2018-00235432-CU-OR

Enoch Duplechan vs. Beverly Fisher

Nature of Proceeding: Motion to Expunge Lis Pendens

Filed By: DeAmicis, Brian

The motion of Defendants Beverly Fisher (Fisher) and her entity Diamond Junk Removal, Inc. (Diamond) (collectively “Defendants”) to expunge lis pendens is GRANTED; fees and costs DENIED.

Background Facts/Procedure

This case presents a real property dispute. The plaintiffs are Enoch Duplechan (Duplechan) and his entity, Big Time Housing, LLC (Big Time) (collectively “Plaintiffs”). Plaintiffs allege what appears to be an oral agreement that they would acquire title to a residence in exchange for payments to Fisher. Plaintiffs allege the following:

8. Prior to January, 2018, FISHER was the reputed owner of the Residence, but was not on title at that time.

9. In about January 2018, FISHER’S son, Coye Fisher (“Coye”), contacted DUPLECHAN about purchasing the Residence. Coye had previously lived in the residence, but it had been vacant for approximately a year and was in need of significant repairs and upgrades to make it rentable marketable. DUPLECHAN was led to believe that Coye and Richana Lyles owned the Residence and that he had the authority to enter into a contract with regard to its disposition.

10. DUPLECHAN told Coye that PLAINTIFFS were willing to take over the existing Mortgage and pay Coye the sum of $60,000 for the Residence.

11. The following day, DUPLECHAN, Coye and FISHER had a three-way telephone conversation. At that time, FISHER claimed to be the owner of the Residence although she was not on the title and stated that she wanted to receive $70,000 in the sale transaction. DUPLECHAN agreed.

12. The specific terms of the agreement were that PLAINTIFFS would assume the liability for the existing mortgage, and FISHER would receive $70,000 within 30-90 days. FISHER and PLAINTIFFS also agreed that commencing March 1, 2018, PLAINTIFFS could take occupancy of the Residence and PLAINTIFFS were required to pay the mortgage and would be responsible for the HOA dues and utilities. To the extent there were unpaid expenses or liabilities before March 1, 2018, FISHER would be responsible for those. Closing costs were to be split 50/50.

DUPLECHAN also agreed to pay FISHER $ 10,000 as a down payment no later than March 1, 2018.

13. Shortly after this three-way telephone conversation, DUPLECHAN and FISHER met at Orange Coast Title with Shannon Selland, the Branch Manager. During the meeting, the terms the agreement between PLAINTIFFS and FISHER were confirmed in the presence of Ms. Selland. At that time, DUPLECHAN discovered that the title to the Residence was not in the name of FISHER, and Ms. Selland prepared a grant deed to transfer title to the property from Richana Lyles to BIG TIME HOUSING, pursuant to the Agreement that had been reached between PLAINTIFFS and FISHER.

14. After Ms. Selland created the aforementioned grant deed, and without the knowledge of DUPLECHAN, FISHER directed Ms. Selland to change the grant deed so that title actually passed from [Fisher’s former daughter-in-law] Richana Lyles to DIAMOND JUNK REMOVAL, the company that controlled by FISHER. FISHER directed this change purportedly so that title for the Residence would pass from DIAMOND JUNK REMOVAL to BIG TIME HOUSING when escrow closed 60 to 90 days later.

15. In January 2018, PLAINTIFFS took possession of the property in reliance on the agreement with FISHER. DUPLECHAN immediately began spending money and time to repair the Residence. […] FISHER and/or Coye also left a significant amount of personal property and furnishings in the house, which had to be removed and disposed of FISHER was present on at least one occasion when DUPLECHAN was removing items from the house to be disposed of.

16. As a result of all the improvements made by DUPLECHAN in January and February, he secured a tenant for the property. BIG TIME HOUSING entered into a one year lease with the tenant and the tenant moved in on February 25, 2018.

17. No later than February 25, 2018, Enoch texted FISHER and told her he had the $10,000 down payment, and said he wanted to meet FISHER at the title company and deliver the money.

18. Throughout the months January and February, FISHER was fully aware that DUPLECHAN was spending time and money making repairs to the Residence.

19. On and after March 1, 2018, PLAINTIFFS began paying the mortgage payments on the Residence, and FISHER was aware of that fact.

20. FISHER was also aware that DUPLECHAN made arrangements to purchase insurance for the Residence.

21. Throughout the months of March and April, FISHER and DUPLECHAN exchanged a large number of text messages and FISHER

began to change the terms of the agreement that had been reached. Instead of the $10,000 down payment, FISHER demanded a $35,000 cash down payment.

22. On April 27, 2018, PLAINTIFFS provided FISHER with a $75,000 cashier’s check to close the transaction and FISHER refused to accept the money.

23. FISHER breached the Agreement to sell the Residence to DUPLECHAN because the house is now more valuable as a result of all the rehabilitation work performed by PLAINTIFFS.

Based on these allegations, Plaintiffs bring causes of action for promissory estoppel, fraud, negligent misrepresentation, restitution based on breach of quasi-contract, intentional interference with prospective economic advantage, and quiet title. Pursuant to CCP § 405.30 et seq., Defendants moved to expunge the lis pendens Plaintiffs recorded.

Defendants’ motion to expunge was predicated solely on CCP § 405.32. That section compels an expungement order where the plaintiff is unable to substantiate any “real property claim” by a preponderance of the evidence. A “real property claim” is one “which would, if meritorious, affect (a) title to, or the right to possession of, specific real property or (b) the use of an easement[.]” (CCP § 405.4.)

The court requested supplemental briefing and continued the hearing. The court questioned whether any of Plaintiffs’ causes of action aside from their quiet title cause of action qualify as a real property claim in the first place. (See id. § 405.31 [court must expunge a lis pendens where the underlying pleading does not contain a real property claim].) Given that Plaintiffs do not appear to allege legal title to the property, the court also questioned whether they could prevail on the quiet title cause of action. (See Warren v. Merrill (2006) 143 Cal.App.4th 96, 113 [as a general matter, one with only equitable title may not quiet title against the legal title holder].) The parties have addressed the court’s questions in supplemental briefing.

Discussion

Plaintiffs concede that the only real property claim in the complaint is the one for quiet title. (See Sur-Reply, Part II-A.) Consequently, the outcome of the motion turns on Plaintiffs’ quiet title cause of action. Assuming Plaintiffs have alleged the elements of quiet title, they have not established the probable validity of their claim.

It appears undisputed that Plaintiffs never acquired legal title. They allege that Fisher’s daughter-in-law held title initially and then transferred title to Diamond. (See Compl., ¶¶ 11, 13, 14.) Accordingly, this is a case in which plaintiffs asserting equitable title are seeking to quiet title against the legal title holder.

As Plaintiffs observe, there is a fraud exception to the general rule barring equitable title holders from quieting title against legal title holders. In Warren, for example, a real estate agent fraudulently induced her client to sign a document removing himself from title. (Warren, p. 103.) Under those circumstances, the agent only acquired “bare legal title,” which she held as a constructive trustee for the client. (Id., pp. 113-114.) Hence, the Warren court concluded that, “based on the equities, [the client] held

superior title” that could be asserted in a quiet title action. (Id., p. 114.)

In contrast, the patchy and conflicting evidence before this court does not establish that Diamond took title by fraud. Duplechan asserts in his declaration that, at some point in early 2018, escrow was supposed to facilitate the transfer of title from Fisher’s daughter-in-law to Big Time. (See Duplechan Decl., ¶¶ 8-12.) He further asserts that Fisher directed the escrow agent, without his knowledge, to grant deed the property to Diamond instead. (Id., ¶ 13.) There is no supporting declaration from the escrow agent.

Fisher tells a different story. She asserts that (1) she initially held title to the property;

(2) in 2017, she sold the property to her daughter-in-law; (3) after her son and daughter-in-law began having problems, both moved out of the property; (4) at that point, Fisher’s daughter-in-law could not afford the mortgage and asked Fisher to take the property back; (5) in December 2017, Fisher and her daughter-in-law orally agreed that Fisher would take title to the property again and would assume all liabilities with the plan to be Fisher’s sale of the property as soon as possible. (See Fisher Decl., ¶¶ 4-5.)

Granted, there are no declarations from Fisher’s daughter-in-law or son to corroborate Fisher’s version. That being said, the weight of the evidence does not establish that Diamond took title from Fisher’s daughter-in-law as part of a fraud. It appears just as likely that she took title to accommodate her daughter-in-law.

The parties vigorously dispute the terms of their own oral agreement for the purchase and sale of the property. They also dispute which of them failed to perform. For present purposes, however, evidence of the agreement’s terms, and of which party may have breached, say relatively little about whether or not Diamond acquired title by fraud. Even if Plaintiffs are correct that Defendants are the ones who breached the agreement, including by withholding title, breach of contract for damages is not a real property claim supporting a lis pendens.

The motion is granted because Plaintiffs have not established the probable validity of any real property claim.

Plaintiffs were substantially justified in opposing the motion. In addition, much of the motion was directed at the largely irrelevant question of whether Plaintiffs breached the oral purchase and sale agreement. Consequently, Defendants’ request for their fees and costs pursuant to CCP § 405.38 is DENIED.

Objections to Evidence

Plaintiffs’ Objections Nos. 8 through 10 and 13 are overruled. The court need not rule and does not rule on the balance of the objections.

Disposition

The motion to expunge is granted; fees and costs denied.

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or further notice is required.