Sanches v. Sanches

Filed 5/21/07 Sanches v. Sanches CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Sheila Fell, Judge. Affirmed.

R. E. Scott for Defendants, Cross‑complainants, and Appellants.

Morris Stone for Plaintiff, Cross‑defendant, and Respondent.

Julio Sanches appeals from a judgment in favor of Julios former wife, Sandra Sanches,[1] in this action declaring Julios and Sandras respective interests in the former family home, in which Sandra has lived in since they divorced in 1970. Julio raises numerous contentions, none of which have merit. We affirm the judgment.

FACTS

Julio and Sandra were married in 1965, had two children, bought a house in Huntington Beach for approximately $30,000, and separated in 1969. The house was financed with a 100 percent Veterans Administration loan. The monthly payment, which included insurance and property taxes, was $182.

Julio and Sandra entered into a marital settlement agreement (MSA) in 1969, which apparently became part of the final dissolution judgment entered in 1970. The actual judgment is not in the record before us, but the MSA, which was an exhibit to Sandras complaint is.[2] Pursuant to the MSA, Sandra was given sole custody of the couples children. Julio was to pay Sandra $150 per month in child support and for six months he was to pay her $50 per month in alimony. The house was to be sold, and the equity therein to be divided equally between Julio and Sandra. No timeline for selling the house was specified in the MSA. The MSA provided it could only be modified by instrument in writing executed by both of us[.]

Julio and Sandra did not sell the house. Sandra remained in the house with the children. And, instead of making the agreed upon child support ($150) and alimony ($50) payments, Julio made the house payment for a while. In 1971, Julio married his current spouse.

On September 12, 1971, Julio delivered a signed, handwritten letter to Sandra, stating: I will stop making the house payment next month and will send you $150 instead. You can start claiming the house interest and taxes on your income tax for the months of Oct. Nov. & Dec. I will stop gaining equity on the house at the end of this month. I have the figure on the total equity up to this point in time and you can also get it by contacting the mortgage co. or your attorney. (Italics added.)

The next day, September 13, Julio sent Sandra a second letter stating, Ive already notified [the bank] that Im not making another payment. When they have to evict you they can sell the house and send half the profits (if any) to you and the other half to me.

Julio and Sandra both testified that after the letters were sent, Julio had absolutely nothing further to do with the house (other than to pick up his children there for visits until they reached adulthood). Julio never made any statements to Sandra suggesting he believed he continued to have any interest in the house. Julio never made any statements to Sandra about selling the house or asked any questions about the status of the loan. Sandra made all mortgage, insurance, and property tax payments. Sandra paid for all maintenance on the house. Sandra has remained living in the house, and she paid off the loan in 1996.

In 1995, Julio recorded a $250,000 deed of trust against his undivided 1/2 interest in the Huntington Beach house in favor of Continental Financial Group (CFG) a Nevada corporation wholly owned by Julio. Julio testified there was no consideration for the transfer, he did not owe his corporation any money, but he recorded the deed of trust to shield assets from potential creditors. In 2004, Julio executed a grant deed purporting to convey his interest in the Huntington Beach house to a trust, of which he and his current wife, were the sole beneficiaries. Julio never communicated with Sandra concerning the encumbrance or transfer. In 2005, Sandra learned for the first time Julio had recorded the deed of trust against the property.

In May 2005, Sandra filed this action against Julio, his current wife, their family trust, and CFG. Her complaint contained causes of action for declaratory relief, quiet title by prescription[,] cancellation of instruments, breach of contract, and fraud. In her prayer for relief, she asked the court to declare the parties rights and interests in the property, quiet title, and direct the cancellation of the 1995 deed of trust and 2004 grant deed. Julio, his current wife, and the family trust answered Sandras complaint and filed a cross‑complaint against her seeking the partition and sale of the property, and one‑half the sale proceeds.

At a bench trial, Julio testified when he sent Sandra the letter in September 1971, saying he would no longer gain equity in the house, he only meant principal[,] i.e., he only intended Sandra would get credit for whatever amount of principal she continued to pay down on the loan when the property was eventually sold. He never intended to give up his right to share in the equity in the house resulting from its future appreciation. Sandra testified she understood Julio was waiving all interest in the property and she relied on his representations.

The court ruled in Sandras favor on the complaint and cross‑complaint. Neither party requested a statement of decision. In a minute order, the court ruled Julio intended by his September 12, 1971, letter to give up his rights to further accumulation of equity, and the letter was sufficient to effect a modification of the MSA because it was signed by Julio. Julio had no interest in any gain in value in the house after September 12, 1971. Julios one‑half share of the equity in the house in 1971 was $3,000.

The court subsequently entered a judgment stating the September 12, 1971, letter modified the MSA, and Julio waived all future increases in the equity of the property. The judgment ordered that upon Sandras payment of $3,000 to Julio, Julio must execute all necessary documents to transfer his interest in the property to Sandra and to remove all liens against the property recorded by him or in his favor.

DISCUSSION

1. Standard of Review

A judgment of the lower court is presumed correct, and all intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. [Citation.] Where no statement of decision is requested, it must be presumed that the trial court found facts necessary to support the judgment. [Citations.] (Roffinella v. Sherinian (1986) 179 Cal.App.3d 230, 236; see also In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133; Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)

2. The September 12, 1971, Letter: Modification of the MSA

Julio contends his September 12, 1971, letter to Sandra directing she take over all financial responsibility for the house and he would thereafter stop gaining equity on the house is unenforceable as a modification to the MSA because: (1) it was not signed by Sandra; and (2) it is not supported by consideration. We consider Julios latter contention first.

a. Consideration

Julio argues the September 12, 1971, letter to Sandra was merely an expression of [his] intent in the future to gratuitously convey his interest in the property to [Sandra] and hence [is unenforceable]. His contention is without merit.

Consideration may be either (1) a benefit conferred or agreed to be conferred upon the promisor or some other person; or (2) a detriment suffered or agreed to be suffered by the promisee or some other person. [Citations.] (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, 203, p. 237; Civ. Code,  1605.) In his letter, Julio advised Sandra he would no longer make home loan payments or pay taxes, and thereafter, he wouldstop gaining equity on the house . . . . The home loan was in both Julios and Sandras names, and Julio was legally obligated to pay the loan. By fully assuming all responsibility for the loan, faithfully making the house payments, and paying all real property taxes, insurance premiums, and maintenance, Sandra satisfied Julios legal obligations on the home loan.

That Sandra also was obligated to pay the home loan does not alter our conclusion. (See 1 Witkin, Summary of Cal. Law, supra, Contracts,  218, p. 251 [usually doing what one is already legally obligated to do does not constitute consideration]; see also OByrne v. Santa Monica‑UCLA Medical Center (2001) 94 Cal.App.4th 797, 805.) By paying the house loan and all its usual attendant financial obligations (i.e., paying taxes, and insuring and maintaining the property), Sandra was not only satisfying her own obligations. She conferred upon Julio the benefit of maintaining in good standing the loan, on which he too was legally obligated, thereby satisfying all Julios legal obligations on the loan.

Even were we to agree with Julio that consideration was lacking, we would nonetheless apply the doctrine of promissory estoppel and affirm. Promissory estoppel is a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced. [Citation.] (Kajima/Ray Wilson v. Los AngelesCounty Metropolitan Transportation Authority (2000) 23 Cal.4th 305, 310.) Under the doctrine, A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. [Citations.] (Ibid.)

The essential elements for application of promissory estoppel are: (1) a clear and unambiguous promise (Lange v. TIG Ins. Co. (1998) 68 Cal.App.4th 1179, 1185); and (2) detrimental reliance (Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 48). Here, the evidence supports application of the doctrine of promissory estoppel. There was no dispute Julio wrote Sandra the September 12, 1971, letter telling her she should henceforth make all payments and he would stop gaining equity in the house. Sandra testified to her reliance on Julios representations.

In his reply brief, Julio complains the doctrine of promissory estoppel was not pled by Sandra, was not argued below, and is being raised for the very first time on appeal. His argument is, to put it kindly, disingenuous. Sandras complaint (which we agree is far from being a model pleading) alleged both the existence of a promise by Julio (Sandra pays everything and Julio stops gaining equity), and her detrimental reliance on Julios promise. The complaint states, Julio is estopped to claim an interest in the said property based upon his written waiver of his interest on September 12, 1971, and his subsequent conduct. [Sandra] justifiably relied upon Julios statement of abandonment and materially changed her position as a result thereof. Sandra testified as to her reliance. And in closing argument, Sandras counsel argued this case presents whats classically called an estoppel: She took his statement, she relied upon it, years later he asserts an interest which she believes he gave up. Counsel explained why Sandra was harmed by Julios promise, i.e., what she gave up. [H]ad he insisted on a sale of the house in 1971 instead of saying, okay, you keep it, do what you want with it, she would be in an entirely different position: at that time she would have realized her own equity, she would have had the opportunity of buying another house, and she would have the whole equity in the [new] house today . . . .

b. Lack of Sandras Signature

Julio also maintains the September 12, 1971, letter is not enforceable because it was not signed by Sandra. We reject his contention.

Julios argument is comprised of two paragraphs. The first recites the fact the MSA contained a provision requiring modifications be in a writing signed by both parties. The second (via a footnote) cites the first three subdivisions of Civil Code section 1698, which provide: (a) A contract in writing may be modified by a contract in writing[;] [] (b) A contract in writing may be modified by an oral agreement to the extent that the oral agreement is executed by the parties[; and] [] (c) Unless the contract otherwise expressly provides, a contract in writing may be modified by an oral agreement supported by new consideration. The statute of frauds ([Civil Code] [s]ection 1624) is required to be satisfied if the contract as modified is within its provisions.[3] Julio leaves it to us to connect the dots.

Julio omits any mention of the final subdivision of Civil Code section 1698, which provides, (d) Nothing in this section precludes in an appropriate case the application of rules of law concerning estoppel . . . . Here, there was a written document signed by Julio, modifying the terms of the MSA. Sandra has fully performed, bearing the full financial burden of the house for over 25 years and paying off the loan. At no time did Julio disclose to Sandra his hidden intention that she would bear the entire financial burden of paying off the loan, so that he could share in the bounty of a significant increase in the value of the home 25 years later. Under the circumstances, Julio is estopped to argue the lack of Sandras signature on the letter precludes enforcement of his promise. (See Wagner v. Glendale Adventist Medical Center (1989) 216 Cal.App.3d 1379, 1388.)

3. Statute of Limitations

Julio contends the four‑year statute of limitations applicable to written contracts (Code Civ. Proc.,  337) applies to Sandras complaint. And because he breached the 1971 agreement in 1995 when he recorded a deed of trust against the property, Sandras action is time barred. We disagree.

Julio cites no law, nor does he engage in any reasoned analysis of his statute of limitations argument. For that reason alone, we may treat the point as waived. (Guthrey v. State of California (1998) 63 Cal.App.4th 1108, 1115‑1116; Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979.)

Furthermore, Julios contention lacks merit. Although he casts Sandras action as simply one for breach of contract, it is fundamentally a quiet title action, because its object is to finally settle and determine, as between the parties, all conflicting claims to the property in controversy, and to decree to each such interest or estate therein as he may be entitled to. [Citation.] (Newman v. Cornelius (1970) 3 Cal.App.3d 279, 284.) And, that is in essence what the trial court did.

In Muktarian v. Barmby (1965) 63 Cal.2d 558, 559‑560, our Supreme Court held the statute of limitations does not run against an action for real property as long as the plaintiff is in possession. In that case, the plaintiff mistakenly deeded property to his son, but remained in possession and paid taxes on the property. When the son refused to sell the property, the father brought a quiet title against him. The Supreme Court rejected the sons contention the action was time‑barred. Since there is no statute of limitations governing quiet title actions as such, it is ordinarily necessary to refer to the underlying theory of relief to determine which statute applies. [Citations.] In the present case, however, it is unnecessary to determine which statute would otherwise apply, for no statute of limitations runs against a plaintiff seeking to quiet title while he is in possession of the property. [Citations.] In many instances one in possession would not know of dormant adverse claims of persons not in possession. [Citation.] Moreover, even if, as here, the party in possession knows of such a potential claimant, there is no reason to put him to the expense and inconvenience of litigation until such a claim is pressed against him. (Id. at pp. 560‑561, fn. omitted.)

4. Specific Performance

Finally, Julio contends the court exceeded its jurisdiction by ordering specific performance of the 1971 agreement because Sandra failed to plead in her complaint she had no adequate remedy at law. His argument fails for three simple reasons. First, Sandra did plead she has no adequate, speedy, and plain remedy at law[,] and, contrary to Julios assertion, the allegation was not only posed as to the corporation, CFG. Second, Julio did not attack the adequacy of the pleading on this, or any other, ground. And third, when the case involves an interest in land, it is statutorily presumed damages are not an adequate remedy, i.e., [t]he plaintiff need not establish the inadequacy of the legal remedy . . . . (13 Witkin, Summary of Cal. Law, supra, Equity,  28, pp. 318-319; Civ. Code,  3387 [It is to be presumed that the breach of an agreement to transfer real property cannot be adequately relieved by pecuniary compensation]; see also Campbell v. Superior Court (2005) 132 Cal.App.4th 904, 918.)

DISPOSITION

The judgment is affirmed. The Respondent is awarded her costs on appeal.

OLEARY, ACTING P. J.

WE CONCUR:

FYBEL, J.

IKOLA, J.

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[1] For convenience we will refer to the parties by their first names. Julios current wife, Charlene Sanches is also an appellant. There are no separate arguments made as to her interest in this proceeding, and there is no suggestion her interest is any different from Julios. Accordingly, for convenience only, we will not refer to her separately in this opinion.

[2] Many documents were introduced into evidence. However, neither party properly requested transmittal of the exhibits, and they are not before us. (See Cal. Rules of Court, rule 8.224(a)(1) [requires a party wanting the reviewing court to consider any original exhibits that were admitted in evidence to timely serve and file the proper notice in superior court designating those exhibits].) In his opening brief, Julio accuses the superior court clerk of having lost or misplaced the actual exhibits. But, the courts minute order indicates all exhibits were ordered returned to counsel. Where exhibits are missing we will not presume they would undermine the judgment. [Citation.] (Western Aggregates, Inc. v. County of Yuba (2002) 101 Cal.App.4th 278, 291; see also Heyman v. Franchise Mortgage Acceptance Corp. (2003) 107 Cal.App.4th 921, 925, fn. 1.)

[3] As the trial court noted, the statute of frauds is satisfied because the letter was signed by the party to be charged[,] i.e., Julio. (Civ. Code,  1624, subd. (a).) Julio does not argue otherwise.