Marriage of Moleyem
Filed 8/14/13 Marriage of Moleyem CA2/8
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
EIGHT
In re Marriage of MARJANEH and
HUSHANG MOLAYEM.
B244691
(Los Angeles
County
Super. Ct.
No. BD 537582)
MAX ASTAN,
Appellant,
v.
R & D DEVELOPMENT et al.,
Respondents.
APPEAL from
a judgment of the Superior Court
of
County, Ralph C. Hofer, Judge. Reversed and remanded.
Kaplan,
Kanegos & Kadin, Jerry Kaplan and David Scott Kadin for Appellant.
Etehad Law
Firm, Simon P. Etehad and Rabin Saidian for Respondents.
* * * * * *
Max Astan
successfully intervened in this marital
dissolution action, which concerns the marriage of Marjaneh and Hushang
Molayem.
alleges a cause of action for declaratory relief against the Molayems and other
defendants. The court sustained without
leave to amend the demurrers of Hushang and another defendant-in-intervention,
R & D Development (R&D). Astan
appeals from the judgment dismissing his complaint. We hold the demurrers should have been
sustained with leave to amend and reverse and remand on that ground.
facts and procedure
Astan
intervened in this action on the ground that he is a creditor of the Molayems
pursuant to a promissory note secured by a deed of trust against the Molayems’
residence. The defendants named in
Astan’s action for declaratory relief include the Molayems, R&D (another
alleged creditor of the Molayems), Leo David (the principal of R&D), his
wife Ruth David, and David Pasternak, the court appointed receiver for the
Molayems’ property. Astan’s complaint,
deemed filed on May 3, 2012, alleges as follows.
Astan gave
certain antiques to the Molayems on consignment. The parties agreed the value of the
merchandise was $805,000. The Molayems
agreed to pay Astan for the merchandise when they sold it, or else they would
return the merchandise to Astan. They
executed a promissory note secured by a deed of trust in the principal sum of
$805,500 as security for either the return of the merchandise or payment of the
agreed-upon value if they did not return the merchandise. The deed
of trust encumbered real property owned by the Molayems at 612
North Crescent Drive in Beverly
Hills (Crescent property). It was dated July 13, 2009, and recorded on July 27, 2009.
The Molayems failed to return the merchandise to Astan and failed to pay
him $805,500, despite Astan’s demand.
At some
point in this action, the receiver sold the Crescent property free and clear of
all liens except a Wells Fargo lien, which was paid through escrow. All other liens on the property attached to
the proceeds of the sale. The receiver
was holding in excess of $2.5 million in sale proceeds. Astan has a lien against the sale proceeds in
the form of the deed of trust securing his promissory note with the
Molayems. He is entitled to $805,500
plus interest at the rate of 7 percent per year and attorney fees, for a total
of over $1 million. R&D claims to be
the assignee of purported loans Leo made to the Molayems or business entities
controlled by them. On this ground, R&D
and Leo also claim liens against the sale proceeds. Astan contends the liens of R&D and Leo
are invalid and his lien is superior to their purported liens. He seeks a judicial declaration of the rights
and obligations of all the parties and an order for the receiver to pay him all
money found owing to him.
R&D and
Hushang demurred to Astan’s complaint on the ground that his deed of trust on
the Crescent property is no longer valid because Astan has reconveyed his
interest back to the Molayems.
name="_ftnref2" title="">[2] R&D and Hushang requested the court take
judicial notice of the recorded “Substitution of Trustee and Full Reconveyanceâ€
(the reconveyance), which states the promissory “[n]ote, together with all
other indebtedness secured by said Deed of Trust, has been fully paid and
satisfied, and as successor Trustee, the undersigned [Astan] does hereby
RECONVEY WITHOUT WARRANTY, TO THE PERSON OR PERSONS LEGALLY ENTITLED THERETO,
all of the estate now held by it under said Deed of Trust.†The reconveyance was dated and notarized on August 5, 2010, and was recorded on March 6, 2012. R&D and Hushang also requested the court
take judicial notice of an excerpt from Astan’s deposition transcript in a
related case brought by R&D against the Molayems. R&D argued Astan admitted to signing a
reconveyance in this excerpt.
Astan
opposed the demurrers on the basis that the reconveyance is invalid. He argued Hushang told him to reconvey the
Crescent property, and in return, Hushang would pay the $805,500 owed under the
note. Astan asserted he signed the
reconveyance and gave it to Hushang on the condition that it would be recorded
only if Hushang paid the money owing.
Because Hushang never paid Astan, there was never any authorization to
record the reconveyance. Astan objected
to the court taking judicial notice of the excerpt from his deposition
transcript on the ground that it was not a complete transcript, and the
transcript as a whole was not signed by him nor certified by the court
reporter.
At
also alleged there was fraud. He
indicated if the court were to sustain the demurrers, he would amend the
complaint to allege (1) he gave the reconveyance on the specific condition that
Hushang pay him, and (2) Hushang fraudulently induced him to sign the reconveyance.
The court
sustained the demurrers of R&D and Hushang without leave to amend.
request to take judicial notice of Astan’s partial deposition transcript. But the court took judicial notice of the
recorded reconveyance and found it established Astan had reconveyed all
interests he had in the Crescent property back to the Molayems such that he had
no valid lien on the property. Moreover,
the court held the parol evidence rule barred his efforts to show a contemporaneous
agreement that the reconveyance would not be recorded until Hushang paid the
money owing. It explained Astan’s
interpretation of the reconveyance as having a condition was not reasonable,
and no ambiguity in the reconveyance allowed for the introduction of extrinsic
evidence. The ruling did not mention
Astan’s fraud in the inducement theory.
The court
entered a judgment in favor of all defendants and also dismissed Astan’s
complaint. Astan timely appealed.
contentions
Astan
advances several arguments on appeal. In
the main, he asserts we should retroactively apply the recent California
Supreme Court decision in Riverisland
Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55
Cal.4th 1169 (Riverisland), which
overruled Bank of America etc. Assn. v.
Pendergrass (1935) 4 Cal.2d 258 (Pendergrass). Pendergrass
concerned the fraud exception to the parol evidence rule. The Pendergrass
court held “the rule which permits parol evidence of fraud to establish the
invalidity of the instrument is that it must tend to establish some independent
fact or representation, some fraud in the procurement of the instrument or some
breach of confidence concerning its use, and not a promise directly at variance
with the promise of the writing.†(
reconsidering Pendergrass, the
exception has been part of the parol evidence rule since the earliest days of
our jurisprudence, and the Pendergrass
opinion did not justify the abridgment it imposed. For these reasons, we overrule [Pendergrass]
and its progeny, and reaffirm the venerable
maxim . . . : ‘[I]t
was never intended that the parol evidence rule should be used as a shield to
prevent the proof of fraud.’†(Riverisland,
supra, at p. 1182.) Astan contends we must reverse the judgment
because, under Riverisland, he should
be permitted to allege Hushang procured the reconveyance through fraud.
Notwithstanding
Riverisland, Astan contends the trial
court erred because (1) ambiguities in the reconveyance raise factual issues
regarding its validity, and (2) the court sustained his objections to taking
judicial notice of his partial deposition transcript yet used his testimony in
support of its ruling.
R&D
contends the court’s ruling rests on the law regarding real estate deeds and
related instruments, which was unaffected by Riverisland, and under that law, the reconveyance was valid and may
not be challenged by evidence of an oral condition to the deed. Moreover, R&D contends (1) Astan cannot
allege fraud in the procurement of the reconveyance because admissions in
Astan’s judicially noticeable deposition transcript demonstrate he did not
actually or justifiably rely on any fraudulent promises, and (2) there were no
material ambiguities in the reconveyance that would raise factual issues
regarding its validity. Hushang joins in
R&D’s brief.
STANDARD OF REVIEW
We review
the complaint de novo to “determine whether [it] states facts sufficient to
constitute a cause of action.
[Citation.] And when [the
demurrer] is sustained without leave to amend, we decide whether there is a
reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its
discretion and we reverse; if not, there has been no abuse of discretion and we
affirm.†(Blank v. Kirwan (1985)
39 Cal.3d 311, 318; see Cantu v.
Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879.) “We treat the demurrer as admitting all
material facts properly pleaded, but not contentions, deductions or conclusions
of fact or law. [Citation.] We also consider matters which may be
judicially noticed.†(Serrano v.
Priest (1971) 5 Cal.3d 584, 591.) We
do not accept the allegations of the complaint as true if they are contradicted
by matters that are judicially noticeable.
(Tucker v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th
201, 210.)
Declaratory Relief
Astan’s sole
cause of action is for declaratory relief.
“Any person interested under a written
instrument, . . . or under a contract, or who desires a
declaration of his or her rights or duties with respect to another, or in
respect to, in, over or upon property . . . , may, in cases
of actual controversy relating to the legal
rights and duties of the respective parties, bring an original action or
cross-complaint in the superior court for a declaration of his or her rights
and duties . . . , including a determination of any
question of construction or validity arising under the instrument or
contract.†(Code Civ. Proc., §
1060.) “‘The fundamental basis
of declaratory relief is the existence of an actual, present controversy
over a proper subject.’†(City of
Cotati v. Cashman (2002) 29 Cal.4th 69, 79.)
The court
may sustain a demurrer to a declaratory relief complaint on the ground that it
fails to allege an actual or present controversy. (DeLaura v. Beckett (2006) 137
Cal.App.4th 542, 545.) In that instance,
the plaintiff has failed to state a cause of action for declaratory
relief. On the other hand, when the
plaintiff’s allegations establish an actual controversy, a demurrer does not
lie merely for the failure to establish a right to a favorable declaration. (Lockheed
Martin Corp. v. Continental Ins. Co. (2005) 134 Cal.App.4th 187, 221 (
by State of California v. Allstate Ins.
Co. (2009) 45 Cal.4th 1008, 1036, fn. 11.)
“‘It is the general rule that in an action for declaratory relief the
complaint is sufficient if it sets forth facts showing the existence of an
actual controversy relating to the legal rights and duties of the respective
parties under a contract [or instrument] and requests that the rights and
duties be adjudged. . . .
If these requirements are met, the court must declare the rights of the
parties whether or not the facts alleged establish that the plaintiff is
entitled to a favorable declaration.’†(Lockheed,
supra, at p. 221, quoting
Bennett v. Hibernia Bank (1956) 47 Cal.2d 540, 549-550.)
Thus,
“[s]trictly speaking, a demurrer is a procedurally inappropriate method for
disposing of a complaint for declaratory relief. As Witkin observes: ‘[A] demurrer would leave the parties where
they were, with no binding determination of their rights, to await an actual
breach and ensuing litigation. This
would defeat a fundamental purpose of declaratory relief, to remove
uncertainties as to legal rights and duties before breach and without the risks
and delays that it involves. In brief,
the object of declaratory “relief†is not necessarily a beneficial judgment;
rather, it is a determination, favorable or unfavorable, that enables the
plaintiff to act with safety. This
theory has prevailed, and the rule is now established that the defendant cannot,
on demurrer, attack the merits of the plaintiff’s claim. The complaint is sufficient if it shows an
actual controversy; it need not show that plaintiff is in the right.’†(Lockheed, supra, 134 Cal.App.4th at p. 221,
quoting 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 831, p. 289.)
But we need
not always reverse when the trial court has erroneously sustained a demurrer to
a declaratory relief complaint. “If the
appellate court’s decision on the merits would necessarily result in a
declaration unfavorable to the plaintiff, reversal would be an idle act. The appellate opinion is in effect a
declaratory judgment. [Citation.] The proper procedure is to modify the
judgment to make that declaration and affirm the judgment as modified.†(Lockheed, supra, 134 Cal.App.4th at
pp. 221-222.)
Here, there
is an actual and present controversy between the parties as to the claimed
liens and their rights to the Crescent property sales proceeds. Astan claims he has a valid lien by virtue of
the deed of trust and claims the reconveyance is not valid. R&D and Hushang claim he has no lien
because the reconveyance is valid. Astan
seeks a declaration of the parties’ rights and obligations. This is sufficient to state a claim for
declaratory relief.
In the following
part, we determine whether we should nevertheless modify and affirm the
judgment because our “decision on the merits would necessarily result in a
declaration unfavorable to†Astan, rendering reversal an idle act. (Lockheed,
supra, 134 Cal.App.4th at p. 221
A deed of
trust is security “for the performance of an act†and constitutes a lien on
real property. (Civ. Code, § 2920, subd.
(a);
S.P. Partnership v. W. L. Bangham, Inc. (1989) 49 Cal.3d 454, 460;
Huntington Beach (2005) 127 Cal.App.4th 248, 258.) A deed of trust often secures the obligation
to pay on a note, as was the case here with the deed of trust by the Molayems
in favor of Astan. “A reconveyance is
the instrument that clears title to property subject to a recorded deed of
trust.†(Ricketts v. McCormack
(2009) 177 Cal.App.4th 1324, 1327, fn. 1.)
On its
face, the notarized and recorded reconveyance clears title to the Crescent
property and extinguishes the lien Astan had on the property under the deed of
trust. The reconveyance therefore
directly contradicts the allegation of Astan’s complaint that he has a valid
lien on the sales proceeds. Moreover,
the court properly took judicial notice of the reconveyance. A court may take judicial notice of a
recorded deed or similar document when the authenticity of the document is not
challenged. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152
Cal.App.4th 1106, 1117; Evans v.
California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549.) Astan does not challenge the existence and
authenticity of the recorded reconveyance, just the manner in which it was
procured, as we discuss below.
name="_ftnref5" title="">[5]
Looking
solely at the complaint and the judicially noticed reconveyance, Astan could
not obtain a favorable declaration from the court. The next question is whether he could amend
the complaint such that a favorable declaration would be possible, in which
case we should not simply modify and affirm the judgment.
Astan
contended below he would amend to allege he gave the reconveyance on the
specific condition that he receive $805,500 for it. The trial court denied leave to amend because
it held the parol evidence rule barred evidence of a contemporaneous agreement
that Hushang could not record the reconveyance until he paid Astan the
money. (Casa Herrera, Inc. v. Beydoun (2004) 32 Cal.4th 336, 344 [parol
evidence rule “necessarily bars consideration of
contemporaneous negotiations or agreements at variance with the written
agreementâ€].) We agree with the trial
court regarding parol evidence of a contemporaneous oral agreement or
condition. In the context of deeds, our
Supreme Court explained in Lavely v. Nonemaker (1931) 212 Cal. 380,
384-385 (Lavely): “‘[W]hether a deed, when delivered, shall
take effect absolutely, or upon the performance of some condition not expressed
therein, cannot be determined by parol evidence. Any condition qualifying the delivery must be
inserted in the deed itself, or else the deed must not be delivered to the
grantee.’†(See also § 1056 [“A grant
cannot be delivered to the grantee conditionally. Delivery to him, or to his agent as such, is
necessarily absolute, and the instrument takes effect thereupon, discharged of
any condition on which the delivery was made.â€].) The remedy for failure to satisfy an
unexpressed condition is not rescission of the deed, but an action for damages
for breach of the grantee’s personal covenant.
(Lavely, supra, at
pp. 384-385.) We may not void a
deed even when the condition at issue is the payment of consideration. (Wooster
v. Department of Fish & Game (2012) 211 Cal.App.4th 1020, 1030 [a deed
is not void for any failure of consideration].)
The fact that we are dealing with a reconveyance as opposed to a grant
deed makes no difference; the same rules apply.
(Schiavon v. Arnaudo Brothers
(2000) 84 Cal.App.4th 374, 378.)
Under these
rules, when Astan delivered the reconveyance to Hushang, it was effective
immediately and free of the condition he claims. The reconveyance contains no conditions
regarding payment of the money or prohibiting recordation until the money is
paid. In fact, it states the underlying
debt has been paid and satisfied. An
amendment to allege the reconveyance was invalid because an unexpressed
agreement or condition had not been satisfied would be futile. If this were all Astan would allege, we might
agree leave to amend was properly denied.
He also asserted, however, he would allege he was fraudulently induced
into giving the reconveyance. This
allegation would fare much better in invalidating the reconveyance.
It is well
established a “deed secured by fraud is invalid and is subject to
cancellation.†(Steiner v. Steiner (1958) 160 Cal.App.2d 665, 668-669; see Cox
v. Klatte (1938) 29 Cal.App.2d 150, 160; 4 Miller & Starr, Cal. Real
Estate (3d ed. 2011, Supp. 2003) § 10:116, p. 356 [“A reconveyance
that has been obtained fraudulently or by forgery can be set aside by a court
of equityâ€]; see Lavely, supra,
212 Cal. at p. 383 [a failure of consideration for a deed or breach of a
personal covenant not expressed in the deed will not void the deed
p. 1030 [“‘a deed without fraud in its
inception . . . is not void for any failure of consideration†(first italics added, second italics
added by Wooster)].) Alleging fraud in the procurement is
different than alleging the instrument was delivered but an unexpressed
condition was not met, or consideration was not paid. The issue is not one of conditional delivery,
but of no delivery at all. (
376.) When a deed is fraudulently
procured, the manual transfer of it is not in the legal sense a
“delivery.†(Steiner v. Steiner,
supra, at p. 669.) Execution and delivery of a deed or similar
instrument “depend upon more than the mechanical acts of signing it and passing
it to another person.†(
They also depend upon consent, and “[a]pparent consent is not real or
free when obtained through fraud.†(Ibid.)
The parol evidence rule does
not bar evidence of promissory fraud in the procurement of an instrument. Code of Civil Procedure section 1856,
subdivisions (f) and (g), establishes an exception to the parol evidence rule
for evidence relevant to the validity of an agreement and specifically for
evidence of fraud. (Riverisland, supra,
teaches, the fraud exception is broad and applies even when the plaintiff
alleges a fraudulent promise “‘directly at variance with the promise of the
writing.’†(Id. at pp. 1175, 1182.)
“When fraud is proven, it cannot be maintained that the parties freely
entered into an agreement reflecting a meeting of the minds.†(Id.
at p. 1182.)
The fraud
exception existed well before Riverisland,
though Riverisland clarified the scope
of it. Whether Riverisland should apply “retroactively†to Astan’s case, as he
asserts, is not truly disputed here.
R&D does not dispute the application of Riverisland and in fact recognizes the rule that “fraud in the
inception or inducement permits extrinsic evidence on the issue of whether
there was actual delivery†of a deed.
Instead, R&D contends “sworn admissions preclude [Astan] from
stating a cause of action for fraud.â€
The admissions to which R&D refers are contained in Astan’s
deposition from the related case between R&D and the Molayems. R&D argues this deposition testimony is
judicially noticeable. We turn lastly to
this material and whether it is judicially noticeable.
R&D and
Hushang requested judicial notice of one portion of Astan’s deposition, which
the court denied. In response to their
request for judicial notice, Astan filed both an objection to their request and
his own separate request for judicial notice of a different portion of his deposition. The record is unclear on whether the court
granted or denied Astan’s separate request for judicial notice.
Astan’s deposition comes from the portion he sought to judicially notice. It reads as follows:
“Q Okay.
Why -- and since you did not get the $805,000 back, why did you sign a
reconveyance document?
“A Okay.
That was the time Harry Molayem[
-- he was not in his house. He always
told me, ‘They kicked me out. I don’t
have a place.’ I give him place to my
house to stay there.
“And
I was involved all this story they have for divorce together. And he came and said, eventually, ‘If you can
help me, if you can give me reconveyance, money is ready.’
“I
said, ‘What’s happened?’
“He
said, ‘There is the’ -- I don’t know.
Maybe Mandy knows. ‘It’s a lot of
people, family members. They already
have a gathering. They are
together. They want to pay this money to
you and just give me reconveyance.’ [¶]
. . . [¶]
“And
I said, ‘Okay. If it’s going to help
you, I am going to give it to you. And
bring me the check.’
“And
he went, and he came back. He said, ‘We
couldn’t settle.’ And after two days, I
remember I got the reconveyance back. I
had a witness too. [¶]
. . . [¶]
“Q Okay.
And I’m trying to understand.
“Why
did you -- what was the reason that you decided to sign a reconveyance even
though your money hadn’t been paid?
“A Because at that time, you know, he was
in my house. We were together. I was trying to help his marriage. If I can help, he is going to bring the check
for me. I knew he was not going to give
my check. This reconveyance doesn’t
worth penny.
“Q Okay.
Why was --
“A But he promise --
“Q Why was the reconveyance not worth a
penny?
“A Because he never filed this
reconveyance. You know, now he come with
the reconveyance. You know, he got the
reconveyance year and a half ago.
“Q But how did you know he wasn’t going to
file the reconveyance?
“A Because some way I was trust -- he
couldn’t -- first of all, I’m in real estate.
I know. If you get the reconveyance,
you go to the title company. If you want
to file it, you cannot go through escrow.
You’re supposed to go and file it.
You cannot go file like that. I’m
in the real estate business. I
understand that.
“Q So what was missing for him to file it --
be able to file it?
“A A lot of paper is there for the
reconveyance. It’s not just one page,
you go to a notary and give it to someone.
“Q Okay.
So what I -- I guess what I’m wondering is: Did Harry basically suggest to you that he
needed to get a reconveyance in order to get the money to pay you off?
“A Yeah.
“Q And I guess he indicated the people that
were going to give him money wanted to see a reconveyance before they would
give it to him to pay you?
“A That was a group of family members. Yeah.
“Q Okay.â€
R&D
contends this testimony negates the actual reliance element of fraud. It argues the testimony demonstrates Astan
only provided the reconveyance out of humanitarian motives (“I was trying to
help his marriageâ€), and he put virtually no stock in any promises Hushang made
to him (“I knew he was not going to give my checkâ€).
In ruling
on a demurrer, the court may take judicial notice of the plaintiff’s discovery
admissions when they cannot reasonably be controverted. (Arce v. Kaiser Foundation Health Plan,
Inc. (2010) 181 Cal.App.4th 471, 485.)
When the so-called admissions are not clear, however, judicial notice is
not appropriate. In Joslin v. H.A.S.
Ins. Brokerage (1986) 184 Cal.App.3d 369, 374 (Joslin), the court explained:
“Taking judicial notice of a document is not the same as accepting the
truth of its contents or accepting a particular interpretation of its
meaning. [Citation.] 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.’
[Citation.] The hearing on demurrer
may not be turned into a contested evidentiary hearing through the guise of
having the court take judicial notice of documents whose truthfulness or proper
interpretation are disputable.
[Citation.]†Accordingly, in Joslin, the court held the trial court
could not consider certain deposition testimony to establish a disputed fact
because the testimony was subject to different interpretations. (Id. at pp. 375-376.)
As in
not the proper subject of judicial notice because it is subject to different
interpretations and does not contain a clear admission. R&D focuses on his statement, “I knew he
was not going to give my check†in isolation.
But reading the whole passage, Astan explained Hushang needed the
reconveyance first, and Hushang would come back with the money from his family
members after he showed them the reconveyance.
Directly before Astan utters the statement on which R&D relies, he
states, “If I can help, he is going to
bring the check for me.†(Italics
added.) Astan’s statement that he knew
Hushang was not going to give him the check could mean nothing more than
Hushang was not going to give him the check right away, when Astan delivered
the reconveyance. The statement was not
necessarily inconsistent with a belief that Hushang would deliver a check at a
later date. A demurrer is not the
appropriate procedure for determining whether this or R&D’s competing
interpretation is the right one. Indeed,
the trial court denied judicial notice of the other deposition excerpt offered
by R&D and Hushang for precisely this reason -- “there [was] no agreement
by the parties as to the meaning of the actual testimony of Max Astan.â€
R&D
also maintains the testimony negates the justifiable reliance element of fraud
because a reconveyance in exchange for a bare promise to pay a debt already in
default is “irrational and inexplicable by any reasonable standard,†especially
when the parties do not agree on a deadline to pay or payment plan. We do not agree the testimony can be
judicially noticed for this proposition either.
Assuming arguendo reliance on
a bare promise to pay was “irrational and inexplicable,†Astan’s statements did
not indisputably say there was no deadline to pay, no payment plan, or no other
conditions on the payment process. The
questioner in this excerpt did not focus on the particulars of any promise
Hushang made. He or she did not put the
relevant questions to Astan, and we will not hold him to “admissions†on these
issues when he did not actually admit anything.
We cannot determine from this short excerpt that Astan’s reliance was
indisputably unjustified. In short,
judicial notice of Astan’s deposition testimony is not appropriate. The testimony does not therefore defeat
Astan’s proposed allegations of fraud in the inducement.
* * *
To
conclude, a demurrer was not, strictly speaking, the appropriate method for
disposing of the complaint for declaratory relief when an actual controversy
existed between the parties regarding their claimed liens. Nevertheless, we have considered the merits
of the parties’ positions to determine whether reversal would be idle because
Astan could not obtain a favorable declaration.
We hold it is not out of the question Astan could obtain a favorable
declaration, given a chance to amend the complaint with allegations of fraud in
the inducement. Thus, we cannot merely
modify the judgment to declare the parties’ rights and affirm the modified
judgment. The demurrers should have been
sustained with leave to amend. (
there is a reasonable possibility that a defect in the complaint can be cured
by amendment or that the pleading liberally construed can state a cause of
action, a demurrer should not be sustained without leave to amend.’â€].)
DISPOSITION
The judgment is reversed and the cause remanded to permit the filing of an
amended complaint. Astan shall have
costs on appeal.
FLIER,
J.
WE CONCUR:
BIGELOW, P. J.
GRIMES, J.
name="_ftn1" title="">[1] When appropriate, we refer to Marjaneh and
Hushang Molayem by
their first names, as a convenience to the reader. The same is true with respect to another
husband and wife involved in the proceedings, Leo and Ruth David. We do not intend this informality to reflect
a lack of respect. (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 475-476, fn. 1.)
name="_ftn2" title="">[2] Hushang’s briefing stated he was demurring for failure to state a
cause of action (Code Civ. Proc., § 430.10, subd. (e)) and lack of legal capacity to sue (Code Civ.
Proc., § 430.10, subd. (b)).
R&D’s briefing stated it was demurring for lack of legal capacity to
sue. Legal incapacity “is merely a legal
disability, such as infancy or insanity, which deprives a party of the right to
come into court.†(Parker v. Bowron
(1953) 40 Cal.2d 344, 351.) “[T]he
question of standing to sue is different from that of capacity.†(Ibid.) Standing relates to the right to relief,
which “goes to the existence of a cause of action.†(Ibid.) The moving parties’ arguments clearly went to
Astan’s right to relief and standing.
(E.g., “As one whose interests in the Deed of Trust has been eliminated by a
willingly-signed and recorded Reconveyance, Claimant simply has no standing to
remain in this action.â€) Therefore, the
demurrers were properly based on failure to state a cause of action,
not lack of legal capacity.
