Carey v. Carey

Filed 9/28/06 Carey v. Carey CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 977.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 ONE

APPEAL from a judgment of the Superior Court of Los Angeles County. John L. Segal, Judge. Reversed.

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Brian Carey, in pro. per., for Plaintiff and Appellant.

Rodi, Pollock, Pettker, Galbraith & Cahill, Allan E, Ceran and Richard W. Petty for Defendant and Respondent.

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In this action between two brothers for constructive trust and other forms of relief, plaintiff Brian Carey appeals from the judgment of dismissal entered after the court sustained the demurrer of defendant Raymond J. Carey without leave to amend. We reverse the judgment of dismissal.

BACKGROUND

This lawsuit concerns a dispute over real property in Pacific Palisades (the property). The suit is in many respects identical to a suit (Carey v. Carey (Super. Ct. L.A. County, No. YC 050000)) between the same parties concerning other real property, also located in southern California.^[1] (See Carey v. Carey (Aug. 30, 2006, B184141) [nonpub. opn.].) Because the parties share a last name, we will refer to them by their first names; no disrespect is intended. The following factual allegations are taken from the second amended complaint. On April 8, 1980, Brian purchased the property but had title placed in the name of his brother, Raymond, pursuant to their agreement that Raymond would hold the property in trust for Brian and would convey the property to Brian upon request. Since purchasing the property, Brian has used it as his family residence. He also has completely renovated the house on the property, at his own expense.

In November 2004, Raymond refused Brian’s request to reconvey the property. Accordingly, on November 24, 2004, Brian filed suit against Raymond to quiet title to the property. He amended the complaint twice, ultimately alleging claims for constructive trust, breach of fiduciary duty, resulting trust, unjust enrichment, adverse possession, specific performance, and declaratory relief. Brian attached as exhibits to the second amended complaint the following documents written by Raymond that indicated the property was being held in trust: (1) Raymond’s letter dated August 12, 2004, informing Brian that Raymond had executed a will “to protect your properties in California”; and (2) an excerpt from Raymond’s will stating that Raymond has “held legal title (but never equitable title)” to the property as Brian’s “nominee[.]”

Raymond demurred to the second amended complaint, contending that the entire complaint was barred by the doctrine of judicial estoppel and the statute of frauds, and also contending that the adverse possession claim failed to state facts sufficient to constitute a cause of action. The trial court agreed that the entire second amended complaint was barred by judicial estoppel and the statute of frauds. On that basis, the court sustained the demurrer without leave to amend and dismissed the complaint. This timely appeal followed.

DISCUSSION^[2]

We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions, or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters that may be judicially noticed. (First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662.)

“On a demurrer a court’s function is limited to testing the legal sufficiency of the complaint. [Citation.] ‘A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.’ (Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879.)” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

I. Judicial Estoppel

The doctrine of judicial estoppel prevents a party from asserting a position in a legal proceeding that is inconsistent with or contrary to a position previously taken in the same or an earlier proceeding. (Daar & Newman v. VRL International (2005) 129 Cal.App.4th 482, 490-491.) The doctrine serves both to protect the integrity of the judicial system and to protect parties from the unfair strategies of their opponents. (Aguilar v. Lerner (2004) 32 Cal.4th 974, 986.) The doctrine is an extraordinary remedy that may be invoked to prevent a miscarriage of justice. (Daar & Newman v. VRL International, supra, 129 Cal.App.4th at p. 491.) The doctrine applies when “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake. [Citations.]” (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 183.)

In this case, the trial court sustained the demurrer and dismissed the complaint on the theory that Brian is barred by the doctrine of judicial estoppel from asserting a position in this litigation that contradicts a position that he previously asserted in a criminal case. In 1993, Brian was convicted on multiple counts of insurance billing fraud. When the criminal court in the prior action inquired into Brian’s financial ability to pay for his legal defense, Raymond executed a declaration stating that he, Raymond, was the owner of the property, having purchased it for investment purposes. On that basis, Brian’s defense attorney argued to the court that Brian had no assets to pay for his defense. In this action, the trial court concluded that Brian, having taken the earlier position in the criminal case that Raymond purchased and owns the property, is judicially estopped to deny those facts now.

On appeal, Brian contends that the doctrine of judicial estoppel does not necessarily apply, as a matter of law, to preclude him from asserting in this litigation that he purchased and is the beneficial owner of the property because: (1) in the criminal case, the court did not rely on the representation that Raymond owned the property in that (a) the court found that Brian was the beneficial owner of the property, and (b) the court absolved Brian of liability for his criminal defense costs solely because of the court’s own failure to advise him of his financial obligation to pay for his legal fees before defense counsel was appointed; and (2) if Raymond is permitted to apply the doctrine of judicial estoppel as a defense in this action, Raymond would unfairly benefit from his (allegedly) perjured testimony in the criminal case.^[3]

We conclude that because the facts are disputed, it is premature to apply the doctrine of judicial estoppel in this case. As Brian correctly points out, one of the necessary requirements for applying the doctrine of judicial estoppel is that “the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true)[.]” (Jackson v. County of Los Angeles, supra, 60 Cal.App.4th at p. 183.) “Absent success in a prior proceeding, a party’s later inconsistent position introduces no ‘risk of inconsistent court determinations,’ [citation], and thus poses little threat to judicial integrity. [Citations.]” (New Hampshire v. Maine (2001) 532 U.S. 742, 750-751; see Jogani v. Jogani (2006) 141 Cal.App.4th 158; Gottlieb v. Kest (2006) 141 Cal.App.4th 110.) If, as Brian argues, the criminal court concluded that Brian was the beneficial owner of the property but absolved him of liability for his defense costs solely because of the court’s failure to inform him of his financial obligations, Brian’s present position that he is the beneficial owner of the property would be consistent with the criminal court’s prior determination.^[4]

Moreover, the parties strongly disagree as to whether Raymond perjured himself in the criminal case by declaring that he had purchased the property as an investment. Because there is a possibility that Raymond committed perjury in the criminal case, it is premature to apply the doctrine of judicial estoppel in this case. (See In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 850 [evidence of wife’s participation with husband in asserting the prior inconsistent position supported the court’s determination that wife may not apply the doctrine of judicial estoppel against husband in the subsequent proceeding].)

II. Statute of Frauds

The factual premise of the complaint is that Brian purchased the property in 1980 but had title placed in Raymond’s name pursuant to an agreement that Raymond would hold the property in trust for Brian, who thereafter occupied the property as his own. Brian contends on appeal that the trial court erred in sustaining the demurrer and dismissing the complaint on the basis of the statute of frauds. We agree. Even in the absence of a written trust agreement for real property, the statute of frauds does not necessarily bar an action to impose a constructive or resulting trust by a plaintiff who had possession of the property and paid the property’s purchase price. (Jones v. Gore (1956) 141 Cal.App.2d 667, 672-673.)

III. Statute of Limitations

Raymond argues, for the first time on appeal, that Brian’s claims are barred by the statute of limitations. Brian contends that the defense was waived. We conclude that to the extent a statute of limitations defense appears on the face of the complaint, Raymond’s failure to raise the defense in his demurrer precludes him from raising it for the first time on appeal. “It is blackletter law that the defense of the statute of limitations is a personal privilege which must be affirmatively invoked in the lower court by appropriate pleading (if the defense appears on the face of the complaint, it must be raised by demurrer; otherwise it must be specially pleaded in the answer) or is waived (Hall v. Chamberlain (1948) 31 Cal.2d 673, 679 . . . ).” (O’Neil v. Spillane (1975) 45 Cal.App.3d 147, 156.)

IV. Leave to Amend

Brian alternatively argues that even if judicial estoppel or the statute of frauds is found to apply, he should have been granted an opportunity to amend his complaint to allege different causes of action, such as promissory estoppel, which would not be barred. In light of our determination that neither defense supports the dismissal of the complaint, we need not reach this issue.

DISPOSITION

The judgment is reversed. Appellant shall recover his costs on appeal. NOT TO BE PUBLISHED.

ROTHSCHILD, J.

We concur:

VOGEL, Acting P.J.

JACKSON, J.^*

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^[1] Because of the similarities between the two cases, we suggest that on the remand the superior court consider consolidating them.

^[2] Raymond argues that we should affirm on the ground that Brian has failed to provide an adequate record on appeal. Although the record does suffer from some procedural deficiencies, we conclude that it is adequate to enable us to analyze the issues presented, so we reject Raymond’s argument. Raymond also asks that we strike the “exhibits” to Brian’s opening brief. A party is permitted, however, to attach up to 10 pages of materials from the record to a brief. (Cal. Rules of Court, rule 14(d).) All eight of the “exhibits” to Brian’s opening brief are copies of documents contained in the record, but the first three “exhibits” alone total 10 pages. Accordingly, “exhibits” 4 through 8 to Brian’s opening brief are stricken from the brief. Finally, Raymond asks that we strike any statements of fact in Brian’s opening brief that are not supported by citation to the record, but Raymond does not specifically identify any such statements. We deny the request, but we will, of course, base our analysis exclusively upon statements that are supported by the record before us.

^[3] Raymond asserts, without explanation, that on appeal Brian “has only addressed the cause of action for constructive trust,” so he has waived any challenge to the dismissal of “all of the other causes of action of the second amended complaint.” The assertion is incorrect. In his demurrer to the second amended complaint, Raymond contended that all of Brian’s causes of action were barred by both judicial estoppel and the statute of frauds (the latter because, according to Raymond, all causes of action depended upon the existence of an alleged oral trust). The trial court agreed that “[t]he [s]econd [a]mended [c]omplaint is barred by judicial estoppel and the statute of frauds.” On appeal, Brian argues against the application of both judicial estoppel and the statute of frauds, without restricting his challenges to any particular cause(s) of action. Brian thus has not waived either issue as a basis for challenging the dismissal of all of his claims.

^[4] Raymond also argues that Brian’s alleged representation that he did not own the property was successful because, in Brian’s appeal from his criminal conviction, the Court of Appeal appointed counsel to represent Brian, “apparently based on his alleged indigent status.” In response, Brian moves to strike this argument from Raymond’s brief because it raises factual issues not presented to the trial court. We granted Raymond’s request for judicial notice of the court file in Brian’s criminal appeal, which contains the order appointing counsel. It appears from the file that the court appointed appellate counsel sua sponte, prior to any application for appointment of counsel by Brian, who was attempting to represent himself on appeal. The appointment of appellate counsel thus appears not to have been based on any purported representations that Brian was indigent. Insofar as any of these facts remain disputed, the parties can litigate those disputes in the trial court on remand. Brian’s motion to strike is denied.

At oral argument, counsel for Raymond also directed our attention to a portion of the reporter’s transcript of the post-trial proceedings in Brian’s criminal case, in which Brian personally told the court that the property was Raymond’s. Counsel argued that, as a result of Brian’s statements concerning ownership of the property, the court imposed a smaller fine than the maximum authorized, so Brian’s statements were successful. The record does not support counsel’s argument. The reporter’s transcript indicates that the court was not persuaded by, and thus did not rely on, Brian’s claim that he did not own the property. Again, insofar as any of the relevant facts remain disputed, the parties can litigate those disputes in the trial court.

^* (Judge of the L. A. Sup. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.)