Banuelos v. Banuelos

Filed 9/27/07 Banuelos v. Banuelos CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

APPEAL from a judgment of the Superior Court of Los Angeles County. Ernest George Williams, Judge. Affirmed.

George M. Halimi for Defendants and Appellants.

Michael Levine for Plaintiffs and Respondents.

This case concerns a dispute among family members over the ownership of certain real property located at 6934, 6936, 6938, and 6940 Valmont Street, in Tujunga, California (the Valmont property). Defendants and appellants Manuel Banuelos (Manuel) and Hilda Diaz (Hilda) (Manuel and Hilda are referred to collectively as defendants) hold legal title to the Valmont property, and claim to be the sole legal and beneficial owners. Plaintiffs Soledad Banuelos (Soledad), Lazaro Banuelos (Lazaro), Felix Banuelos (Felix), and Elena Rodriguez (Elena) (collectively plaintiffs), claim that pursuant to the terms of an oral agreement, they and the heirs of Pablo Banuelos (Pablo), are beneficial owners of the Valmont property with Manuel. Felix and Elena are Manuels siblings; Soledad and Lazaro are Manuels parents; and Pablo, who is now deceased, was Manuels brother.

After a three-day court trial, the trial court entered judgment in favor of plaintiffs, concluding that defendants hold legal title to the Valmont property for the benefit of plaintiffs, Manuel, and the children of Pablo Banuelos -- Pablo Banuelos, Jr., Lourdes Banuelos, Laura Banuelos, and Saul Banuelos (Pablos heirs). The trial court ordered defendants to execute and deliver to plaintiffs a deed conveying to each of them an undivided one-sixth interest in the Valmont property as tenants in common, and conveying to each of Pablos heirs an undivided one twenty-fourth interest in the Valmont property as tenants in common. Defendants contend the judgment must be reversed because the trial court lacked personal and subject matter jurisdiction over Pablos estate, and because the evidence does not support the trial courts factual findings or its determination concerning the parties respective undivided beneficial interests in the Valmont property. Defendants further contend the trial court lacked jurisdiction to render a judgment in favor of Pablos heirs, who are not parties to this action. We affirm the judgment.

BACKGROUND

Before moving to the United States, Manuel, Soledad, Lazaro, Felix, and Elena lived in a house in Tijuana, Mexico. Pablo had purchased the Tijuana house for the family. At the time the Tijuana house was purchased, it was uninhabitable and needed a roof, kitchen, bathrooms, plaster, and a retaining wall. Felix and Elena provided funds to buy building materials, and Lazaro, Soledad, and Manuel performed much of the labor needed to make the house habitable.

In 1993, the family decided to sell the Tijuana house, because by that time the family members had moved to the United States. The Tijuana house was sold for $32,500 in U.S. dollars, and the sale proceeds were given to Soledad, who had the money brought to the United States. Soledad, Pablo, and Elena discussed investing the sale proceeds in California real estate, and Elena and her husband, Jose Rodriguez (Jose), began looking for properties to purchase. Elena and Jose found the Valmont property, which consisted of four houses on a single lot in Tujunga, California.

The family members agreed that Soledad, Lazaro, Pablo, Felix, Elena, and Manuel would be the owners of the Valmont property, because each of them had made substantial contributions toward the familys home in Tijuana, and most of the funds used to acquire the Valmont property would come from the sale proceeds for the Tijuana home. The family members further agreed that because Manuel was unmarried, he would hold title to the Valmont property for the benefit of the others. The Valmont property was purchased for $160,000. Soledad and Lazaro provided $24,000 toward the purchase price, Elena provided $8,000, and Manuel provided $5,000. The balance of the purchase price was financed.

The Valmont property was in a state of disrepair at the time it was purchased. Pablo and Jose removed debris that had been abandoned on the property and repaired a failing septic system. Soledad, Felix, and Elena purchased building materials and hired contractors to perform other necessary repairs. The Valmont property was occupied by tenants who had not paid the rent for some time, and Elena, who was a legal secretary, prepared eviction notices and hired an attorney to assist in removing the tenants. For two-and-a-half years after the Valmont property was purchased, Soledad gave Manuel approximately $400 a month toward the mortgage payments for the property.

In 2001, Manuel refinanced the property and executed a quitclaim deed transferring title to the Valmont property to himself and to Hilda, as joint tenants. At the time, plaintiffs were unaware that the Valmont property had been refinanced, or that title had been transferred to Hilda and Manuel jointly. In 2005, defendants entered into a contract to sell the Valmont property for a net sale price of approximately $461,000.

On August 1, 2005, plaintiffs filed a complaint for imposition of a constructive trust, preliminary injunction, elder abuse, and intentional infliction of emotional distress. In their complaint, plaintiffs alleged that pursuant to the terms of an oral agreement, Manuel, Pablo, and each of plaintiffs owned a one-sixth beneficial interest in the Valmont property, and that Manuel held legal title to the Valmont property for the benefit of the others. Plaintiff further alleged that Pablo had died in 2004, and that his interest in the property passed to his adult children, Pablo Banuelos, Jr., and Lourdes, Laura, and Saul Banuelos. After a three-day court trial, the trial court ruled that defendants held legal title to the Valmont property as constructive trustees for the benefit of plaintiffs and Pablos heirs, and ordered defendants to execute and deliver a deed conveying an undivided one-sixth interest in the Valmont property to each of plaintiffs, as tenants in common, and an undivided one twenty-fourth interest in the Valmont property to each of Pablos heirs, as tenants in common. The trial court ruled that plaintiffs action was not barred by the statute of frauds, and that defendants were not liable for damages based on elder abuse or intentional infliction of emotional distress. Defendants filed this appeal.

DISCUSSION

I. Applicable Law and Standard of Review

A constructive trust may be imposed as an equitable remedy whenever the evidence establishes a party has gained property by fraud, breach of trust, or other wrongful act. A constructive trust is not a true trust but an equitable remedy available to a plaintiff seeking recovery of specific property in a number of widely differing situations. The cause of action is not based on the establishment of a trust, but consists of the fraud, breach of fiduciary duty, or other act which entitles the plaintiff to some relief. That relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff. (5 Witkin, Cal. Procedure (3d ed. 1985) Pleading, 791, p. 234, original italics.) (Olson v. Toy (1996) 46 Cal.App.4th 818, 823.)

The principal circumstances where constructive trusts are imposed are set forth in Civil Code sections 2223 and 2224. Section 2223 provides that [o]ne who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner. Section 2224 states that [o]ne 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. Under these statutes and the case law applying them, a constructive trust may only be imposed where the following three conditions are satisfied: (1) the existence of a res (property or some interest in property); (2) the right of a complaining party to that res; and (3) some wrongful acquisition or detention of the res by another party who is not entitled to it. [Citations.] (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990.)

A party attempting to establish the constructive trust must establish the claim by clear and convincing evidence. [Citation.] (Taylor v. Fields (1986) 178 Cal.App.3d 653, 665.) We review the trial courts factual findings for substantial evidence. (Sheila S. v. Superior Court (2000) 84 Cal.App.4th 872, 880-881.) We review the trial courts imposition of a constructive trust for abuse of discretion. (GHK Associates v. Mayer Group, Inc. (1990) 224 Cal.App.3d 856, 878; Hicks v. Clayton (1977) 67 Cal.App.3d 251, 265 [propriety of granting equitable relief in a particular case by way of . . . impressment of a constructive trust, generally rests upon the sound discretion of the trial court exercised in accord with the facts and circumstances of the case].)

II. Constructive Trust

The trial court found that at the time the Valmont property was purchased, plaintiffs, Manuel, and Pablo agreed that because their collective efforts had enabled them to purchase the Valmont property, each of them would own an equal one-sixth interest in the Valmont property and that legal title would be held in Manuels name for the benefit of the others. The trial court further found that a fiduciary relationship existed between Manuel, on the one hand, and plaintiffs and Pablo, on the other hand, and that Manuel breached that duty by transferring the Valmont property in July 2001 to himself and to Hilda, as joint tenants, and by entering into a contract to sell the Valmont property to a third party. The trial court found that Pablo is deceased and that his surviving heirs are his children, Pablo Banuelos, Jr., Lourdes, Laura, and Saul Banuelos. Substantial evidence supports these findings.

Soledad and Elena testified that before moving to the United States, the family lived in a house in Tijuana. Pablo had provided the funds necessary to purchase the house, and plaintiffs and defendant contributed labor and materials to improve the house. When the Tijuana house was sold in 1993, Soledad brought the $32,500 in sale proceeds to the United States for the family to invest in California real estate. Soledad, Elena, Jose, and Felix all testified that Manuel knew the Valmont property was a family investment and that although Manuel was designated as the title owner of the property, plaintiffs, Manuel, and Pablo had agreed that they were all to be beneficial owners of the property. Soledad provided $24,000 and Elena provided $8,000 toward the purchase price of the Valmont property. Neither intended their contribution to be considered a gift or a loan. Soledad testified that sometime after the Valmont property was purchased, Manuel gave her $16,000 in cash, for which he asked her to sign a receipt. Pablo subsequently died, and Soledad used some of the $16,000 to pay for Pablos funeral.

Although Manuels testimony at trial conflicted with that of plaintiffs (he denied agreeing to purchase the Valmont property for the benefit of any other family members, and stated that Soledad had loaned him $16,000 toward the purchase price of the Valmont property, which he subsequently repaid in full, we must consider all of the evidence in the light most favorable to the prevailing party, accept as true all the evidence and reasonable inferences therefrom that tend to establish the correctness of the trial courts findings and decision, and resolve every conflict in favor of the judgment. [Citation.] It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is anysubstantial evidence, contradicted or uncontradicted, in support of the judgment. [Citation]. (Baxter Healthcare Corp. v. Denton(2004) 120 Cal.App.4th 333, 369.)

Substantial evidence supports the trial courts factual findings, and the imposition of a constructive trust under the circumstances presented here was not an abuse of discretion. (Hicks v. Clayton, supra, 67 Cal.App.3d at p. 265.)[1]

III. Alleged Jurisdictional Issues

Defendants contend the judgment must be reversed because the trial court had no jurisdiction over Pablos estate. The trial courts jurisdiction, or lack thereof, over Pablos estate and his heirs is neither relevant to, nor at issue in this action for equitable relief. The subject matter of this action is not Pablos estate, but the parties interests in the Valmont property. The trial court had jurisdiction to adjudicate the matter before it. (Code Civ. Proc., 392, subd. (a)(1) [the superior court in the county where the real property that is the subject of the action, or some part thereof, is situated, is the proper court for the trial of the following actions: [] . . . For the recovery of real property, or of an estate or interest therein, or for the determination in any form, of that right or interest].)

Defendants further contend that the trial court lacked jurisdiction to enter a judgment in favor of Pablos heirs, who are not parties to this action. Even assuming Pablos heirs are indispensable parties to this action, their absence is not a jurisdictional defect, as the trial court had jurisdiction to render a decision as to the parties before it, and that judgment is valid as to those parties. (Martin v. Kehl, supra, 145 Cal.App.3d at p. 242.) Defendants, moreover, waived any issue concerning the failure to include Pablos heirs as parties to this action by not raising it with the trial court below. Plaintiffs complaint alleged that as the result of Pablos efforts and contributions toward the familys Tijuana home, he owned a beneficial one-sixth interest in the Valmont property, as a tenant in common with Manuel and plaintiffs. Plaintiffs complaint sought an order compelling defendants to convey to them their respective interests in the Valmont property and to convey Pablos interest to his successors. Defendants raised no objection or issue with the trial court concerning the absence of Pablos heirs as parties to this action either before or after the trial court issued its statement of decision. Defendants accordingly waived any issue concerning the absence of Pablos heirs by not raising it until this appeal. (Martin v. Kehl, at p. 242; King v. King (1971) 22 Cal.App.3d 319, 326 [when a case has been fully tried without objection to the absence of parties and the claim that the absent parties were indispensable is raised for the first time on appeal . . . policy considerations of avoiding piecemeal litigation and multiplicity of suits [citation] are of little consequence].)

DISPOSITION

The judgment is affirmed. Plaintiffs are awarded their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

____________________, J.

CHAVEZ

We concur:

_______________________, Acting P. J.

DOI TODD

_______________________, J.

ASHMANN-GERST

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[1] The judgment may also be affirmed on the basis of a resulting trust. (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238; Kraus v. Willow Park Public Golf Course (1977) 73 Cal.App.3d 354, 373.) A resulting trust, like a constructive trust, is an involuntary trust implied by law. It arises when property is transferred under circumstances showing that the transferee was not intended to take the beneficial interest, or, as is the case here, the entire beneficial interest. (Martin v. Kehl, at p. 238) Ordinarily a resulting trust arises in favor of the payor of the purchase price of the property where the purchase price, or a part thereof, is paid by one person and the title is taken in the name of another. (Ibid.) It has been termed an intention enforcing trust, to distinguish it from the other type of implied trust, the constructive or fraud rectifying trust. (American Motorists Ins. Co. v. Cowan (1982) 127 Cal.App.3d 875, 884-885.) Here, Manuel held title to the Valmont property in trust for the other beneficial owners.