Cochran v. Bennett

Filed 9/18/09 Cochran v. Bennett CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

APPEAL from a judgment of the Superior Court of Los Angeles County.

Rolf M. Treu, Judge. Reversed.

Law Office of Louis P. Dell and Louis P. Dell for Plaintiff and Appellant.

Simon H. Langer for Defendant and Respondent.

_______________

Plaintiff Melody L. Cochran ("Wife") appeals the judgment in favor of her husband, defendant William Bennett ("Husband"), entered following the latter's successful motion for judgment on the pleadings. The trial court took judicial notice of the contents of certain documents on file in the parties' dissolution action, and ruled that Wife's judicial admissions establish that the statute of limitations has run on her claims against Husband in this lawsuit. We disagree, and reverse the judgment.

FACTUAL AND PROCEDURAL SUMMARY^[1]

Husband and Wife were married on December 11, 1994. Wife filed a petition for dissolution of the marriage on August 26, 2002; a final judgment of dissolution has yet to be entered.

Prior to her marriage, Wife had inherited a residence located at 1526 North Avenue 50 in Los Angeles (the "Property"), as her sole and separate property. During the marriage, Husband promised to manage the Property on Wife's behalf. In 1996, without Wife's knowledge, consent or authorization, Husband caused Wife's signature to be forged on a grant deed, resulting in the transfer of record title to others. Through a series of subsequent transfers, Anthony H. Delonay, Husband's business partner, became the record owner of the Property in 2003. Wife learned of these fraudulent transfers of the Property in February 2004.

Wife filed this suit to quiet title to the Property on September 21, 2006; the operative second amended complaint was filed on August 24, 2007. In that complaint, Wife names as defendant Husband, Mr. Delonay, the notary who attested to Wife's signature on the 1996 grant deed, and the beneficiary, its nominee, and the trustee under two deeds of trust recorded on the Property.

Husband is the sole defendant on this appeal. The two causes of action concerning him were for fraud in the unauthorized transfer of the Property in 1996, and breach of fiduciary duty based on that same conduct.

Husband moved for judgment on the pleadings based on the statute of limitations. He sought to have statements made by his Wife in the dissolution proceeding judicially noticed, claiming that these statements establish that she was at least on inquiry notice of the fraud more than three years before this action was filed (i.e., before September 21, 2003). The trial court granted the request for judicial notice, and entered judgment on the pleadings, from which Wife appeals.

Discussion

"A demurrer lies '[w]hen any ground for objection to a complaint, . . . appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, . . . .' (Code Civ. Proc., 430.30, subd. (a).) Consequently, the 'demurrer tests the pleading alone and not the evidence or other extrinsic matters which do not appear on the face of the pleading or cannot be properly inferred from the factual allegations of the complaint. This principle means that if the pleading sufficiently states a cause of action the demurrer cannot be granted on the basis of a showing of extrinsic matters by inference from attached exhibits, affidavits or otherwise except those matters which are subject to judicial notice.' (Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 Cal.App.3d 496, 499.)" (Bach v. McNelis (1989) 207 Cal.App.3d 852, 864.) "[T]he question of proof cannot be resolved on a demurrer where all properly pled allegations 'are taken as true even though their proof appears unlikely.' (Stanson v. Brown (1975) 49 Cal.App.3d 812, 814.)" (Bach v. McNelis, supra, 207 Cal.App.3d at p. 866.) "A motion for judgment on the pleadings 'is made on the same grounds, and is decided on the same basis, as a general demurrer, i.e., it will be granted only if the complaint on its face fails to state a cause of action.' (5 Witkin, Cal. Procedure (3d ed. 1985) Pleadings, 953, pp. 385-386.)" (Bach v. McNelis, supra, 207 Cal.App.3d at p. 865.) "As a reviewing court, we are not bound by the construction of the pleadings by the trial court, but we make our own independent judgment of the sufficiency of the complaint. [Citation.]" (Parsons v. Tickner (1995) 31 Cal.App.4th 1513, 1521.)

Husband requested the trial court to take judicial notice, as court records pursuant to Evidence Code section 452, subdivision (d), of the following documents:

1. Wife's dissolution petition filed on August 26, 2002, and specifically Attachment 4 thereto, a list of property as to which "Petitioner requests confirmation as separate property assets;" the Property does not appear on the list. Husband argues that this constitutes Wife's admission that she no longer owned the Property as of August 2002.

2. Wife's Order to Show Cause filed on November 26, 2002, together with Wife's supporting declaration. In this declaration, Wife expresses the shock she experienced when she learned that she "was married to a professional 'con-man' with a litany of prior criminal activities." She also references a "home" which she "lost" on account of Husband's actions: "As I look back on our relationship, I realize that respondent caused me to lose my first home . . ." and "As I have indicated above, prior to our marriage I lost my home as a direct result of my having completely, albeit foolishly, trusting respondent." Husband argued that this declaration, coupled with Wife's deposition testimony in which she stated that the "first home" referred to in the foregoing declaration was the Property on North Avenue 50, established that Wife knew that she no longer owned the Property more than three years before this lawsuit was filed.

3. Wife's response to form interrogatories propounded in the dissolution action, in which she states that Husband "indicated to me that I was still an owner of my residence, which I had prior to the incident, located at 55026 [sic] North Avenue 50, Los Angeles, California. [Husband] indicated he would be deeding that back to me, even though it was in my name prior to our marriage." Again, Husband argues that this statement constitutes a judicial admission that Wife knew, as of the time the statement was made, that Husband had fraudulently transferred the Property out of her name.

Wife maintains that the trial court erred in taking judicial notice of the foregoing documents. Husband counters that the statements in Wife's declarations and dissolution petition were properly judicially noticed, arguing that a court may take judicial notice of the admissions or inconsistent statements by a pleader made in prior pleadings, citing

Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604-605 and Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383-384.

"Although a court is authorized to take judicial notice in connection with a demurrer (Code Civ. Proc., 430.30, subd. (a)), it may not judicially notice the truth of assertions in declarations or affidavits filed in court proceedings." (Bach v. McNelis, supra, 207 Cal.App.3d at pp. 864-865.) However, as the court in Del E. Webb Corp. recognized, a court "passing upon the question of the demurrer may look to affidavits filed on behalf of plaintiff, and the plaintiff's answers to interrogatories [citation], as well as to the plaintiff's response to request for admissions," but "only where they contain statements of the plaintiff or his agent which are inconsistent with the allegations of the pleading before the court. The hearing may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of affidavits, declarations, depositions, and other such material which was filed on behalf of the adverse party and which purports to contradict the allegations and contentions of the plaintiff." (Del E. Webb Corp. v. Structural Materials Co., supra, 123 Cal.App.3d at p. 604-605.) Thus, "'judicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.' (Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1134.)" (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 375.)

Wife's deposition testimony and her response to form interrogatories, while constituting evidentiary admissions, are not properly subject to judicial notice, for they are subject to interpretation. For instance, Husband's statement that Wife is still an owner of the Property and that he would deed it back to her could mean either that he transferred title to a third party in alienation of Wife's interests in the Property, or simply that he added his own name to the title, and would quitclaim the Property back to her. Similarly, Wife's statement that her husband "caused me to lose my first home," while relevant evidence concerning the state of her knowledge, does not conclusively establish the fact which Husband seeks to prove. Indeed, Wife asks this court to take judicial notice of evidence to explain a contrary meaning of this statement.^[2] Because there is a factual dispute regarding the meaning of these statements, they are not subject to judicial notice.

Neither is Attachment 4 to the dissolution petition, which lists Wife's separate property but does not include the Property, the proper subject of judicial notice. We note that Attachment 4 does not purport to be, nor was Wife required to, submit a complete list of her separate property as part of the dissolution petition. The "fact" which Husband would have the court draw from the absence of the Property on the attachment to the petition is that Wife did not believe that she owned the Property at the time the attachment was prepared. That is a reasonable inference to draw from the evidence, sufficient on a motion for summary judgment to shift to Wife the burden of producing evidence to raise a triable issue on the question of whether she in fact knew that she no longer held title to the Property. It is not, however, a conclusive admission, for it does not contradict the allegations of the complaint.

In addition to her contention that the trial court erred in judicially noticing improper materials, Wife maintains that the statute of limitations was tolled throughout the marriage; because the marriage has yet to be dissolved, the statute has yet to run. The trial court, based on the language of Family Code section 2102, rejected this argument. The cited statute provides that, from the date of separation until the date of dissolution, each party is a fiduciary of the other as to community and quasi-community assets and liabilities. We agree with the trial court that Family Code section 2102 makes clear that no fiduciary relationship remains between divorcing parties with respect to separate property.

In sum, there is a factual dispute concerning that which was sought to be judicially noticed, that is, when Wife learned that Husband had forged her signature on a fraudulent deed and terminated her rights in and to the Property. While Wife's statements to the effect she had "lost" the Property on account of Husband's actions, as well as her failure to list the Property as her separate property on Attachment 4 to the dissolution petition, constitute admissible evidence on the question, they do not conclusively establish what she knew concerning Husband's defalcation at the time the statements were made. Consequently, the statements are not judicial admissions upon which judgment on the pleadings may be granted.

DISPOSITION

The judgment is reversed. Wife is to recover her costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

ARMSTRONG, J.

I concur:

MOSK, J.

I respectfully dissent. In paragraph 5 of the second amended complaint, plaintiff alleges the deed to her home was forged and the property was sold on February 26, 1996. In paragraph 41 of the second amended complaint, plaintiff alleges: In that the parties are still married, [defendant] remains a fiduciary. [Defendants] status as a fiduciary, the confidential relationship, and his conduct and concealment prevent and/or excused [p]laintiff from actually discovering the facts giving rise to the aforesaid breach of fiduciary duties. Plaintiff believes that she was unaware of the forged title until on or about February 2004. In my view, the trial court correctly ruled that given the judicially noticeable documents, plaintiff, Melody L. Cochran, did not allege sufficient nonconclusory specific facts that upon, discovery she had lost her home, she conducted a reasonable investigation of all potential causes of her injury so as to render the complaint timely filed.

First, defendant, William S. Bennett, requested judicial notice of the original, first amended, and second amended complaints in this lawsuit and following documents relevant to plaintiffs marital dissolution action: her marital dissolution petition filed August 26, 2002; her order to show cause filed November 26, 2002, in the marital dissolution matter; the November 22, 2006 declaration filed in support of the order to show cause; a portion of the transcript of her deposition; and her interrogatory answers. The documents were judicially noticeable in defendants view in that they constituted admissions and contradicted her allegations in the second amended complaint concerning why the present lawsuit was not filed earlier. The trial court granted defendants judicial notice motion.

Second, the judicially noticeable facts, when considered collectively, demonstrate the following. On March 27, 1989, plaintiff, who was single at the time, inherited the residence at 1526 North Avenue 50 in Los Angeles. In October 1994, defendant moved into the 1526 North Avenue 50 residence. On December 11, 1994, plaintiff and defendant were married. During the marriage, defendant told plaintiff the 1526 North Avenue 50 residence was her separate property. In 1997 and 2002, defendant indicated the 1526 North Avenue 50 residence was plaintiffs separate property. On February 29, 1996, a forged grant deed transferred the North Avenue 50 residence to a codefendant, Michael Laporte. Thereafter, the 1526 North Avenue 50 property was transferred: to a codefendant, Flair International, a sham entity of which plaintiff was an officer, by means of a grant deed recorded on November 6, 1997; a codefendant, Byron McIntyre, in a grant deed recorded on November 4, 1998; a codefendant, Juan D. Martinez, in a grant deed recorded on February 25, 2000; and in a grant deed dated April 1, 2003, to a codefendant, Anthony H. Delonay. Between February 29, 1996, and October 21, 2003, trust deeds were recorded by lenders securing loans using the 1526 North Avenue 50 residence as collateral. Plaintiff knew nothing of these transfers and encumbrances on her 1526 North Avenue 50 residence.

On August 26, 2002, plaintiff filed a dissolution of marriage petition following her separation from defendant on July 31, 2002. In her August 26, 2002 marital dissolution petition, plaintiff requested confirmation of separate property which was not in the martial estate. The 1526 North Avenue 50 residence was not among the assets listed in her petition which plaintiff sought to have confirmed as separate property.

On November 26, 2002, plaintiff secured the issuance of an order to show cause concerning spousal support and injunctive and other relief. In connection with the November 26, 2002 order, she filed a declaration. In her declaration dated November 22, 2002, filed in support of her order to show cause, plaintiff stated, As I look back on our relationship, I realize that [defendant] caused me to lose my first home (which was purchased prior to our marriage) . . . . At another place in her July 31, 2002 declaration, plaintiff stated: [P]rior to our marriage I lost my home as a direct result of my having completely, albeit foolishly, trust[ed] [defendant]. While I have been informed and believe there is probabl[y] nothing this court can do to help me recapture those monies, I make this comment as it supports that fact I have nowhere else to live other than our community home on Bothwell Road. At her deposition, plaintiff explained what home she was referring to in her November 22, 2002 declaration: Q. The first sentence says, As I look back on our relationship, I realize that [respondent], which is that William Bennett youre referring to? [] A Thats the only respondent, yes. [] Q -- caused me to lose my first home which was purchased prior to marriage. Which home are you referring to? [] A Any house prior to marriage is Highland Park -- the 1526 house. [] Q The North Avenue 50 property? [] A Yes. In her November 22, 2002 declaration, plaintiff stated, My attorney has begun discovery in order that we learn about all community property interest in this dissolution. Further, in her interrogatory answers, plaintiff admitted she had lost ownership of a home at 55026 North Avenue 50.

Third, plaintiff cannot contradict her discovery and prior pleading admissions; most of which were made while represented by counsel. (Bockrath v. Aldrich Chemical Co. (1999) 21 Cal.4th 71, 83 [discovery admissions]; Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 877 [prior pleadings].) The foregoing judicially noticeable matters prove plaintiff knew on November 22, 2002, she had lost the 1526 North Avenue 50 residence which had been her separate property. Yet the complaint was not filed until more than three years later on September 21, 2006. And this case is subject to the three year-fraud based statute of limitations. (Code Civ. Proc., 338, subd. (d); Stalberg v. Western Title Ins. Co. (1991) 230 Cal.App.3d 1223, 1230; April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 826-827; see Rylaarsdam, Cal. Practice Guide: Statute of Limitations (The Rutter Group 2009) 4:1792, pp. 4-154-4-155.) Here, the actual discovery occurred more than three years prior to the filing of suit. Having knowledge she had lost her home, plaintiff had a duty to plead facts showing she acted reasonably to discover her cause of action. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807; Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 398.)

Fourth, the controlling authority is Fox v. Ethicon Endo-Surgery, Inc., supra, 35 Cal.4th at pages 808-809: In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to show diligence; conclusory allegations will not withstand demurrer. [Citation.] [] Simply put, in order to employ the discovery rule to delay accrual of a cause of action, a potential plaintiff who suspects that an injury has been wrongfully caused must conduct a reasonable investigation of all potential causes of that injury. If such an investigation would have disclosed a factual basis for a cause of action, the statute of limitations begins to run on that cause of action when the investigation would have brought such information to light. In order to adequately allege facts supporting a theory of delayed discovery, the plaintiff must plead that, despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period. (See Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1532.) Plaintiff has failed to allege specific nonconclusory facts showing once she knew she had lost the property by November 22, 2002, the date of her order to show cause declaration, she exercised diligence to discover her causes of action premised on the forged deed and file suit within three years thereafter. Thus, the trial court correctly granted defendants judgment on the pleadings motion on statute of limitations grounds.

TURNER, P. J.

Publication courtesy of California free legal advice.

Analysis and review provided by Carlsbad Property line attorney.

San Diego Case Information provided by www.fearnotlaw.com

^[1]For purposes of this discussion, we accept as true the well-pleaded facts of the complaint.

^[2]We decline the request for the reasons stated in this opinion.