Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Kern County Super. Ct. No. CV-256090. Sidney P. Chapin, Judge.
Timothy L. Orr for Plaintiff and Appellant.
Best, Best & Krieger and Victor L. Wolf for Defendant and Respondent.
HILL, J.
Plaintiff appeals the judgment entered after the motion for summary judgment filed by defendant, Rosamond Community Service District (the District), was granted. Plaintiff alleged two causes of action: quiet title and declaratory relief. Each sought a determination that plaintiff remains the owner of two parcels of real property he acquired through a tax sale. Plaintiff contended the District obtained its claimed interest in the property through improperly conducted foreclosure sales. The District moved for summary judgment. The court granted the motion and plaintiff appeals. We will affirm.
FACTS AND PROCEEDINGS
In 1996, defendant District obtained a decree of foreclosure against certain parcels of real property to recover delinquent assessments. In November 2002, plaintiff purchased two of the parcels at a tax sale. After plaintiff’s purchase of the property, the District notified plaintiff the property was subject to its judgment and he needed to pay the unpaid assessments. When he failed to do so, the District proceeded to foreclose and sell the property. Plaintiff was the highest bidder at the sale; he deposited a portion of the price on the day of the sale, but was late tendering the remaining balance. Because plaintiff was late tendering the balance, the sheriff’s department treated it as a default, cancelled the sale, and set a date for a new sale. At the new sale, the sheriff’s department, acting as levying officer, rejected any bids on the property by plaintiff and his associate. The property was sold to the District, which sold it to another defendant.
Plaintiff sued to quiet title and for declaratory relief. The District’s motion for summary judgment was granted, and plaintiff appeals. Plaintiff contends he raised triable issues of fact sufficient to defeat the motion, including facts disputing that the District had the right to foreclose on the property, that plaintiff defaulted in payment after the first foreclosure sale so that a new sale was required, that the sheriff had discretion to exclude plaintiff and his associate from bidding at the second sale, and that the second sale was final and could not be set aside because the time for challenging it expired before plaintiff filed his action.
DISCUSSION
“As a summary judgment motion raises only questions of law regarding the construction and effect of supporting and opposing papers, this court independently applies the same three-step analysis required of the trial court. We identify issues framed by the pleadings; determine whether the moving party's showing established facts that negate the opponent's claim and justify a judgment in the moving party's favor; and if it does, we finally determine whether the opposition demonstrates the existence of a triable, material factual issue. [Citations.] ¶ The burden of a defendant moving for summary judgment only requires that he or she negate plaintiff's theories of liability as alleged in the complaint.” (Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342.)
The first amended complaint alleges that plaintiff became the lawful owner of two specified parcels of property on November 26, 2002, by tax sale and tax deed; on October 21, 2003, the District purportedly took title to the parcels by sheriff’s deed under an “In lien (sic) of Foreclosure Statement.” The first amended complaint further alleges the District’s deed is invalid; it was “part of a series of unlawful acts by said District to wrongfully attempt to deprive Plaintiff of his interest in the subject property, said acts including the refusal of said District to accept Plaintiff’s payment as successful bidder on an earlier public sale, and refusal of said District to allow Plaintiff or his associates to bid on a second public sale held just prior to the above unlawful ‘Deed in lien of foreclosure’ to said District, which was made without notice to Plaintiff.” The pleading also alleges the District subsequently transferred the parcels to defendant, Glasskite, Inc., by quit claim deed, without notice to plaintiff, and Glasskite transferred the parcels to defendants, Gilbert and M. Esther Montano. It alleges the Montano defendants claim to hold title superior to plaintiff’s title, but their title is invalid. It seeks a declaration of the rights and obligations of the parties, and an order quieting title to the property in plaintiff.
The District moved for summary judgment, arguing that plaintiff defaulted in payment after the first sale, so a second sale was justified; that plaintiff was properly prevented from bidding at the second sale; that it was the sheriff’s department, not the District, that refused to accept late payment after the first sale and excluded plaintiff from bidding at the second sale; and that the statutory time for bringing suit to challenge the sale to the District expired prior to the filing of plaintiff’s action.
The District presented facts, which plaintiff did not dispute, including: on October 25, 1996, the District obtained a judgment of foreclosure against a number of parcels of property, including the two plaintiff subsequently acquired; on November 8, 2001, the court issued a writ of sale for the subject parcels and a notice of levy was recorded on April 12, 2002; on November 26, 2002, plaintiff purchased the parcels at a tax sale. Plaintiff also did not dispute that, on March 13, 2003, the District notified him that the property remained subject to its judgment, but he failed to satisfy the judgment and the District exercised its right to foreclose on the property.
Plaintiff was the highest bidder at the June 12, 2003, sale, and he deposited a portion of the purchase price with the sheriff’s department. The District did not receive plaintiff’s payment for the balance of the purchase price within 10 days after the sale. In his opposition, plaintiff disputed the District’s assertion that he thereby defaulted; at the hearing, his counsel conceded he “technically” defaulted. There was no dispute a second sale was held on October 14, 2003, and the sheriff’s department rejected any bids by plaintiff or his associate at that sale. After the second sale, the property was deeded to the District. Plaintiff disputed that the District purchased the property and that the documentation of this transaction was proper.
I. Finality of the Second Sale
The sale of the property was conducted pursuant to a writ of sale. The procedures for such a sale are set out in Code of Civil Procedure sections 701.510 through 701.680. (Code Civ. Proc., § 716.020, subd. (b).) Section 701.680 provides in pertinent part:
All further references are to the Code of Civil Procedure unless otherwise stated.
“(a) Except as provided in paragraph (1) of subdivision (c), a sale of property pursuant to this article is absolute and may not be set aside for any reason. [¶ ] … [¶ ]
“(c) If the sale was improper because of irregularities in the proceedings, because the property sold was not subject to execution, or for any other reason:
“(1) The judgment debtor, or the judgment debtor’s successor in interest, may commence an action within 90 days after the date of sale to set aside the sale if the purchaser at the sale is the judgment creditor.…
“(2) The judgment debtor, or the judgment debtor’s successor in interest, may recover damages caused by the impropriety.…”
Although plaintiff’s complaint is framed as an action to quiet title to the property, he alleges various irregularities in the sale proceedings as the basis for his claim that his title should prevail. The effect of quieting title in plaintiff would be to invalidate or set aside the sale to the District and each subsequent transfer based on irregularities in the sale. Consequently, plaintiff’s action is effectively one to set aside the second sale, and section 701.680, subdivision (c), applies.
“[S]ection 701.680 is crystal clear—it states that execution sales are absolute and may not be set aside ‘for any reason’ unless the judgment creditor was the purchaser.” (Gonzalez v. Toews (2003) 111 Cal.App.4th 977, 981.) It is also crystal clear that, if the judgment creditor was the purchaser, any action by the judgment debtor or his successor in interest to set aside the sale must be filed within 90 days after the sale, or the sale is absolute and may not be set aside for any reason. (See First Federal Bank of California v. Fegen (2005) 131 Cal.App.4th 798, 801.)
The second sale occurred on October 14, 2003, and the property was sold to the District, i.e., the judgment creditor. Pursuant to section 701.680, subdivision (c), plaintiff was required to bring his action to set aside the sale within 90 days after the sale. Plaintiff filed his complaint in this action more than two years later, on November 14, 2005. Plaintiff presented no evidence he filed a timely action to set aside the sale.
Plaintiff asserts that the District is estopped to assert the 90-day time limit, because county counsel represented to him, a month after the second sale, that the sale was final and could not be set aside. The doctrine of equitable estoppel may be applied against the government where justice and right require it, but it will not be applied against the government if to do so would effectively nullify a strong rule of policy, adopted for the benefit of the public. (City of Long Beach v. Mansell (1970) 3 Cal.3d 462, 493.)
“The government may be bound by an equitable estoppel in the same manner as a private party when the elements requisite to such an estoppel against a private party are present and, in the considered view of a court of equity, the injustice which would result from a failure to uphold an estoppel is of sufficient dimension to justify any effect upon public interest or policy which would result from the raising of an estoppel.” (City of Long Beach v. Mansell, supra, 3 Cal.3d at pp. 496-497.)
“‘[F]our elements must be present in order to apply the doctrine of equitable estoppel [against a private party]: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel had a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.’” (City of Long Beach v. Mansell, supra, 3 Cal.3d at p. 489.) In the case of estoppel against the government, if those elements are present, the court must then balance the burden on the individual if estoppel is not applied, against the public policy that would be affected by the estoppel. (Lentz v. McMahon (1989) 49 Cal.3d 393, 400-401.)
Plaintiff did not show that the four elements necessary to raise an estoppel are present; plaintiff presented no evidence of conduct of the District on which it intended that plaintiff would act. Plaintiff claims estoppel based upon representations made in a letter he received from John Irby, of the office of county counsel. The letter includes a statement that, “under Code of Civil Procedure section 701.680, the sale is final for all purposes and cannot be set aside.” Plaintiff claims that, in reliance on this representation, he did not challenge the sale.
Assuming, without deciding, that the letter was admissible evidence in opposition to the motion for summary judgment, it did not raise a triable issue of fact regarding estoppel. The letter begins, “The Sheriff’s Department has asked that we respond to your letter of October 30, 2003.…” Plaintiff presented no evidence that Irby’s letter was sent at the behest of, or even with the knowledge of, the District. Plaintiff argues generally that the sheriff and county counsel acted as agents of the District. Even if the sheriff’s department, as levying officer, acted as agent of the District in selling the property, such an agency would be a special agency for a particular transaction, i.e., the sale of the property pursuant to the decree of foreclosure. (Civ. Code § 2297.) There is no evidence that either the sheriff’s department or county counsel was acting on behalf of the District, or with its knowledge, a month after the sale, when Irby answered a letter from plaintiff complaining about the way the sale was conducted by the sheriff’s department. Plaintiff argues that the District ratified the representation of county counsel by accepting the benefits of that representation. In some circumstances, ratification can be made “by accepting or retaining the benefit of the act, with notice thereof.” (Civ. Code § 2310.) “A principal must have knowledge of material facts at the time of the alleged ratification … in order to be held liable for the unauthorized act of another.” (Chastain v. Belmont (1954) 43 Cal.2d 45, 58.) Plaintiff, however, presented no evidence that the District knew of Irby’s letter or the representation made in it at any relevant time.
Additionally:
“Although generally speaking it is true that the application of the doctrine of equitable estoppel to controversies centered upon title to land involves the same basic factors of the doctrine as are brought into play in other areas of the law, the courts in California and other jurisdictions have proceeded with considerable caution and restraint when the effect of raising an estoppel would be to take the title to land from one person and vest it in another, for such a result would be essentially contrary to the intent and purpose, if not the letter, of the statute of frauds.” (City of Long Beach v. Mansell, supra, 3 Cal.3d at p. 489.)
Section 701.680, subdivision (c), permits the judgment debtor or his successor in interest to file an action to set aside the sale or an action for damages. Only the action to set aside the sale is required to be filed within 90 days after the sale. The obvious purpose is to minimize interference with the title conveyed by the sale.
In the circumstances of this case, the public interest in the finality of execution sales and the resulting transfer of title outweighs the burden on the judgment debtor of losing his opportunity to file an action to set aside the sale. The judgment debtor’s right to redeem real property sold at execution sale has been repealed. (Yancey v. Fink (1991) 226 Cal.App.3d 1334, 1346.) While the right to redeem existed, the purchaser was forced to take title that was defeasible during the redemption period. (Id. at p. 1345.) At the same time the right of redemption was repealed, section 701.680 was enacted, limiting the persons who could file suit to have an execution sale set aside and the time within which such an action could be filed. (Stats. 1982, ch. 1364, § 2.) Through these acts, the Legislature has manifested its intent that execution sales, and the titles conveyed as a result of them, be absolute and final, except in very limited circumstances. The Legislature has not placed such a strict time limit on the judgment debtor’s action for damages for irregularities in the sale. Thus, the potentially adverse effects of the 90-day limit on time to commence an action to set aside the sale are mitigated by the continued availability of the damages remedy.
The property was sold to the District and plaintiff did not timely challenge the sale. The property has been transferred to third parties. At the time plaintiff’s action was filed, the sale was “absolute” and could not be set aside “for any reason.” Plaintiff did not raise a triable issue of material fact regarding his claim of equitable estoppel. He did not present evidence of any representation or conduct of the District on which he relied to his detriment, and the situation is not one where justice requires equitable estoppel to be applied against the District. Because plaintiff’s action is essentially one to set aside the sale of the property to the District, the trial court correctly determined it is barred by the time limitation set out in section 701.680, subdivision (c)(1).
II. Irregularities in the First Sale
Plaintiff’s complaint also alleged the deed to the District was invalid because of irregularities in the conduct of the first sale; specifically, he alleged plaintiff was the successful bidder at the first sale, but the District refused to accept his payment. To the extent plaintiff, as the successor of the judgment debtor, seeks to set aside the sale to the District based on irregularities in the sale process, including irregularities in the first sale, his action is barred by section 701.680, subdivision (c)(1).
Plaintiff, as successful bidder at the first sale, cannot have title quieted in him. First, to do so would effectively require invalidating or setting aside the second sale, which is precluded by section 701.680. Second, plaintiff did not comply with the statutory requirements for purchase of the property and did not take title.
“(a) Except as otherwise provided in this section, the purchaser at a sale shall pay in cash or by certified check or cashier’s check. [¶] … [¶]
“(c) If the highest bid for an interest in real property sold exceeds five thousand dollars ($5,000), the highest bidder may elect to treat the sale as a credit transaction. A person who makes the election shall deposit at least five thousand dollars ($5,000) or 10 percent of the amount bid, whichever is greater, and within 10 days after the date of the sale shall pay the balance due plus costs ….” (§ 701.590.)
Plaintiff was the highest bidder at the first sale, and deposited a portion of the purchase price at that time. Plaintiff did not pay the balance due within 10 days of the June 12, 2003, sale. The tenth day fell on Sunday, June 22, 2003. Plaintiff mailed payment to the sheriff’s department on June 23; it arrived sometime after June 23 and on or before June 26.
“If the highest bidder does not pay the amount bid as prescribed by Section 701.590:
“(a) The levying officer shall sell the property: [¶] … [¶]
“(2) If the default occurs after the sale to a credit bidder pursuant to subdivision (c) of section 701.590, to the highest bidder at a new sale.” (§ 701.600.)
In accordance with this section, when plaintiff failed to timely pay the balance of the price he bid at the first sale, the sheriff gave notice of a new sale and sold the property on the new sale date.
Plaintiff contends his failure to pay the balance on time should be excused because of representations made to him by a supervisor in the sheriff’s department, that he could have until noon on June 24, 2003, to pay the balance due. Even if such a representation was made to him, no evidence was presented that the payment mailed by plaintiff was received by the sheriff by noon on June 24, 2003. Thus, there is no evidence payment was timely made even if the time for payment was extended by the supervisor’s representation.
The first sale was not completed. Plaintiff did not timely pay the balance of the purchase price, and title did not pass to him. Title cannot be quieted in him based on his successful bid at the first sale.
III. Foreclosure of Interest of Judgment Debtor
Plaintiff argues that title should be quieted in him because the judgment debtor whose interest was foreclosed at the District’s sale held no interest in plaintiff’s two parcels. Therefore, he concludes, his interest in the parcels was unaffected by the sale.
Plaintiff acquired his interest in the two parcels as a result of a tax sale. He asserts the tax deeds showed Protective Land Investment Corporation (PLIC) as the party to whom the taxes were last assessed prior to the sale, but the judgment debtors identified in the writ of sale and notice of levy pursuant to which the District’s sale was held were Lillian and George Hood. Based on these assertions, he argues the Hoods never owned any interest in these parcels, PLIC was not a judgment debtor whose interest was the subject of the sale, so the sale pursuant to the writ of sale did not affect the title plaintiff acquired through the tax sale.
The first amended complaint contains no allegations of any of these facts. It alleges only that the sheriff’s deed to the District was unlawful because the District refused to accept plaintiff’s payment as successful bidder at the first sale, refused to allow plaintiff or his associates to bid at the second sale, and subsequently transferred the property to others without notice to plaintiff.
A defendant moving for summary judgment need only negate plaintiff’s theories of liability as alleged in the complaint. (Tsemetzin v. Coast Federal Savings & Loan Assn., supra, 57 Cal.App.4th at p. 1342.) Defendant need not refute liability on some theoretical possibility not included in the pleadings. (Ibid.) Plaintiff’s response may not create issues outside the pleadings. (Ibid.) This theory was not alleged by plaintiff in his first amended complaint and the District was not required to address to it in its motion for summary judgment.
The court notes that plaintiff also submitted no evidence in opposition to the motion for summary judgment regarding when the District’s judgment against PLIC and the Hoods became a lien on the property, or who owned or held an interest in the property at any time prior to plaintiff’s purchase at the tax sale. “The purchaser of property at an execution sale acquires any interest of the judgment debtor in the property sold (1) that is held on the effective date of the lien under which the property was sold or (2) that is acquired between such effective date and the date of sale.” (§ 701.640.) The execution sale conveys the interest that was liable for the satisfaction of the judgment on the date of levy or the date the judgment became a lien on the property. (Cal. Law Revision Com. com., 19A West’s Ann. Code Civ. Proc. (1987 ed.) foll. § 701.640, p. 265.) Plaintiff submitted no evidence supporting his assertion that the Hoods held no interest in the parcels that could be conveyed by the District’s sale.
IV. Other Issues.
Plaintiff also argues that the statute of limitations on a fraud cause of action is three years, rather than 90 days, so such a cause of action is not barred by section 701.680; that although the statutory right of redemption from an execution sale has been eliminated, an equitable right to redemption remains and is not limited by the 90-day period set out in section 701.680; and that his constitutional rights have been violated. None of those theories was alleged in the first amended complaint, and they cannot be used to create new issues in response to the District’s motion for summary judgment. (Tsemetzin v. Coast Federal Savings & Loan Assn., supra, 57 Cal.App.4th at p. 1342.)
V. Declaratory Relief.
The judgment entered after the District’s motion for summary judgment was granted did not include any declaration of the parties’ rights and obligations pursuant to the declaratory relief cause of action. As stated in Anderson v. Stansbury (1952) 38 Cal.2d 707, 717:
“However, plaintiffs' complaint also included a count for declaratory relief, and the disposition of such count would ordinarily require an express declaration of the rights of the parties. [Citation.] While the trial court therefore erred in entering a nonsuit rather than a declaratory judgment in disposition of the count for declaratory relief, such error cannot be deemed prejudicial here. Any declaration of the rights of the parties would necessarily have been unfavorable to plaintiffs in conformity with the disposition of the other two counts, which latter disposition constituted the equivalent of an express declaration that plaintiffs had failed to establish any rights. Under such circumstances, the procedural error of the trial court does not constitute ground for reversal of the judgment. [Citation.]”
Likewise, any declaration of the rights of the parties in this action would necessarily have been unfavorable to plaintiff in conformity with the disposition of the quiet title cause of action, and the disposition of that cause of action was the equivalent of an express declaration that plaintiff failed to raise any triable issue of fact regarding his claimed rights. The failure to make an express declaration of rights in favor of the District does not constitute a ground for reversal.
DISPOSITION
The judgment is affirmed. Respondent is awarded its costs on appeal.
WE CONCUR: LEVY, Acting P.J., KANE, J.