Opinion
NOT TO BE PUBLISHED
Superior Court County No. CIV227944, of Ventura, Frederick H. Bysshe, Jr., Judge.
Law Offices of Richard L. Francis & Associates and Richard L. Francis for Appellant.
Law Offices of Howe & Holmes and James T. Holmes for Respondents.
PERREN, J.
Beatriz Alejandra Sanchez appeals the judgment entered on her cross-complaint against her sister Ana M. Gonzalez, Ana's husband Jose A. Gonzalez, and Jose's brother Gerardo T. Gonzalez (hereinafter collectively referred to as the Gonzalezes). Beatriz contends the trial court abused its discretion in denying reformation of grant deeds whereby the Gonzalezes and Beatriz and Ana's parents, Manuel and Maria Sanchez, hold title to a parcel of residential property as joint tenants. She also claims (1) the joint tenancy created by the original deeds was void because it lacked the requisite "four unities;" (2) the court should have imposed an equitable trust accounting for her monetary contributions to the acquisition and maintenance of the property; (3) the court erred in allowing an appraiser to testify without her approval; and (4) she is entitled to costs as the prevailing party. We affirm.
We refer to the parties for ease of reference, and not out of disrespect.
Respondents move to dismiss the appeal on the ground that Beatriz has voluntarily accepted the benefits of the judgment. The motion is premised on the fact that two thirds of the sale proceeds from the property were distributed in accordance with the judgment, with Beatriz, Jose and Ana each receiving a one-third share. Because respondents have not appealed the finding that Manuel validly transferred his interest in the property to Beatriz, it is undisputed that Beatriz is entitled to the monies she already received. "[W]here the appellant's right to the accepted portion of the judgment is not disputed on appeal . . . the appeal as to the disputed portion may proceed, because a reversal will have no effect on the appellant's right to the benefit he or she has accepted. [Citations.]" (Epstein v. DeDomenico (1990) 224 Cal.App.3d 1243, 1246.) Accordingly, respondents' motion to dismiss the appeal is denied.
FACTS AND PROCEDURAL HISTORY
This case involves a dispute between two sisters regarding ownership of the family residence. In 1999, three grant deeds were executed on the subject property located at 3023 South A Street in Oxnard. The identical deeds state that the property was granted to "JOSE A. GONZALEZ and ANA GONZALEZ, husband and wife and MANUEL G. SANCHEZ and MARIA SANCHEZ, husband and wife and GERARDO T. GONZALEZ, a single man all as joint tenants." Beatriz had gifted Manuel $7,000, which was used for a portion of the down payment, but she was not included on the title due to her bad credit. Gerardo was placed on title solely for the purpose of obtaining financing, and has never claimed any ownership interest in the property.
The real estate agent who represented the parties as buyers of the property advised them to seek legal counsel regarding the form in which title should be taken. The agent also translated all of the relevant documents into Spanish for Manuel and Maria. The buyers chose the form of title by checking off a box on the escrow documents.
Maria died in August 2003, and Manuel deeded his interest in the property to Beatriz the following December. On June 28, 2004, the Gonzalezes filed a complaint against Beatriz, alleging that Manuel had lacked the capacity to convey his interest in the property to her. Beatriz filed a cross-complaint alleging, among other things, that the deeds by which the property was conveyed to the Gonzalezes and Manuel and Maria mistakenly identified the spouses (Ana and Jose, and Manuel and Maria) as joint tenants vis-à-vis each other, and that Gerardo had no legal or equitable interest in the property. The cross-complaint sought reformation of the trust deeds to remove Gerardo from title, and to reflect that the spouses held their interests as community property. Beatriz also sought a constructive trust, an accounting, and a partition of the property.
While the trial was pending, the parties filed a stipulation that Gerardo had no legal or equitable interest in the property. At the conclusion of the court trial, judgment was entered in favor of Beatriz on the complaint, and against her on her cross-complaint. The court found (1) that Jose, Ana, Manuel and Maria all held title to the property as joint tenants, and the evidence was insufficient to demonstrate that was not their intent; (2) that Gerardo had been removed from title by the parties' stipulation; (3) that upon Maria's death, Jose, Ana, and Manuel each held an undivided one-third interest in the property as joint tenants; (4) that Manuel was competent to transfer his interest in the property to Beatriz; (5) that Jose, Ana and Beatriz thereafter became tenants in common, each with an undivided one-third interest in the property; (6) that Ana and Jose had continuously lived at the property since it was purchased in 1999, and had kept all loan payments current and paid for repairs, maintenance, and improvements; (7) that Beatriz had contributed the majority of funds used for the initial down payment, and paid "rent" during the times she was residing at the property; and (8) that Jose and Ana also received "rent" from other family members and third parties who lived at the property at various times.
Beatriz attached a file-stamped copy of the stipulation as an exhibit to her opening brief, and in a footnote stated "the Clerk's Record is requested to be augmented" with this document. Our local rules provide that requests to augment the record shall be made by separate motion. (Ct. App., Second Dist., Local Rules, rule 2.) We nevertheless grant the request in the interests of economy.
Accordingly, the court ordered that Beatriz, Jose and Ana owned the property as tenants in common, each with an undivided one-third interest, and that the property be partitioned by sale. Two-thirds of the sale proceeds were to be distributed equally to Beatriz, Jose and Ana, with the remaining one-third maintained in an interest bearing account. The court also ordered that "[t]he amount of each co-tenants' share shall be determined by subtracting the balance at the time of computation of the First Trust Deed loan from the fair market value of the real property or approved sales price of $552,000.00 and then paying Jose and Ana Gonzalez, or not as to be determined, an amount which represents compensation for their expenditures in maintaining the property, (mortgage loan payments, taxes, insurance, repairs, etc.) after deducting the value of their use and enjoyment of the property and also less the amount 'loaned' by Beatriz to her parents for the purchase of the property plus interest computed at the legal rate of interest." To effect this purpose, the court also ordered the appointment of an "accountant/referee."
Beatriz filed a memorandum of costs, which the Gonzalezes moved to strike. The court concluded that neither party was the prevailing party under Code of Civil Procedure section 1032, subdivision (a)(4), and accordingly disallowed recovery of costs.
DISCUSSION
I.
Reformation
Beatriz contends the trial court abused its discretion in refusing to reform the grant deeds to correct a mistake regarding the manner in which title was held. Beatriz asserts that the two sets of spouses (Ana and Jose, and Manuel and Maria) did not intend to own the property as joint tenants with their respective spouses, but rather intended that each couple hold its collective interest as joint tenants with the other couple. If the deeds were reformed in this manner, Manuel would have inherited Maria's interest as community property upon her death. Beatriz would thereby have a one-half interest in the property, as opposed to the one-third interest she received under the judgment.
As a joint tenant, Maria's interest in the property terminated upon her death.
Civil Code section 3399 provides that "When, through fraud or a mutual mistake of the parties, or a mistake of one party, which the other at the time knew or suspected, a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved, so as to express that intention, so far as it can be done without prejudice to rights acquired by third persons, in good faith and for value." Our Supreme Court has directed that "[i]n reforming the written agreement, a court may 'transpose[], reject[], or suppl[y]' words [citation], but has ' "no power to make new contracts for the parties" ' [citations]. Rather, the court may only reform the writing to conform with the mutual understanding of the parties at the time they entered into it, if such an understanding exists. [Citation.]" (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524.)
"The error in the document and the mistake or fraud that is the basis for the reformation is established as a question of fact. The person seeking reformation has the burden of proving the true intent of the parties by clear and convincing evidence." (12 Miller & Starr, Cal. Real Estate (3d ed. 2001) Remedies, § 34:14, pp. 63-64, and cases cited therein, fns. omitted.) Moreover, "[t]he fundamental rule that if there is substantial evidence to support the judgment of the trial court its decision will not be disturbed on appeal applies in reformation cases. On appeal it is assumed that the trial court applied the proper standard, and its conclusion will not be disturbed if supported by substantial evidence." (11A Cal.Jur.3d (2007) Cancellation and Reformation, § 127, pp. 183-184, and cases cited therein, fns. omitted.)
In denying reformation, the court reasoned: "While the equitable remedy of reformation has a broad reach, it is not without limits and constraints. Neither intelligent surmise nor educated speculation regarding 'true intentions' can be substituted for logical deductions from the evidence. The court finds that there is insufficient evidence on which the court can conclude that there was a mistake of law or fact, must less fraud, entitling Beatri[z] to reformation of the original Deed." On this record, we discern no error in the court's finding.
While Beatriz finds support for her position in assertion in Ana and Jose's deposition and trial testimony, the testimony of other family members regarding Manuel and Maria's understanding of their interests in the property, and the fact that the deeds identify each couple as "husband and wife," the trier of fact could reasonably conclude there was no clear and convincing evidence of the spouses' intent to hold their respective titles as community property. For example, the parties' real estate agent testified that Manuel and Maria told him that if one of them died, "[t]hey wanted their portion to go to Beatriz." Beatriz and Ana's sister Maria testified that Manuel prepared the grant deed conveying his interest in the property to Beatriz while his wife Maria was still living. Moreover, while Ana and Jose indicated that they would have preferred an ownership interest that would preserve spousal survival rights, Jose testified at trial, "I don't think that would have been possible" because Gerardo had to be on the title for purposes of obtaining credit. In addition, the parties were advised to seek counsel regarding the manner in which they should hold title, and as the buyers it was they who designated their ownership as joint tenants. This evidence supports the court's finding that Beatriz had failed to demonstrate, by clear and convincing evidence, that all of the grantees on the deed intended something other than a joint tenancy.
II.
The Four Unities
Civil Code section 683, subdivision (a) provides in pertinent part that "[a] joint interest is one owned by two or more persons in equal shares, by a title created by a single will or transfer, when expressly declared in the will or transfer to be a joint tenancy . . . ." This statute does not abrogate the common law rule that four unities are essential to the creation and continuation of a joint tenancy: unity of interest, time, title, and possession. (Tenhet v. Boswell (1976) 18 Cal.3d 150, 155.) If one of the unities is destroyed, the joint tenancy is severed and the cotenants become tenants in common, without a right of survivorship. (Ibid.)
Beatriz alternatively argues that the subject deeds failed to create a joint tenancy, such that the parties to the original deeds held their interests as tenants in common, because Gerardo did not hold the same interest in the property as the other joint tenants. We disagree. It is undisputed that the four unities existed with regard to Ana, Jose, Manuel and Maria. Beatriz offers no authority for the proposition that a joint tenancy involving more than two parties cannot be created because only one of the parties does not possess all four unities. (Compare De Witt v. City of San Francisco (1852) 2 Cal. 289, 297-298, italics added ["If, therefore, a grant should be made to two persons, which in its terms should imply a joint-tenancy, but such an estate could not vest, for the reason that some of the requisite unities were wanting, the result would be the creation of a tenancy in common"].) Indeed, it has long been established that when "one of three or more joint tenants conveys his interest to a third person, the latter then becomes a tenant in common, instead of a joint tenant, with the other, although such others remain joint tenants as between themselves." (Hammon v. McArthur (1947) 30 Cal.2d 512, 516, italics added.) Because the four unities existed with regard to Ana, Jose, Manuel and Maria, Geraldo's lesser interest has no bearing on the creation of a joint tenancy among the others.
III.
Beatriz also complains that the court failed to account for her contributions to the "capital acquisition costs" of purchasing the property. As the Gonzalezes correctly note, this claim appears to be premature. The judgment provides for the appointment of an accountant/referee to evaluate Beatriz's claims for an equitable trust, which involves the determination of "an amount which represents compensation for [Ana and Jose's] expenditures in maintaining the property . . . after deducting the value of their use and enjoyment of the property and also less the amount 'loaned' by Beatriz to her parents for the purchase of the property plus interest computed at the legal rate of interest." One-third of the sale proceeds from the property are being maintained in an interest-bearing account for the purpose of making these adjustments, if necessary. Because these issues have yet to be litigated, they are not properly redressed on appeal.
IV.
Appraiser's Testimony
Beatriz also contends the court erred in allowing a real estate appraiser to testify over her objection. She complains that the court was required to obtain her approval for any appraisal of the property. (See Code Civ. Proc., § 873.910.) She fails to allege, however, that she suffered any prejudice as a result of the purported error. Indeed, the court did not proceed with a partition by appraisal under section 873.910 of the Code of Civil Procedure, but rather proceeded with a sale of the property under section 872.820.
That section provides in pertinent part that "the court shall order that the property be sold and the proceeds be divided among the parties in accordance with their interests in the property as determined in the interlocutory judgment in the following situations: [¶] (a) The parties agree to such relief, by their pleadings or otherwise. [¶] (b) The court determines that, under the circumstances, sale and division of the proceeds would be more equitable than division of the property. For the purpose of making the determination, the court may appoint a referee and take into account his report."
V.
Costs
Beatriz asserts that the court was compelled to award her costs as the prevailing party against Gerardo because he did not recover from her on his complaint, and she prevailed on her cross-complaint in that she succeeded in removing him from the deed. We disagree.
The court denied costs pursuant to section 1032, subdivision (a)(4) of the Code of Civil Procedure, which provides in relevant part: " 'Prevailing party' includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant [w]hen any party recovers other than monetary relief . . ., the 'prevailing party' shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not . . . ." In finding that there was no prevailing party, the court reasoned: "I think that the—the equitable way to finally conclude this case is not to allow cost[s] to any of the parties, and I know that's a resolution that the parties may take strong issue with, but that's what I think is the fair way to resolve this contention."
We cannot say the court abused its discretion in concluding that neither party was entitled to costs as the prevailing party. While Beatriz correctly notes that Gerardo did not recover any relief against her on the complaint, and that she obtained relief against him on her cross-complaint by succeeding in removing him from the deeds, that recovery was not monetary. The governing statute expressly provides that the court has discretion whether to allow costs "[w]hen any party recovers other than monetary relief." (Code Civ. Proc., § 1032, subd. (a)(4).) Accordingly, Beatriz was not a compulsory "prevailing party" in the action.
The judgment is affirmed. Respondents are entitled to their costs on appeal.
We concur: GILBERT, P.J., YEGAN, J.
"The title of each [joint] tenant extends to the whole estate. Hence, when one tenant dies, the entire estate survives to the others, to the exclusion of the heirs of the decedent. [Citations.]" (12 Witkin, Summary of Cal. Law (10th ed. 2005) Real Property, § 34, p. 86.)