Opinion
D072334
06-20-2018
PATRICK KEALY, Plaintiff and Appellant, v. JPMORGAN CHASE BANK, N.A. et al., Defendants and Respondents.
Hua Gallai, Nicholas T. Hua and Giacomo Gallai for Plaintiff and Appellant. Best Best & Krieger, Christopher E. Deal; Bryan Cave, Glenn J. Plattner and Deborah Heald for Defendants and Respondents JPMorgan Chase Bank, N.A. and U.S. Bank National Association. Fidelity National Law Group and Sheri M. Kanesaka for Defendant and Respondent Ticor Title Company of California. Harbin & McCarron and Michael L. Parker for Defendant and Respondent Precision Asset Management. Songstad Randall Coffee & Humphrey and William D. Coffee for Defendants and Respondents Rebuilding Together Long Beach; Marc Lantzman, Trustee of the Lantzman Family Trust Dated 1/11/89; Peter Glaeser; and Glaeser Builders, Inc. No appearance for Defendant and Respondent MCM Management Consultants.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 37-2012-00058939) APPEAL from a judgment of the Superior Court of San Diego County, Earl H. Maas III, Judge. Affirmed. Hua Gallai, Nicholas T. Hua and Giacomo Gallai for Plaintiff and Appellant. Best Best & Krieger, Christopher E. Deal; Bryan Cave, Glenn J. Plattner and Deborah Heald for Defendants and Respondents JPMorgan Chase Bank, N.A. and U.S. Bank National Association. Fidelity National Law Group and Sheri M. Kanesaka for Defendant and Respondent Ticor Title Company of California. Harbin & McCarron and Michael L. Parker for Defendant and Respondent Precision Asset Management. Songstad Randall Coffee & Humphrey and William D. Coffee for Defendants and Respondents Rebuilding Together Long Beach; Marc Lantzman, Trustee of the Lantzman Family Trust Dated 1/11/89; Peter Glaeser; and Glaeser Builders, Inc. No appearance for Defendant and Respondent MCM Management Consultants.
Patrick Kealy appeals a judgment against him following phase one of a bifurcated trial and the defendants' successful motions for judgment on the pleadings on the remaining causes of action. He seeks reversal of the trial court's determination regarding ownership of real property, reversal of the judgment on the pleadings, reversal of expungement of lis pendens, and reversal of the trial court's finding he was not a prevailing party. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Christopher Kelley and Kealy entered a joint venture to purchase and develop property located at 2815-2817 Luciernaga Street, in Carlsbad, California. Kelley owned the property, which contained an undivided duplex. To prepare for the division of the units, Kealy and Kelley hired O'Day Consultants, Inc. to prepare a condominium plan. The plan listed the unit at 2815 Luciernaga as "U-2817" and the unit at 2817 Luciernaga as "U-2815." It was recorded March 22, 2007.
References to 2815 Luciernaga and 2817 Luciernaga reflect the street addresses of these properties.
Kelley signed a grant deed transferring property to Kealy in April 2007 and it was recorded in May 2007. Kealy took out a loan from Washington Mutual Bank secured by a first deed of trust on the property, which refinanced half the existing lien. The deed of trust for 2817 Luciernaga listed Kealy as the borrower. Amended escrow instructions from the transaction listed the recording as 2817 Luciernaga. The documents for Kealy's adjustable rate note listed 2817 Luciernaga as the property's address. Other documents Kealy signed, including insurance and escrow paperwork, a change in ownership document, a taxpayer form, the truth in lending statement, and the escrow disbursement charges document, also listed 2817 Luciernaga as the property's address. The mortgage company ordered an appraisal of 2817 Luciernaga for Kealy, and the mortgage broker sent an e-mail to the title company stating, "Kealy - Is taking 2817 Luciernaga St[reet]." Kealy wrote and signed a letter in May 2007 stating he was refinancing his property located at 2817 Luciernaga. Despite this documentary evidence, at trial Kealy testified he had reviewed the condominium plan when he signed the papers, and he intended to own 2815 Luciernaga from the start. He also testified he had an agreement with Kelley to own the westerly unit, 2815 Luciernaga.
The loan was later acquired by JPMorgan Chase Bank, N.A. (Chase).
Kelley also took out a loan secured by a first deed of trust, and his loan documents listed 2815 Luciernaga as the property address. Kelley's amended escrow instructions and the estimated borrower statement listed 2815 Luciernaga as the property address. The mortgage broker ordered an appraisal for Kelley of 2815 Luciernaga and reported to the title company: "Kelley - Is taking 2815 Luciernaga St[reet]." Kelley wrote a letter to his prospective lender explaining he was planning to transfer 2817 Luciernaga to Kealy, and he planned to move into 2815 Luciernaga.
After escrow closed, Patrick O'Day from O'Day Consultants learned the condominium unit numbers did not match the street addresses, and he was "very concerned that it would cause a lot of confusion when they started conveying properties." In September 2007, O'Day prepared a revised condominium plan that aligned the unit numbers with the street addresses. In July 2008, all the parties except Kealy signed it. Kealy later testified he refused to sign it because he was the owner of 2815 Luciernaga.
At trial Kealy testified he took possession of Kelley's unit at some point in late Summer 2007 by climbing through a window to gain access. Kelley did not stop making loan payments on his property until later that year, in November 2007. In January 2008, Chase issued a warning of intent to foreclose on 2815 Luciernaga, followed a few months later by a notice of default with intent to proceed with a foreclosure sale. In June 2008, the notice of trustee's sale was recorded; it stated 2815 Luciernaga would be sold at auction. Kealy hired Gail Galloway and attorney Brian Langa to stop the foreclosure, contending he owned 2815 Luciernaga, and the defaulted loan was for 2817 Luciernaga. Chase postponed the foreclosure sale.
In May 2008 and again in March 2009, after the notice of foreclosure was sent, Kealy signed lease agreements with tenants. The May 2008 lease did not list the property address, and the rent payments noted they were for "Luciernaga," with no street number. The March 2009 lease identified the address as 2815 Luciernaga. Kealy also purchased landlord insurance for "2815, 2817 Luciernaga." In early September 2008, there was water damage to 2815 Luciernaga. Kealy received money from the insurance company to complete repairs, but he did not spend all the money or complete the related repairs.
In October 2008, Kelley authorized Galloway to represent him in working out a short sale of 2815 Luciernaga. Later that year, Langa sent correspondence on Kealy's behalf to title companies and banks claiming ownership of 2815 Luciernaga. Galloway submitted offers on behalf of Kealy to purchase 2815 Luciernaga. She testified it was really an offer by Kealy to purchase his own property.
In September 2009, a notice of trustee's sale for 2817 Luciernaga was recorded, listing Kelley as the property owner in default after the title company approved the sale. Galloway represented that Kealy was supposed to be the owner of 2817 Luciernaga in an October 2009 e-mail. She wrote the "title company . . . decide[ed] that Mr. Kealy, [her] client, owned the side that was damaged [2815 Luciernaga]," placing him "in a position where the unit he purchased and has a mortgage on is now not his, and his unit, where he does have the mortgage and has made all of the payments [2817 Luciernaga], is in foreclosure."
In April 2010, Kealy removed a "for sale" sign and a lockbox that had been placed at 2817 Luciernaga. He also e-mailed a real estate broker stating he was the owner of 2817 Luciernaga and had never missed a payment on his loan. In July 2010, an office manager for Kealy's company sent a letter to a title company explaining Kelley owned 2815 and Kealy owned 2817 Luciernaga. At trial, Kealy testified the office manager was not authorized to write the letter and did not write it at his direction.
At the end of 2010, after Kealy removed the lockbox and "for sale" sign at 2817 Luciernaga, Chase took possession of 2815 Luciernaga. At some point, Chase requested Kealy's permission to sell 2815, and Kealy told Chase it could. Kealy testified he did not mean it when he said it.
In July 2011, Rebuilding Together Long Beach (RTLB) purchased 2815 Luciernaga, took possession of the property, and completed repairs and upgrades.
The Lantzman Family Trust, a named defendant and respondent, financed the deal.
Kealy filed his original verified complaint in December 2012 and a first amended verified complaint in May 2013. He alleged 21 causes of action against various defendants, including claims based on his ownership of 2815 Luciernaga and claims based on adverse possession of 2817 Luciernaga.
In December 2013, Kelley signed a declaration stating he had been the owner of 2817 Luciernaga before he stopped paying the mortgage. At trial, Kelley testified Kealy's attorneys had drafted the declaration and indicated there would be a quick resolution to the conflict if he were to sign it, so he signed it. However, he was not sure which unit they each were supposed to take.
While this suit was pending, Kealy submitted a loan application for an unrelated property and listed 2817 Luciernaga as property he owned. The promissory note for the related construction loan also listed 2817 Luciernaga as collateral Kealy owned.
The case proceeded to a bifurcated trial in July 2016, with a bench trial for the equitable claims first. At the opening of the first phase of trial, MCM Management Consultants (MCM) moved for judgment on the pleadings, explaining it was a lender and never had a claim to title of property. The parties stipulated that MCM would make no claim to title and would be bound by the title decision at the end of the trial. The court released MCM from the first phase of trial.
MCM had provided a loan to RTLB to refurbish 2815 Luciernaga, and RTLB paid back the loan before the trial began.
The case did not proceed to the second phase of trial because the court granted the motions for judgment on the pleadings. The court adjudged MCM a prevailing party. Though Kealy named MCM in this appeal, MCM did not file a respondent's brief and has not participated in this appeal.
At the close of the first phase of trial, the court quieted title of 2815 Luciernaga in favor of RTLB. It also ordered reformation of all documents in RTLB's chain of title to reflect RTLB's ownership of 2815 Luciernaga. The court determined Kealy to be the owner of 2817 Luciernaga, with Chase a valid lienholder against the property. The defendants filed motions for judgment on the pleadings. Kealy opposed the motions as untimely and argued they were improperly based on the findings of fact contained in the court's statement of decision at the end of the first phase of trial. The court concluded it had discretion to consider the motions and granted judgment on the pleadings, obviating the need for a second phase of trial.
MCM did not file a motion for judgment on the pleadings.
In February 2017, RTLB moved for expungement of lis pendens and payment of attorney fees for related costs, which the court granted. The court entered judgment April 11, 2017, finding the defendants to be prevailing parties, and awarding them costs. This appeal timely followed.
DISCUSSION
Kealy raises several arguments for why the trial court's judgment should be reversed. He contends there is not substantial evidence to justify the court's findings regarding property ownership, the judgment on the pleadings was untimely and not based on facts that are judicially noticeable, and there was no basis for dismissing the remaining causes of action. He also contends the expungement of lis pendens on 2815 Luciernaga and the corresponding award of attorney fees was improper. He further contends the court's finding of the defendants as prevailing parties was incorrect. We disagree and address each contention in turn.
Trial Phase I Findings of Ownership
Kealy argues there is not substantial evidence to support the trial court's finding he owns 2817 Luciernaga and RTLB owns 2815 Luciernaga or to justify reformation of the relevant documents.
"In order to reform a written instrument, the party seeking relief must prove the true intent by clear and convincing evidence. However, the clear and convincing evidence rule applies only at the trial level. On appeal, it is assumed that the trial court applied the proper standard and the judgment will not be upset if there is substantial evidence to support it." (Shupe v. Nelson (1967) 254 Cal.App.2d 693, 700.) We must affirm the trial court's resolution of facts in dispute if the trial court's determinations are supported by substantial evidence. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.) In evaluating the existence of substantial evidence, we look to the entire record of the appeal, not to isolated pieces of evidence selected by one party. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873 (Bowers).)
Even when two or more inferences can be deduced from the facts, we do not substitute our deductions for those of the trial court. (Bowers, supra, 150 Cal.App.3d at p. 873-874.) If there is substantial evidence to support the trial court's judgment, it is "of no consequence that the trial court believing other evidence, or drawing other reasonable inferences, might have reached a contrary conclusion." (Id. at p. 874.) "A trial court's findings and judgment 'must be sustained if they are supported by substantial evidence, even though the evidence could also have justified contrary findings.' " (Linton v. Desoto Cab Co., Inc. (2017) 15 Cal.App.5th 1208, 1215, quoting Yield Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 557.)
Additionally, "[i]n reviewing the sufficiency of the evidence, we must consider all of the evidence in the light most favorable to the prevailing party, accept as true all the evidence and reasonable inferences therefrom that tend to establish the correctness of the trial court's findings and decision, and resolve every conflict in favor of the judgment." (Baxter Healthcare Corp. v. Denton (2004) 120 Cal.App.4th 333, 369.) If there is substantial evidence, regardless of how slight it appears in comparison to contradictory evidence, we must uphold the judgment. (Ibid.) Moreover, a trial court can ignore testimony it deems not credible. (See Ortzman v. Van Der Waal (1952) 114 Cal.App.2d 167, 170-171.)
Kealy seeks to reframe the facts in a light exclusively favorable to his position and ignores evidence and testimony on which the court relied in reaching its decision to the contrary. In doing so, his statement of facts does not represent completely the evidence presented during the first phase of trial, much of which provides support for the trial court's findings.
Kealy's opening brief references scant evidence to contradict his accounting of the parties' intent. This does not comply with the requirement an appellant summarize all the evidence, not evidence and inferences favorable almost exclusively to his or her position. (Arechiga v. Dolores Press, Inc. (2011) 192 Cal.App.4th 567, 571 [explaining an appellant is obligated to "completely and fairly summarize the evidence supporting the court's findings and judgment"]; Doe v. Roman Catholic Archbishop of Cashel & Emly (2009) 177 Cal.App.4th 209, 218 [opening brief only set forth appellant's version of events].)
There is some evidence the parties intended Kealy to own 2815 Luciernaga, including the grant deeds which reference the condominium plan and some witness testimony. Some title company investigations, which were admitted to show Kealy was challenging the title, reflected Kealy's representations he intended to own 2815 Luciernaga. Chase's attempted sale of 2817 Luciernaga at one point also could suggest Kealy owned 2815 Luciernaga.
However, the trial court found Kealy to lack credibility, noting "[h]is testimony bounced back and forth," and explaining "he suggests the only document he read was an obscure page in the Condo plan which contained an error," instead of reviewing the remaining documentary evidence, all of which contained the street address. The court similarly considered Galloway's testimony, noting it "established so many inconsistencies that her testimony was not credible."
In contrast, the court concluded Kelley's trial testimony was "credible and more consistent with the independent facts than his earlier testimony." It also found O'Day to be "very credible," and noted O'Day, who prepared the condominium plan, testified he transposed the numbers on the plan. There is also other substantial evidence to support the court's conclusion. For example, though the grant deeds contained legal descriptions for the condominium units, all the corresponding loan documents and contemporaneous writings by Kealy and Kelley and their mortgage broker used the street addresses and identified Kealy as the owner of 2817 Luciernaga. Kealy never completed repairs to 2815 Luciernaga after it suffered water damage, and he only spent some of the insurance money he received to cover those costs. When Chase tried to take possession of 2817 Luciernaga after Kealy asserted ownership over 2815 Luciernaga, Kealy intervened to claim he owned that unit. Kealy also claimed ownership of 2817 Luciernaga on a loan application during the pendency of this suit.
Even though Kealy can point to some evidence he has selected to support his position, when we consider the evidence in a light most favorable to the prevailing parties and resolve conflicts in favor of the judgment, we conclude there is substantial evidence of intent that Kealy owns 2817 Luciernaga. The documentary evidence from the time of conveyance and some of Kealy's behavior since then points to his ownership of 2817 Luciernaga, not 2815 Luciernaga. While some of this evidence is contradicted by Kealy's postconveyance behavior, the trial court was in the best position to evaluate the credibility of witnesses and evidence, and it concluded the most credible evidence pointed to Kealy's ownership of 2817 Luciernaga, not 2815. We will not disturb this finding on appeal.
Timing of Judgment on the Pleadings
Kealy's contention that judgment on the pleadings violated Code of Civil Procedure section 438, subdivision (e) and California Rules of Court, rules 3.720-3.730 is without merit. The trial court has discretion over the timing of motions for judgment on the pleadings. (§ 438, subd. (e) [limiting the timing of the motion "unless the court otherwise permits"]; Burnett v. Chimney Sweep, (2004) 123 Cal.App.4th 1057, 1063.) Section 438 permits a party to bring a motion for judgment on the pleadings after trial has begun. (See Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 546.) Moreover, a nonstatutory motion for judgment on the pleadings may be made after the time to demur has expired and either before or during the time of trial. (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650; Sofias v. Bank of Am. (1985) 172 Cal.App.3d 583, 586.)
Further unspecified statutory references are to the Code of Civil Procedure.
Here, the motions for judgment on the pleadings regarded the second phase of trial, based on the outcome of the first phase of trial. Defendants' motions complied with section 438, subdivision (e) because they were brought by the various defendants November 15 through 21, 2016, after the first phase had finished. This was after the time to demur had expired and during the trial, between the two phases. Additionally, because the trial court had discretion to consider and grant the motions for judgment on the pleadings at any time, it was not improper to do so. (§ 438, subd. (e).)
Phase One Statement of Decision Controls in Phase Two
In ruling on the motions for judgment on the pleadings, the trial court took judicial notice of its own statement of decision. Kealy contends the trial court lacked authority to do so. Kealy's contention ignores the posture of the case as a bifurcated trial and the court's ability to apply the legal effect of judicial notice of the court record.
A court is authorized to take judicial notice of records of any court in California. (Evid. Code, §§ 450 & 452, subd. (d).) Additionally, "[i]t is settled that a court may take judicial notice of the contents of its own records." (Dwan v. Dixon (1963) 216 Cal.App.2d 260, 265.) While a court may not take judicial notice of hearsay allegations that are part of a court record or file, the court can take judicial notice of the truth of facts asserted in orders, findings of fact, conclusions of law, and judgments. (Day v. Sharp (1975) 50 Cal.App.3d 904, 914 (Day).) "[W]hen courts take judicial notice of the existence of court documents, the legal effect of the results reached in orders and judgments may be established." (Linda Vista Village San Diego Homeowners Assn., Inc. v. Tecolote Investors, LLC (2015) 234 Cal.App.4th 166, 185 (Linda Vista Village).)
Additionally, "[i]ssues adjudicated in earlier phases of a bifurcated trial are binding in later phases of that trial and need not be relitigated." (Arntz Contracting Co. v. St. Paul Fire & Marine Ins. Co. (1996) 47 Cal.App.4th 464, 487 (Arntz); Orange County Water Dist. v. Alcoa Global Fasteners, Inc. (2017) 12 Cal.App.5th 252, 359.) This makes sense because relitigation of duplicate issues would subvert the goal of efficiency. (Arntz, at p. 487; see § 1048, subd. (b) [authority to bifurcate causes of action for expedition and economy].)
Kealy's reliance on Sosinsky v. Grant (1992) 6 Cal.App.4th 1548 and Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875 is unhelpful to his position. In those cases, the challenge was to judicial notice of the truth of factual findings from a different court (Sosinsky, at pp. 1551-1552) or that were not the product of an adversarial hearing. (Lockley, at pp. 882-883.) In contrast, here, the court took judicial notice of its own statement of decision following a full adversarial trial.
Relying on its own findings from the first phase of trial was not an abuse of discretion because the findings of fact litigated during phase one of the trial are binding on the outcome of phase two. (Arntz, supra, 47 Cal.App.4th at p. 487.) To hold otherwise would undercut the value and purpose of bifurcation as a tool of efficiency. Moreover, the court could take judicial notice of the legal outcome of the first phase of trial, which concluded RTLB is the owner of 2815 Luciernaga and Kealy is the owner of 2817 Luciernaga and reformed and canceled documents to ensure their legal effect. (Linda Vista Village, supra, 234 Cal.App.4th at p. 185; Day, supra, 50 Cal.App.3d at p. 914.)
Thus, the court's factual findings regarding property ownership, the reformation of the condominium plan, and any corresponding legal effect were binding on the causes of action that remained.
Motions for Judgment on the Pleadings
Kealy asserts he had standing to take the trial to phase two because he suffered an injury in fact and because the determination of ownership was not a necessary element of the remaining negligence and breach of contract causes of action.
Kealy mentions in his opening brief that the court's grant of judgment on the pleadings violated section 437, subdivision (c). The motions were for judgments on the pleadings, not summary judgment, and the court ruled based on the pleadings. Kealy does not offer any substantive argument for why he believes the motions for judgment on the pleadings were really hidden motions for summary judgment. Accordingly, we deem this argument waived. (Orange County Water Dist. v. Sabic Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 383 [noting failing to support a point with reasoned arguments and citations to the record results in waiver].)
As discussed ante, "[i]ssues adjudicated in earlier phases of a bifurcated trial are binding in later phases of that trial and need not be relitigated." (Arntz, supra, 47 Cal.App.4th at p. 487.) Moreover, when cases involve both equitable and legal issues, a trial court can try the equitable issues without a jury first; if the determination of the equitable issues is dispositive of the remaining legal issues, nothing remains to be tried by the jury. (Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665, 671.)
This is what occurred in the instant case. The court's determination in the first phase of trial that RTLB is the owner of 2815 Luciernaga and Kealy is the owner of 2817 Luciernaga effectively disposed of the remaining legal issues. Though Kealy contends there are remaining issues to be tried by a jury, his brief fails to explain why. His allegation of injury-in-fact is not sufficient on its own to require the case to proceed to the second phase of trial. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879 (Cantu) [adequate pleading must establish every element of cause of action].)
A judgment on the pleadings is the equivalent of a demurrer and uses the same standard of review. (Sprague v. County of San Diego (2003) 106 Cal.App.4th 119, 127 (Sprague).) This means our review is de novo; we independently determine whether the complaint states facts sufficient to constitute a cause of action. (Ibid.) " ' "The grounds for a motion for judgment on the pleadings must appear on the face of the challenged complaint or be based on facts which the court may judicially notice." ' " (County of Los Angeles v. Commission on State Mandates (2007) 150 Cal.App.4th 898, 911.) We accept as true properly pleaded factual allegations in the first amended complaint. (See Sprague, at p. 127.) " ' "[A] complaint otherwise good on its face is nevertheless subject to demurrer when facts judicially noticed render it defective." ' " (Marina Tenants Assn. v. Dauville Marina Development Co. (1986) 181 Cal.App.3d 122, 130.) We may take judicial notice of facts that contradict the face of a complaint. (Swiss Park, Inc. v. City of Duarte (1982) 136 Cal.App.3d 755, 758-759.) When they contradict, "[t]he complaint should be read as containing the judicially noticeable facts, 'even when the pleading contains an express allegation to the contrary.' " (Cantu, supra, 4 Cal.App.4th at p. 877, quoting Chavez v. Times-Mirror Co. (1921) 185 Cal. 20, 23.) To establish adequate pleading, a plaintiff must show the facts pleaded are "sufficient to establish every element of that cause of action." (Id. at p. 879.)
Here, the motions for judgment on the pleadings were accompanied by requests for judicial notice of the contents of the court's own statement of decision, which the court granted. As explained ante, the court's decision to take judicial notice of its own statement of decision was proper in determining whether it would grant judgment on the pleadings. The statement of decision had the legal effect of determining Kealy owned 2817 Luciernaga and always had, and RTLB owned 2815 Luciernaga.
Negligence
Kealy alleges a negligence cause of action against Chase and Precision Asset Management. To prevail on a negligence claim, Kealy must demonstrate the defendants owe him a legal duty, breached the duty, and were the proximate and actual cause of Kealy's injuries. (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 477; McIntyre v. The Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.) The existence of a legal duty is a determination of law. (Vasquez v. Residential Investments, Inc. (2004) 118 Cal.App.4th 269, 278.)
Kealy contends a duty arose out of the contractual and fiduciary relationship under the 2007 trust deed between Kealy and Chase "regarding the 2815 Address Home" and during the escrow period in July 2011. He further alleged the defendants should have known he owned 2815 Luciernaga, creating an obligation to exercise diligence selling it.
These allegations contradict the outcome of the first phase of trial; the court ordered reformation of the condominium plan so all the documents in RTLB's chain of title would reflect it is the owner of 2815 Luciernaga, unit 2815. Because Kealy is not the owner of 2815 Luciernaga, and he alleges the duty arises out of ownership of 2815 Luciernaga, Kealy cannot maintain his cause of action for negligence.
Breach of Contract Claim
Kealy's complaint also alleges one breach of contract claim against Chase. To state a claim for breach of contract, Kealy must be able to show the existence of a contract and failure by the opposing party to perform its duties under the agreement. (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 402.)
Kealy's complaint identifies the contract as the trust deed between Kealy and Chase regarding unit 2817 and 2815 Luciernaga, as a single location. Following the first phase of trial, the court ordered reformation of documents so that unit 2817 and 2817 Luciernaga reference the same, single property. The legal description attached to the verified complaint grants ownership of U-2817, which the court reformed to match 2817 Luciernaga dating back to the date of the original grant deed. Reconciling the complaint with the legal effect of the statement of decision, the alleged contract is between Kealy and Chase for the security interest in 2817 Luciernaga.
The breach allegations rely on Kealy's ownership of 2815 Luciernaga, alleging foreclosure of 2815 Luciernaga was "fraudulent" and "baseless" under the terms of the agreement. However, because the agreement relates to 2817 Luciernaga, actions taken related to 2815 Luciernaga cannot demonstrate breach. Accordingly, the court properly dismissed the breach of contract cause of action on the pleadings.
The Other Causes of Action
Kealy's appeal does not specifically identify other causes of action he believes the court wrongly dismissed or explain why he could maintain the remaining causes of action. Our review of the first amended complaint reveals each of the remaining causes of action rests on Kealy's purported rightful possession and ownership of 2815 Luciernaga or Kealy's adverse possession of 2817 Luciernaga. Kealy cannot properly maintain such claims because the outcome of the first phase of trial is that RTLB is the rightful owner of 2815 Luciernaga, and Kealy has always been the owner of 2817 Luciernaga. Forcing the case to proceed to the second phase of trial when Kealy could not demonstrate an element of each remaining cause of action would undermine the expedition and efficiency advanced by bifurcation. (See Arntz, supra, 47 Cal.App.4th at p. 487; § 1048, subd. (b).)
The eighth cause of action for adverse possession of 2817 Luciernaga, the ninth cause of action for quiet title of 2817 Luciernaga based on adverse possession, and the 10th cause of action for declaratory relief regarding 2817 Luciernaga were mooted by the outcome of the first phase of trial. The second cause of action for fraud arises out of the alleged intent to defraud Kealy of ownership of 2815 Luciernaga. The third cause of action for wrongful foreclosure was based on the foreclosure and taking possession of 2815 Luciernaga. The 11th and 12th causes of action for unjust enrichment and accounting allege rental income derived from 2815 Luciernaga resulted in ill-gotten gains for some defendants. The 13th and 17th causes of action for constructive trust and trespass are based on the defendants' alleged wrongful acquisition and possession of 2815 Luciernaga. The 14th and 15th causes of action are for intentional interference with prospective business relationship based on Kealy's ownership and possession of 2815 Luciernaga. The 16th cause of action is for intentional infliction of emotional distress related to the ownership and/or possession of 2815 Luciernaga and actions surrounding its foreclosure as extreme or outrageous. The 18th cause of action is for slander of title based on Kealy's alleged ownership of 2815 Luciernaga when the title transferred to RTLB. The 19th cause of action is for cancellation of the RTLB trust deed on the basis Kealy owns 2815 Luciernaga. The 21st cause of action is for violation of the business and professions code based on Kealy's lost income related to his alleged ownership of 2815 Luciernaga.
Lis Pendens
Kealy seeks a reversal of the order expunging lis pendens and a reversal of fees against counsel imposed under section 405.38.
Title 4.5, chapter 3 of the Code of Civil Procedure contains the statutory provisions relating to motions to expunge lis pendens. Section 405.39 provides, "[n]o order or other action of the court under this chapter shall be appealable. Any party aggrieved by an order made on a motion under this chapter may petition the proper reviewing court to review the order by writ of mandate." The attorney fee award from which Kealy appeals comes under section 405.38, which falls within title 4.5, chapter 3. (See Shah v. McMahon (2007) 148 Cal.App.4th 526, 529 (Shah) [only remedy for challenging award of attorney fees in connection with lis pendens is writ of mandate].) This challenge must be made through the writ process, not on an appeal.
Kealy's attempt to distinguish his case from Shah is unpersuasive. The procedural requirements outlined in section 405.39 and discussed in Shah make clear that no order or action of the court brought in connection with a motion to expunge a lis pendens is appealable. (Shah, supra, 148 Cal.App.4th at p. 529.) This includes both the order expunging the lis pendens and the related order awarding attorney fees.
Kealy's citation to Gavin W. v. YMCA of Metropolitan Los Angeles (2003) 106 Cal.App.4th 662 is inapposite. That case discusses a nonappealable order arising under section 597, which addresses special defenses that can be appealed after entry of the final judgment. (Gavin, at p. 669.) The matter before us arises under section 405.38, not section 597. --------
Prevailing Parties and Costs
Kealy seeks a modification of the judgment to clarify the claim to quiet title for 2817 Luciernaga and to cancel foreclosure documents listing 2817 Luciernaga as foreclosed upon, along with a finding he is a prevailing party on these claims. We decline to order such modification.
Kealy did not prevail on the claim to quiet title of 2817 Luciernaga because he alleged ownership by way of adverse possession. The court concluded Kealy always owned 2817 Luciernaga, so he could not have adversely possessed it, and there was no need to quiet title. Additionally, though he appears to seek cancellation of foreclosure documents for 2817 Luciernaga now, he did not raise this in his complaint. Because Kealy is not the prevailing party in the matter, costs were properly awarded to the various defendants.
DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal.
BENKE, J. WE CONCUR: McCONNELL, P. J. O'ROURKE, J.