Mogan v. Wong
Filed 7/25/12 Mogan v. Wong CA2/6
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opinion has not been certified for publication or ordered published for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
SIX
BONNIE MOGAN,
Plaintiff and Respondent,
v.
ROBERT WONG,
Defendant and Appellant.
2d
Civil No. B236538
(Super.
Ct. No. CV090350A)
(San
Luis Obispo County)
Robert Wong appeals from
a judgment voiding two gift grant deeds that purportedly grant Wong a joint
tenancy interest in a house on Placentia Way
(Placentia) and a second house on Wawona
Way (Wawona) in Shell
Beach. Bonnie Mogan, Wong's ex-girlfriend, was the
original owner of Placentia and,
much to her regret, is the owner of record of Wawona which has gone down in
value. The
services in the construction/remodel of Placentia,
to be offset against $110,129.59 Wong owes Mogan for a mortgage/property tax
delinquency on Wawona. We affirm.
Facts and Procedural History
Wong,
a real estate developer/investor, was Mogan's boyfriend from 1995 to 2006. In 1999, Mogan purchased a small house on Placentia in Shell Beach as her
principle residence. In 2003, Wong
offered to help Mogan knock down the existing house and build a new house. After Mogan took out a $310,000 open line of
credit, Wong supervised the work and paid the subcontractors.
Before
the construction was completed, Wong asked Mogan to purchase a house on Wawona
for him, using her good credit. Wong was
in the business of buying and "flipping" homes– something he had done
in Fresno." Wong could not buy Wawona because he owed
taxes and had poor credit.
Acting
on Wong's request, Mogan bought Wawona for $625,000 and financed the purchase
with a $500,000 first mortgage and a $93,750 second mortgage. Wong contributed $35,096.87 for the down
payment and promised to pay all the mortgage payments and property taxes.
Wong
also asked Mogan to execute gift grant deeds on Placentia and Wawona
based on the representation that he would not record the grant deeds unless
something "happened" to Mogan.
Mogan trusted him and signed the grant deeds.
A
few months after Wawona was purchased, Wong and Mogan "broke
up." Wong recorded the gift grant
deeds, leased Wawona to renters, and kept the rent for himself. Between 2008 and 2010, the fair market value
of Wawona dropped from $650,000 to $307,2000.
Wong defaulted on the mortgage and property taxes, which resulted in a $110,129.59
mortgage/property tax deficiency and a possible deficiency judgment against
Mogan.
Mogan
sued for breach of contract,
cancellation of the gift grant deeds, quiet title, fraud, and declaratory relief. Wong filed a first amended cross-complaint to
partition the properties, reimbursement for his services and construction
costs, a partnership accounting, and declaratory relief.
The
trial court, in a written statement of decision, ruled that the gift grant
deeds were void and there was no partnership.
The court awarded Mogan $110,129.59 damages on the Wawona
mortgage/property tax deficiency and awarded Wong $33,675 for the reasonable
value of his services. Denying a
judgment which provides in pertinent part that:
` 1. Full title to Placentia and Wawona
is to be restored to Mogan as an unmarried woman.
2. That Wong pay $110,129.59 damages for the
Wawona mortgage/property tax deficiency, subject to a $33,675 offset for Wong's
services, for a net judgment of $76,454.59 against Wong.
3. That Wong can satisfy the judgment by paying
the mortgage and property tax delinquency, transferring the Wawona mortgages
and encumbrances to his name, and removing Mogan as the obligor and Wawona
owner of record. If Wong "meets
these conditions then [Mogan] shall relinquish her title in the Wawona
Property" and Mogan would have to pay Wong $33,675.
Partnership
Wong argues
that the trial court erred in finding no partnership or joint venture.
"Whether a partnership or joint venture exists is primarily a factual
question to be determined by the trier of fact from the evidence and inferences
to be drawn therefrom.
[Citations.]" (Bank of California v. Connolly (1973) 36
Cal.App.3d 350, 364.) "An agreement
by a landowner to share with another profits to be derived from the sale of
land does not, without more, create a partnership or joint venture relationship
[Citations.]" (Ibid.) The trial
court discredited Wong's testimony that Wong and Mogan agreed to jointly own
property, share profits and losses, sell Placentia, or build a
new house on Wawona. In the words of the
trial court, "Mogan did not consider [Wong] a business partner but rather
her boyfriend." This is consistent
with Wong's testimony that he "showed her a lot of love" and they
were "partners for life."
The
trial court reasonably concluded that Wong's contracting services and love did
not create a partnership. (See Brockman v. Lane (1951) 103
Cal.App.2d 802, 805 [no partnership where land owner "ran all the risk of
loss" and man who farmed it on behalf of owner was paid a monthly salary
and share of profits].) It is
uncontroverted that Mogan purchased Placentia, obtained
the $310,000 open line of credit to rebuild the house, and planned to move back
into the house and make it her principal place of residence. Mogan bore the entire risk of loss, which
contravenes all principles of partnership law.
(Ibid.) A "partnership"
connotes co-ownership of property, with a sharing in the profits and losses of
a continuing business. (Corp. Code,
§ 16101, subd. (8)(B)(9); Chambers v. Kay (2002) 29 Cal.4th 152, 151.) From a legal stand point, the
interrelationship of partners and joint ventures is virtually the same. (Weiner v. Fleischman (1991) 54 Cal.3d 476, 482.)
Gift Grant Deeds
Wong
relies on Machado
v. Machado (1962) 58 Cal.2d 501 for the principle that a joint
tenancy deed creates a rebuttable presumption that the property is held in
joint tenancy. (Id., at p. 506.)
But joint ownership of property "does not by itself establish a
partnership, even if the coowners share profits made by the use of the
property." (Corp. Code,
§ 16202, subd. (a)(1).)
Mogan
executed the gift grant deeds based on Wong's representation that they would
not be recorded until something "happened" to her. The grant deeds were testamentary in nature,
to provide for Mogan's children after her death.
The
trial court correctly found that the gift grant deeds transferred no interest
to Wong. Any attempt to convey property
by a deed that is to become effective on the grantor's death is ineffective and
void. (Miller & Starr, Cal. Real
Estate (3rd ed. 2011) § 8:43, p. 8-121.)
"'A
deed delivered with the intent that it shall take effect only on the death of
the grantor is an attempted testamentary disposition and therefore void.' [Citation.]
The applicable rule is well-stated in Henneberry v. Henneberry, 164 Cal.App.2d 125[]: 'In addition to physical delivery, and an
acceptance by the grantee, to constitute a valid delivery there must exist a
mutual intention on the part of the parties, and particularly on the part of
the grantor, to pass title to the property immediately. . . . Even if the document is manually delivered,
but the evidence shows the parties or the grantor intended the document to
become operative only upon death, the document is testamentary in character and
void as a deed.' [Citation.]" Meyer v. Wall (1969) 270 Cal.App.2d 24, 27.)
Reasonable Value
of Services
With respect
to Wong's claim for reimbursement of construction costs and services, the trial
court awarded $33,675. Wong was not a
licensed contractor. He was new to the
area. Wong supervised the Placentia construction
because of the relationship with Mogan and to establish a name for himself on
the central coast as a property development manager. The trial court found: "During the time that Placentia was
being remodeled [Wong] . . . was still 'flipping' houses in Fresno." Wong testified that he "'flipped' at
least 12 in Fresno and that at least 6 of those were in 2006. This contrasts with his testimony that he
spent 8, 10 or 12 hours a day, every day, on the Placentia job. Additionally, there was testimony that during
this time frame he was working for others (Schiro) on additional projects in
the coastal area. . . ."
Paul
Schiro, a licensed general contractor, testified that the standard fee for an
unlicensed contractor was 10 to 12 percent of the project hard costs. Schiro estimated that the Placentia hard
costs were $336,750, which was consistent with Mogan's testimony that the
$310,000 line of credit plus $15,623 was spent on the construction. The trial court discredited Wong's testimony
that the hard costs were $500,000 and that Wong put $195,000 of his own money
into the project. Wong had no bills,
cancelled checks, receipts, or records to verify that he used his own money or
that the hard core costs exceeded $300,000.
Wong
asserts that he spent tens of thousands of dollars on "soft costs"
(i.e., building permits, tear down and disposal costs, engineering costs,
architect fees, etc.) but failed to produce a single receipt, bill or,
cancelled check. Mogan, on the other
hand, produced records documenting every
mortgage payment on Placentia, all the improvements, and virtually all the
construction costs including architect fees and permit fees. After the $310,000 line of credit ran out,
Mogan spent another $15,623.14 for floor materials, a house sound system,
gates, landscaping, window coverings, and a soft water system.
Substantial
evidence supports the finding that the reasonable value of Wong's services and
construction costs advanced by Wong did not exceed $33,675.
Statement of Decision
Wong argues that the
trial court erred in not fully responding to his request for statement of
decision which lists "controverted
issues" predicated on the theory that a partnership did in fact
existed.
title="">[1] A trial court is not required to respond
point by point to each issue posed in the request for statement of
decision. (Muzquiz v. City of Emeryville (2000) 79
Cal.App.4th 1106, 1126.) "[A]ll
that is required is an explanation of the factual and legal basis for the
court's decision regarding the principal controverted issues at trial as are
listed in the request.
[Citation.]" (Hellman v. La Cumbre Golf
& Country Club (1992) 6 Cal.App.4th 1224, 1230.)
The
statement of decision explains in detail why there was no partnership and why
the gift grant deeds and Wong's services did not create an implied
partnership. It fairly discloses the
court's determination as to the ultimate facts and material issues in the case. (Golden Eagle Ins. Co. v. Foremost Insur. Co. (1993) 20
Cal.App.4th 1372, 1380.) On appeal, we
do not reweigh the evidence or determine credibility. (Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749.
771.) An equitable decree is reviewed
under the abuse of discretion standard, under which "we resolve all
evidentiary conflicts in favor of the judgment and determine whether court's
decision '"falls within the permissible range of options set by the legal
criteria."' [Citations.]"
Conclusion
Unhappy
about the outcome, Wong rhetorically asks, "If Mogan bore the entire risk
of loss on both Placentia and Wawona, then how did Wong end up owing Mogan over
$76,000?" The reason is
simple. Wong convinced Mogan to purchase
Wawona and promised to pay all the mortgage payments and property taxes. After the romance ended, Mogan asked Wong to
refinance Wawona and "get it into his name." Instead, Wong surreptitiously recorded the
gift grant deeds, pocketed the rents, and failed to pay $110,129,59 in mortgage
payments and property taxes as Wawona plummeted in value.
The
trial court gave Wong the choice of either (1) paying Mogan $110,129,59 and
taking a $33,675 offset for his services, or (2) curing the mortgage and tax
deficiencies, take Mogan off title and the Wawona mortgages, and accept $33,675
for his services and money advanced on Placentia. The court found "[t]his is the only
equitable solution . . . ."
We
concur. The predicament in which Wong
finds himself is of his own doing.
"No one can take advantage of his own wrong." (Civ. Code, § 3517.)
The
judgment is affirmed. Mogan is awarded
NOT TO BE PUBLISHED.
YEGAN,
J.
We concur:
GILBERT,
P.J.
PERREN,
J.
Dodie
Harmon, Judge
Superior
Court County of San Luis Obispo
______________________________
Eddie
Adams, for Appellant.
Gregory
A. Connell; Belsher, Becker & Roberts, for Respondent.
name="_ftn1" title="">[1] The request for statement of decision asks
whether Mogan breached the partnership agreement "by backing out of the
parties' 'agreement' to build out the 'Placentia' property, sell it and use the
proceeds to build out 'Wawona'. . . ."
It asks, "What was the amount of money that each partner
contributed to the partnership?" and "What is each partner entitled
to receive from the partnership?"
