Angel City Fitness v. Conrad

Filed 5/19/06 Angel City Fitness v. Conrad CA2/8

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION EIGHT

ANGEL CITY FITNESS CORPORATION,

Plaintiff and Appellant,

MICHAEL CONRAD,

Defendant and Respondent.

B182905

(Los Angeles County

Super. Ct. No. BC 310645)

APPEAL from a judgment of the Superior Court for the County of Los Angeles. Jane L. Johnson, Judge. Affirmed.

Law Offices of Michael L. Thornburg and Michael L. Thornburg for Plaintiff and Appellant.

Daniel Gunning for Defendant and Respondent.

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SUMMARY

The trustor under a deed of trust securing payment of a promissory note cannot expunge or void the deed of trust on the ground the underlying promissory note was executed by a third party rather than, as stated in the deed of trust, by the trustor. Nor may the trustor void the deed of trust on the ground the trustor did not agree to pledge its property, or did not receive consideration for the pledge. Accordingly, the trial court properly sustained the beneficiary's demurrer to the trustor's complaint.

FACTUAL AND PROCEDURAL BACKGROUND

Angel City Fitness Corporation was the owner of a parcel of real property in Culver City. Matthew Swogger, the president and sole shareholder of Angel City Fitness, has owned and operated fitness gymnasiums in Southern California since 1990. In addition to owning Angel City Fitness, Swogger was one of three shareholders in Miracle Fitness Corporation, which was formed in 2001 for the purpose of opening and operating a fitness gymnasium in Newbury Park. Miracle Fitness needed funds to make improvements to a building in Newbury Park it planned to develop into a fitness center. Michael Conrad agreed to lend funds for the project, in return for shares in Miracle Fitness and a promissory note.

On July 24, 2002, Angel City Fitness, by Swogger as its president, executed a deed of trust on its Culver City property, securing the payment of a promissory note in favor of Conrad for $195,000. The long form deed of trust states it was:

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Description	A decision wherein held that The trustor under a deed of trust securing payment of a promissory note cannot expunge or void the deed of trust on the ground the underlying promissory note was executed by a third party rather than, as stated in the deed of trust, by the trustor. Nor may the trustor void the deed of trust on the ground the trustor did not agree to pledge its property, or did not receive consideration for the pledge.
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