Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. HG05216989
Pollak, J.
Appellants Manuel Carranco, Oscar Herrera, and Cubus, Inc. appeal from a summary judgment entered in favor of respondent Eric Quintana on appellants’ cross-complaint to quiet title to residential real property. Appellants contend the trial court erred in granting summary judgment despite the presence of disputed factual issues outside the scope of the issues framed by the pleadings. Because appellants’ cross-complaint did not allege that Quintana obtained his title fraudulently, we reject appellants’ contention that Quintana had the burden of establishing that he gave valuable consideration for his interest in the property. The trial court properly granted Quintana’s motion based on the undisputed fact that his interest in the property was created prior to appellants’ interest.
Quintana’s complaint to quiet title to the same property was dismissed after the trial court granted his motion for summary judgment on appellants’ cross-complaint. The dismissal of the complaint is not the subject of this appeal.
Factual and Procedural History
In December 2003, Quintana attended a real estate investment seminar hosted by Princess Properties & Associates Property Acquisitions & Holdings, LLC (Princess). In early 2004, Quintana was contacted by Princess and offered a 10 percent equity interest in property located at 30593 Midlothian Drive in Hayward, California (the property). At that time, Princess held title to the property and had leased the property to its former owner, Mark Montgomery, who had the right to repurchase it within one year. Although Quintana was purchasing only a 10 percent interest in the property, the transaction was structured so that Quintana initially purchased the whole property from Princess for $370,000. Quintana obtained a $236,800 mortgage on the property, the proceeds of which were paid to Princess, and the remainder of the purchase price was paid in the form of a $133,200 promissory note from Quintana to Princess, secured by a deed of trust on the property. Princess agreed that Montgomery’s rental payments would be applied to the payments due on Quintana’s mortgage obligation and explained that, if the property was not repurchased by Montgomery within one year, the property would be sold and Quintana would receive 10 percent of the net proceeds from the sale.
Per their agreement, Princess deeded the property to Quintana and also paid Quintana $5,000 for his participation in the transaction. Immediately after escrow on the sale closed, Quintana deeded the property back to Princess. Montgomery’s initial rent payments were sent to Princess, and Princess made the monthly payments on Quintana’s mortgage obligation.
In December 2004, Princess contacted Quintana and informed him that it was having financial difficulties. Princess offered to assign to Quintana all of its rights, title, interest and obligations in the property. Quintana agreed, and in December 2004 Princess conveyed the property back to Quintana. The grant deed was recorded on May 2, 2005.
Meanwhile, on March 10, 2005, appellants had filed an action against Princess for breach of an unrelated contract. On April 12, 2005, appellants obtained an order in that action authorizing attachment of Princess’s properties, including the property at issue in this case.
On June 9, 2005, Quintana filed a complaint against appellants in the present action, seeking to quiet title to the property. Appellants filed a cross-complaint also seeking to quite title to the property. Appellants’ cross-complaint alleges in relevant part that after they were granted and recorded their writ of attachment, “Quintana . . . recorded a grant deed, issued to [him] much earlier by [Princess], purporting to transfer to [him] the property . . . . [¶] [Appellants] seek a judicial declaration that said grant deed[] [is] void, or at least create[s] a equity interest in favor of . . . Quintana . . . that is behind the attachment claims of [appellants]. A judicial controversy exists inasmuch as [appellants] contend they, having recorded first, have an equity interest in the . . . property that is senior to that of . . . Quintana . . . .”
Quintana moved for summary judgment on appellants’ cross-complaint. In support, Quintana submitted evidence of the following four undisputed facts: (1) Princess conveyed its interest in the property to Quintana by grant deed dated December 20, 2004; (2) On April 12, 2005, appellants obtained a writ directing attachment of the property; (3) Notice of the attachment was recorded on April 27, 2005; and (4) The December 2004 grant deed was recorded on May 2, 2005. Quintana argued that appellants did not have any interest in the property as a matter of law because Princess transferred the property to Quintana before appellants obtained and recorded their writ of attachment. In opposition, appellants contended that Quintana’s claim is subordinate to theirs under Civil Code section 1214 because their attachment was recorded first. Appellants also argued that there were triable issues of fact as to whether Princess’s second transfer of the property to Quintana was fraudulent, and as to whether Quintana had “unclean hands” because of false statements on his loan application.
The trial court granted Quintana’s motion. The court explained, “It is undisputed that the . . . property was conveyed to [Quintana] for valuable consideration before [appellants] obtained and recorded the writ of attachment. Accordingly, [appellants] did not acquire any interest in the . . . property.” The court found that Civil Code section 1214 was inapplicable and that appellants could not rely on the doctrine of unclean hands.
Quintana subsequently dismissed his complaint and judgment was thereafter entered declaring, among other things, that “Quintana is and has been the legal owner of the subject property . . . commencing as of December 20, 2004.” Appellants filed a timely notice of appeal.
Discussion
“A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. [Citation.] We review the trial court’s decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.] In the trial court, once a moving defendant has ‘shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established,’ the burden shifts to the plaintiff to show the existence of a triable issue; to meet that burden, the plaintiff ‘may not rely upon the mere allegations or denials of its pleadings . . .. but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action.’ ” (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476-477.)
In analyzing a motion for summary judgment, the court must first “identify the issues framed by the pleadings,” because the motion must show “there is no factual basis for relief on any theory reasonably contemplated by the opponent’s pleading.” (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064.) A defendant moving for summary judgment need address only the issues raised by the complaint, and a plaintiff cannot raise “new, unpleaded issues” in his or her opposing papers. (Government Employees Ins. Co. v. Superior Court (2000) 79 Cal.App.4th 95, 98-99, fn. 4.) “A sufficient motion cannot be successfully resisted by counter declarations which create immaterial factual conflicts outside the scope of the pleadings; counter declarations are no substitute for amended pleadings.” (AARTS Productions, Inc. v. Crocker National Bank, supra, at p. 1065.)
Here, this first step is particularly critical. The allegations of appellants’ cross-complaint, which are set forth above almost in full, claim only that appellants’ writ of attachment was recorded prior to Quintana’s grant deed. There are no allegations suggesting that Quintana’s deed was the result of a fraudulent transfer. Nor are there any allegations regarding the doctrine of unclean hands. Accordingly, the sole question before the court was whether Quintana negated appellants’ claim that their interest was superior to Quintana’s because it was recorded first.
Although appellants pled unclean hands as a defense to Quintana’s complaint, the complaint was not the subject of the summary judgment motion. Appellants’ cross-complaint, which was the subject of the motion, did not allege unclean hands and appellants at no time requested leave to amend their cross-complaint to include such an allegation.
In support of his motion, Quintana argued that his interest in the property is superior to appellants’ alleged interest because it was created first, and that appellants, as attaching creditors rather than bona fide purchasers, are not entitled to priority under the recording statutes because of Quintana’s failure to record. As explained in 5 Miller and Star, California Real Estate (3rd ed. 2000) § 11:114, page 300, “The interest of the attaching creditor is subject to any prior interests, whether known or unknown, and whether or not the prior interest is recorded. The attachment creditor is not a bona fide purchaser and, therefore, he or she is subject to the general rule establishing priority by the date of the creation of the interest. The attachment creditor is not protected by the recording laws against prior unrecorded interests in the property.” (See also Overton v. Schmitt (1936) 7 Cal.2d 163, 167 [prior unrecorded deed takes precedence over an attachment or judgment lien]; Wells Fargo Bank v. PAL Investments, Inc. (1979) 96 Cal.App.3d 431, 438 [same].) Quintana’s undisputed evidence establishes that Princess transferred the property to Quintana prior to the granting and recording of appellants’ writ of attachment. Accordingly, Quintana established his superior interest in the property and the burden shifted to appellants to raise a triable issue of fact to defeat the motion.
In the trial court, appellants opposed Quintana’s motion on the ground that under Civil Code section 1214, their claim to the property was superior to Quintana’s claim despite the fact that Quintana’s interest was created first because their interest was recorded first. On appeal, appellants have abandoned this argument, which unquestionably lacks merit because appellants are not subsequent purchasers or mortgagees of the property for value.
Civil Code section 1214 provides, “Every conveyance of real property or an estate for years therein, other than a lease for a term not exceeding one year, is void as against any subsequent purchaser or mortgagee of the same property, or any part thereof, in good faith and for a valuable consideration, whose conveyance is first duly recorded, and as against any judgment affecting the title, unless the conveyance shall have been duly recorded prior to the record of notice of action.”
Appellants now argue that “[o]nly a bona fide purchaser is entitled to priority for his unrecorded deed” and that Quintana’s undisputed facts do not establish that he gave valuable consideration for the reconveyance. Contrary to appellant’s argument, valuable consideration is not a necessary element of Quintana’s claim to the property. “It is a well-established rule, recognized by statute, that a consideration is not necessary to the validity of a deed. A deed voluntarily executed without consideration does not differ from any other deed in its operation as a transfer of title to the property described in the deed. However, the absence of consideration may subject the deed to attack by one who has a superior equity that the grantor had no right to cut off, and may become an important factor in determining whether the instrument was obtained by fraud, undue influence, or the like.” (26 Cal.Jur.3d (2008) Deeds, § 134; 3 Miller & Starr, supra, § 8:44, fns. omitted; Civ. Code, § 1040; La Mar v. La Mar (1933) 135 Cal.App. 693, 698.)
Nothing in section 11:14 of the Miller and Star treatise or the cases relied on therein suggest that only a bona fide purchaser is entitled to priority for his unrecorded deed as against an attachment creditor. Following its recitation of the general rule that the interest of an attaching creditor is subject to all prior interests, the treatise concludes: “Thus, when a debtor conveys property, or gives a trust deed secured by the property, for valuable consideration by an unrecorded instrument, the title or lien of the grantee or beneficiary is senior to the lien of the attachment, even though the transaction is unknown to the subsequent attachment creditor.” (5 Miller & Star, supra, § 11:114, p. 300, italics added.) The italicized language, however, does not suggest that only the prior interests of bona fide purchasers are protected. Rather, it recognizes that a deed that is not supported by adequate consideration is subject to attack as fraudulent.
In Overton v. Schmitt, supra, 7 Cal.2d at page 164, cited by the treatise in support of this statement, the cross-complaint alleged that the conveyance “was voluntarily made without consideration, at a time when the [owners] were insolvent or in contemplation of insolvency, and in pursuance of a secret agreement to hinder, delay, and defraud appellant, as their creditor.” Section 11:114 of 5 Miller & Star, supra, at page 301, later explains, “When a prior conveyance or lien by the debtor is without an adequate consideration and is executed by an insolvent grantor with the intent to defraud creditors, it is deemed that the grantor/debtor retained ownership. The attachment lien attaches to the property and the lien is senior to the interests of the grantee or beneficiary.” (See also Civ. Code, § 3439.05 [“A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation”].)
In moving for summary judgment, Quintana had no obligation to prove that he gave consideration for the transfer absent an allegation that the conveyance was fraudulent. Appellants did not allege in their cross-complaint that Quintana’s deed was fraudulent or obtained in a fraudulent conveyance. Quintana was not obligated to anticipate such an allegation or offer evidence to negate it. (AARTS Productions, Inc. v. Crocker National Bank, supra, 179 Cal.App.3d at p. 1064.) Appellants were not entitled to assert such a contention for the first time in opposition to Quintana’s motion. (Government Employees Ins. Co. v. Superior Court, supra, 79 Cal.App.4th at p. 98, fn. 4.)
Finally, appellants contend that even if the court properly granted Quintana’s motion, Quintana was not entitled to a judgment quieting title to the property as against them. They assert that Quintana was required to move for summary judgment of his own complaint. It is immaterial, however, whether Quintana’s title was established under the cross-complaint or his own complaint. Indeed, appellants acknowledge that their cross-complaint sought the same declaratory relief as Quintana sought in his complaint. While appellants are correct that “[i]n a quiet title action the plaintiff must prove his title in order to recover” (Pacific States Sav. & Loan Co. v. Warden (1941) 18 Cal.2d 757, 759), Quintana has done just that. He established by undisputed evidence that the property was conveyed to him by Princess in December 2004. Quintana did not, as appellants’ suggest, merely present evidence challenging their interest in the property. Accordingly, Quintana was entitled to a judgment quieting his title to the property as against appellants.
Disposition
The judgment is affirmed. Quintana shall recover his costs on appeal.
We concur: McGuiness, P. J., Siggins, J.