Cobrai v. Cobraei

Filed 1/17/07  Cobrai v. Cobraei CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b).  This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court of Los Angeles County, Michael B. Harwin, Judge.  Affirmed.

Douglas S. Draper for Defendant, Cross-Complainant and Appellant Gary R. Cobrae.

Law Office of Dale L. Sare and Dale L. Sare for Defendant, Cross-Defendant and Appellant John E. Cobrae.

Law Office of Larry E. Wasserman and Larry E. Wasserman for Plaintiff, Cross-Defendant and Respondent Cheryl Cobrae.

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            We review for a second time this appeal and cross appeal arising from a family property dispute.[1]  We formerly reversed and remanded the matter for the trial court to issue a statement of decision pursuant to Code of Civil Procedure section 632.  The parties now contest a portion of the judgment following remand.  Finding no error, we affirm. 

FACTUAL AND PROCEDURAL BACKGROUND

I.          FACTS

This is an appeal and cross appeal arising from a family property dispute.  Plaintiff, cross-defendant and respondent Cheryl Cobrae[2] was formerly married to defendant, cross-defendant and appellant John Cobrae.  Defendant, cross-complainant and appellant Gary Cobrae is John's father and Cheryl's former father-in-law.

            In 1984 or 1985, Gary and John entered into an oral agreement to invest in a parcel of real property located at 18429 Tarzana Drive, Tarzana, California (the parcel), priced at $206,000.  As a real estate investor, Gary agreed to finance the purchase and development of the parcel.  As a general contractor, John agreed to supervise construction and manage the parcel pending its resale.  Each agreed to take half the net profits after Gary recouped his original investment of $115,000. 

            The parcel was subsequently subdivided into two lots:  18425 (the property) and 18431 (the adjacent property).  Gary and John moved a house onto the front of the property.  They made improvements to both properties.  

            In 1986, Gary refinanced both properties for $143,500 with California Federal Savings and Loan.  He received $20,000 from the refinance.  John became a 50 percent owner on the deeds of both properties.

            That same year, John and Cheryl married.  They moved into the house on the property, paid its bills and taxes, remitted rent to Gary, made improvements, managed and rented out the guest house in the back of the property as well as the house on the adjacent property.  They also collected and forwarded the tenants' rent to Gary, who paid the loans on the properties.  Cheryl and John each owned 25 percent of the property as tenants in common.

            In 1987, Gary, John and Cheryl refinanced the second trust deed to the adjacent property for $41,882 with Coast Federal Savings.  Gary received $17,396 in proceeds on the refinance, which was applied toward his expenses for the initial construction and land costs.  As of 1987, Gary had recouped approximately $77,000 from the refinance of the two properties.  At this point, no profits had been split between Gary, John and Cheryl.  

            In 1988, the parties sold the adjacent property at a net profit of $193,223.  Gary deducted $39,600 for himself.  From the remainder, Gary took half and John and Cheryl took the other half of the net profit.  Even though John had been added to the title of the adjacent property, Gary claimed the distribution to John and Cheryl was a gift.

            In 1989, the parties again refinanced the property for $92,905 with Coast Federal Savings.  John claimed that he and Cheryl received $25,763 from the refinance to reimburse them for improvements they made to the property.  However, Gary maintained they received the entire net proceeds of $44,935 and he received nothing.  Cheryl and John asserted that Gary was paid $25,000.

Between 1991 and 1992, Gary claimed that he loaned John and Cheryl $15,000 and that he allowed them advances against their interests in the property. 

In early 1992, a promissory note allegedly signed by John gave Gary a deed of trust and a lien against the property in the amount of $27,500, representing the $15,000 loan, plus $12,500 of the advances that John and Cheryl had received.  John maintained he had no recollection of ever having signed the note or agreeing to pay any interest on the document at that time, and denied the signature was his. 

            In 1992, the parties refinanced the property a final time for $288,000 with Great Western Bank.  After payment of the existing loans on the property and the transactional costs, the net proceeds from the refinance were approximately $47,995.  Gary received $25,000 from the distribution.

            John and Cheryl moved out of the property in 1996 and divorced in 1997.  During the course of the divorce, allegedly to protect John's interest and to avoid being Cheryl's business partner, Gary gave John a deed of trust to sign for the $27,500 note.  John did so and the deed was recorded.  John believed Gary would never use the deed of trust against him.  

            From 1996 onwards, Gary managed the property.  He allegedly encountered tenant problems, was forced to make numerous repairs, and was ultimately prohibited under the housing codes from renting the guest house to anyone outside the family.  Later, Joan Cobrae, Gary's ex-wife and John's mother, moved into the guest house and paid a reduced rent.  Gary did not pay any rent proceeds to John and Cheryl, alleging that he had incurred losses in excess of $80,000 on the property. 

            In 2000, Gary asked John and Cheryl to quitclaim the property to him.  John and Cheryl disputed Gary's alleged expenditures on improvements to the property, and refused to quitclaim their interests.  Instead, John offered to take back management of the property, which Gary also declined to accept.  In 2001, John paid Gary $1,000 in cash â€