Rivet v. Stodter

Filed 7/16/07 Rivet v. Stodter CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, S. Charles Wickersham, Judge. Reversed.

Robin Rivet appeals a judgment determining that she has no interest in a single family residence. We reverse and remand for further proceedings to determine Rivet's share.

FACTS

Rivet had a romantic relationship with Joe Dziensuwski from 1979 to 2004.^[1] In 1990, they rented a house on 33rd Street in San Diego. When their landlord wanted to sell the house in 1995, Rivet and Dziensuwski were interested in buying it but could not make the down payment or qualify for a loan due to delinquencies on student loans, failure to file income taxes for several years, and being self-employed in an unlicensed business.

Dziensuwski's parents and his sister, Janet L. Stodter, agreed to loan money to Rivet and Dziensuwski for the down payment: $10,000 from the parents and $20,000 from Stodter. Stodter also agreed to obtain a loan and put title in her name while Rivet and Dziensuwski agreed to pay all the monthly mortgage payments, property taxes, insurance, and to maintain the property and make all necessary improvements. Under the agreement, Stodter would transfer title to Rivet and Dziensuwski once they obtained a loan for the property and repaid both Stodter and the parents. The purchase price for the house was $155,000. The initial loan on the property was for a five-year period with a balloon payment at the end.

In 2000, the property was refinanced with a 30-year loan in Stodter's name and title was retained in Stodter's name. Rivet suggested using equity in the property to obtain a loan and repay Stodter and Dziensuwski's parents, but Dziensuwski felt it was

not necessary to do so at that time and he wanted to remodel the house.

In 2002, Stodter refinanced the property with a 15-year loan, and Stodter retained her name on the title. At that time, Stodter wrote to Dziensuwski stating that he and Rivet needed to "get [their] act together in regards to the IRS" and obtain a loan in their names. She wanted her name removed from the title by 2006 or she would sell the property. Stodter wanted to purchase another property and having her name on the title on the San Diego property was complicating the other purchase. Rivet discussed obtaining a loan with Dziensuwski and placing title in their names, but they continued to have tax problems, and he placed priority on remodeling the house.

Over the years, Rivet and Dziensuwski made improvements on the property worth about $30,000.

In 2003, the relationship between Rivet and Dziensuwski began to deteriorate. During 2003 and 2004, Rivet corresponded with Stodter who initially indicated that she believed Rivet and Dziensuwski were each entitled to half the house and that she only wanted repayment of her $20,000 loan plus some interest. At one point, Dziensuwski proposed splitting the house 50/50 with Rivet.

In April 2004, Rivet obtained a restraining order against Dziensuwski based on domestic violence, which excluded him from the house. Stodter wrote to Rivet informing her that if Dziensuwski were not permitted in the house, she would "evict" Rivet. She told Rivet that given Rivet's and Dziensuwski's failure to reach any agreement, she had "no other option but to sell the home," Rivet and Dziensuwski would not be entitled to any of the equity in the property, and she considered Rivet and Dziensuwski to be renters while she was the owner of the property. She directed Rivet and Dziensuwski to make "rent" payments directly to the bank that held the deed of trust.

Rivet filed her complaint in this action in July 2004. In her second amended complaint, filed in April 2005, Rivet asserted causes of action against Dziensuwski, Stodter and the bank holding the deed of trust based on theories of promissory estoppel, constructive trust, resulting trust, quiet title and partition. She sought damages, an order declaring that Stodter held the property in trust for Rivet and Dziensuwski, transfer of the property to Rivet and Dziensuwski, and partition of the property by sale with a distribution of the proceeds in part to Rivet. Stodter and Dziensuwski filed a cross-complaint for declaratory relief and quiet title.

A bench trial was held in August 2005. After Rivet testified, the trial court granted nonsuit, concluding that Rivet was not entitled to recover on any of her theories. The trial court found that since Rivet and Dziensuwski had never performed the conditions of the agreement, that is, repaid Stodter and the parents or obtained a property loan in their own names, Stodter was entitled to the property. The court rejected Rivet's promissory estoppel theory, finding there was no detrimental reliance by Rivet and Dziensuwski, and noting that they had made a choice to spend money for improvements rather than repay Stodter and the parents. The court also found Stodter had not engaged in any wrongful conduct that would support Rivet's theories of promissory estoppel or constructive trust. The court found Rivet was not entitled to enforce a resulting trust because the loans had not been repaid; Rivet had never tendered payment and did not appear to have the ability to repay the loans. Since Rivet's causes of action for quiet title and partition were dependent on her prevailing on one of her other theories, the court ruled she was not entitled to recover. The court ruled Stodter held both legal and equitable title to the property.

DISCUSSION

I

Dismissal of Appeal

Stodter made a motion to dismiss the appeal on the basis Rivet's appeal was not timely filed. We deny the motion.

When the court clerk mails to the parties a document entitled "Notice of Entry" or a file-stamped copy of the judgment (California Rules of Court, rule 8.104(a)(1), former rule 2(a)(1)), the parties have 60 days to file a notice of appeal. If no such notice is mailed by the clerk and none served by a party, the parties have 180 days to file a notice of appeal. (Id., rule 8.104(a)(3), former rule 2(a)(3)); In re Marriage of Taschen (2005) 134 Cal.App.4th 681, 685-686; Cuenllas v. VRL International, Ltd. (2001) 92 Cal.App.4th 1050, 1054.)

Here, the clerk mailed to Rivet a copy of the minutes dated September 29, 2005, labeled as an "ex parte minute order" that stated the court had read and considered the proposed statement of decision and judgment submitted by the defendants, and was adopting that proposed statement of decision as its own, and concluded by stating, "The Proposed Judgment is the judgment of the court." However, this document was neither labeled as "Notice of Entry" of the judgment nor was it file-stamped. Therefore, Rivet had 180 days to file her notice of appeal and her notice filed on March 2, 2006, was timely.

II

Entitlement to An Interest in the Property

Rivet argues the court erred in ruling that Stodter was entitled to both legal and equitable title to the property. We conclude Rivet's resulting trust theory has merit. Stodter was not entitled to the equitable title or a beneficial interest in the property.

"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." (Lloyds Bank California v. Wells Fargo Bank (1986) 187 Cal.App.3d 1038, 1042 (Lloyds Bank California).) It is sometimes referred to as an "intention-enforcing" trust since "the trust carries out the inferred intent of the parties." (13 Witkin, Summary of Cal. Law (10th ed. 2005) Trusts,  311, p. 885 (hereafter Witkin); Calistoga Civic Club v. City of Calistoga (1983) 143 Cal.App.3d 111, 117; Martin v. Kehl (1983) 145 Cal.App.3d 228, 238; Lloyds Bank California, at p. 1042; see also Millard v. Hathaway (1865) 27 Cal. 119, 139 [trusts implied or presumed from the "supposed intention of the parties and the nature of the transaction" are known as "resulting trusts."].)

When property is transferred to one person (grantee) who takes title to the property, but the purchase price is paid by another (claimant or beneficial owner), the transfer is presumed to create a trust in favor of the claimant who paid the purchase price. (13 Witkin, supra, Trusts,  314, p. 888.) The consideration may be paid directly by the claimant or be paid on behalf of the claimant by another person. (See Barroilhet v. Anspacher (1885) 68 Cal. 116, 121; Breitenbucher v. Oppenheim (1911) 160 Cal. 98, 103 [" 'in order that a trust might result in their favor, it was not necessary that the consideration for the transfer should have been paid by them. It was enough if it was paid for them,' " (italics added)]; Viner v. Untrecht (1945) 26 Cal.2d 261, 269.) Thus, if the grantee loaned money or credit to the claimant, the consideration will be viewed as having been paid by or on behalf of the claimant. "In this kind of situation, it is the claimant's own money that is subject to the obligation to repay, and the trust will arise." (13 Witkin, supra, Trusts,  316, p. 890; Novak v. Novak (1967) 249 Cal.App.2d 438, 442 ["Although a resulting trust generally arises in favor of the payor of the purchase price when one pays and another takes title, the payor may be the trustee rather than the holder of the beneficial interest where his payment constituted a loan to the beneficiary"].)

When the money paid by the claimant is loaned by the grantee and there is a condition of repayment of the loan before title will be transferred to the claimant, "the grantee holds a double relation to the real purchaser, he [or she] is trustee of the legal title to the land and he [or she] is mortgagee for the money advanced for its purchase, and, as in the case of any other mortgage which is evidenced by an absolute deed, is entitled to retain the title until the payment of the claim for which it is held as security; and he [or she] may also enforce [a] lien by an action of foreclosure." (Mercantile Collection Bureau v. Roach (1961) 195 Cal.App.2d 355, 358; Campbell v. Freeman (1893) 99 Cal. 546, 548.)

The resulting trust situation commonly occurs in family situations. For example, in Novak v. Novak, supra, 249 Cal.App.2d 438, 441-443, a father purchased property but defaulted on his mortgage payments and was unable to refinance the property and avoid foreclosure. His son and daughter-in-law agreed to buy the property from the bank and to reconvey title to him once the loan was fully repaid. Title was put in the son and daughter-in-law's names for the father's convenience. The father resided on the property and made all the payments on the trust deed, taxes, and insurance and maintained and improved the property. When the father's health began to fail, he repaid the loan ahead of schedule and sought reconveyance of the property from his son and daughter-in-law. When they failed to reconvey, he brought a quiet title action. The court concluded the son and daughter-in-law "were trustees of the legal title for [the] father. They held bare legal title; they never asserted the right nor were given possession of the dwelling, nor did they reside there. The father's promise to make the installment payment is necessarily implied from the nature of the transaction and the conduct of the parties thereafter. Once the loan was repaid, the father made no rental payments to [his son and daughter-in-law], but at all times he conducted himself in a manner consistent with belief in his ownership." (Id. at p. 442.) The court found the situation presented " 'the most elementary and simplest type of a resulting trust.' " (Id. at p. 443.)

Similarly, in Bishop v. Freeman (1949) 90 Cal.App.2d 861, 861-862, a mother and her husband purchased a house and made all the monthly mortgage payments but title was put in the name of the mother's son for the convenience of the mother and her husband. The mother and her husband lived in one-half of the property while the son and his wife lived in the other half. The court held the evidence was sufficient to support a conclusion there was a resulting trust with the son holding title only as trustee for the benefit of the mother and her husband. (Id. at p. 864.)

Martin v. Kehl, supra, 145 Cal.App.3d 228, 243 involves a situation not dissimilar to that here. In Martin v. Kehl, Edward Martin, Patricia Kehl and her boyfriend made an oral agreement that Martin and Kehl's boyfriend would purchase property with each owning 50 percent of the property but that title and the deed of trust would be put in Kehl's name. Martin contributed one-half of the cost of the down payment. Under the agreement Kehl agreed to pay the monthly mortgage payments and perform minor maintenance while she lived on the property but if she vacated the property, then it would be sold and Martin would receive one-half of the proceeds. Kehl vacated and refused to either sell the property or pay Martin his share. The court held there was a resulting trust in favor of Martin who was entitled to one-half of the proceeds from the sale of the house. The court found this was "a classic case for imposition of a resulting trust." (Id. at p. 236.)^[2]

A resulting trust will not be found when the evidence shows the payments made on a property were intended to be rental payments, and not payments on the purchase price (see Martin v. Kehl, supra, 145 Cal.App.3d. at p. 244 [noting defendant's payments on trust deed while she resided on the property were intended as rent]), when the contribution of funds was made after legal title had vested in the grantee (Keene v. Keene (1962) 57 Cal.2d 657, 667), or when the claimant lends money to the grantee to purchase the property (13 Witkin, supra, Trusts,  315, p. 890).

Here, Stodter and the parents agreed to loan money to Rivet and Dziensuwski. The parties intended Rivet and Dziensuwski, not Stodter, to own the property. Stodter agreed to obtain a deed of trust and place title in her name not because she was intended to be the beneficial owner of the property, but for the convenience of Rivet and Dziensuwski who had credit problems. Additionally, placing title in Stodter's name secured the loans; under the agreement Stodter was not required to convey title to Rivet and Dziensuwski until the loans were repaid and financing was obtained in the names of Rivet and Dziensuwski. None of the payments on the deed of trust were made by Stodter. She did not reside on the property, nor did she have the obligation to maintain or repair the property. Instead, Rivet and Dziensuwski were in possession of the property; were responsible for the deed of trust payments, insurance, and real estate taxes; performed all the maintenance on the property; and made improvements. This factual scenario presents a classic resulting trust situation where Stodter held title only as trustee while Rivet and Dziensuwski held the beneficial or equitable title.

Under the agreement, Rivet and Dziensuwski were required to repay the loans to Stodter and the parents and obtain financing in their own names before obtaining title to the property. Stodter was not required to transfer title to Rivet and Dziensuwski until these conditions were met. Stodter was not required to wait indefinitely for Rivet and Dziensuwski to perform these conditions, but was entitled to repayment and refinancing in the names of Rivet and Dziensuwski within a reasonable period. When Rivet and Dziensuwski failed to perform the conditions within a reasonable period of time, Stodter's remedy was not to convert the equitable interest in the property to her own use and treat Rivet and Dziensuwski as mere renters. Instead, if she wanted to be removed from the title and obtain repayment, her remedy was to foreclose on her lien by selling the property and obtaining repayment of her loan from the sales proceeds. The court erred when it held Stodter was entitled to have both equitable and legal title quieted in her favor.

The parties' briefs indicate that after the trial in this case, Stodter sold the property and obtained a price substantially exceeding the amount of her loan.^[3] In March 2006, according to the briefs, Stodter sold the house for $639,000 and agreed to hold 50 percent of the net proceeds ($245,000) in a trust account pending resolution of this appeal. Because this sale occurred after the trial in this case, it is necessary to remand to the trial court for a determination of Rivet's share of the proceeds, taking into consideration any interest that may be due to Stodter or the parents on the loans and any mortgage payments that may have been made by Stodter in the interim.

DISPOSITION

The judgment is reversed and the cause remanded for further proceedings. Rivet is awarded costs on appeal.

McCONNELL, P. J.

WE CONCUR:

BENKE, J.

McINTYRE, J.

Publication Courtesy of San Diego County Legal Resource Directory.

Analysis and review provided by San Diego County Property line attorney.

^[1] Dziensuwski was named as a defendant and cross-complainant but he is not a party to this appeal.

^[2] See also Helmer v. Helmer (1948) 87 Cal.App.2d 682, 683, where the court held substantial evidence supported a finding of a resulting trust in favor of a son and daughter-in-law, where the mother's contribution of money toward the purchase was a gift, and title was held in the mother's name only because of her concerns about the son losing the property by mortgaging it and the likelihood the father would disapprove of her gift; Viner v. Untrecht, supra, 26 Cal.2d 261, 265, where the court held a resulting trust existed in an association's favor when the defendant loaned money to association to complete purchase of a building, make improvements and to pay accrued taxes, took title in her name, but the association made the payments and the defendant merely paid rent for a room in the building; Stone v. Lobsien (1952) 112 Cal.App.2d 750, 755, where the court held a resulting trust existed in favor of wife after her husband's death when a close friend of theirs was named on the secured note and the title but the husband and wife had made the downpayment and paid all the mortgage payments; Rowland v. Clark (1949) 91 Cal.App.2d 880, where the court held there was a resulting trust in favor of a grandmother during her lifetime where the grandmother paid the consideration for the property but took title in the name of herself and her granddaughter as joint tenants with intent to retain a life estate.

^[3] The sale of the property moots any claims to quiet title.