Judge: Stephen I. Goorvitch, Case: 22STCV33441, Date: 2023-01-19 Tentative Ruling

Case Number: 22STCV33441    Hearing Date: January 19, 2023    Dept: 39

Juan Ligutom, et al. v. Raymond Ligutom, et al.

Case No. 22STCV33441

Demurrer

            Plaintiffs Juan Ligutom and Anh My Ligutom (collectively, “Plaintiffs”) filed this action against Raymond Ligutom and Stella M. Ligutom (collectively, “Defendants”), among others.  Plaintiffs assert causes of action for: (1) breach of oral contract, (2) equitable estoppel, (3) quiet title, (4) slander of title, (5) adverse possession, and (6) declaratory relief.  Plaintiffs allege that Defendants, who are Plaintiff Juan Ligutom’s parents, agreed to help them purchase a house.  Plaintiffs allege that Defendants “orally agreed to help by qualifying for financing, temporarily holding title, and transferring title to [Plaintiffs] after they were able to qualify for financing on their own.”  (Complaint, ¶ 11.)  Plaintiffs allege that they “would locate the home, negotiate the purchase, and make all payments,” and that they “paid the entire down payment and closing costs.”  (Complaint, ¶¶ 11, 14.)  Plaintiffs allege that “Defendants did not pay anything toward the purchase price of the house” and that Defendants have refused to transfer title, per the agreement.  (Complaint, ¶¶ 16, 25.) 

            A.        Breach of Contact

            The Court overrules the demurrer to the first cause of action for breach of contract.  Defendants allege that the contract is invalid under the statute of frauds.  In this case, Plaintiffs allege that Defendants “orally agreed to help by qualifying for financing, temporarily holding title, and transferring title to [Plaintiffs] after [Plaintiffs] were able to qualify for financing on their own.”  (Complaint, ¶ 11.)  In essence, Plaintiffs allege they had an option to purchase the property from Defendants.  Such an agreement is subject to the statute of frauds.  (See Robert T. Miner, M.D., Inc. v. Tustin Avenue Investors, LLC (2004) 116 Cal.App.4th 264, 270.) 

            Nevertheless, Plaintiffs satisfy the pleading standard.  First, Plaintiffs allege that they exchanged text messages with Defendants about the agreement.  Informal writings may satisfy the statute of frauds.  (Brewer v. Horst-Lachmund Co. (1900) 127 Cal. 643, 646.)  While Defendants argue that the alleged agreement and text messages were vague, omitted material terms, and did not constitute an agreement, these issues must wait for a dispositive motion or trial, as the pleadings are sufficient at this stage. 

Putting that aside, however, Plaintiffs sufficient allege partial performance, which defeats Defendants’ statute of frauds argument.  Specifically, Plaintiffs allege that they made the entire down-payment and paid all closing costs, mortgage payments, property taxes, property insurance premiums, and all maintenance and repair costs, and that they were in possession of the homes at all relevant times.  (Complaint, ¶¶ 14, 17, 18, 20, 21.)   Partial performance of an oral real property sale contract takes the contract out of the statute of frauds.  (See Code Civ. Proc., § 1972, subd. (a).)  Plaintiffs’ possession of the property, together with their payments, constitutes partial performance.  (See Calanchini v. Branstetter (1890) 84 Cal. 249, 252.)  These allegations are sufficient to allege that the statute of frauds does not apply and may be sufficient to establish that there was, in fact, an agreement that Defendants breached.   

The Court has considered Defendants’ remaining arguments and finds that none is persuasive.  Therefore, the Court overrules Defendants’ demurrer with respect to the first cause of action. 

            B.        Equitable Estoppel

The Court sustains the demurrer to the second cause of action for equitable estoppel.  There is no cause of action for equitable estoppel.  (Joffe v. City of Huntington Park (2011) 201 Cal.App.4th 492, 513, fn. 15, citing Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1463.)  Therefore, the demurrer to the second cause of action is sustained. 

C.        Quiet Title

The Court sustains the demurrer to the third cause of action for quiet title.  Plaintiffs cannot maintain a cause of action for quiet title because Plaintiffs concede they are not the legal owners of the property.  (Lewis v. Superior Court (1994) 30 Cal.App.4th 1850, 1866.)  “[T]he holder of equitable title cannot maintain a quiet title action against the legal owner.”  (Id., citing Stafford v. Ballinger (1962) 199 Cal.App.2d 289, 294-295.)  Rather, the appropriate cause of action is a breach of contract claim with a remedy of specific performance.  Therefore, the demurrer to the third cause of action is sustained. 

D.        Slander of Title

The Court sustains the demurrer to the fourth cause of action for slander of title.  The recover damages for slander of title to real property, the plaintiff must prove the following elements: (1) There must have been a direct or indirect disparagement of the owner’s title; (2) The disparaging statement must have been published; (3) The matter published must be untrue; (4) When the statement was published it must not have been privileged and was without justification; (5) The statement must have been made with malice; and (6) The published matter must be the proximate cause of pecuniary loss or damage to the owner of the interest.  (See 5 Miller & Starr, Cal. Real Estate (3d ed. 2009) § 11.41, pp. 11-147-11-148, citations omitted.)  As Plaintiffs do not hold title to the property at issue, they cannot state a claim for slander of title.  (See Glass v. Gulf Oil Corp. (1970) 12 Cal.App.3d 412, 419.)  Rather, the appropriate cause of action is a breach of contract claim with a remedy of specific performance.  Nor do Plaintiffs allege any damages as a result of Defendants’ claim that Plaintiffs do not own the property.  Therefore, the demurrer to the fourth cause of action is sustained.   

E.         Adverse Possession

The Court sustains the demurrer to the fifth cause of action for adverse possession.  Plaintiffs concede that Defendants permitted Plaintiffs to reside at the property. (Complaint, ¶¶ 28, 30.)  As such, Plaintiffs’ possession of the property was not adverse to Defendants’ rights.  (Southern Pac. Co. v. San Francisco (1964) 62 Cal.2d 50, 56.)  

F.         Declaratory Relief

The Court overrules the demurrer to the sixth cause of action for declaratory relief.  “[D]emurrer is usually not an appropriate method for testing the merits of a declaratory relief action, because the plaintiff is entitled to a declaration of rights even if it is adverse to the plaintiff's interest.”  (Qualified Patients Ass'n v. City of Anaheim (2010) 187 Cal.App.4th 734, 751, internal quotations and citations omitted.)   Plaintiffs are entitled to declaratory relief regarding the rights of Plaintiffs and Defendants with respect to the property.  (Code Civ. Proc., § 1060.)

            G.        Conclusion and Order

            Based upon the foregoing, the Court orders as follows:

1.         The Court overrules the demurrer to the first and sixth causes of action.

2.         The Court sustains the demurrer to the second, third, fourth, and fifth causes of action.  The Court denies leave to amend, as the allegations make clear that no amendment would be successful.

3.         Defendants shall file an answer within thirty (30) days.

4.         The Court continues the case management conference to April 6, 2023, at 8:30  a.m., as the Department of Veterans Affairs has not been served. 

5.         Plaintiff’s counsel shall provide notice and file proof of such with the Court.