Sarinana v. Soria

Filed 8/28/07 Sarinana v. Soria 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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, Robert D. Monarch, Judge. (Retired judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI,  6 of the Cal. Const.) Reversed and remanded. Motion to augment record. Granted. Motion to strike portions of clerks transcript. Denied. Motion for sanctions against appellants. Denied. Motion for award of costs and/or monetary sanctions against respondents. Denied.

Law Offices of Roger E. Naghash and Roger E. Naghash for Plaintiffs and Appellants.

Law Office of Stanley L. Moerbeek and Stanley L. Moerbeek for Defendants and Respondents Richard R. Soria and Lynda F. Soria.

Bradford Calvin for Defendant and Respondent Richard C. Soria, Sr.

* * *

Introduction

Plaintiffs Irene R. Sarinana (Mother), Richard C. Soria, Jr. (Richard Jr.), Barbara Soria (Barbara), Eleanor I. Soria (Eleanor), and Renee R. Soria (Renee) (collectively Plaintiffs) appeal from a judgment entered after the trial court granted a nonstatutory motion for judgment on the pleadings at the outset of trial. The trial court denied Plaintiffs request for a brief continuance to prepare written opposition and granted the motion on the same day it was filed, on the ground that each of Plaintiffs causes of action was time‑barred.

It is unclear whether a nonstatutory motion for judgment on the pleadings survived enactment of Code of Civil Procedure section 438. In any case, the trial court should not have granted a motion for judgment on the pleadings with minutes notice and without affording Plaintiffs an opportunity to prepare written opposition. This procedural irregularity aside, however, the trial court erred by granting judgment on the pleadings. We conclude each of Plaintiffs causes of action was timely under Probate Code section 16460, the relevant statute of limitations, and therefore reverse and remand.

As we are reversing, we cannot say the appeal is frivolous, so we deny defendants motion for sanctions. We agree with the defendants that the appellants briefs contain serious violations of the California Rules of Court. We decline to impose sanctions this time, but warn Plaintiffs counsel that we will impose sanctions against him in the future for filing briefs with such rules violations. We grant Plaintiffs motion to augment the record, deny Plaintiffs motion to strike portions of the clerks transcript, and deny Plaintiffs motion for award of costs and/or sanctions.

Allegations

Defendants Richard R. Soria (Grandfather) and Lynda F. Soria (Grandmother) are the parents of defendant Richard C. Soria, Sr. (Father). (Grandfather, Grandmother, and Father are collectively referred to as Defendants.) Father and Mother are the parents of Richard Jr., Barbara, Eleanor, and Renee. Father and Mother divorced in 1994.

On March 13, 1993, Father and Mother owned a house at 5417 West Fourth Street in Santa Ana. The first amended complaint alleged that on March 13, 1993, Father and Mother, on the one hand, and Grandfather and Grandmother, on the other, entered into a written trust agreement (the Agreement).

The Agreement, handwritten on a form, identified Father and Mother as the First Part and identified Grandfather and Grandmother as the Second Part. The handwritten portion of the Agreement reads: The First Part agrees to sign over Grant deed of house, Located at 5417 W 4th St. City of Santa Ana, County of Orange. State of Calif. Lot 8 block tract 547. Reasons being First Part cannot afford completions of or pmts. of 1st & 2nd mor[t]gage total of $1200.00 per mo. [] First Part agreement is only. [] . . . [] when second Part is paid all money paid out to to [sic] date on mor[t]gages & has spent on constructions & will have to spend [] at such time if divorce occurs between First Parts & or Second part is paid back in full, Grant deed will be turned back to [] Richard C. Soria Father [] Richard C. Soria Jr[.] son [] Barbara Soria daughter [] Eleanor I. Soria daughter [] Rene R. Soria daughter. (Father, Richard Jr., Barbara, Eleanor and Renee are referred to collectively as the beneficiaries.)

The complaint alleged that pursuant to the Agreement, Grandfather and Grandmother agreed and appointed to be the trustees, of a trust, and receive legal title to the Subject Property, for safe keeping purposes and for the sole benefit of [the beneficiaries]. According to the complaint, Grandfather and Grandmother, as trustees, agreed to maintain the Subject Property, make repairs, perform necessary improvements, pay taxes, pay expenses, pay mortgage payments, preventing waste on the Subject Property, and make the Subject Property profitable for the sole benefit of [the beneficiaries]. Also, according to the complaint, Grandfather and Grandmother agreed that at any time, upon demand by the beneficiaries, Defendants, the Trustees will transfer the legal title to the Subject Property to the beneficiaries, Plaintiffs, Richard-Jr.-Son, Barbara, Eleanor, Renee, and Defendant, Richard-Sr.-Father. Grandfather and Grandmother agreed that upon transferring the property they would provide the beneficiaries a complete and detail[ed] accounting of any and all expenses, charges, fees, mortgage payments, taxes, improvements, and profits earned in connection with the Subject Property.

The complaint alleged that in August 2003 Plaintiffs demanded that Grandfather and Grandmother, as trustees, transfer legal title to the house to the beneficiaries and provide an accounting. According to the complaint, Grandfather and Grandmother refused to comply with those demands.

The complaint alleged that starting in 1993 and continuing through August 2003, Grandfather and Grandmother made these fraudulent misrepresentations: (1) they would improve the subject property and increase its market value for the sole benefit of the beneficiaries, (2) Grandfather and Grandmother were knowledgeable and capable of maintaining and managing the subject property, (3) the beneficiaries would make a substantial profit from the increased value of the property with no risk of loss if they trusted Grandfather and Grandmother, (4) Grandfather and Grandmother would transfer legal title to the property to the beneficiaries upon demand, and (5) Grandfather and Grandmother would provide the beneficiaries with a complete and detailed accounting on demand.

The complaint alleged Plaintiffs relied on those misrepresentations in entering into the Agreement, creating the trust, and transferring title to the house to Grandfather and Grandmother. Plaintiffs discovered the alleged fraud and breach of the Agreement sometime after August 2003, when, the complaint alleged, Grandfather and Grandmother refused to comply with Plaintiffs demand to convey title and provide an accounting.

The complaint asserted causes of action for fraud, breach of contract, rescission, money had and received, breach of fiduciary duty, unjust enrichment, and injunctive relief arising out of Grandfather and Grandmothers alleged refusal to convey title to the house and to provide an accounting.

Proceedings in the Trial Court

Plaintiffs filed this lawsuit on June 27, 2005 and filed the first amended complaint three days later, on June 30, 2005.

On August 17, 2006, the trial court (Judge McEachen) granted Grandfather and Grandmothers motion to sever the statute of limitations defense and try it separately.

Counsel and the parties appeared in court on November 6, 2006 to commence trial before Judge Monarch. The court conferred with counsel in chambers during the afternoon of November 6 and the morning of November 7. Settlement negotiations were conducted on November 7, but the case did not settle. The record does not disclose the substance of any discussion because none of the in‑chambers conferences was reported. During the morning of November 7, Grandfather and Grandmother brought a nonstatutory motion for judgment on the pleadings asserting each cause of action was time-barred under Probate Code section 16460. The court heard the motion the same day, denying Plaintiffs request for a continuance to prepare written opposition.

The trial court granted the nonstatutory motion for judgment on the pleadings on the ground all claims raised in each and every cause of action of the First Amended Complaint are barred by the Statute of Limitations under Probate Code, 16460, Code of Civil Procedure, 337, and Code of Civil Procedure, 318. The court denied Plaintiffs oral motion to amend the complaint, concluding Plaintiffs counsel failed to make an adequate offer of proof.

Judgment in favor of Defendants and awarding them costs was entered on November 21, 2006. Plaintiffs filed a notice of appeal from the judgment on November 30.

Defendants subsequently filed a cost memorandum, and Plaintiffs moved to tax costs. Apparently, the trial court denied Plaintiffs motion (the record does not include an order on the motion).

Standard of Review

Judgment on the pleadings is reviewed under the same de novo standard applied to judgment following the sustaining of a demurrer. (McCutchen v. City of Montclair (1999) 73 Cal.App.4th 1138, 1144; Boccato v. City of Hermosa Beach (1994) 29 Cal.App.4th 1797, 1803‑1804.) Accordingly, we treat the properly pleaded allegations of the complaint as true and liberally construe them to achieve substantial justice among the parties. (American Airlines, Inc. v. County of San Mateo (1996) 12 Cal.4th 1110, 1118.) We consider only the allegations of the complaint and matters subject to judicial notice to determine whether the facts alleged state a cause of action under any theory. (Ibid.) A complaint which, on its face, is barred by the statute of limitations does not state a cause of action and is therefore subject to a motion for judgment on the pleadings. (Hunt v. County of Shasta (1990) 225 Cal.App.3d 432, 440.)

Discussion

I.

Plaintiffs Causes of Action Were Timely
Under Probate Code Section 16460

Plaintiffs alleged in the complaint and asserted throughout the litigation that the Agreement created an express trust with Grandfather and Grandmother as trustees. Probate Code section 16460, subdivision (a) therefore is the relevant statute of limitations. Section 16460, subdivision (a) governs proceedings against trustees and states, in relevant part: Unless a claim is previously barred by adjudication, consent, limitation, or otherwise: [] . . . []  (2) If an interim or final account in writing or other written report does not adequately disclose the existence of a claim against the trustee for breach of trust or if a beneficiary does not receive any written account or report, the claim is barred as to that beneficiary unless a proceeding to assert the claim is commenced within three years after the beneficiary discovered, or reasonably should have discovered, the subject of the claim.

Probate Code section 16460, subdivision (a) establishes a three-year statute of limitations applicable to all claims for breach of trust. (Noggle v. Bank of America (1999) 70 Cal.App.4th 853, 859.) If, as in this case, no written account or report was provided to the beneficiaries, the three-year limitations period commences when a beneficiary discovers, or reasonably should have discovered, the subject of the claim. (Id. at p. 858.)

The Agreement is, to say the least, ambiguous. The complaint alleged the Agreement created a trust with Grandfather and Grandmother as trustees and the house as the trust corpus, and alleged that Grandfather and Grandmother, as trustees, agreed to maintain the Subject Property, make repairs, perform necessary improvements, pay taxes, pay expenses, pay mortgage payments, preventing waste on the Subject Property, and make the Subject Property profitable for the sole benefit of [the beneficiaries]. According to the complaint, Grandfather and Grandmother agreed they would transfer the house to the beneficiaries at any time upon demand and provide the beneficiaries a full accounting upon transfer. The complaint alleged that in August 2003 Plaintiffs demanded that Grandfather and Grandmother, as trustees, transfer legal title to the house to the beneficiaries and provide an accounting. Grandfather and Grandmother refused to comply with those demands.

Thus, as alleged in the complaint, the breach of trust occurred no earlier than August 2003, when Grandfather and Grandmother refused to transfer the house to the beneficiaries and to provide them an accounting. The causes of action for breach of contract and breach of trust were timely because the complaint was filed less than two years later, in June 2005.

As to the cause of action for fraud, the complaint alleged that Grandfather and Grandmother made the alleged misrepresentations starting in 1993 and continuing through at least August 2003. The complaint alleged Plaintiffs did not discover and had no reason to discover the fraud, until sometime after August 2003, when Grandfather and Grandmother refused to respond to the beneficiaries request to transfer the house to them and for an accounting. The fraud cause of action was timely because the complaint was filed within three years of the date that the complaint alleged the beneficiaries discovered the fraud. (Prob. Code,  16460, subd. (a); Noggle v. Bank of America, supra, 70 Cal.App.4th at p. 858.)

Plaintiffs suggest the Agreement created a resulting trust rather than an express trust, and an action to enforce an express trust is subject to a four-year statute of limitations. A resulting trust arises by operation of law from a transfer of property under circumstances showing that the transferee was not intended to take the beneficial interest. (Estate of Yool (2007) 151 Cal.App.4th 867, 874.) In Estate of Yool, the court confirmed the applicable statute of limitations on an action to establish a resulting trust is the four-year statute of Code of Civil Procedure section 343. (Estate of Yool, supra, 151 Cal.App.4th at p. 875.) The statute of limitations does not begin to run against a voluntary resulting trust in the absence of repudiation by the trustee, that is, until demand has been made upon the trustee and the trustee refuses to account or convey. (Ibid., citing Berniker v. Berniker (1947) 30 Cal.2d 439, 447‑448.)

We agree the complaint, to the extent it can be read to seek enforcement of a resulting trust, was timely filed. The complaint was filed within four years of August 2003, when Grandfather and Grandmother allegedly refused to convey the house and to account.

In the prayer of the complaint, Plaintiffs sought an offset for any and all delinquencies of child support against any and all interest that Defendant, Richard-Sr.-Father has in the Subject Property. Defendants argue, [t]his tacked on request for relief is not justiciable and is an improper attempt to enforce child support in a civil action. While that might be true, the only issue before us is whether Plaintiffs causes of action were time-barred on the face of the complaint. The motion for judgment on the pleadings did not include a motion to strike portions of the prayer for relief.

Because we reverse the judgment on the merits, we need not address the denial of Plaintiffs motion to tax costs.

II.

Motions

Plaintiffs moved to augment the record with filings related to costs recovery and their motion to tax costs, and with the transcript of the hearing on their motion to tax costs. Although we are reversing the judgment, including the award of costs, we grant the motion to augment in order to have a complete record. We deny Plaintiffs motion to strike portions of the clerks transcript. The items that Plaintiffs move to strike from the clerks transcript were filed with the trial court and were timely designated by Defendants as part of the appellate record.

Defendants moved for sanctions against Plaintiffs pursuant to rule 8.276(e)(1) of the California Rules of Court on the grounds the appeal is frivolous and the appellants briefs contain numerous violations of the California Rules of Court. As we are reversing the judgment, the appeal is not frivolous. Defendants are correct, however, in arguing that Plaintiffs make factual assertions in their briefs without citations to the record, that some of their citations to the record are overbroad or misleading, that some of Plaintiffs arguments lack citation to authority, and that Plaintiffs rely on Di Grazia v. Anderlini (1994) 22 Cal.App.4th 1337, which has been overruled by enactment of Code of Civil Procedure section 438.

We may impose sanctions against a party or counsel for [c]omitting any . . . unreasonable violation of these rules. (Cal. Rules of Court, rule 8.276(e)(1)(C).) We may impose monetary sanctions for any unreasonable infraction of the rules governing appeals . . . as the circumstances of the case and the discouragement of like conduct in the future may require. (Pierotti v. Torian (2000) 81 Cal.App.4th 17, 19.)

Plaintiffs counsel violated California Rules of Court, rule 8.276(e)(1)(C) by repeatedly making factual assertions that are not supported by the record. Pages 7 through 11 of the appellants opening brief recite at length what purportedly occurred during the in‑chambers conferences on November 6 and 7, 2007. Those conferences were not reported. The record contains no declaration of counsel describing what occurred at those conferences. In reciting these unreported, in-chambers conferences, Plaintiffs counsel impugns the character and motive of the trial court judge, accusing him of inviting Defendants to bring a motion for judgment on the pleadings in retribution for Plaintiffs refusal to dismiss their case. While we conclude the trial court erred by granting Defendants motion for judgment on the pleadings, we see no impropriety in the courts actions.

We cannot overlook counsels violations of the California Rules of Court, but believe a warning, rather than monetary sanctions, is sufficient to discourage like conduct in the future. We therefore issue this warning to Plaintiffs counsel, the Law Offices of Roger E. Naghash and Roger E. Naghash: In the future, we will impose sanctions against you for making factual assertions that are not supported by the record or by making factual assertions without citations to the record in violation of California Rules of Court, rule 8.276(e)(1)(C).

In response to Defendants motion for sanctions, Plaintiffs moved for an award of costs and/or sanctions against Defendants. Plaintiffs request for sanctions was untimely because it was not filed within 10 days of the appellants reply brief. (Cal. Rules of Court, rule 8.276(e)(2).) Further, Plaintiffs request for sanctions has no merit.

Disposition and Order

The judgment is reversed and the matter remanded for further proceedings.

Defendants motion for sanctions is denied. Plaintiffs motion to augment the record is granted. Plaintiffs motion to strike portions of the clerks transcript and Plaintiffs motion for award of costs and/or sanctions are denied.

In the interest of justice, no party may recover costs incurred in this appeal.

FYBEL, J.

WE CONCUR:

SILLS, P. J.

RYLAARSDAM, J.

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