, Powers contends Emsaffa “is merely the reorganization of [Marquez’s] members which formed Emsaffa in order to try to avoid liability for the debt.” (Opp., 9-10.) As such, Powers contends that Powers’ interests were recorded and were known to Vicino, and thus Emsaffa, because the Title Report, introduced as RJN Exhibit 16 “further demonstrates that even the Title Company identified Powers’ record [sic] interest and in order to remove them as exceptions fact required [sic] that the Beneficiary (Powers) provide certain documentation which was never provided.” (Opp., 12, citing RJN Exh. 16 at p. 70.) “Thus, not only was Powers’ interest a matter of record including actual notice because Vicino and Emsaffa themselves recording [sic] the documents, even if these parties did not have actual knowledge any reasonable inquiry would have established that Powers was never paid as promised in the 2013 Deed of Trust or the subsequent amendments thereto.” (Opp., 12-13.)

In reply, Emsaffa asserts it is a “bona fide encumbrancer[], against whom Powers’ claim to an interest in the Property is not enforceable, because: (1) the Reconveyance was at most voidable and not void; (2) Vicino and Emsaffa relied on the recorded Reconveyance of Powers’ interest in the Property; and (3) when the Reconveyance was recorded, neither Vicino or Emsaffa Corp. had actual or constructive knowledge of Powers’ claimed interest in the Property.” (Reply, 2-4.) As such, Emsaffa contends “it had no knowledge that Powers’ reconveyance was invalid for any reason.” (Reply, 3.) Emsaffa further reasserts that Powers has presented no evidence that any notice can be imputed to Vicino or Emsaffa. (Reply, 5-6.) However, whether Exhibit 16, the Preliminary Title Report which outlined Powers’ recorded interests in the Properties, provided notice to Emsaffa or Vicino is not addressed.

A deed that has not been delivered or accepted is void and completely ineffective to transfer title. (See Civil Code §1054; Green v. Skinner (1921) 185 Cal. 435, 439-440; Rothney v. Rothney (1940) 41 Cal.App.2d. 566, 570[“Delivery is a question of fact which is to be determined from the circumstances surrounding the particular transaction.”]) “The delivery and acceptance are of necessity simultaneous and correlative acts. The law does not force a man to take title to real property against his will.” (Reina v. Erassarret (1949) 90 Cal.App.2d. 418, 426.) Acceptance by the grantee requires that the grantee have an intention to take legal title to the property, manifested by his or her conduct or declaration. (Henneberry v. Henneberry (1958) 164 Cal.App.2d 125, 129.)

Viewing the evidence submitted in the light most favorable to Powers, the court finds that triable issues exist with regard to Emsaffa’s claims.

First, the court finds that whether Emsaffa had knowledge of the invalid nature of the Reconveyance to be a question of fact, one that involves a weighing of the evidence presented in such that way that this summary adjudication inquiry does not allow the court to determine.

Second, the court finds that a triable issue exists with regard to whether Vicino or Emsaffa had constructive or actual knowledge of Powers’ recorded interest in the Subject Properties, pursuant to RJN Exhibit 16. As Emsaffa fails to address the Preliminary Title Report in their reply papers, the court thus views the evidence submitted most favorably to Powers and finds this further triable issue of material fact exists.

For these reasons, Emsaffa’s motion is denied.

Conclusion