Opinion
B190105
5-11-2007
Estate of GUADALUPE RIOS OLVERA, Deceased. ANNA OLVERA, as Administrator, etc., Petitioner and Respondent, v. BEATRIZ OLVERA STOTZER et al., Objectors and Appellants.
Drescher & Drescher and William T. Drescher for Objectors and Appellants. Law Offices of Linda A. Paquette and Linda A. Paquette for Petitioner and Respondent.
NOT TO BE PUBLISHED
When Guadalupe Rios Olvera ("Guadalupe") died, title to her home was held by her adult daughter and son-in-law, Beatriz and Samuel Stotzer. Legal title to the property initially had been transferred by Guadalupe to Guadalupes brother, Jose Luis Rios Ramirez ("Jose Luis") who ultimately transferred title to the Stotzers.
Anna Olvera, another daughter of Guadalupe and the administrator of her estate, brought a petition to determine that, although the Stotzers held legal title to the house, beneficial title was held by Guadalupe and therefore passed to her estate. A bench trial was held. The trial court determined that when Guadalupe had transferred title to Jose Luis, it was understood that legal title alone had transferred to Jose Luis, and Guadalupe had retained equitable title. The trial court further determined that when Jose Luis had transferred title to the Stotzers, it was similarly understood that Guadalupe had retained equitable title. The trial court therefore entered judgment reconveying the property to Guadalupes estate and distributing the property equally among her children.
The Stotzers appeal, arguing the evidence is insufficient to support the trial courts judgment. We disagree and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Guadalupe and her husband had six children, two of whom had muscular dystrophy. They all lived in a one-bedroom house, which they rented. In April 1965, they purchased the property from their landlord and friend, Aurora Rindler. At this time, their daughter Beatriz was 14 years old.
Although Guadalupes husband sometimes found work and was able to contribute to expenses, the familys main source of income was public assistance. Shortly after the purchase of the home, Guadalupes husband was arrested for dealing drugs. Guadalupe and Beatriz were concerned that the family might lose the house if Guadalupes husband went to jail or if they lost his income. Guadalupe, with Beatriz present, asked Rindler for advice. Rindler suggested that the family transfer the house to a family member so they could protect the house in the event of any legal proceedings against it. After their discussion with Rindler, Guadalupe and Beatriz "discussed . . . at length" the possibilities. Beatriz suggested the home be transferred to one of her uncles. Guadalupe agreed.
In the Stotzers brief on appeal, they imply that it strains credulity to believe that a 14-year-old girl was an architect of the plan to transfer the property. Yet Beatrizs own testimony was that she was deeply involved in the discussions regarding the property at this time. Beatrizs trial brief indicates that, despite her young age, she "shouldered a significant portion of the financial burden of the family," and "had to deal not only with the burdens of two profoundly disabled siblings, but also with her fathers abandonment of the family."
In October 1965, Guadalupe and her husband signed a grant deed conveying title to the property to Jose Luis. Although the grant deed gave Jose Luis title to the property, he never believed that he owned the property. He never collected rent on the property. He never paid the mortgage, the utilities, or the taxes on the property. Instead, Guadalupe and her family continued to pay these expenses.
In 1972, Jose Luis executed a notarized affidavit, the purpose of which was to give Guadalupe the legal authority to make necessary improvements to the house. The document states, "I certify that I am the owner of a house that I have at [the homes address]. That my sister is renting this house[;] her name [is] Guadalupe Rios Olvera. I am submitting this document to give my sister authorization so that she can go ahead and do all the improvements that she needs in that house."
In 1973, the family needed to move, as the electrical system in their home was insufficient to support the respirator required by one of their children. The family moved into another home, and rented out the family home. Rent payments were made to Guadalupe; not to Jose Luis.
Beatriz testified that rent was paid either to Guadalupe or herself. As Beatriz had no claim to the property at this point, it is clear that any rent payments she collected were on behalf of her mother.
By 1975, Beatriz was an adult. Beatriz was willing to make the necessary repairs to the home, but believed she "needed to have the power of attorney to do them." She discussed the issue with her mother, who agreed. Guadalupe therefore asked Jose Luis to give Beatriz power of attorney over the property. On June 30, 1975, Jose Luis executed a second notarized affidavit. This document states, "I am giving this power of attorney to my [n]iece Beatriz Arcella Olvera . . . so that in my name she can sign whatever is needed in the matter of the house that I bought which is [the homes address]. She is going to keep up with the house payments. She has full power and authority to do and perform whatever requisite be necessary to be done as I might [or] could personally do if present. I also wish to put a clause to this matter, that in case she sells the house when she finishes paying it, then she has to give equal parts of the sale to [her siblings]." The latter clause was in the document at Guadalupes insistence.
Interestingly, Beatriz testified at deposition that she told her mother that a power of attorney was necessary so they could make the repairs because "nobody held legal title other than [Jose Luis]." At no point did Beatriz suggest they needed to ask Jose Luiss permission to make repairs to his property; she simply recognized that Jose Luiss holding of legal title might have interfered with their ability to make repairs.
At trial, Beatriz testified that her uncle had inserted the final clause. She was impeached with her deposition testimony that her "mom was insistent that he stipulate certain issues around what I could do with the property."
It appears that the repairs were not made. Apparently, it was necessary to take out loans secured by the property in order for Beatriz to obtain the necessary funds to effect repairs. In February 1977, by grant deed, Jose Luis transferred title to the home to Beatriz and her husband, Samuel Stotzer. Samuel Stotzer testified that they were not "purchasing" the house and that, instead, the reason his name was on the deed "had to do with being able to qualify at the time for loans for some repair work." Jose Luis testified that he did not "give" the house to Beatriz; she was simply going to "hold" the home. He explained, "I cant give something that is not mine." Jose Luis did not accept any money or other consideration from the Stotzers for the house; he told them to just repair it. Beatriz takes the position that, from the time of this grant deed, the property belonged solely to her and her husband.
He also testified that his wife was in charge of all transactions regarding this property and that he simply signed whatever she directed him to sign without objection.
In July 1977, sufficient repairs had been made to the house to enable Guadalupe and her disabled daughter to return. Beatriz had Guadalupe execute a lease on the property, indicating the Stotzers were her landlords.
Thereafter, the Stotzers claimed all tax deductions associated with ownership of the property. While Beatriz conceded that her mother gave her checks that indicated they were for "taxes" on the property, Beatriz took the position that these checks were simply for back rent.
Over the years, the Stotzers took out loans on the property in order to complete renovations to the property. They paid off those loans. However, a substantial mortgage on the property was paid off by Guadalupe. Guadalupe had inherited some money from her mother. Her brother Ramon Rios Ramos ("Ramon") invested the money for her, and the amount grew. At one point, Guadalupe asked Ramon to use $38,000 of this money to pay off the mortgage on her home; he did so. Beatriz takes the position that this was a gift to her. In contrast, Ramon testified that each of Guadalupes children was paid $5,000 from Guadalupes inheritance. Although Beatriz declined her $5,000, this equal distribution certainly calls into doubt Beatrizs testimony that the $38,000 Guadalupe used to pay off the mortgage was a gift to her.
Beatriz testified that when Guadalupe gave her the money to pay off the mortgage, Beatriz promised that her disabled brother, Gil, would always have a roof over his head. Shortly after Guadalupe died, Beatriz told Gil to leave the house, because he had not been paying rent. When confronted with this fact, Beatriz amended her testimony, saying that her promise to Guadalupe that Gil would always have a roof over his head was conditioned on Gil paying her rent.
Guadalupe continued to refer to the house as her house. Beatriz believed these statements were simply delusional, as her mother had, over the years, suffered some mental breakdowns. At times, Guadalupe asked Beatriz to transfer title to her, or to put her siblings on the title; Beatriz refused.
Anna, who was her mothers primary caretaker, testified that one of her mothers mental breakdowns was precipitated by Beatrizs refusal to return title to her, upon her request.
Guadalupe died intestate on May 5, 2004. Anna is the administrator of her estate. Shortly after entry of the order designating Anna administrator, she filed the petition to determine title to real property at issue on this appeal. The case proceeded to a bench trial, where evidence of the facts, as set forth above, was introduced.
On appeal, the Stotzers argue that Anna improperly changed her theory of the case. In the initial petition, Anna alleged that the property was initially transferred to Jose Luis so that its ownership would not disqualify Guadalupe from receiving public assistance. Prior to trial, the Stotzers argued that relief could not be granted on this theory, as it was based on Guadalupes intention to commit welfare fraud. Anna opposed the motion on the basis that Beatriz was, in fact, the mastermind behind any attempted welfare fraud. Beatriz believes this was a change in theory. Beatriz further argues that Anna again changed her theory at trial, when it appeared that continued eligibility for welfare was not, in fact, the motivation behind transferring title to the house to Jose Luis. None of these changes in theory are material. Anna has always asserted that legal title, and not beneficial title, was transferred to Jose Luis. The reason motivating this transfer is immaterial.
Additionally, Beatriz relied on an alleged notarized statement by her mother. Beatriz testified that, after a session with her psychiatrist, Guadalupe wanted to make a written declaration of her wishes. Beatriz testified that she "called around and found a notary that had someone who spoke Spanish in the office." Beatriz testified that she took Guadalupe to the notary, left her there for approximately one half hour, and picked her up afterward. Exhibit 61 is a copy of the document allegedly produced by this session; no original was offered into evidence. The document itself is typed, in Spanish. The meaning of the language is somewhat unclear, but it appears to indicate that Guadalupe intended for her property to be distributed equally among her grandchildren, as opposed to her children. It also states that Guadalupe recognized that she had lied to her children and told them different versions of what she wanted done upon her death. There is substantial evidence that Beatrizs entire testimony regarding the creation of Exhibit 61 is a complete fabrication. The first page of the document consists of the declaration itself with Guadalupes signature. The second page consists of the notarys identification of the date, location, and person signing, followed by the notarys signature and seal. Wendy Gaston is the notary who purportedly notarized Exhibit 61. Gaston testified that she has never drafted a document (in any language) on behalf of a client. Gaston can neither speak nor read Spanish. While Gaston admitted the signature and seal on the document appear to be hers, she testified that the handwritten portion (setting forth the date, location, Guadalupes name, and Gastons name) is not in her writing. Moreover, there is no entry in her notary journal corresponding to this document, and Gaston was certain that she never notarized a document without putting it in her journal. Gaston had no explanation for how her signature and seal appeared on the document. She testified, "I didnt do it." A possible explanation for this situation is that someone photocopied Gastons signature and seal from another document onto a new document which purports to acknowledge Guadalupes signature.
The trial court found, on clear and convincing evidence, that in transferring legal title to Jose Luis, Guadalupe intended to retain beneficial ownership of the property. The court found that clear and convincing evidence also existed that Guadalupe intended to retain beneficial ownership when she authorized the transfer of legal title from Jose Luis to the Stotzers. The court concluded, on clear and convincing evidence, that a resulting trust existed, whereby Guadalupe was the beneficiary, Jose Luis was the trustee, and Beatriz was the successor trustee. As such, the court concluded Beatriz had a duty to reconvey the property to Guadalupe on her request, and had breached the trust by failing to do so. The court ordered that the property be reconveyed to the estate to be distributed to Guadalupes heirs. The court ordered that Beatriz was to be reimbursed, from the estate, for the amounts she paid on loans to repair the property.
The Stotzers filed a timely notice of appeal.
CONTENTIONS ON APPEAL
The Stotzers sole contention on appeal is that the evidence is insufficient to support the trial courts judgment. In particular, the Stotzers argue that Jose Luis must be conclusively presumed to have been the owner of the house, due to his statements to that effect in the powers of attorney that he had signed. Moreover, the Stotzers argue that the only remaining evidence is insufficient uncorroborated hearsay. Finally, Samuel Stotzer argues that, whatever the evidence may be against his wife, there is no evidence that he was aware of any resulting trust on the property which might have prevented him from taking full legal and equitable title.
DISCUSSION
1. Law of Resulting Trusts is Irrelevant
Before we begin an analysis of the issues raised by the Stotzers, it is important to recognize what is not at issue in this case. Specifically, the Stotzers do not contend that the facts as found by the trial court are insufficient to establish a resulting trust as a matter of law. " `A resulting trust arises when the legal estate is transferred under such circumstances that the intent appears, or is inferred, that the beneficial interest should not be enjoyed with the legal title. [Citations.] [¶] Such a trust is implied by law to carry out the intention of the parties; it is implied from the facts, and neither written evidence of agreement nor fraud on the part of the trustee is an essential element. " (Laing v. Laubach (1965) 233 Cal.App.2d 511, 515.) Parol evidence is admissible to prove the existence of a resulting trust, and where a resulting trust exists, the statute of frauds does not apply. (Jones v. Gore (1956) 141 Cal.App.2d 667, 673.)
The most typical type of resulting trust is a purchase money resulting trust, in which one party pays the seller all or part of the consideration for a property, but title is taken in the name of a third party. (E.g., Johnson v. Johnson (1987) 192 Cal.App.3d 551 [plaintiff parents purchased property in their sons name as the son was eligible for a G.I. loan]; Nishi v. Downing (1937) 21 Cal.App.2d 1 [plaintiff paid for property but had a third party to take title because plaintiff, as an alien, was ineligible to own property].) Indeed, there is some authority suggesting that only payment of the purchase money, not subsequent substantial monetary contributions, can give rise to a resulting trust. (Martin v. Kehl (1983) 145 Cal.App.3d 228, 243.)
In this case, we are not concerned with a purchase money resulting trust, but one which arose when title was transferred without consideration from the owner (who had paid for the property) to a relative (who had not) under circumstances strongly suggesting the transfer of title was in name only. The Stotzers make no argument that a resulting trust does not, in fact, arise in such a situation. We therefore need not reach the issue.
We note, however, that even if a resulting trust does not arise in the circumstances of this case, a constructive trust does. "It has been established by a number of decisions in this state, that where confidential relations exist between two parties and one of them executes a conveyance of real estate to the other, upon a parol promise by the other that he will hold it for the benefit of the grantor, or for the benefit of some third person in whom the grantor is interested, there being no other consideration for the conveyance, a trust arises by operation of law in favor of the grantor, or in favor of the third person, for whom the property is to be held. It is the violation of the parol promise which constitutes the fraud upon which the trust arises." (Cooney v. Glynn (1910) 157 Cal. 583, 587.) "[I]f by means of a parol promise to reconvey a party obtains an absolute deed without consideration from one to whom he stands in a fiduciary relation, the violation of the promise is constructive fraud, although at the time of the promise there was no intention not to perform." (Feeney v. Howard (1889) 79 Cal. 525, 529.)
We emphasize that we have not been called upon to determine whether the facts found by the trial court give rise to a resulting trust, and we do not make that determination. It is clear, however, that if the trial court erred in concluding this factual scenario gave rise to a resulting trust, the error was one of semantics only, as a constructive trust would surely arise.
2. Standard of Review
"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.) " ` " `The sufficiency of evidence to establish a given fact, where the law requires proof of the fact to be clear and convincing, is primarily a question for the trial court to determine, and if there is substantial evidence to support its conclusion, the determination is not open to review on appeal. [Citations.]" [Citation.] 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 respondents evidence, however slight, and disregarding the appellants evidence, however strong." " (In re Mark L. (2001) 94 Cal.App.4th 573, 580-581.)
3. The Evidence is Sufficient to Support the Trial Courts Findings
Under the applicable standard, we have no difficulty concluding the evidence was sufficient to support the trial courts findings. We first consider the transfer of title to Jose Luis, then the transfer from Jose Luis to the Stotzers.
When Guadalupe and her husband transferred the house to Jose Luis, the circumstances clearly demonstrate that it was a transfer of legal title only. Guadalupe and her husband had just recently purchased the house. The home was the familys only significant asset; they were receiving public assistance at the time. Jose Luis paid Guadalupe no consideration for the house, and it would strain credulity to conclude Guadalupe intended to give her familys only asset to her brother in her familys hour of need. Jose Luis understood this. His testified clearly and unambiguously that he never owned the house and was only holding title. Moreover, it is undisputed that Guadalupe and her family paid Jose Luis no rent on the property. It is undisputed that when Guadalupe was required to move out of the house, she collected rent on the property, not Jose Luis. It is undisputed that the mortgage, utilities and taxes on the property were all paid by Guadalupe and her family, not Jose Luis. Moreover, Beatriz testified that when Jose Luis gave power of attorney over the property to Beatriz, Jose Luis included a limitation on Beatrizs ability to dispose of the proceeds of the property, at Guadalupes request. In short, substantial, if not overwhelming, evidence indicates that Jose Luis and Guadalupe understood that beneficial title remained with Guadalupe, and acted in accordance with that understanding.
The Stotzers argue this testimony must be disregarded in light of the written powers of attorney signed by Jose Luis, in which he stated that he owned the property. We will discuss these documents below.
We now consider the transfer from Jose Luis to the Stotzers. First and foremost, there is no evidence that the Stotzers were bona fide purchasers without knowledge that Jose Luis held the property in trust for Guadalupe. Indeed, all of the evidence is to the contrary. The Stotzers admit they gave no money to Jose Luis in connection with the transfer of title. Beatriz, who had suggested Jose Luis as the original transferee in 1965, was well aware of the circumstances of the initial transfer to Jose Luis, and also aware of the way the parties had acted with regard to the property after that transfer. Indeed, Beatriz testified that, when the family had renters in the property, she sometimes received the rent payments. This evidence, taken together, is more than sufficient to support the trial courts conclusion that Beatriz knew that Jose Luis held the property as a mere trustee, and was therefore aware that he could not convey beneficial title to her. Further evidence supporting this conclusion is found in: (1) Beatrizs admission that Guadalupe continued to refer to the property as hers; (2) Guadalupes checks to Beatriz that indicate they were for taxes on the property; and (3) the fact that Guadalupe paid off a $38,000 mortgage on the property. While Beatriz attempted to explain away all of this evidence, the trial court was well within its authority to disbelieve her explanations. In sum, there is substantial evidence supporting the trial courts conclusion that Beatriz and her husband obtained title to the property as successor trustees to Jose Luis.
Moreover, although the trial court made no express findings regarding the credibility of the witnesses, we note that the extremely questionable status of Exhibit 61, the purportedly notarized statement by Guadalupe, would support a trial court determination to disregard Beatrizs testimony in its entirety. Beatrizs testimony regarding the circumstances as to how the document came about appears to be a complete fabrication, in light of the notarys testimony denying the notarization and the indisputable fact that it does not appear in her notary journal.
4. Evidence Code § 622 is No Bar
The Stotzers rely heavily on Evidence Code section 622, arguing that, under this provision, it must be conclusively presumed that Jose Luis owned the house and Guadalupe rented it from him, because he set forth those "facts" in the powers of attorney he executed when he held title to the house. The Stotzers vastly overstate the effect of Evidence Code section 622.
Evidence Code section 622 provides, "The facts recited in a written instrument are conclusively presumed to be true as between the parties thereto, or their successors in interest; but this rule does not apply to the recital of a consideration." By its own terms, the reach of the presumption is limited to "the parties" to the "written instrument" in question, or their successors in interest. (Henneberry v. Henneberry (1958) 164 Cal.App.2d 125, 132 [discussing a predecessor statute].)
As such, Evidence Code section 622 has no application to the two powers of attorney executed by Jose Luis. Guadalupe was not a party to either document. As such, neither Guadalupe nor her estate is bound by the facts recited therein. As to Jose Luis, the statements are simply prior inconsistent statements of a witness. The trial court was free to conclude that Jose Luiss testimony was more worthy of belief than the facts he set forth in documents intended to give Guadalupe and her family legal power over property he believed he owned in name only.
She was the individual designated in the first power of attorney, but did not sign the document or otherwise indicate her agreement with the factual assertions therein.
To the extent Evidence Code section 622 has any application in this case, it applies only to factual recitals in documents executed between the parties or their successors in interest. The only such document is the original deed from Guadalupe to Jose Luis — as the estate is a successor in interest to Guadalupe and the Stotzers are successors in interest to Jose Luis. But there are no factual recitations in that document that might control the outcome of this case. The document had the legal effect of transferring legal title to the property from Guadalupe to Jose Luis. As discussed above, this gave rise to a rebuttable presumption that Jose Luis was also transferred beneficial title. The document alone did not bar Guadalupes estate from introducing evidence of a resulting trust.
5. The Evidence is Not Mere Uncorroborated Hearsay
The Stotzers allege that, as there is no documentary evidence supporting the conclusion that Guadalupe intended to retain beneficial title, the sole evidence was uncorroborated hearsay which is insufficient to support the judgment. The Stotzers misconstrue the record. It is not merely hearsay testimony regarding Guadalupes wishes that supports the trial courts determination. Instead, the conclusion is supported by, among other things: (1) Jose Luiss testimony that he never owned the property; (2) Beatrizs admission that Guadalupe was responsible for the restriction Jose Luis inserted in the document giving Beatriz power of attorney; (3) Beatrizs testimony regarding the circumstances that gave rise to the initial transfer of the property; (4) the undisputed facts as to the payment of rent, mortgage payments, and taxes during Jose Luiss "ownership" of the property; and (5) the undisputed evidence that Guadalupe paid off the $38,000 encumbrance. None of this evidence is hearsay.
6. The Judgment Against Samuel Stotzer is Supported
Finally, the Stotzers argue that the judgment against Samuel Stotzer is unsupported, on the basis that there is no evidence that he was aware of any resulting trust on the property. We disagree. Although Samuel Stotzer testified that he simply signed at his wifes direction and was not involved in the transaction, he admitted that they did not purchase the property and that the reason that his name was on the title "had to do with being able to qualify at the time for loans for some repair work." As such, the trial court was justified in concluding Samuel Stotzer understood that he never took beneficial title to the property.
DISPOSITION
The judgment is affirmed. Anna, as administrator of Guadalupes estate, is to recover her costs on appeal.
We concur:
KLEIN, P. J.
KITCHING, J.