Sumampow v. Mercator Property
Consultants
Filed 12/12/12 Sumampow v. Mercator Property
Consultants CA2/2
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IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
TWO
IEFENN ADRIANNE SUMAMPOW
et al.,
Plaintiffs and Appellants,
v.
MERCATOR PROPERTY CONSULTANTS
PTY, LTD.,
Defendant and Respondent.
B236491
(Los Angeles
County
Super. Ct.
No. SC107790)
APPEAL from
a judgment of the Superior Court
of
County.
Ronald M. Sohigian, Judge.
Affirmed.
Greenberg
& Bass, James R. Felton and John Yates for Plaintiffs and Appellants.
Russ,
August & Kabat, Judith L. Meadow and Nathan D. Meyer for Defendant and
Respondent.
_________________________
Iefenn
Adrianne Sumampow (Iefenn) and Ievan Sumampow (Ievan) (collectively siblings)
appeal summary judgment in favor of
defendant Mercator Property Consultants PTY, Ltd. (Mercator) in a declaratory
relief and quiet title action pertaining to properties located in Beverly
Hills, California on Rexford Drive (Rexford Property) and Wilshire Boulevard
(Wilshire Condo).
We affirm.
FACTS
The
siblings’ verified complaint against Mercator alleged: Their father, Robby Sumampow (Sumampow),
transferred the Rexford Property to Iefenn and the Wilshire Condo to
Ievan. Mercator contends that the
transfers were invalid. Moreover, it
claims an interest in the Rexford Property and the Wilshire Condo, and it
intends to proceed against them to satisfy a claim that it has against Sumampow
for over $5.5 million. The siblings are
entitled to a declaration and a judgment quieting title to establish that they
are the true owners of the properties.
Mercator’s
June 22, 2010, judgment against Sumampow in case No. BC387373
In a pending action against
Sumampow, Mercator obtained a judgment for recognition and enforcement of an
Australian judgment against him in the amount of $5,681,796. In addition, pursuant to Civil Code section
3439.04,
the judgment provided: (a) on April 30,
2007, Mercator was a creditor of Sumampow when he transferred the Rexford
Property and the Wilshire Condo; (b) to the extent Sumampow transferred the
properties to his children, Iefenn and Ievan, Sumampow acted with the intent to
hinder, delay, and defraud Mercator; and (c) Mercator may avoid the transfers
to the extent necessary to satisfy its judgment.
case No. SC107790; the order and judgment; this appeal
In its
motion for summary judgment, Mercator noted that the siblings claimed title to
the properties based on bequest agreements dated April 30, 2007, and that the
bequest agreements did not require payment and were not signed by
Sumampow. Mercator argued that there was
no merit to the siblings’ complaint because they could not prove title to the
properties. In particular, they could
not produce deeds and therefore could not prove a valid transfer of the
properties to them pursuant to section 1091.
In addition, Mercator argued (1) it had attachment liens against the
properties effective July 7, 2008; (2) in the action against Sumampow, the
trial court made a determination under section 3439.04 that any transfers to
Iefenn and Ievan were made with the intent to hinder, delay and defraud
creditors, specifically Mercator; (3) the siblings have no standing to
challenge the trial court’s findings in the prior action; and (4) the siblings
did not pay consideration for the properties, so they have no defense to
Mercator’s attachment liens.
The
siblings opposed. Though they
acknowledged that a transfer of real property generally cannot be enforced
without a deed, they cited an exception.
Under that exception, equity will protect a gift of real property if the
transferees are in possession and if they made valuable improvements. With respect to the other issues raised by
the motion, they argued that there was no admissible evidence that
consideration was lacking, that Sumampow was the record owner of the
properties, or that Mercator had any attachment liens.
Iefenn
submitted a declaration stating that Sumampow transferred the Rexford Property
to her in the Spring of 2007, in Indonesia. Since taking ownership, she paid half of the
2008 property taxes, $1,700 for landscaping, $15,455 to demolish the garage and
$1,250 to fence the pool. Also, she pays
a monthly gardening fee of $120 and a management fee of $500. Ievan also submitted a declaration. He declared that Sumampow transferred the
Wilshire Condo to him in the Spring of 2007, in Indonesia. Ievan paid half of the 2008 property taxes
and he spent $4,200 to repair the air conditioning system. On a monthly basis, he pays a $1,707
homeowners association fee and a $250 management fee.
At the
hearing on the motion, the trial court ruled that there were no triable issues
as to whether the siblings possessed title either through deeds or parol
transfers. As a result, it granted the
motion. In doing so, it stated that the
siblings “do not establish that [their expenditures on the properties] exceed
the value of the benefit of the estate in land.
. . . [¶]
And I find no other evidence here concerning monetary detriment,
payments reasonably equivalent to the use of the land, or any other
circumstance of hardship. [¶] Here, we have a pair of real properties which
I think the parties agreed are extremely valuable. I can take judicial notice of the fact [of]
. . . where they are and the value. . . . And it seems to me
that [the detriment cited by the siblings is] obviously and drastically
inadequate to show the elements that would vindicate or support the parol gift
theory. And the I think the [siblings]
know it.â€
Judgment
was entered for Mercator.
This timely
appeal followed.
STANDARD OF REVIEW
On an appeal from summary judgment,
we employ the de novo standard of review.
(Merrill v. Navegar, Inc.
(2001) 26 Cal.4th 465, 476.) In doing
so, we follow the traditional three-step analysis. “We first identify the issues framed by the
pleadings, since it is these allegations to which the motion must respond. Secondly, we determine whether the moving
party has established facts which negate the opponents’ claim and justify a
judgment in the movant’s favor. Finally,
if the summary judgment motion prima facie justifies a judgment, we determine
whether the opposition demonstrates the existence of a triable, material
factual issue. [Citation.]†(Torres
v. Reardon (1992) 3 Cal.App.4th 831, 836.)
“[W]e construe the moving party’s affidavits strictly, construe the
opponent’s affidavits liberally, and resolve doubts about the propriety of
granting the motion in favor of the party opposing it.†(Szadolci
v. Hollywood Park Operating Co. (1993) 14 Cal.App.4th 16, 19.)
DISCUSSION
The
siblings proffer a single issue for our consideration: Is there a triable issue as to whether the
properties were orally transferred?
The answer is no.
Applicable Case Law.
The case
law regarding parol transfers of real property was established from the late
1800’s to the 1950’s. This law involves
present gifts of property or promises to give property upon certain conditions.
When the
California Supreme Court was in its infancy, it considered whether a parol
contract to convey property could be enforced.
(Burlingame v. Rowland (1888)
77 Cal. 315 (Burlingame).) The facts were these. A father and equitable owner of property
promised his daughter that if she lived on the property with her husband and
family, then he would convey the property when he obtained legal title. She moved onto the property and made valuable
and lasting improvements. When the
father obtained legal title, the daughter demanded a conveyance. The father refused. The court noted: “The evidence shows a plain, unequivocal
promise to convey the property, which is fully identified and located. It sufficiently appears that, acting upon
this promise, the daughter and her family went upon the property, which was
wholly unimproved, moved a house upon it, erected other buildings, and
cultivated the land. The authorities are
clear that such a contract, acted upon and partially
performed, and shown here, may be specifically enforced.†(Id.
at p. 317.)
In
to the plaintiff if he occupied and improved it. Claiming he had made valuable and lasting improvements
to the land, the plaintiff sued the administrators of Lander’s estate to compel
them to convey the property. The trial
court found in favor of the plaintiff.
The California Supreme Court reversed.
The court
noted that when a present parol gift is made, “and the donee has entered under
the gift, and has made permanent and valuable improvements upon the realty, and
the circumstances are such that it would be unjust to the donee if he were
thereafter to be deprived of the property by reason of imperfections in the
gift, equity will treat the acts of the donor, together with the acts of the
donee, as being such performance of the gift as will relieve the contract from
the operation of the statute of frauds, and it will under such circumstances lend
its assistance to the perfection of the donee’s title.†(Burris,
supra, 114 Cal. at p. 314.) This rule applies in an action “to compel the
perfection of a gift presently but incompletely made.†(Ibid.)
The
be a second rule. It occurs when a donor
makes a promise that induces a donee to change his position. “If a donor by promises induces the donee to
change his position to his detriment, after the change is made the donor can be
compelled to make his promise good. The
relation between them then becomes one of contract. [Citation.]
. . . ‘Where the donee has accepted the promise, entered
into possession of the land, made improvements on the faith of the promise, and
thus changed his condition, the donor will be required to make good his
gift. Such a state of facts will take
the case out of the statute of frauds.’
[¶] But, to give the plaintiff
the benefit of this rule, the expenditures must have been made upon the faith
of the promise, and must be in the nature of lasting benefits and
improvements to the land, tending to enhance its value over and above the value
of the use of the property to the plaintiff.
[Citation.] Slight and temporary
improvements, or trivial outlays, made to suit the taste or convenience of the
occupant, do not raise an equity in favor of the donee [citations]; for, if the
value of the expenditures made by the occupant does not exceed the benefit to
him of the use of the land without charge or rental, then, generally, and in
the absence of other circumstances of hardship shown, he not only will not have
been injured, but will in fact have been advantaged by the promises made.†(Burris,
supra, 114 Cal. at pp. 314–315.)
In the
court’s view, the plaintiff had sued upon the second rule. It reversed because the evidence showed that
the plaintiff’s expenditures did not exceed the value of the use of the land
calculated as the rental value of the land during his four-year occupancy, and
because the expenditures did not enhance the land’s value. (Burris,
supra, 114 Cal. at
pp. 315–316.)
A century
ago, in Kinsell v. Thomas (1912) 18
Cal.App. 683 (Kinsell), the Court of
Appeal considered these facts. The
defendant lived on the property at issue with his parents and took care of
it. Desiring to compensate the
defendant, the parents orally transferred the property to him. They asked him to fence it off and erect a
house, barn and other buildings.
Thereafter, he placed a house, barn and stable on the property, built a
fence, sunk a well and filled in a lot with soil and gravel. By doing so, he increased the value of the
property from $75 to $1,500. After the
gift, he performed labor and services for his parents for which he received no
compensation. The defendant’s mother
died. The father moved in with and was
cared for by the defendant without compensation. Then the father conveyed the land to the
plaintiff for $10. The plaintiff had
full knowledge of the facts. (
The
to the defendant. (Kinsell, supra, 18
Cal.App. at p. 688.) Citing various
cases, the court noted that it cannot be “‘questioned that a
parol gift of real property, under certain circumstances or conditions, will be
sustained by courts of equity’†such that “‘[a] gift of real estate may be made
by parol if possession is given and taken under such gift and acts done by the
donee to carry out the purpose of the gift;’†“‘it is, of course, settled law
that courts will compel the specific performance of parol
contracts for the sale of real property where there has been a part performance
of the contract, and parol gifts will be enforced under like circumstances and
conditions as parol sales;’†and “‘[e]quity protects a parol gift of land
equally with a parol agreement to sell it if accompanied by possession and the
donee, induced by a promise to give it,
has made valuable improvements on the property, and this is particularly true
where the donor stipulates that the expenditure shall be made, and by doing
this makes it the consideration or condition of the gift.’†(Id.
at p. 688.) Pushing forward, the
court concluded that the equities favored the defendant after noting that he
had made substantial improvements to the property. Also, the plaintiff was not a good faith
purchaser because he had paid only $10 for the property, and because he
purported to take title with full notice of the defendant’s acts and
possession. (Id. at pp. 689–693.)
Similar
holdings were rendered in Peixouto v.
Peixouto (1919) 40 Cal.App. 782 [the court upheld a parol transfer of real
property via a contract between a father to son when the donee son accepted the
transfer and erected a house, cultivated the land and remained in possession]
and Kennedy v. Scally (1923) 62
Cal.App. 367 [based on Burris and
other cases, a gift of real property was upheld after the donee made
improvements exceeding the rental value].
In Andreotti v. Andreotti (1964) 224 Cal.App.2d 533 (
“the statute of frauds forecloses a gift of real property by a mere oral
transfer. [Citations.] However, it now is established that where a
parol gift of real property is made in
praesenti pursuant to which possession thereof is given to and taken by the
donee who, in reliance thereon, places valuable and permanent improvements upon
the realty, makes substantial expenditures in connection therewith, or
otherwise so acts in relation thereto as to make it unjust to deprive him of
the property by reason of an imperfection in the mode of transfer, equity will
not permit reliance upon the statute of frauds to defeat the intended
gift. [Citations.] Fundamentally, the rule as stated is based
upon the equitable principle of estoppel.
[Citations.] Its application
requires proof not only of the transfer of possession of the subject property
to the donee, but also of his receipt in reliance thereon of a detriment of a
sufficient degree to make it unjust not to effect the attempted transfer of
title to him. Where the monetary
detriment suffered by the donee does not exceed the benefit to him of the use
of the land without charge or rental, and no other circumstances of hardship
are shown, the basis for an estoppel does not exist. [Citations.]â€
(Id. at p. 538.)
In support of their appeal, the
siblings claim that Andreotti
improperly conflated the two rules recognized in Burris. We disagree. In our view, Andreotti reflects a rational understanding of the law. The present gift rule recognized in
that detriment exceed the value of the use of the property. It does, however, require a finding of
injustice in the event that the donee is denied title. We, like Andreotti,
fail to see how an injustice will result if the detriment is not greater than
the value of the use the property. This
stands to reason because if the detriment is lesser, then the donee has not
been harmed.
II. The Siblings’ Reading of Kinsell is Misplaced.
According
to the siblings, Kinsell represents a
split of authority regarding oral transfers of real property. In their view, the Kinsell holding breaks away from cases such as Burlingame, Burris and
gift of real property will be upheld based upon evidence that a gift of the
property was intended and the gift recipient has acted upon the intended gift
by demonstrating . . . intent to accept it.†For several reasons, we disagree.
Kinsell
quoted statements of the law from different cases. One quote came from Bakersfield T.H. Ass’n v. Chester (1880) 55 Cal. 98 (
rehearing, it stated, “A gift of real estate may be made by parol, if
possession is given and taken under such gift, and acts done by the donee to
carry out the purpose of the gift.†(
It is this quote that the siblings rely on to establish that a gift and
acceptance is enough to overcome the statute of frauds applicable to the
transfer of real estate.
A close reading of
not construe the law as suggested. Prior
to the Bakersfield quote,
property, under certain circumstances or conditions, will be sustained by
courts of equity.†(Kinsell, supra, 18
Cal.App. at p. 688.) After the
and other authorities for the proposition that equity will uphold a parol
transfer of real property only if a donee was induced to make valuable
improvements upon the land. (
When analyzing the issues, the Kinsell
court examined the improvements made by the donee. That examination would have been superfluous
if Kinsell construed the law as the
siblings suggest. Thus, we conclude that
Kinsell, like other cases, required
the donee to establish that he or she detrimentally changed position by making
valuable improvements or otherwise expending money such that the failure to
recognize a transfer would be unjust.
Even supposing that
power to ignore them. (
(1962) 57 Cal.2d 450, 455.)
Finally, the siblings reading must
be rejected because it is newly minted on appeal. Below, in their opposition, the siblings
stated: “The principal exception to the
requirement of a deed to transfer real property is described in [
Court’s decision in Neale v. Neale
[(1869) 76 U.S. 1]: [¶] ‘Equity protects
a parol gift of land equally with a parol agreement to sell it if accompanied
by possession and the donee, induced by a promise to give it, has made valuable
improvements on the property. . . .’†The siblings then argued that by paying
taxes, maintaining the properties and improving them, they satisfied the
written deeds. Now, before us, they
argue for the first time that Kinsell
represents a split from the very rule that they cited Kinsell for below. To permit them to raise a
new issue that was not raised in the trial court would not only be unfair to
the trial court, but manifestly unjust to Mercator. (North
Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22,
29.)
III. There is no Triable Issue as to the Validity
of the Parol Transfers.
Even if
case law requires a showing of detriment, the siblings contend that their
papers show enough detriment to defeat summary judgment.
This contention lacks merit.
Preliminarily,
we must determine whether the issue is even cognizable. A quiet title action must plead “[t]he title
of the plaintiff as to which a determination under this chapter is sought and
the basis of the title.†(Code Civ.
Proc., § 761.020, subd. (b).) The
siblings did not allege that they obtained title to the properties after
detrimentally relying on parol transfers and expending substantial sums of
money. All they alleged is that they
“obtained title to the Properties from their father, [Sumampow].†This allegation was deficient to raise the
issue of whether the siblings obtained title through the application of equity.
It is well-established that “‘[t]he
burden of a defendant moving for summary judgment only requires that he or she
negate plaintiff’s theories of liability as
alleged in the complaint. A “moving
party need not ‘. . . refute liability on some theoretical
possibility not included in the pleadings.’
[Citation.]â€â€™â€ (
Co. (2006) 137 Cal.App.4th 292, 332.)
“A plaintiff wishing ‘to rely upon unpleaded theories to defeat summary
judgment’ must move to amend the complaint before the hearing.
[Citations.]†(Knapp v. Doherty (2004) 123 Cal.App.4th 76, 90.) But this rule is not absolute. If a new theory is argued in an opposition
and the moving party does not object, the trial court has the discretion to
either reject the new theory or consider it on the merits. (Ibid.) Thus, whether we need to examine the siblings
argument depends upon whether Mercator objected to it, and whether the trial
court considered it.
A review of the record reveals that
Mercator did not object to the parol transfer argument, and the trial court
ruled on it. Thus, the argument is in
play.
We turn to our analysis.
Mercator
met its burden to negate a triable issue regarding the siblings claim to title
by citing section 1091 and showing that the bequest agreements purporting to
transfer the properties to the siblings were not signed by Sumampow. Section 1091 provides: “An estate in real property, other than an
estate at will or for a term not exceeding one year, can be transferred only by
operation of law, or by an instrument in writing, subscribed by the party
disposing of the same, or by his agent thereunto authorized by writing.†Absent an exception, section 1091 establishes
that the bequest agreements did not transfer title.
The burden
shifted to the siblings to establish a triable issue regarding an exception to
the application of section 1091. Under
the case law, this means that they were required to demonstrate: (1) they made (a) valuable and permanent
improvements or substantial expenditures and (b) the monetary detriment they
suffered exceeded the benefit of the use of the land without charge or rental;
or (2) they suffered some other detriment that is sufficient to make it unjust
to deprive them of the properties for want of properly executed deeds.
The
siblings did not meet their burden.
Through their declarations, the siblings established that they paid half
of the 2008 property taxes and paid management fees. In addition, Iefenn made some improvements
and paid a monthly gardening fee, and Ievan repaired the air conditioning
system and paid homeowners association dues.
The problem is that the siblings did not offer evidence that the
detriment they suffered exceeded the benefit of the use of the properties
without charge or rental. More
specifically, they did not show the value of the use of the properties. As a result, they failed to show a basis for
equity.
Despite
their omissions below, the siblings contend that the trial court erred when it
granted Mercator’s motion because, at the hearing, the trial court indicated
that it could take judicial notice that the properties were extremely valuable
due to their location in Beverly Hills, California. The siblings argue that this was improper,
and that judicial notice did not support the trial court’s conclusion that
their detriment fell below the value of the use of the properties. Assuming for the sake of argument that the
siblings are correct, the point is moot.
They bore the burden on this issue, and they did not meet it. Moreover, a review of the trial court’s oral
pronouncement reveals that its ruling was not dependent on taking judicial
notice of the value of the properties.
Before it took judicial notice, the trial court properly ruled that the
siblings had not met their burden of establishing a triable issue. Thus, in our view, the trial court’s decision
to take judicial notice was superfluous.
DISPOSITION
The judgment is affirmed.
Mercator
shall recover its costs on appeal.
NOT
TO BE PUBLISHED IN THE OFFICIAL REPORTS.
______________________________,
J.
ASHMANN-GERST
We concur:
_______________________________,
P. J.
BOREN
_______________________________,
J.
DOI
TODD
All further statutory references are to the Civil Code unless otherwise
indicated.
The record contains hearsay and hints about the events
leading up to this judgment. For context
only, we glean or infer the following: Mercator sold
its shares in an Australian hotel and casino to Sumampow but he did not pay
when the money came due. Mercator sued
Sumampow in Australia and obtained a judgment against him in 2000. After an appeal by Sumampow and various
collection efforts by a liquidator, only a portion of the judgment was
satisfied. When searching for assets,
Mercator discovered that Sumampow owned the Rexford Property and the Wilshire Condo.
As a result, it filed an action to recognize and enforce the Australian
judgment in California. In June 2008, it
recorded attachment liens.
