Judge: Stephen P. Pfahler, Case: 24STCV17950, Date: 2025-04-29 Tentative Ruling

Case Number: 24STCV17950    Hearing Date: April 29, 2025    Dept: 68

Dept. 68

Date: 4-29-25

Case 24STCV17950

Trial Date: Not Set

SET ASIDE SALE OF REAL PROPERTY

MOVING PARTY: Plaintiff, Geraldine Williams

RESPONDING PARTY: Defendant, Kenda Worthen

RELIEF REQUESTED

Motion to Set Aside Sale of Real Property

SUMMARY OF ACTION

On July 19, 2024, Plaintiff Geraldine Williams filed a verified complaint for quiet title against Kenda Worthen and Duane Harris regarding 3523 Enville Place, Los Angeles. On January 2, 2025, Plaintiff filed a notice of pendency of action. On April 1, 2025, the court entered the request for dismissal of Duane Harris Sr. without prejudice.

RULING: Granted, in Part, Pending Determination of Deposit

Plaintiff Geraldine Williams moves to set aside the sale of the property located at 3523 Enville Place, Los Angeles. Plaintiff alternatively moves that any proceeds from the sale should be placed in a constructive trust or deposited with the court pending adjudication of the action. Defendant Kenda Worthen, in pro per, opposes the motion on grounds of a proper purchase of the property and contends the motion lacks any basis for relief. Defendant also maintains an adverse possession position in defense to any challenge seeking to reverse the sale. Plaintiff in reply reiterates the lack of notice, request for fees, and alternative request for a constructive trust and deposit of the sales proceeds with the court.

On January 7, 2025, the court specially set the subject hearing pursuant to an ex parte order.

Plaintiff moves for relief based on the failure to provide any notice of the sale, as required upon both the filing the of the verified complaint for quiet title and notice of lis pendens. The court reviews the cited sections and the context for the authority.

“Notwithstanding any other provision of this title, the court shall order sale by such methods and upon such terms as are expressly agreed to in writing by all the parties to the action.” (Code Civ. Proc., § 873.600.) “(a) The court may, at the time of trial or thereafter, prescribe such manner, terms, and conditions of sale not inconsistent with the provisions of this chapter as it deems proper for the particular property or sale. (b) The court may refer the manner, terms, and conditions of sale to the referee for recommendation but shall not approve the referee's report except following a hearing upon noticed motion.” (Code Civ. Proc., § 873.610.) “(a) Unless the interests and rights of the parties will be materially prejudiced thereby, the court shall order that distinct lots or parcels of real property be sold separately. (b) The court may order that the real and personal property or any portion thereof be sold as a unit.” (Code Civ. Proc., § 873.620.) “(a) Notice of the sale of real or personal property shall be given in the manner required for notice of sale of like property upon execution. Such notice shall also be given to every party who has appeared in the action and to such other interested persons as may have in writing requested the referee for special notice. (b) Where real and personal property are to be sold as a unit, notice of the sale may be in the manner required for notice of sale of real property alone. (c) The court may order such additional notice as it deems proper. (d) Where the court orders a new sale of property pursuant to Section 873.730 or Section 873.740, notice of sale shall be as provided in this section.” (Code Civ. Proc., § 873.640.)

“(a) A purchaser, the referee, or any party may move the court to confirm or set aside the sale. (b) The moving party shall give not less than 10 days' notice of motion to: (1) The purchaser if the purchaser is not the moving party; and (2) All other parties who have appeared in the action.” (Code Civ. Proc., § 873.720.) “(a) At the hearing, the court shall examine the report and witnesses in relation to the report. (b) The court may confirm the sale notwithstanding a variance from the prescribed terms of sale if to do so will be beneficial to the parties and will not result in substantial prejudice to persons interested in the sale. (c) The court may vacate the sale and direct that a new sale be made if it determines any of the following: (1) The proceedings were unfair or notice of sale was not properly given. If there is no finding at the hearing of unfairness or improper notice, the sale may thereafter not be attacked on such grounds. (2) The sale price is disproportionate to the value of the property. (3) It appears that a new sale will yield a sum that exceeds the sale price by at least 10 percent on the first ten thousand dollars ($10,000) and 5 percent on the amount in excess thereof, determined after a reasonable allowance for the expenses of a new sale.” (Code Civ. Proc., § 873.730.) “(a) If at the hearing under Section 873.730 a responsible bidder makes a written increased offer that exceeds the sale price by at least 10 percent on the first ten thousand dollars ($10,000) and 5 percent on the amount in excess thereof, the court in its discretion may do either of the following: (1) Vacate the sale and direct that a new sale be made. (2) Vacate the sale, accept the increased offer, and confirm the sale to the offerer. (b) Except as provided in subdivision (c), the amount by which an increased offer exceeds the sale price is determined on the basis of the gross amount of the increased offer including any commission on the increased offer to which an agent may be entitled. (c) Where in advance of sale the court has so ordered or the parties have so agreed, if an increased offer is made by a party to the action who is not represented by an agent, the amount by which an increased offer of a nonparty exceeds the sale price is determined on the basis of the net amount of the increased offer excluding any commission on the increased offer to which an agent may be entitled.” (Code Civ. Proc., § 873.740.)

A review of the operative statutory language indicates that the notice and reversal provisions apply to partition actions, and where the court orders a sale. The subject action involves neither. While the sale was indisputably conducted without the approval of Plaintiff, the court declines to “reverse” the sale under this authority. (Butte Creek Island Ranch v. Crim (1982) 136 Cal.App.3d 360, 365-369; Williams v. Wells Fargo Bank & Union Trust Co. (1943) 56 Cal.App.2d 645, 647.) The court therefore also declines to consider whether the property was purchased for good consideration, as presented in the opposition in that the sale itself is not under review by the court. The request for sanctions/attorney fees under this section is also not considered and denied.

On the second part of the request, placement of any sales proceeds into a constructive trust or deposited with the court, the court again reviews the basis for said relief. The foundation for a constructive trust arises in statute. “One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.” (Civ. Code, § 2223.) “One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.” (Civ. Code, § 2224.) “‘[A] constructive trust may be imposed in practically any case where there is a wrongful acquisition or detention of property to which another is entitled.’” (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238.)

“A constructive trust is an equitable remedy imposed where the defendant holds title or some interest in certain property which it is inequitable for him to enjoy as against the plaintiff. [¶] In order to create a constructive or involuntary trust as defined in section 2224, no conditions other than the three stated in that section are necessary: the existence of a res (property or some interest in property), the plaintiff's right to that res, and the defendant's gain of the res by fraud, accident, mistake, undue influence, the violation of a trust or other wrongful act (citations). A constructive trust is a remedial device primarily created to prevent unjust enrichment; equity compels the restoration to another of property to which the holder thereof is not justly entitled (citation).” (Kraus v. Willow Park Public Golf Course (1977) 73 Cal.App.3d 354, 373.)

The circumstances of the sale, especially given the noticed lis pendens establishes a basis for the wrongful sale of the property. Defendant, in pro per, offers significant legal challenge as to the validity of the quiet title action itself, contends any such equitable relief should be imposed against third parties Charles and Orelie Williams, and that Defendant in pro per properly relied on the representations of the escrow and title company as to the property of the bona fide sale for value. Any challenge to the validity of the quiet title action itself is not the proper subject matter for an opposition to the subject motion. Defendant appeared in the action and apparently waived any challenges to the validity of the pleading itself, including potentially missing indispensable parties. The court declines to consider said positions.

Defendant also challenges the court as the proper forum for the subject action. This position lacks any legal support. Even if the court considered the contention, again, any challenges on the statute of limitations or other issues with the operative complaint are not properly raised in the subject opposition. The court also declines to consider the adverse possession or equitable ownership claim presented via the extensive exhibits showing payments for property tax, insurance payment, etc. Given the extensive presentation of the numerous legal positions by Defendant appearing in pro per, Defendant may also research the means for presenting said counterclaims as to the ownership and valuation dispute. The court in no way lowers the standards required for a pro per appearing party. (Kobayashi v. Superior Court (2009) 175 Cal.App.4th 536, 543.)

Finally, on laches, the court again finds a lack of support. While the complaint was filed in July 2024, the sale occurred on December 26, 2024, and the motion was filed on March 19, 2025. The court assumes a certain amount of time was required to discover the sale.

Thus, the court GRANTS the motion to impose a constructive trust on the sales proceeds pending adjudication of the quiet title action.

Because the property is already sold, and it remains unclear whether a lis pendens was actually recorded prior to the sale, the court cannot impose a constructive trust on the property itself.

“When it is admitted by the pleadings, or shown upon the examination of a party to the action, that he or she has in his or her possession, or under his or her control, any money or other thing capable of delivery, which, being the subject of litigation, is held by him or her as trustee for another party, or which belongs or which is due to another party or which should, under the circumstances of the case be held by the court pending final disposition of the action, the court may order the same, upon motion, to be deposited in court or delivered to such party, upon those conditions that may be just, subject to the further direction of the court.” (Code Civ. Proc., § 572.)

The court finds at least a certain amount of the sales proceeds are subject to a potential judgment in favor of Plaintiff. Because of the improper sale, and potential to abscond with the funds, the court is within its equitable authority to order a deposit of funds with the court pending adjudication of the action. (In re Marriage of Fithian (1977) 74 Cal.App.3d 397, 401; Michal v. Adair (1944) 66 Cal.App.2d 382, 389.)

Other than an indication of the sale of the property for “one million dollars,” however, the court cannot determine the actual net sales proceeds or any other claims of equity based on the regular mortgage payments. The court therefore requests a supplemental brief from each party articulating the basis of the amount subject to deposit based on claims of net equity between the two parties.

The court therefore continues the hearing for the purpose of determining the net amount to be deposited with the court. The court will NOT consider any challenges to the right to seek the deposit. If Defendant choses to represent the inability to deposit the funds for whatever reason, Plaintiff may consider a fraudulent conveyance action, which may include naming any and all potential defendants discovered through subpoenas of bank records of the paid sales proceeds.

An OSC re: Determination of Deposit Amount is set for June 5, 2025. Plaintiff will serve any supplemental brief of no more than five (5) pages 16 court days before the hearing date–May 13, 2025. Defendant, in pro per, or should new counsel appear in the case, shall file any opposition/response no less than nine (9) court days from the hearing date—May 29, 2025. The court will not accept any reply. A failure to submit any supplemental brief, may lead to the motion being denied due to lack of any determined amount or granted without opposition based on unchallenged representation of any amount representing a potential judgment.

Plaintiff Williams to give notice.