Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court No. BC372749 of Los Angeles County. John Shepard Wiley, Jr., Judge. Affirmed.
Law Offices of Walter R. Huff and Associates and Walter R. Huff for Defendant and Appellant.
John C. Torjesen & Associates and John C. Torjesen for Plaintiff and Respondent.
CHANEY, J.
After a bench trial, the court entered judgment in favor of plaintiff Willietta Boyd for her interest in a family home that was sold to a third party by defendant Betty Rice. On appeal, defendant challenges the sufficiency of the evidence, two evidentiary rulings, and the sufficiency of the complaint. We affirm.
BACKGROUND
A. Trial Testimony
Beginning in 1984, Marquee Rice (Marquee) lived in a house at 920 West 245th Street in Harbor City, California (sometimes referred to as the 920 house) with his wife, defendant Betty Rice (Rice), his mother, Katheryn E. Rice (Katheryn E.), his sister, plaintiff Willietta Boyd (Boyd), and other members of his extended family. When they purchased the 920 house in 1984, Marquee and Rice paid $11,560 of the $21,500 down payment and Katheryn E. paid $9,940 on Boyd’s behalf. Legal title was held 75 percent by Marquee and Rice and 25 percent by Boyd as tenants in common. In the years following, the parties shared costs, including the mortgage payment. In 1995, Marquee gave his share of the Marquee/Rice 75 percent interest to Rice and moved out. The resulting 75/25 percent divided interest between Rice and Boyd as tenants in common is not disputed.
In 2003, at the time of the transactions at issue, Boyd’s credit rating was poor, partly because she had sought bankruptcy protection in 2002. On December 15, 2003 she quitclaimed her 25 percent interest in the property to Rice. She testified she did so to obtain a favorable interest rate when they refinanced the property to make repairs on it. Boyd stated that it was both parties’ intent that she would retain a 25 percent interest despite the contrary legal title and would later regain legal title to that interest. The parties had made at least one similar arrangement in the past.
In contrast, Rice testified Boyd quitclaimed her interest because she did not want the obligation of owning the property and wanted to protect Rice’s credit rating.
Boyd’s quitclaim deed and the refinancing documents were recorded sequentially. Boyd received nothing in exchange for her interest.
In February 2006, while continuing to live in the house with Boyd and Katheryn E., Rice sold the property to a third party without informing Boyd or Katheryn E. Boyd continued to make full or partial mortgage payments to Rice until June or August 2006, stopping when she discovered Rice had sold the property. Rice lived in the house until June 2008. Boyd and Katheryn E. lived there as of the day of trial.
B. Pleadings and Procedural Background
Boyd filed a lawsuit “for fraud and other causes” and urged the trial court “to impose a trust upon money Rice got for selling Boyd’s share of the house.” She sought a portion of the proceeds of the sale and “such other relief as may be fair and reasonable.” Though Rice did not designate the complaint as part of the record on appeal, she reports it contained causes of action for fraud, breach of fiduciary duty, interference with economic advantage, willful misconduct, constructive trust, conversion, injunctive relief, and cancellation of instruments.
After trial, the court issued a comprehensive 18-page statement of decision in favor of Boyd. In it, the court stated “the central question in this case” was “Why did Boyd transfer her 25% share in the house to Rice?” The court indicated “Boyd and Rice gave conflicting answers on the stand. [¶] According to Boyd, she signed the 2003 deed to get a better rate during a 2003/2004 refinance of the 920 house. Boyd said they all needed cash for work on the roof, porch, doors, carpet, and so forth.... The problem was Boyd had injured her credit rating by declaring bankruptcy the year before. Boyd said [a loan broker] proposed a solution: refinance the house in Rice’s name alone, with Boyd and her bankruptcy off the title. That would yield a lower mortgage payment. Boyd said she and Betty Rice went along with [the] idea. It would not change the reality of the 75/25 ownership, according to Boyd, because Boyd and Rice planned to put Boyd back on the title sometime after the loan went through. By Boyd’s account, the 2003 transfer was strictly to fool the lender by manipulating deed appearances, leaving the reality of the 75/25 split unchanged. Rice broke this oral deal, according to Boyd, by secretly selling the 920 house in February 2006 and taking 100% of the proceeds.”
“Defendant Betty Rice gave a different account of December 15, 2003. Rice said Boyd in 2003 was in financial straits after her bankruptcy and was behind on paying the mortgage. Rice said having Boyd on the house title posed a default risk to Rice. So Rice suggested Boyd go off the house title, and Boyd did on December 15, 2003. By Rice’s account, the legal title in her name alone reflected the reality that the house now belonged to her alone.”
The court stated it “accept[ed] Boyd’s account and reject[ed] Rice’s. Boyd’s story is logical but Rice’s is not. By Boyd’s account, Boyd and Rice were both motivated by financial advantage. Both Boyd and Rice gained from paying less for housing and from improving its quality. People often seek financial advantage and personal gain. It is a common and comprehensible motive for conduct. Boyd’s story thus hangs together. [¶] Rice’s account, however, is illogical. It has Boyd doing a puzzling thing: surrendering Boyd’s 25% interest In real estate for nothing. Rice claims Boyd gave the 25% interest to Rice as a gift. This does not make sense.” “In sum, Rice and Boyd had 75%/25% ownership shares in the 920 house. They manipulated the legal title to conceal this reality and to get an attractive refinancing rate. Neither one meant to alter the reality of the 75%/25% shares. But then Betty Rice took secret advantage of the legal title situation by selling the house out from under Boyd and by pocketing 100% of the proceeds.”
The court concluded, “Boyd’s version of events is the only logical explanation for what happened in this case. Boyd’s account is clearly and convincingly superior to Rice’s. ‘The trial court could impose a constructive trust herein to prevent unjust enrichment without a finding of a fiduciary relationship. And, in any event, this is a classic case for imposition of a resulting trust.’ (Martin v. Kehl (1983) 145 Cal.App.3d 228, 236.)’.... [¶] Therefore, Willietta Boyd is entitled to a judgment for $110,765.63 against Betty Rice.”
The court entered judgment for Boyd in the amount of $110,765.63.
DISCUSSION
A. Sufficient Evidence Existed to Impose a Constructive Trust
Rice challenges the sufficiency of the evidence supporting imposition of a constructive trust.
“One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.” (Civ. Code, § 2223.) “One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.” (Civ. Code, § 2224.) A trial court possesses broad equitable powers to fashion a remedy that will prevent a defendant from being unjustly enriched at a plaintiff’s expense. (Martin v. Kehl (1983) 145 Cal.ApP.3d 228, 237.) “‘A constructive trust is a remedial device primarily created to prevent unjust enrichment; equity compels the restoration to another of property to which the holder thereof is not justly entitled....’ [Citations.]” (Ibid.) “‘[A] constructive trust may be imposed in practically any case where there is a wrongful acquisition or detention of property to which another is entitled.’ [Citations.]” (Id. at p. 238.)
“The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.” (Evid. Code, § 662.) “Section 662 thus codifies the common law rule [citations] that oral trusts in derogation of title are disfavored and must be proved by clear and convincing evidence.” (People v. Semaan (2007) 42 Cal.4th 79, 88.)
Whether Boyd retained a 25 percent interest in the 920 house was a question of fact that the trial court resolved on the basis of conflicting evidence. A trial court’s resolution of conflicting evidence is reviewed under the substantial evidence test. (People v. Semaan, supra, 42 Cal.4th at p. 87; Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053.) “‘The standard is deferential: “When a trial court’s factual determination is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination....”’ [Citation.]” (People v. Semaan, at p. 88.)
Here, the evidence supports the trial court’s finding that Rice wrongfully retained the proceeds from sale of Boyd’s 25 percent interest in the property. It was undisputed that Boyd owned a 25 percent interest on December 15, 2003, when she quitclaimed the interest to Rice. Boyd testified she quitclaimed her interest to obtain a more favorable interest rate when the property was refinanced and the parties intended that she retain her interest despite the change in legal title. Circumstances bore her out: She had a prior bankruptcy and a poor credit rating yet wished to refinance at a favorable rate. Rice’s contrary account, that Boyd did not want the property and ceded her interest to protect Rice’s credit rating, is unreasonable. Boyd continued to pay a portion of the mortgage between executing the quitclaim deed until the summer of 2006. The court was justified in concluding from Boyd’s testimony and undisputed circumstances that a constructive trust was warranted.
Rice concedes that Boyd’s testimony “inarguably” satisfies the preponderance of the evidence standard but argues it cannot satisfy a clear and convincing standard as a matter of law. She is incorrect.
The clear and convincing standard was adopted to guide the trial court; it is not a standard for appellate review. (Crail v. Blakely (1973) 8 Cal.3d 744, 750.) The substantial evidence rule applies no matter what the standard of proof at trial. “Thus, on appeal from a judgment required to be based upon clear and convincing evidence, ‘the clear and convincing test disappears... [and] the usual rule of conflicting evidence is applied, giving full effect to the respondent’s evidence, however slight, and disregarding the appellant’s evidence, however strong.’ [Citation.]” (Sheila S. v. Superior Court (2000) 84 Cal.App.4th 872, 881.)
Because Rice concedes Boyd’s testimony constitutes substantial evidence, she necessarily concedes it suffices on appeal.
B. Any Challenge to the Admission of Katheryn E.’s Testimony is Waived
Rice contends she was “unduly prejudiced when the trial court assured defendant’s counsel that the court did not take into consideration the testimony of Boyd’s mother, Katheryn A. [sic] Rice, when it rendered its decision in this case.” Rice neglects to support the contention with any cogent argument or citation to authority. It is therefore waived. (McComber v. Wells (1999) 72 Cal.App.4th 512, 522-523.)
On examination, the contention turns out to be a reiteration of Rice’s argument that uncorroborated party testimony cannot support a judgment reached under the clear and convincing standard. As discussed above, the argument is rejected.
C. The Trial Court Did Not Err in Admitting Altered Documents
Rice argues the trial court prejudicially erred when it allowed Boyd to introduce photocopies of two receipts, both in the name of “Rice,” reflecting withdrawals in 1984 of $9,940 and $11,560 from two different accounts held with the Hughes Aircraft Employees Federal Credit Union. The receipts did not bear the account holders’ full names. One receipt bore the handwritten notation: “K.E.” It was undisputed at trial that the withdrawals were made to fund the down payment on the 920 house.
Boyd argued Katheryn E. wrote her initials on one receipt to distinguish it from the other and indicate which payment came from her account. Rice drew “more sinister implications,” arguing both sums came from Marquee, and that someone added the “K.E.” to conceal that Marquee paid 100 percent of the down payment on the 920 house. The trial court found “Boyd’s innocuous explanation is reasonable”: Katheryn E. “wrote in her initials to distinguish one receipt from the other.”
Rice’s counsel objected to admission of the photocopies on the ground that they lacked authentication.
Rice argues that introduction of the photocopies was improper under Evidence Code section 1402, which provides: “The party producing a writing as genuine which has been altered, or appears to have been altered, after its execution, in a part material to the question in dispute, must account for the alteration or appearance thereof. He may show that the alteration was made by another, without his concurrence, or was made with the consent of the parties affected by it, or otherwise properly or innocently made, or that the alteration did not change the meaning or language of the instrument. If he does that, he may give the writing in evidence, but not otherwise.” (Italics added.)
We observe Rice failed to object to the receipts on the ground that they had been altered, and thus has forfeited the contention for purposes of this appeal. (Evid. Code, § 353 [“finding shall not be set aside, nor shall the judgment or decision based thereon be reversed, by reason of the erroneous admission of evidence unless: [¶] (a) There appears of record an objection to or a motion to exclude or to strike the evidence that was timely made and so stated as to make clear the specific ground of the objection or motion”].) In any event, the argument is meritless for two reasons.
First, the receipts are immaterial. It was undisputed that Boyd owned a 25 percent interest in the 920 house at the time she quitclaimed her interest to Rice. Whether she received that interest from Katheryn E. at the time of purchase is irrelevant: a constructive trust results from misappropriation of a beneficiary’s rightful interest in property no matter how or when the interest was obtained. The trial court recognized this fact, stating “the issue of original shares of the down payment is not central to this case. There was no dispute that, on [] December 14, 2003, the 920 house’s title belonged to Betty Rice and Willietta Boyd as tenants in common. Betty Rice’s share was 75%, while Willietta Boyd held 25%. How they came by those agreed-upon shares is not the crucial issue in this case.”
Rice argues actual payment by a beneficiary towards the purchase of property is a requisite element for imposition of a resulting trust. She is correct (Majewsky v. Empire Constr. Co. (1970) 2 Cal.3d 478, 485 [a resulting trust may be imposed when “one has advanced the consideration wherewith to make a purchase in the name of the other.”]), but the point is inapposite. The trial court imposed a constructive trust, not a resulting trust. True, the court did not use the words “constructive” (or “resulting” or “trust”) to characterize its judgment. But its imposition of a constructive trust can be inferred from Rice’s report that Boyd sought a constructive trust, from the court’s conclusion that Rice “took secret advantage of the legal title situation by selling the house out from under Boyd and by pocketing 100% of the proceeds,” and from the court’s finding that the issue of original shares was “not central” to the case.
The second reason Rice’s challenge of the altered receipts fails is that Boyd satisfactorily explained the alteration. An altered writing may properly be admitted when the party offering it shows the alteration was innocently made. (Evid. Code, § 1402.) The trial court accepted Boyd’s explanation that the alteration was “innocuous.” The receipts were therefore properly admitted.
D. Boyd Need not have Alleged a Resulting Trust
Rice argues she was unfairly surprised by judgment imposing a resulting trust because Boyd did not seek a resulting trust. As can be inferred from the discussion above, the argument fails on its premise: The trial court imposed a constructive trust, not a resulting trust.
Rice appears to argue a constructive trust cannot be imposed when a constructive trustee sells trust property before the beneficiary complains. If such is her argument, it is meritless. Rice, in taking Boyd’s 25 percent interest in the 920 house under the December 15, 2003 quitclaim deed, became an involuntary trustee thereof, holding it for Boyd’s benefit. (Civ. Code, § 2224.) A trustee who disposes of trust property must replace it with its fruits or account for its proceeds with interest. (Clapp v. Vatcher (1908) 9 Cal.App. 462, 466.) “This rule is general and applicable to cases of trusts created by constructive as well as actual fraud, and to sales of trust property made in good faith as well as to those which are fraudulent.” (Ibid.; e.g., Shahood v. Cavin (1957) 154 Cal.App.2d 745, 750; see Prob. Code, § 15002 [“Except to the extent that the common law rules governing trusts are modified by statute, the common law as to trusts is the law of this state.”].) When Rice sold the 920 house she became an involuntary trustee of Boyd’s 25 percent share of the proceeds. (GHK Assocs. v. Mayer Group (1990) 224 Cal.App.3d 856, 879, 880 [“it is not the Property on which [the beneficiary] has a constructive trust, it is the rents and profits derived from the Project constructed on the Property.”].)
DISPOSITION
The judgment is affirmed
We concur: MALLANO, P. J.ROTHSCHILD, J.