Judge: Stephen I. Goorvitch, Case: 22STCV06694, Date: 2022-09-01 Tentative Ruling

Case Number: 22STCV06694    Hearing Date: September 1, 2022    Dept: 39

Gustavo Valdez, et al. v. 21st Century Management, Inc., et al.

Case No. 22STCV06694

Demurrer

            Plaintiffs Gustavo Valdez and Norma Valdez (collectively, “Plaintiffs”) filed this action on February 23, 2022, alleging that they fell victim to a mortgage refinancing fraud.  Plaintiffs allege that they sought to refinance their property in 2010 and sought the assistance of Defendant Global Team Consulting (“Defendant Global”).  Plaintiffs paid Defendant Global a total of $30,000 for the purported loan modification.  However, in March 2010, Defendant Laura Ngocdiep Mai, also known as Jacqueline Mai (“Defendant Mai”) forged a quit claim deed transferring the property.  The quit claim deed was notarized by Defendant Sandy Lorraine Alvarez-Molina (“Defendant Alvarez-Molina”).  Based upon these allegations, Plaintiffs assert causes of action for fraud, fraudulent conveyance, forgery, and conspiracy, as well as quiet title, unfair competition, cancellation of deed, and declaratory relief.  Defendant Alvarez-Molina demurs to these causes of action. 

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.”  (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  In ruling on a demurrer, the court must “liberally construe[]” the allegations of the complaint.  (Code Civ. Proc., § 452.)  “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.”  (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

            Per Code of Civil Procedure section 338, subdivision (f)(3), “an action against a notary public on the notary public's bond or in the notary public's official capacity shall be commenced within six years.”  (Code Civ. Proc., § 338, subd. (f)(3).)  “[E]very action against a notary in his official capacity is subject to a six-year maximum limitation period running from the date of the notarial act.  The six-year limit applies regardless of whether the action is based on malfeasance and whether its discovery is delayed.”  (Purdum v. Holmes (2010) 187 Cal.App.4th 916, 923.) Here, Plaintiffs allege that Defendant notarized a forged quitclaim deed in March 2010.  (Complaint, ¶ 25.)  Plaintiffs did not file their complaint until February 23, 2022, which is more than six years after the alleged forgery.  Accordingly, Plaintiffs’ complaint is untimely.

In opposition, Plaintiffs argue that their claims are not against Defendant Alvarez-Molina in her official capacity as a notary.  The Court disagrees.  The only factual allegation against Defendant Alvarez-Molina is that she notarized the deed.  “A notary’s official duties include taking the acknowledgment of deeds, verifying the identity of signatories, and collecting their signatures in a journal.  The nature of the right sued upon, not the form of action or relief demanded, determines the applicable statute of limitations.  (Purdum v. Holmes (2010) 187 Cal.App.4th 916, 923–924, internal quotations and citations omitted.)  Therefore, Plaintiffs’ claims are subject to the statute of limitations.

To the extent Plaintiffs allege that Defendant Alvarez-Molina was part of the fraud, independent of her act of notarizing the quitclaim deed, Plaintiffs do not satisfy the heightened pleading standard for fraud cases.  Plaintiffs may pursue their claims against Defendant Alvarez-Molina, independent of her notarizing the quitclaim deed, if they have sufficient facts to establish that she was an active participant in the fraud.  Indeed, a notary who actively participates in a scheme to defraud, independent of her notarization of a document, cannot rely upon Code of Civil Procedure section 338 with respect to the underlying fraud.  However, Plaintiffs’ complaint does not satisfy the pleading standard for fraud claims, as Plaintiffs allege only: “Plaintiffs, upon information and belief, and thereupon allege, Mai conspired with Alvarez-Molina to notarize the forged March 2010 Quitclaim Deed.”  (Complaint, ¶ 25.)  Plaintiffs must allege specific facts demonstrating that Defendant Alvarez-Molina played an active role in the fraud, i.e., that Defendant Alvarez-Molina did more than simply notarize a document for Defendant Mai, who may have relied on false identification.

Based upon the foregoing, the demurrer is sustained with leave to amend.  Plaintiffs may file a first amended complaint within thirty (30) days.  Defendant’s counsel shall provide notice and file proof of such with the Court.