Judge Thomas D. Long, Case Number: 23STCV20836, Date: 2024-12-26 Tentative Ruling

On August 30, 2023, Plaintiff Yellow Owl Properties Managements, Inc. filed this quiet title action against Defendant Cristian Arturo Llamas.

On August 31, 2023, Plaintiff recorded a Notice of Pendency of Action for the property commonly known as 15526 Mar Vista Street, Whittier, CA 90605 (Document No. 20230582290).

On November 21, 2024, Plaintiff filed a “Notice Notice of Recorded Notice of Lis Pendens [Pendency of Action]” in this action.

Plaintiff’s Objection Nos. 1-4 to the Declarations of Luis Castellanos and Sandra Zepeda are sustained for lack of foundation and improper opinion.

Defendant’s Objection Nos. 23-24 are sustained for lack of foundation and speculation.

Defendant submitted his own declaration (with exhibits) for the first time with his Reply. The Court generally will not consider new evidence submitted with a reply.¿¿(See¿Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537-1538.) Even if the Court does consider this new evidence, it does not change the Court’s decision.

Plaintiff’s request for judicial notice of the complaint, Defendant’s answer, and a court order in this action is denied as unnecessary because these items are already part of this case’s record.

Plaintiff’s request for judicial notice of a trial order in another case is denied as irrelevant.

When a party asserts a real property claim, that party may record a notice of pendency of action in the office of the county recorder. (Code Civ. Proc., § 405.20.) Before recording the notice, the claimant must mail a copy to all parties to whom the real property claim is adverse and to all owners of record of the real property affected by the real property claim. (Code Civ. Proc., § 405.22.) Immediately after recording the notice, a copy of the notice shall be filed with the court. (Ibid.) If these requirements are not met and if a proof of service is not recorded with the notice of pendency of action, the notice is void and invalid. (Code Civ. Proc., § 405.23.)

After the notice of pendency of action is recorded, a party or nonparty with an interest in the property may apply to expunge the notice. (Code Civ. Proc., § 405.30.) The Court must order the notice expunged if the pleading on which the notice is based does not contain a real property claim or if the claimant has not established the probable validity of the real property claim. (Code Civ. Proc., §§ 405.31, 405.32.)

A. Plaintiff Substantially Complied with the Service Requirements, and Defendant Had Actual Notice.

Defendant argues that the lis pendens is invalid because Plaintiff did not comply with the procedural rules. (Motion at pp. 6-7.) As of the date Defendant filed the motion, “Plaintiff still has not filed the lis pendens with the Court nor does it appear that it was served on the Defendant.” (Id. at p. 7.)

“[A] party alleging a lis pendens is ‘void and invalid’ (§ 405.23) for defective service may move for expungement on that basis.” (Rey Sanchez Investments v. Superior Court (2016) 244 Cal.App.4th 259, 263.) “The notice requirement is intended to assure that property owners receive prompt notice of the recording of a lis pendens.” (Biddle v. Superior Court (1985) 170 Cal.App.3d 135, 137.) Substantial compliance that unquestionably conveys prompt actual notice satisfies the purpose of the statute. (Id. at pp. 137-138) A party may also waive any service defects by waiting too long to assert them. (Id. at p. 138.)

Plaintiff did not file a notice of its lis pendens in this action until November 21, 2024, after Defendant filed this motion. However, Defendant’s motion demonstrates that he had actual notice. Moreover, Plaintiff has shown that it substantially complied with the service requirements and that Defendant had actual notice during his entire involvement in this action.

On August 30, 2023, the notice of pendency of action was mailed to Defendant at two different mailing addresses. (Carter Decl. ¶ 9.) To support his contention that the notice was never served on him, Defendant provides a copy of the USPS website printout with tracking numbers used for Plaintiff’s certified mail, which shows a last status of “Moving Through Network” on September 4, 2023 and no delivery date. (Motion at p. 7 & Ex. B.) In response, Plaintiff provides copies of the signed Domestic Return Receipts with the same tracking numbers, proving delivery. (Opposition, Ex. 17.)

Additionally, on September 18 and 19, 2023, Plaintiff’s counsel emailed Defendant and his counsel copies of, among other things, the complaint and the recorded copy of the notice of pendency of action. (Carter Decl. ¶¶ 10-11 & Exs. 18-19.) The proof of service of the summons filed on October 4, 2023 also includes the Notice of Pendency of Action in the list of documents that were served on September 28, 2023.

Under these circumstances, the Court finds that Plaintiff substantially complied with the notice requirements and that Defendant had actual notice of the lis pendens.

Defendant filed an answer on December 4, 2023, engaged in discovery, opposed Plaintiff’s motion for a protective order, deposed Plaintiff’s officers/directors, and posted jury fees. Defendant did not assert any service defects until almost 15 months after this action was filed, and almost 14 months after he was served with the summons, notice, and other documents. Accordingly, the Court also finds that Defendant has waived the defects in service.

B. Plaintiff Has Established the Probable Validity of the Real Property Claim.

The court shall order that a notice of lis pendens be expunged if the claimant has not established by a preponderance of the evidence the probable validity of the real property claim. (Code Civ. Proc., § 405.32.) “Probable validity ‘means that it is more likely than not that the claimant will obtain a judgment against the defendant on the claim.’ (§ 405.3.) Thus, when presented with a pretrial motion to expunge a lis pendens, the court must grant the motion unless the claimant establishes by a preponderance of the evidence the probable validity of the real property claim.” (De Martini v. Superior Court (2024) 98 Cal.App.5th 1269, 1279, quotation marks omitted.)

Plaintiff’s claim to the property is based on Defendant allegedly recording a forged deed that granted the property from Plaintiff to himself. On December 16, 2015, Sandra and Jesse Zepeda transferred the property via grant deed with 95% to Plaintiff and 5% to Defendant. (Complaint ¶ 17.) On September 12, 2016, Mara Llamas quitclaimed her interest (if any) to Christian Arturo Llamas. (Complaint ¶ 18.) On October 26, 2016, Defendant signed a grant deed transferring the property to Plaintiff. (Complaint ¶ 19 & Ex. 2.) After that, Plaintiff held full title to the property. (Complaint ¶ 13.) On June 16, 2023, a quitclaim deed dated November 22, 2019 was recorded. (Complaint ¶¶ 25-26.) The deed was purportedly signed by Arturo Llamas, as Plaintiff’s President, to transfer title of the property to Defendant. (Complaint ¶ 26.) Plaintiff alleges that the 2019 quitclaim deed does not contain Arturo Llamas’s true signature. (Complaint ¶ 27.)

Defendant argues that Plaintiff cannot offer any evidence to establish the probable validity of its claims because Plaintiff has no basis for the allegation that the signature on the deed in question was forged. (Motion at p. 6.) According to Defendant, Plaintiff’s representatives “admit the signature is valid and/or they do not have a legitimate basis to claim otherwise.” (Id. at pp. 3-4.)

During Jessica Llamas’s deposition, she was asked if the deed contained her father’s signature, and she responded, “It appears to be.” (Motion at p. 4; Motion, Ex. C at p. 72.) Jessica was also asked, “But you—you confirmed this is his signature, to your knowledge, correct?” and she responded, “I repeat that I said it assumes to be, yes.” (Motion at p. 4; Motion, Ex. C at p. 73.) Finally, she was asked, “Has anybody other than your lawyer told you that that’s not your father’s signature on Exhibit—on page 150?” to which she responded, “No.” (Motion at p. 4; Motion, Ex. C at pp. 74-75.)

During Claudia Llamas’s deposition, she was asked whose signature was on the deed, and she responded, “My father’s.” (Motion at p. 4; Motion, Ex. D at p. 56.) She had “no idea” who signed it, and said that she did not think her father signed it because “[h]e wouldn’t gift this house for him for free.” (Motion at p. 4; Motion, Ex. D at p. 57.) Claudia saw someone notarized her father’s signature a few times, but she did not know what was being notarized or why. (Motion at pp. 4-5; Motion, Ex. D at pp. 62-63.) She was then asked, “So you don’t know if this quitclaim deed, page 150, is one of those things that you witnessed with your own eyes your dad signing; do you?” and she responded, “No, I’m not sure.” (Motion at p. 5; Motion, Ex. D at pp. 62-63.)

These responses from Jessica and Claudia Llamas that the signature “appears to be” Arturo’s and they did not know if the deed is one of the documents that they saw be notarized are only slight evidence in Defendant’s favor that suggests that Arturo’s signature on the 2019 deed is authentic and therefore a valid transfer. These are not unequivocal denials that the signature is Arturo’s, but they are also not express confirmation that the signature is authentic.

The notary who notarized Arturo’s signature on the 2019 deed “[verifies] that Arturo Llamas is the person who signed it,” the signature is valid, and all necessary protocols were followed. (Castellanos Decl. ¶ 4.) This is also slight evidence in Defendant’s favor; however, the notary lost his notary journal to theft on October 1, 2020, so his testimony is the only evidence. (Castellanos Decl. ¶ 5.)

Sandra Zepeda, the prior owner of the property, declares that she has “a clear memory of the transaction” when she sold the property to Defendant in 2016, and she “always understood and believed that the buyer was Cristian Llamas.” (Zepeda Decl. ¶¶ 2-3.) This is contradicted by the December 16, 2015 grant deed from “Sandra Zepeda and Jesse Zepeda, Husband and Wife as Joint Tenants” to “Yellow Owl Properties Managements, Inc., a California Corporation as to an undivided 95% interest and Cristian Arturo Llamas, a married man as his sole and separate property as to an undivided 5% interest.” (Complaint, Ex. 1.) Sandra Zepeda cannot credibly “confirm[] that the buyer was the Defendant in this action” (Motion at p. 5) when Defendant received only a 5% interest. This third-party declaration has no evidentiary value.

In response, Plaintiff focuses on evidence of Arturo’s intent and the totality of the control over the property since the 2019 deed. (See Opposition at pp. 6-11.)

Defendant stopped providing services for Plaintiff in 2018. (J. Llamas Decl. ¶ 13.) Claudia began working for Plaintiff in 2015, and Jessica began working for Plaintiff in 2019. (J. Llamas Decl. ¶¶ 12, 14.) Since 2019, Claudia and Jessica have been involved in managing the properties owned by Plaintiff. (J. Llamas Decl. ¶ 15.) As of July 30, 2019, Arturo named Claudia as Plaintiff’s CFO, Jessica as Secretary, and Arturo and Claudia as the only Directors. (J. Llamas Decl. ¶¶ 17-18 & Ex. 4 [Statement of Information]; see C. Llamas Decl. ¶ 4.) They remained in these roles as of the November 22, 2019 deed. (J. Llamas Decl. ¶ 22.) Also, by the end of October 2019, Plaintiff held full title to the property. (Complaint ¶¶ 13, 19 & Ex. 2.)

Plaintiff’s January 21, 2022, November 9, 2022, and November 22, 2023 Statements of Information name Claudia as CEO and CFO, Jessica as Secretary, and both of them as the only two Directors. (J. Llamas Decl. ¶¶ 34-36 & Exs. 9-11; see C. Llamas Decl. ¶ 3.) Jessica and Claudia have never seen the 2019 deed, which states there is no transfer tax and has “gift” written on it. (J. Llamas Decl. ¶¶ 21, 24; C. Llamas Decl. ¶ 5; see J. Llamas Decl. ¶ 28.) Arturo never mentioned that he was going to have Plaintiff transfer the property to Defendant, and there was no board discussion or approval of the transfer. (J. Llamas Decl. ¶¶ 23, 27; see C. Llamas Decl. ¶ 7.)

This evidence of Jessica’s and Claudia’s involvement in Plaintiff and unawareness of Plaintiff’s purported transfer supports Plaintiff’s assertion that it did not validly transfer title to the property to Defendant via Arturo. Arturo’s treatment of Plaintiff, the property, and the individuals during his lifetime further casts doubts on him validly transferring the property from Plaintiff to Defendant. Arturo amended his trust to grant Jessica and Claudia each a 50% interest in Plaintiff upon his death, and he provided nothing for Defendant. (J. Llamas Decl. ¶ 33.) This division is consistent with Arturo’s decisions for Plaintiff’s management: as of July 30, 2019, Arturo named Claudia as Plaintiff’s CFO, Jessica as Secretary, and Arturo and Claudia as the only Directors. (J. Llamas Decl. ¶¶ 17-18 & Ex. 4 [Statement of Information]; see C. Llamas Decl. ¶ 4.) Arturo’s failure to include Defendant in both the division of his trust and the management of Plaintiff (the property owner) strongly suggests that he would not transfer property ownership from Plaintiff to Defendant.

Other evidence shows that since 2019, Defendant has not acted in a manner that is consistent with ownership. “A person who exercises acts of ownership over property is presumed to be the owner of it.” (Evid. Code, § 638; see Motion at pp. 9-10.) Defendant argues that Evidence Code section 638 “relates to personal property, not real property.” (Reply at p. 2.) Not so. (See, e.g., Kunza v. Gaskell (1979) 91 Cal.App.3d 201, 208 [possession conferred title to real property in the absence of other evidence, citing section 638].)

Jessica has lived at the subject property since December 2015, and Claudia lived there from December 2015 through March 2021. (J. Llamas Decl. ¶¶ 19-20.) Plaintiff continued to pay the taxes, improve the property, and manage the property. (J. Llamas Decl. ¶¶ 29-30 & Exs. 5-6 [2019-2022 tax statements and invoice for improvements].)

Defendant argues that he also lived at the property “on and off through January 2022,” made tax payments, and required maintenance be paid by Plaintiff. (Reply at pp. 5-6; Reply, C. Llamas Decl. ¶¶ 5-6.) The “record of tax payment for the Property which [Defendant] personally made” is a photograph of an Annual Secured Property Tax Bill and payment receipt. (Reply, C. Llamas Decl., Ex. 3.) It does not identify any property or payor, and it has no apparent evidentiary value. Defendant also contends that he “continued to receive reports from my father and indeed texts from Claudia” about work for Plaintiff. (Reply, C. Llamas Decl. ¶ 4.) The attached exhibit contains text messages from March 2019 of a few short Spanish phrases without context (presumably from Arturo) and an unidentifiable photo from Jessica. (Reply, C. Llamas Decl., Ex. 2.) This exhibit has no apparent evidentiary value with respect to Defendant’s actions after the purported November 22, 2019 transfer. On the other hand, Plaintiff’s evidence includes full copies of Annual Secured Property Tax Bills addressed to Plaintiff for the property at issue. (Opposition, Ex. 5.) Plaintiff’s evidence shows that it was Plaintiff, not Defendant, who paid the property taxes for 2019-2022, consistent with the obligations of the true owner of the property.

Defendant did not attempt to assert any ownership rights from the November 22, 2019 purported transfer until the July 6, 2023 sixty-day notice to pay or quit served on Jessica and Claudia. (See Complaint ¶ 31; C. Llamas Decl. ¶¶ 25-26.) Defendant’s failure to collect rent after the purported transfer, failure to assert any right to the property before Arturo’s death, and failure to pay property taxes on a property purportedly held in his own name do not suggest that any property transfer was valid since 2019. (See Huth v. Katz (1947) 30 Cal.2d 605, 609.)

Plaintiff also appears to argue that regardless of the deed’s signature, Arturo could not have transferred the property to Defendant in his lifetime because he did not deliver the deed to Defendant. (See Opposition at pp. 10-11.) “A grant takes effect, so as to vest the interest intended to be transferred, only upon its delivery by the grantor.” (Civ. Code, § 1054.) Defendant’s discovery responses suggest that the 2019 deed was not delivered to him to cause the property transfer during Arturo’s lifetime. According to Defendant, he did not record the 2019 deed earlier than June 16, 2023 “because it had been misplaced.” (Opposition, Ex. 22 [Special Rog Nos. 7-8].) Defendant found the deed in the attic at another property “[a]round the time it was recorded” “[b]y looking through boxes in the attic.” (Opposition, Ex. 23 [Special Rog Nos. 9-12].)

Only in his Reply does Defendant argue that title to the property passed “irrespective of whether the deed is recorded and irrespective of whether delivery is accompanied by change of possession,” and “neither recording nor possession of the property in question is relevant where, as here, the deed has been delivered to the grantee.” (Reply at pp. 1-2; see Civ. Code, § 1217 [“An unrecorded instrument is valid as between the parties thereto and those who have notice thereof.”].) Defendant declares that “[t]he deed in question was delivered from my father Arturo Llamas, as president of Yellow Owl, to me, on the date he signed it,” and Defendant placed the deed in the attic of his business “until [he] went searching for it and found it in 2023.” (Reply, C. Llamas Decl. ¶ 2.)

At this stage of the proceedings, the Court need not decide the issue of whether the transfer is valid due to the deed’s purported delivery to Defendant. The totality of other evidence tends to disprove Arturo’s intent to transfer the property to Defendant, thereby demonstrating some validity of the asserted claims. (See Opposition at pp. 11-12.)

Additionally, Defendant first began claiming ownership and management of Plaintiff around January 29, 2024—five months after Plaintiff filed this action—when he filed an unauthorized statement of information for Plaintiff naming him as the CEO, CFO, Secretary, and sole Director of Plaintiff. (J. Llamas Decl. ¶ 37 & Ex. 12.) Defendant offers no explanation for this conduct, which further impugns his credibility.

The Court finds that Plaintiff has established by a preponderance of the evidence the probable validity of the real property claim, and the lis pendens should not be expunged.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court