Najor v. Ateeq

Filed 6/19/06 Najor v. Ateeq CA4/1

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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, William C. Pate and Ronald S. Prager, Judges. Affirmed.

Ramsey Louis Najor (Ramsey) was a 50 percent co-owner, with his father, Elia Najor (Elia),[1] of 13 acres of unimproved property in San Diego County (the 13-acre parcel). However, in 1991 Ramsey executed a quitclaim deed that stated he was transferring his 50 percent interest in the 13-acre parcel to Elia. In 1996, when Elia was in bankruptcy, he executed a grant deed attempting to transfer, without bankruptcy court approval, his 100 percent interest in the 13-acre parcel back to Ramsey.

George Ateeq (Ateeq), a creditor of Elia's who held a judgment against him in the amount of approximately $450,000, received a relief from stay from the bankruptcy court to enforce his judgment against Elia's assets, including the 13-acre parcel. A marshal's sale was held and Ateeq obtained title to the 13-acre parcel. Ateeq thereafter instituted a quiet title action seeking to remove clouds on the title to the 13-acre parcel, including any purported interest held by Ramsey. Although Ramsey was apparently never served with the complaint in that action, a default judgment was entered against Ramsey, as well as a holder of a second trust deed on the 13-acre parcel.

Ateeq sold the 13-acre parcel to the Environmental Trust, Inc. (the Environmental Trust). The Environmental Trust granted the City of San Diego (the City) an irrevocable conservation easement on the13-acre parcel.

Ramsey thereafter brought this quiet title action against Ateeq, the Environmental Trust and the City, alleging that at all times he was the owner of the 13-acre parcel. He also asserted causes of action for fraud, conspiracy and intentional infliction of emotional distress against Ateeq, and Mohammad Nassiri, the individual who signed the proof of service on Ramsey for Ateeq's quiet title action, alleging that he never received notice of the marshal's sale or Ateeq's quiet title action.

The matter proceeded to a court trial on the quiet title and declaratory relief causes of action. After the trial, the court found in favor of the Environmental Trust and the City, finding that Ramsey had, by the 1991 quitclaim deed, transferred his 50 percent interest in the 13-acre parcel to Elia. The court also found that the 1996 grant deed transferring the 13-acre parcel back to Ramsey was of no effect because it was accomplished while Elia was insolvent in an attempt to defraud creditors, and while that asset was in possession of, and under the protection of, the bankruptcy court.

On appeal, Ramsey contends that the court erred by concluding that the 1991 quitclaim deed operated to transfer his 50 percent interest in the 13-acre parcel to his father Elia because (1) the grantor of the 1991 quitclaim deed, his trust, had no legal title to convey; (2) the legal description contained in the 1991 quitclaim deed was conflicting and uncertain; and (3) the court failed to determine whether the 1991 quitclaim deed was accepted by Elia. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. The 13-Acre Parcel

In March 1970 Ramsey and Elia acquired the 13-acre parcel as joint tenants, each with a 50 percent share. In April a grant deed in favor of Elia and Ramsey was recorded with the San Diego County Recorder's Office.

B. The 10-Acre Parcel

In April 1988 a grant deed was recorded in San Diego County transferring Elia's interest in a 10-acre parcel (the 10-acre parcel) from Elia to Ramsey, as an individual, and the Ramsey Louis Najor Defined Benefit Plan. Ramsey paid Elia $180,000 for the 10-acre parcel.

C. Ateeq Judgment

In April 1991 a judgment in favor of Ateeq was entered against Elia in the amount of $449,010.59. An abstract of judgment was recorded with the San Diego County Recorder's Office.

D. The 1991 Quitclaim Deed

On June 7, 1991, Ramsey executed a handwritten quitclaim deed (the 1991 quitclaim deed) transferring a 50 percent interest in the 13-acre parcel to Elia. The transferor on the 1991 quitclaim deed is listed as "Ramsey L. Najor, Pension Plan No. 2." However, Ramsey signed the 1991 quitclaim deed in his individual capacity. The 1991 quitclaim deed included a legal description that referred to the 13-acre parcel. However, the assessor's parcel number identified the 10-acre parcel. Ramsey changed the date on the 1991 quitclaim deed by interlineating the date of May 1, 1991, and reinserting the date of June 7, 1991. He changed the location of execution from "San Diego, California" to "Dana Point, California 92629." Ramsey initialed both of these changes.

E. The Bankruptcy Proceedings of Elia

In July 1992 Elia filed a voluntary bankruptcy petition. In an initial schedule, Elia's interest in the 13-acre parcel was stated as 50 percent. In all subsequent schedules, however, Elia's interest in the 13-acre parcel was stated as 100 percent. In February 1993 Elia filed a plan of reorganization. In the plan, Elia claimed that he held a 100 percent interest in the 13-acre parcel. In October 1993 a third amended plan of reorganization was filed by Elia. Again, Elia claimed that he held a 100 percent interest in the 13-acre parcel. In September 1995 the bankruptcy examiner filed his report of the status of the properties of Elia. The bankruptcy examiner noted that Elia was the holder of a 100 percent interest in the 13-acre parcel.

In July 1993 a notice of last date to file proofs of claim or interest in the bankruptcy proceedings was filed. The notice provides that "[f]ailure to file a claim may result in your inability to collect funds from [Elia's] estate." Ramsey was served with the notice. However, he failed to take action to assert any claim to or to protect his purported interest in the 13-acre parcel.

In June 1995 Ateeq filed a motion for relief from stay seeking bankruptcy court approval to enforce his judgment against property owned by Elia. On page 4 of the motion, there is a schedule that reflects several San Diego County properties, including a reference that Elia was the 100 percent owner of the 13-acre parcel. In September 1995 Ateeq's motion for relief from stay was granted by the bankruptcy court.

In October 1995 Elia's bankruptcy was converted from a chapter 11 proceeding to a chapter 7 proceeding. As part of the order, the bankruptcy court ordered that the debtor-in-possession or the bankruptcy trustee turn over to the chapter 7 trustee all records and property of the estate under its custody and control as required by the bankruptcy rules. This included the 13-acre parcel.

F. Elia's Attempt To Convey the 13-Acre Parcel While in Bankruptcy

In February 1996, during his bankruptcy proceedings, Elia executed a grant deed (the 1996 grant deed) purporting to convey a 100 percent interest in the 13-acre parcel back to Ramsey. The 1996 grant deed was recorded with the San Diego County Recorder's Office.

G. Forced Sale of the 13-Acre Parcel

After receiving relief from stay, Ateeq sought to enforce his judgment against the 13-acre parcel. In April 1997 a notice of levy was served on the 13-acre parcel. In December 1997 Ramsey was served with a "Notice of Marshal's Sale" at his home address. Ramsey did not take any action to contest the marshal's sale. The marshal's sale occurred in January 1998 in El Cajon, California.

In February 1998 the marshal recorded with the San Diego County Recorder's Office a "Marshal's Deed Under Execution." The marshal's deed was the result of the writ of execution and levy against Elia and the sale of the 13-acre parcel at the public auction. The marshal's deed conveyed all right, title and interest of Elia in the 13-acre parcel to Ateeq.

H. Quiet Title Proceeding

In January 2001 Ateeq initiated a quiet title action against Ramsey and Grocer's Capital, a holder of a second deed of trust on the property. A proof of service for the action was filed on or about April 3, 2001, evidencing service on Ramsey on March 30, 2001.[2] In August 2001 a default judgment was entered against Ramsey and Grocer's Capital. The court quieted title to the 13-acre parcel in Ateeq and found that the second deed of trust in favor of Grocer's Capital was void, extinguished, and of no effect.

I. Conveyance of Subject Property to the Environmental Trust

In September 2002 Ateeq conveyed the 13-acre parcel to the Environmental Trust. In December 2002 the Environmental Trust dedicated an irrevocable conservation easement on the 13-acre parcel to the City.

J. The Instant Action

In June 2003 Ramsey wrote letters to Ateeq, Commonwealth Land Title and Commonwealth Land America claiming ownership of the 13-acre parcel. In those letters, Ramsey claimed that he owned a 100 percent interest in the 13-acre parcel by virtue of the 1991 quitclaim deed and 1996 grant deed, each of which he claimed transferred the property from Elia to him.

In December 2003 Ramsey filed this action for quiet title and for fraud, breach of statute, conspiracy, intentional infliction of emotional distress, and declaratory relief. Only the causes of action for quiet title and declaratory relief were alleged against the Environmental Trust and the City. The complaint asserted all causes of action against Ateeq and Nassiri. In the complaint, Ramsey claimed that he owned the 13-acre parcel and that it was erroneously or fraudulently sold without his knowledge at a 1998 marshal's sale which was conducted to satisfy a judgment held by Ateeq against Elia. Ramsey sought to set aside Ateeq's sale of the 13-acre parcel to the Environmental Trust. Alternatively, Ramsey sought damages from Ateeq and Nassiri. Ramsey named the City as a defendant because it is the holder of the environmental easement on the 13-acre parcel.

Ateeq filed a cross-complaint for equitable indemnity and declaratory relief. The Environmental Trust also filed a cross-complaint for declaratory relief, quiet title and indemnity.

K. Trial

The Environmental Trust filed an ex parte application to bifurcate the equitable issues regarding title to the 13-acre parcel and try them in a separate proceeding before trying the legal issues. Environmental Trust's application was granted by the court.

In February 2005 a court trial on the quiet title issue commenced. Ramsey testified that when he purchased his father's interest in the 10-acre parcel in 1988 for $180,000, he believed that he was receiving the 13-acre parcel. However, he admitted that the legal description on the grant deed he signed showed it was the 10-acre parcel that he was purchasing. He claimed that that was a "mistake," that the "assessor parcel numbers got transposed or something like that."

With regard to the 1991 quitclaim deed, Ramsey first testified that he was going to hold it until he was paid back the $180,000 he had paid to his father Elia. If Elia paid him back the money, he would then have recorded the deed, transferring the 13-acre parcel to Elia. However, because Elia never paid him the money, the deed was never recorded. Ramsey then testified that he believed that the 1991 quitclaim deed actually conveyed Elia's 50 percent interest in the 13-acre parcel to him.

Ramsey testified that when Elia was in bankruptcy he purchased Elia's interest in the 13-acre parcel in 1996 based upon the $180,000 that was owing from Elia to him. However, he admitted that he never received permission from the bankruptcy court to purchase the 13-acre parcel.

L. Court's Decision

The court found against Ramsey on his claims for quiet title and declaratory relief and quieted the City's right, title and interest against the adverse claims of Ramsey.

In doing so, the court rendered an oral statement of decision from the bench. The court found that the 1991 quitclaim deed was signed by Ramsey in his individual capacity and that "[i]t purports to convey [Ramsey's] and/or his pension plan's interest in one-half of the 13-acre parcel to his father, Elia . . . ." The court next addressed the issue of whether the 1991 quitclaim deed was delivered to Elia. The court cited the testimony of Ramsey that he did not deliver the deed, that he was holding it, and that he would only deliver it if Elia paid him the $180,000 owing to him. However, the court noted that the documents presented during trial showed that Ramsey had given his father $180,000 in exchange for a one-half interest in the 10-acre parcel that was not the subject of this litigation. The court also found that Ramsey's version of events conflicted with the documents submitted by Elia in his bankruptcy case wherein he "averred to [the] bankruptcy court" that he owned "100 percent of the 13-acre parcel." The court found Ramsey's claim the 1991 quitclaim deed had no legal force was inconsistent with Elia's attempt to transfer a 100 percent ownership interest in the 13-acre parcel back to Ramsey in 1996. The court found this to be evidence of Ramsey and Elia's knowledge that Elia was the 100 percent owner of the 13-acre parcel at that time.

The court noted that Ramsey only produced a copy of the 1991 quitclaim deed at trial, evidence that the original had been delivered to Elia. The court also noted that Elia was not produced to testify at trial on the issue and from that the court could infer that his testimony would not be helpful to Ramsey's position. Based upon all these facts, the court found Ramsey's testimony "to be lacking credibility on many significant points . . . ."

The court found, "by a preponderance of the evidence that, in fact, the quitclaim deed that was prepared and executed on or about the 7th of June by [Ramsey] did, in fact, transfer ownership to [Elia], and as to 50 percent of the 13-acre parcel." The court further found that the 1996 grant deed transferring the 13-acre parcel back to Ramsey was of no effect because it was accomplished to defraud creditors while Elia was insolvent, and while that asset was in possession of, and under the protection of, the bankruptcy court.

The court entered judgment quieting title to the 13-acre parcel in favor of the City.[3] Based upon the resolution of the case, and in order to expedite any appeal, the parties stipulated to entry of judgment in favor of Ateeq and Nassiri, the court reserving jurisdiction to reinstate Ramsey's claims against them upon conclusion of an appeal. This timely appeal follows.

DISCUSSION

I. APPLICABLE AUTHORITY

"An effective deed must be written and must name a grantor and a grantee." (3 Miller & Starr, Cal. Real Estate (3d ed. 2005) § 8:2, p. 8, fns. omitted.) "It must be subscribed by the grantor or the grantor's agent, and it must be delivered to and accepted by, the grantee." (Ibid., fns. omitted.) Where each of these elements is present, "the deed is effective to transfer title to the grantee." (Ibid.) The document and surrounding circumstances must disclose an intent by the grantor to transfer a present interest in the property. (Marlenee v. Brown (1943) 21 Cal.2d 668, 679; Hotaling v. Hotaling (1924) 193 Cal. 368, 382-383; Rich v. Ervin (1948) 86 Cal.App.2d 386, 394-395; Security-First National Bank v. Leatart (1946) 75 Cal.App.2d 211, 214-216.)

II. ANALYSIS

A. Ramsey's Power To Transfer Title

Ramsey asserts that the court erred in finding that the 1991 quitclaim deed validly transferred title to the 13-acre parcel to Elia because it failed to address the fact that he was a 50 percent owner of the 13-acre parcel in his individual capacity and the transferor on the deed was his pension plan, which had no interest in the 13-acre parcel. We reject this contention.

The court did address the issue of who the actual transferor was. The court found that the 1991 quitclaim deed was signed by Ramsey and that it purported to convey "[Ramsey's] and/or his pension plan's interest in one-half of the 13-acre parcel to his father, Elia . . . ." In other words, the court interpreted the 1991 quitclaim deed as transferring whatever interest Ramsey as an individual, or his pension plan, had in the 13-acre parcel. Based upon these facts, and the other evidence supporting a finding that it was Ramsey's intention to transfer his interest in the 13-acre parcel to Elia, the court found that "the quitclaim deed that was prepared and executed on or about the 7th of June by [Ramsey] did, in fact, transfer ownership to [Elia], and as to 50 percent of the 13-acre parcel." Substantial evidence supports this finding by the court, as detailed in its statement of decision, and the factual background, ante.

Additionally, the court found that Ramsey's testimony to a contrary intention was lacking in credibility. On appeal we do not second guess the court's credibility determinations. (De Anza Enterprises v. Johnson (2002) 104 Cal.App.4th 1307, 1315; Ortzman v. Van Der Waal (1952) 114 Cal.App.2d 167, 170-171.)

Further, to the extent the statement of decision was ambiguous as to whether the court resolved the issue of who the transferor was, the court corrected it when Ramsey brought a motion for new trial. At the oral argument on that motion Ramsey's counsel argued that the court had failed to consider the fact that it was Ramsey's pension plan that was the transferor on the 1991 quitclaim deed, but that Ramsey held his 50 percent interest in the 13-acre parcel as an individual. Counsel for the City responded that the intent of the 1991 quitclaim deed, by having Ramsey listed as an individual, then a comma, followed by reference to the trust, was that he and the trust were granting whatever interest either held in the 13-acre parcel. Counsel for Nassiri then pointed out: "[I]t's important to note [the 1991 quitclaim deed] is signed by [Ramsey]. It's not signed by [Ramsey] as trustee of the pension plan, that's clear evidence. [Ramsey] was signing over his individual interest and not signing the deed as the trustee of the pension plan, as it would be appropriate."

The court responded: "[I]t looks to me like, same as when I went through it before, [] father-son hold the property as joint tenants and then son quitclaims the property over to father. He signed it. Looks to me like that's the only reasonable interpretation of what he did. So the entire property went over to the father . . . ." (Italics added.) Thus, to the extent that the court's original oral statement of decision was unclear on this issue, the court made it clear at this hearing that it was finding that Ramsey transferred his individual interest in the 13-acre parcel by the 1991 quitclaim deed.

B. Ambiguity

Ramsey next contends that the trial court erred in finding that the 1991 quitclaim deed validly transferred his interest in the 13-acre parcel because it failed to address the fact that there was a conflict between the legal description, which referenced the 13-acre parcel, and the assessor's parcel number, which referred to the 10-acre parcel. This contention is unavailing.

Revenue & Tax Code section 11911.1 provides:

"Any ordinance which imposes the documentary transfer tax may require that each deed, instrument or writing by which lands, tenements, or other realty is sold, granted, assigned, transferred, or otherwise conveyed, shall have noted upon it the tax roll parcel number. The number will be used only for administrative and procedural purposes and will not be proof of title and in the event of any conflicts, the stated legal description noted upon the document shall govern. The validity of such a document shall not be affected by the fact that such parcel number is erroneous or omitted, and there shall be no liability attaching to any person for an error in such number or for omission of such number." (Italics added.)

San Diego County Ordinance No. 3801 (New Series), section 22.312.1 of the San Diego County Code of Regulatory Ordinances, requires that all deeds contain tax roll parcel numbers and, as with Revenue & Tax Code section 11911.1, states that the number "will be used only for administrative and procedural purposes and will not be proof of title and in the event of any conflicts, the stated legal description noted upon the document shall govern." (Italics added).

Thus, under this statutory authority, there is no conflict as the legal description for title purposes controls. Indeed, in his reply brief Ramsey concedes that, based upon the above state and local code sections, "there does not appear to be any ambiguity to resolve, and it cannot be said that the trial court erred as a matter of law when it found that the [1991 quitclaim deed] transferred title to the 13 acre rather than 10 acre parcel."

C. Acceptance

Najor asserts that the court erred in quieting title in favor of the Environmental Trust and the City because the court failed to make a determination that the 1991 quitclaim deed was accepted by Elia. This contention is unavailing.

A deed does not transfer title unless it is accepted by the grantee. Acceptance, however, is generally presumed by the courts. Acceptance is presumed where the conveyance is beneficial to the grantee. (Wilkerson v. Seib (1942) 20 Cal.2d 556, 562- 563; Blackburn v. Drake (1963) 211 Cal.App.2d 806, 816-817; Windiate v. Moore (1962) 201 Cal.App.2d 509, 515; Belli v. Bonavia (1959) 167 Cal.App.2d 275, 280; Marshall v. Marshall (1956) 140 Cal.App.2d 475, 479; Steitz v. Irvin (1949) 94 Cal.App.2d 871, 875-876.)

Counsel for Ramsey did not raise the issue of acceptance at any time during the trial. The issue was not raised in any of Ramsey's trial briefs, nor counsel's opening statement or closing argument. Thus, Ramsey failed to rebut the presumption of acceptance and affirmatively waived the acceptance issue by failing to raise it at trial.

Moreover, to the extent the statement of decision was defective for failing to make a determination of whether Elia accepted the 1991 quitclaim deed, Ramsey has waived that issue on appeal because he did not raise it in his motion for new trial and motion for judgment notwithstanding the verdict. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134.)

DISPOSITION

The judgment is affirmed.

NARES, Acting P. J.

WE CONCUR:

McINTYRE, J.

AARON, J.

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[1] We refer to Ramsey and Elia Najor by their first names for purposes of clarity only. No disrespect is intended.

[2] At trial, evidence was presented that the process server, Nassiri, did not serve the complaint on Ramsey. However, that aspect of Ramsey's complaint is not before us on this appeal.

[3] Judgment was not entered in favor of the Environmental Trust, apparently because around that time it filed for bankruptcy protection.