Opinion
NOT TO BE PUBLISHED
Received for posting 3/12/10.
Super. Ct. No. 06AS01995.
HULL, J.
Plaintiff, Masaru Yamamoto, as Administrator of the Estate of Eigoro Yamamoto, brought this action for ejectment against defendants, Yasushi and Shihoko Yamamoto, based on defendants’ continued occupancy of real property owned by the estate. The trial court granted plaintiff’s motion for summary judgment and entered final judgment in their favor.
Defendants appeal, contending questions of fact remain as to whether they are in rightful possession of the real property by virtue of a lease entered into with the prior owner. In light of the scant evidence presented to the trial court in connection with the summary judgment motion, we agree with defendants and reverse the judgment.
Facts and Proceedings
On review of an order granting summary judgment, we construe the evidence in the light most favorable to the opposing party. (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)
Defendants Yasushi and Shihoko Yamamoto are husband and wife; plaintiff Masaru Yamamoto and defendant Yasushi Yamamoto are brothers. Their father, Eigoro Yamamoto, died on April 10, 1996, and plaintiff was appointed administrator of his estate. The probate proceedings in the Estate of Eigoro Yamamoto, Case No. 96PR00970 (Estate of Yamamoto), are ongoing.
The real property at issue in this matter is located at 2917 Land Park Drive in Sacramento (the Property). Defendants purchased the Property in 1995 and have resided there ever since.
MML Productions Corp, LLC (MML), is a Nevada Limited Liability Company formed in 2002. That same year, MML acquired title to the Property “[i]n consideration for repayment of a loan.” The manager of MML is Doris Yamamoto who, from the limited record before us, appears to be defendants’ daughter.
On December 9, 2002, MML leased the Property to defendants. The term of the lease is specified as follows: “This Agreement shall commence on December 9, 2002 (‘Commencement Date’)[.] This Agreement shall continue as a lease for term. The termination of the lease will be based on the Tenant providing the Landlord 60 days prior notice of their intent to vacate the property.” The lease provides that no rent is owed but that the tenants are responsible for all utilities and repairs.
Defendants have not given notice of termination of the lease.
On December 7, 2005, in Estate of Yamamoto, the probate court entered an order determining that MML “holds title to the [Property] as constructive trustee for the benefit of the above-entitled estate.” The order states: MML “shall immediately convey the [Property] to petitioner Masaru Yamamoto as administrator of the estate of Eigoro Yamamoto.” It further states: “The parties shall execute all documents as may be necessary to accomplish the above-described conveyance.”
Although not reflected in the record, it appears MML never conveyed title of the Property to plaintiff as ordered.
On June 29, 2007, plaintiff, in his capacity as administrator of the Estate of Yamamoto, filed the complaint in this action, seeking ejectment of defendants from the Property. Plaintiff claimed title to the property by virtue of the December 7, 2005, order of the probate court.
Plaintiff moved for summary judgment, arguing, among other things, that because MML is a constructive trustee of the Property for the benefit of plaintiff, defendants, as lessees from MML, have a right to possession that is likewise subject to the constructive trust.
Defendants filed opposition, arguing their right of possession predates creation of the constructive trust and, therefore, is not subject to it. Defendants further argued the December 7, 2005, order of the probate court is invalid due to lack of notice and improper service of process.
The trial court entered summary judgment for plaintiff. The court concluded plaintiff has the right to possession of the Property notwithstanding the failure of MML to convey title. The court further concluded: “As MML is the constructive trustee of the subject property, defendants as lessees of the constructive trustee with knowledge of the trust, they occupy the same position with the original trustee are [sic] also constructive trustees, and must return possession of the [P]roperty to plaintiff.” Regarding defendants’ claim that the probate court order is invalid for lack of proper service, the court concluded: “[N]o declaration to support the asserted improper service by MML has been submitted.” The court further concluded a motion for relief from the probate court order based on improper service would be untimely.
The trial court thereafter entered judgment for plaintiff.
Discussion
Defendants contend the trial court erred in granting summary judgment on plaintiff’s complaint for ejectment, because they (defendants) are in lawful possession of the Property by virtue of the 2002 lease. Defendants argue that, to the extent the estate took title to the Property by virtue of the December 7, 2005, probate court order, it took title subject to the lease.
Plaintiff responds that, in an ejectment action, the only issues are: (1) whether plaintiff has title to the property, and (2) whether defendants’ occupation of the property is unlawful in light of that title. Plaintiff argues the evidence is undisputed he has title to the Property, or at least constructive title, on behalf of the estate. Plaintiff further argues that “all subsequent transferees of constructive trust property occupy the same position with the original trustee,” unless they are subsequent purchasers for value without notice. Here, defendants are lessees and, hence, not subsequent purchasers for value without notice. Hence, plaintiff argues, defendants are subject to the constructive trust and must give up possession of the Property.
“A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner.” (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990.) In light of its 2005 order, the probate court presumably concluded the rightful owner of the Property was the estate, not MML. On the limited evidence presented in connection with plaintiff’s summary judgment motion, we cannot ascertain the basis on which the court made this determination. According to the evidence presented, defendants purchased the Property in 1995 “with [their] own money,” and MML obtained ownership of the Property in 2002 “[i]n consideration for repayment of a loan.”
However, the factual basis for the probate order is not at issue. And, although defendants challenge the jurisdiction of the probate court to enter the order because of a lack of notice, as we shall explain, we need not consider that issue.
Assuming the probate court properly entered its 2005 order finding MML a constructive trustee of the Property, the question remains the effect of that order on the lease between MML and defendants. The trial court concluded defendants, as the lessees of MML, a constructive trustee, took their leasehold interest subject to the constructive trust. However, this assumes the constructive trust predated the leasehold interest. As a general rule, one who takes from the landlord takes subject to the lease. (Scholey v. Steele (1943) 59 Cal.App.2d 402, 404-405.) As a corollary to this rule, where a leasehold exists before a change in ownership of the property, the leasehold is not eliminated by that change. Similarly, if a leasehold exists before the creation of a constructive trust, the leasehold is not affected by the constructive trust.
On the limited evidence presented in connection with plaintiff’s summary judgment motion, we cannot determine which came first. Although the lease was established in 2002, we cannot determine the length of the lease term. It states: “This Agreement shall continue as a lease for term,” and gives the tenant alone a right to terminate upon 60-days notice. We do not know what it means for a lease to continue “for term.” If the lease is month-to-month, or year-to-year, then any periodic renewal of the lease after creation of the constructive trust would, presumably, be subject to that trust.
We requested supplemental briefing on whether the lease created a month-to-month tenancy. Plaintiff responded by arguing it does not, but rather creates a life estate in defendants. Plaintiff further argues creation of the life estate was invalid, because it was a gift without consideration and violated the statute of fraud. Defendants argue in opposition that the term of the lease is ambiguous and therefore extrinsic evidence may be used to explain it. They further argue such evidence was presented in the form of defendants’ declaration, in which they said they understood the term of the lease to be for the remainder of their lives.
The parties thus agree the term of the lease (or estate) is for the lifetime of defendants. As for plaintiff’s arguments that the life estate was without consideration and violates the statute of frauds, these arguments were not raised below and are forfeited for purposes of this appeal. As a general matter, appellate courts will not consider issues or theories raised for the first time on appeal unless the question is one of law to be applied to undisputed facts. (Johanson Transp. Service v. Rich Pik’d Rite, Inc. (1985) 164 Cal.App.3d 583, 588.) The questions of whether there was consideration for the purported life estate and whether the statute of frauds was violated are not purely questions of law. For purposes of this appeal, we shall therefore assume defendants are correct that the lease dates back to 2002 with no later renewals.
However, the other side of the equation is the effective date for creation of the constructive trust. Although the order establishing the constructive trust is dated December 7, 2005, it is possible the probate court intended that the constructive trust dates from when MML obtained title to the Property, which would have been before the leasehold was created. At oral argument, plaintiff suggested this was the case, while defendants argued otherwise. The trial court apparently did not read the probate order as establishing a constructive trust ab initio. In its tentative order granting summary judgment, the court stated plaintiff took constructive ownership of the Property “since Dec. 7, 2005.”
“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 or 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, italics added.) On the other hand, “[o]ne who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.” (Id. at § 2223, italics added.) Thus, one may become a constructive trustee of property if that property was either wrongfully gained or wrongfully detained.
In its December 7, 2005, order in Estate of Yamamoto, the probate court did not explain the basis for its conclusion MML held the Property as a constructive trustee. Thus, it cannot be determined if the court concluded MML had wrongfully gained or wrongfully detained the Property. If the latter, then it also cannot be determined when MML wrongfully detained the Property, i.e., before or after creation of the leasehold.
As the moving party below, it was plaintiff’s burden to prove his right to possession of the Property. As explained, this required him to prove the constructive trust came into existence before the leasehold. He failed to do so. On the contrary, the only evidence in the record is that MML acquired the Property “[i]n consideration for repayment of a loan.” In other words, MML paid consideration for the Property and, therefore, did not gain the Property wrongfully. We can only speculate as to what happened thereafter to warrant imposition of a constructive trust. Therefore, for purposes of this appeal, we cannot rule out that the lease predated creation of the constructive trust and continues in force for the remainder of defendants’ lives.
In ruling for plaintiff, the trial court cited Lucas v. Associacao Protectora etc. Da Cal. (1943) 61 Cal.App.2d 344 (Lucas). In Lucas, the plaintiff obtained a life estate in real property as the result of a divorce decree and desired to purchase her ex-husband’s remainder interest. She approached a fraternal lodge of which she was a member to obtain financing. Because of another lien on the property, the lodge proposed to purchase an assignment of the existing note and deed of trust, foreclose and sell under the deed of trust, purchase the property at the sale, and then reconvey clear title of the property to the plaintiff for the amount of the lodge’s costs. (Id. at pp. 346-347.) However, prior to the foreclosure sale, it was learned a creditor of the remainderman intended to bid on the property. Therefore, a member of the lodge arranged for his brother, Montero, to bid on the property in the event the creditor bid higher than the lodge. (Id. at p. 348.)
At the ensuing foreclosure sale, the lodge bid $796.48 and was told by its attorney not to bid any higher. The creditor of the remainderman bid $1,100, whereupon Montero bid $1,125. The property was sold to Montero. Thereafter, Montero refused to reconvey the property to the plaintiff for his costs. (Lucas, supra, 61 Cal.App.2d at p. 349.)
The plaintiff sued, and the trial court ruled in her favor, concluding Montero held the property as a constructive trustee on behalf of the plaintiff. The Court of Appeal concluded the evidence supported the conclusion that Montero took title to the property with full knowledge of the arrangement between the plaintiff and the lodge. (Lucas, supra, 61 Cal.App.2d at p. 350.) According to the court, when the association secured the assignment of the trust deed and held the foreclosure sale, it was acting as a trustee for the plaintiff and obtained title to the property as a constructive trustee. And, “[o]nce it is established that the lodge held the property subject to the trust above defined, it follows, as a matter of law, that if [Montero] knew of the trust when he purchased, he took title subject to the trust whether or not there was, in fact, a confidential relationship between him and [the plaintiff].” (Id. at p. 351.)
The present matter is readily distinguishable from Lucas. In Lucas, when Montero obtained title to the property, the trust relationship between the plaintiff and the lodge already existed and Montero was aware of it. Here, when defendants obtained a leasehold interest in the Property, no trust relationship between MML and plaintiff existed. Thus, even though defendants may have been aware of the trust relationship after it came into existence, they did not obtain the leasehold subject to a trust relationship that did not yet exist.
“To prevail in ejectment it must be shown that the possession of the property by the defendant is unlawful and that the plaintiff has the right to immediate possession.” (Canal-Randolph Anaheim, Inc. v. Wilkoski (1978) 78 Cal.App.3d 477, 494.) Based on the evidence presented to the trial court in connection with the summary judgment motion, plaintiff failed to establish that defendants’ possession of the Property was unlawful and that plaintiff has the right to immediate possession.
Although we conclude the trial court erred in granting plaintiff’s motion for summary judgment, we caution that our conclusion in this regard is based on our determination that plaintiff failed to establish, as a matter of undisputed fact, that the constructive trust predated the lease or any renewal of the lease. In this regard, we point out that MML is a limited liability company apparently managed by defendants’ daughter and the lease purportedly allows defendants to remain on the property for the remainder of their lives rent free. However, the validity of that lease is not before us on this appeal.
Having concluded the trial court erred in granting plaintiff’s motion for summary judgment, we need not consider defendants’ alternate contention regarding the lack of adequate service in connection with the probate court order.
Disposition
The judgment is reversed. Defendants are awarded to their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: SCOTLAND, P. J., ROBIE, J.