Filed 4/3/20 Forde v. Dew Investments CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

STEPHEN FORDE,

Plaintiff, Cross-defendant

and Appellant,

v.

DEW INVESTMENTS,

Defendant, Cross-

complainant and Respondent.

B295479

(Los Angeles County

Super. Ct. No. YC071096)

APPEAL from judgment of the Superior Court of Los Angeles County, Michael P. Vicencia, Judge. Affirmed.

Henry J. Josefsberg for Plaintiff, Cross-defendant and Appellant.

Fidelity National Law Group and Kevin R. Broersma for Defendant, Cross-complainant and Respondent.

This appeal concerns competing actions for quiet title to real property located at 1129 Verdugo Road, Glendale, California 91206 (the Verdugo Property) between plaintiff, cross-defendant, and appellant Stephen Forde and defendant, cross-complainant, and respondent Dew Investments, LLC (Dew). Dew filed a motion for summary judgment, arguing that it was a bona fide purchaser for value without actual or constructive notice of an adverse claim against or interest in the Verdugo Property. The trial court granted the motion and entered judgment quieting title in Dew free and clear of any adverse interest.

Forde appeals from the judgment, contending there is a triable issue of fact that Dew possessed actual or constructive notice through lis pendens recorded against the Verdugo Property. He also contends the court abused its discretion when it overruled his evidentiary objections to recorded documents that traced ownership interest in the property. We conclude the court did not abuse its discretion in overruling Forde’s evidentiary objections. We also conclude Dew established a prima facie case that it was a bona fide purchaser for value without any notice of an adverse claim. Because Forde failed to create a triable issue of fact, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Forde’s Complaint

Forde’s complaint sets forth one cause of action against Dew and three former owners of the Verdugo Property—Randy and Reyna Taylor (the Taylors), and Steve Hawrylack.

The complaint alleges that in 2006, the Taylors and Hawrylack, joint tenants with full legal title to the Verdugo Property, conveyed an undivided one-third interest to Carol Unruh. In 2011, Unruh conveyed her one-third ownership interest to Forde. Shortly after he acquired his ownership interest, Forde filed a lawsuit against the Taylors and Hawrylack for mismanaging the property’s profits and debts. Two Notices of Pendency of Action (lis pendens) were recorded against the property in conjunction with the lawsuit (Superior Court No. YC064625). Though the parties settled the lawsuit in 2012, the lis pendens remained recorded due to “substantial financial and accounting requirements required by the [parties’] settlement agreement,” and to impart notice that the Taylor-Hawrylack ownership interest was subject to a constructive trust in favor of Forde.

Forde alleged that he obtained a $240,000 loan from the Allan Entous 401K Profit Sharing Plan (Allan Entous) in December 2013 to cure arrearages and tax reimbursements on the Verdugo Property. Allan Entous secured the loan by a deed of trust on Forde’s ownership interest in the property. Following the execution of the loan, the Taylors, Hawrylack, and Allan Entous conspired to squeeze out Forde by foreclosing on the deed of trust and quickly selling the Verdugo Property to Dew. The foreclosure on the property was illegal.

Forde alleged that Dew was not a bona fide purchaser for value because it “took title with legal, actual and constructive notice of the title claims” against the Taylors, Hawyrlack, and Allan Entous, as reflected in the 2011 lis pendens and subsequent lis pendens pertaining to related litigation.

For reasons not apparent, Forde sought a judgment splitting ownership in the Verdugo Property between himself and Unruh.

Dew’s First Amended Cross-Complaint

Dew filed the operative first amended cross-complaint for quiet title, injunctive relief, equitable subrogation, and declaratory relief against Forde, Unruh, and any person claiming legal or equitable rights to the Verdugo Property.

Dew’s cross-complaint set forth the same allegations regarding the initial ownership interests in the Verdugo Property between the Taylors, Hawrylack, Unruh, and Forde. Dew’s cross-complaint added allegations concerning Forde’s loss in ownership and Dew’s status as a bona fide purchaser for value.

After Forde acquired his undivided one-third interest in 2011, he obtained two loans from Allan Entous for $80,000 and $240,000. Both loans were secured by deeds of trust against his ownership interest in the Verdugo Property. Following a notice of default and election to sell on the $240,000 deed of trust, Allan Entous foreclosed on Forde’s ownership interest, conveying the undivided one-third interest to itself during a non-judicial foreclosure sale. Allan Entous recorded a trustee’s deed upon sale against the Verdugo Property in June 2015. Following its acquisition, Allan Entous entered into an agreement with the Taylors and Hawrylack to sell the Verdugo Property to Dew for $888,000. By grant deed recorded on November 20, 2015, Dew acquired title to the property.

Though Forde no longer possessed any interest in the property, he continued to hold himself out as the property manager and person entitled to rent from the tenants residing at the Verdugo Property.

A total of five lis pendens were recorded against the Verdugo Property from the time Unruh acquired her one-third interest to the time Dew acquired full title to the property. The five lis pendens were either withdrawn, expunged, or the lawsuits to which they pertained were dismissed before Dew purchased the property.

In its quiet title cause of action, Dew alleged it was a bona fide purchaser for value entitled to 100 percent interest in the Verdugo Property free and clear of any adverse interest claimed by Forde or Unruh. Dew also sought an order enjoining Forde from holding himself out as the manager of the Verdugo Property.

Dew’s Motion for Summary Judgment

Dew filed a motion for summary judgment, or in the alternative, summary adjudication on the complaint and cross-complaint. Dew argued there was no triable issue of fact regarding who owned the Verdugo Property: Dew was a bona fide purchaser for value without any notice of an adverse claim to the property. Notwithstanding its knowledge that various lis pendens were recorded against the property, Dew argued that it was not on notice as a matter of law because the lis pendens had either been expunged, withdrawn, or the lawsuits to which they applied had been dismissed before it purchased the property.

In support of its motion, Dew presented a series of recorded documents tracing ownership interests in the Verdugo Property. By quitclaim deed recorded on March 24, 2011, Forde acquired an undivided one-third interest in the Verdugo Property from Unruh. On December 20, 2013, Forde obtained a $240,000 loan from Allan Entous, which was secured by a deed of trust against Forde’s ownership interest in the property. Following a notice of default and election to sell under the deed of trust, Allan Entous recorded a notice of trustee’s sale on May 20, 2015. The trustee’s deed upon sale was recorded on June 16, 2015, and conveyed Forde’s ownership to Allan Entous. By grant deed recorded November 20, 2015, Dew purchased the Verdugo Property for $888,000 and acquired title from the Taylors, Hawrylack, and Allan Entous.

Forde objected that the recorded documents could not be considered for the truth of matters contained within them. He argued that “[t]he efficacy of [these documents] and [their] contents are subject to an ongoing dispute between [Forde] and . . . Dew herein and between Forde and Allan Entous . . . . Dew apparently seeks judicial notice of the truth of the contents of the document which constitute hearsay. The contents of recorded documents are inadmissible hearsay. [Citations.] While courts may take judicial notice of public records, they do not take notice of the truth of matters stated therein. [Citation.]” The court overruled Forde’s objection.

In further support of its motion for summary judgment, Dew submitted a declaration from Nicholas Hacopian, one of its managing members. According to Hacopian, Dew purchased the Verdugo Property from Allan Entous, Hawrylack, and the Taylors for the listing price of $888,000. As part of its due diligence, Dew obtained a preliminary title report. Because the title report indexed lis pendens recorded against the property, Dew required that each lis pendens be cleared from affecting title prior to purchase. “My understanding is that at the time Dew acquired title to the Verdugo Property, there was no lis pendens affecting the Verdugo Property, and that all lis pendens that may have once affected the Verdugo Property were either expunged of record, withdrawn of record, or no longer provided notice because the lawsuit(s) to which they applied had been dismissed.”

Dew submitted a declaration from James Simpson, a paralegal with more than 20 years of experience as a title searcher and paralegal in the title insurance industry. As part of this litigation, Simpson reviewed the title chain for the Verdugo property between the time Unruh acquired the property in 2006 and the time Dew acquired the property in 2015. Simpson identified five lis pendens recorded against the property.

The first two lis pendens were recorded in conjunction with a lawsuit entitled Stephen Forde v. Steve Hawrylack et al. (Superior Court No. YC064625). “I found no recorded withdrawals of these Lis Pendens in the chain of title. I checked the status of Case No. YC064625 . . . and found that the case was dismissed on November 16, 2012.” A case summary for Superior Court No. YC064625 listed the case’s status as “Dismissed—Other 11/16/2012.” On November 16, 2012, the court entered an order dismissing the action “with the court to retain jurisdiction to enforce settlement pursuant to CCP 664.6.” The three remaining lis pendens were either withdrawn, expunged, or the cases were dismissed prior to Dew’s acquisition. Simpson concluded, “there was no effective Notice of Pending Action of record at the time Dew acquired the Verdugo Property.”

Forde’s Opposition to the Summary Judgment Motions

Forde introduced an appendix of evidence that included portions of deposition testimony from Hacopian, Arthur Mangassarian, and Levik Hagobian. Hacopian and Hagobian are managing members of Dew. Mangassarian served as Dew’s purchasing representative during the Verdugo Property acquisition.

Mangassarian testified that Dew obtained a preliminary title report that identified lis pendens recorded against the Verdugo Property. The items listed on the title report could have clouded title. In an email sent to the seller’s agent, Mangassarian expressed concern about financing options for the property: “All of these [options] are subject to your seller clear the title [sic] (which is a mess).” Nevertheless, Mangassarian testified in substance that when Dew purchased the property, title had been cleared—“If it’s clear, we buy it. If not, we don’t buy it.”

In his testimony, Hagobian admitted that he also noticed title issues in the preliminary title report. He did not know if there were lis pendens in place, but he knew there was an issue with title prior to Dew’s acquisition of the property.

Hacopian testified that “I know, or I recall that there was an issue with title” when Dew reviewed the preliminary title report. However, those issues were cleared in an amended preliminary report. “So whatever the amended was or whatever those things had to be done, we [Dew] got a clear title.”

Forde’s appendix of evidence also included a stipulation to dismiss Superior Court case No. YC064625. The stipulation provided that Forde, Hawrylack, and the Taylors entered into a settlement agreement calling for the dismissal of the case with the court to retain jurisdiction to enforce the terms of the agreement pursuant to Code of Civil Procedure section 664.6. The stipulation and order of dismissal was filed November 16, 2012.

Dew’s Reply Separate Statement

In addition to filing a reply brief, Dew filed a reply statement of disputed and undisputed facts. The reply statement of facts responded to Forde’s own statement of undisputed facts. The reply statement of facts did not introduce new evidence.

The Trial Court’s Ruling

After hearing argument, the court overruled all but one of Forde’s evidentiary objections and granted Dew’s motion for summary judgment. The court entered judgment in favor of Dew on both competing causes of action for quiet title. The court held that Forde and Unruh have “no right, title, estate, lien or interest in the Verdugo Property,” and it enjoined Forde from holding himself out as manager of the Verdugo Property and the person entitled to receive rent.

Forde filed a timely notice of appeal.

DISCUSSION

Forde contends the trial court erred by overruling his evidentiary objections to the recorded documents and to the Hacopian and Simpson declarations. He also contends a triable issue of material fact exists that Dew possessed actual or constructive notice of adverse claims against the Verdugo Property.

We conclude that Forde has forfeited his contention regarding the Hacopian and Simpson declarations for his failure to present argument or legal authority. We also conclude that the court did not err in overruling his objection to the recorded documents. Dew presented a prima facie case that it was not on notice of pending causes of action against the property. Because Forde failed to carry his own burden of establishing a triable issue of fact, we conclude that summary judgment was properly granted.

I. Standards of Review

We review the court’s evidentiary rulings for abuse of discretion. (Mackey v. Board of Trustees of California State University (2019) 31 Cal.App.5th 640, 657 (Mackey).) “The party challenging an evidentiary ruling bears the burden of establishing the court exceeded the bounds of reason.” (Ibid.)

“A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. [Citation.] We review the trial court’s decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.] In the trial court, once a moving [party] has ‘shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established [or that the elements in its own causes of action have been proven],’ the burden shifts to the [nonmoving party] to show the existence of a triable issue; to meet that burden, the [party] ‘may not rely upon the mere allegations or denials of its pleadings . . . but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action . . . .’ [Citations.]” (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476–477, citing § 437c, subd. (o)(2); see id., § 437c, subds. (p)(1)–(p)(2).)

“‘“As with an appeal from any judgment, it is the appellant’s responsibility to affirmatively demonstrate error and, therefore, to point out the triable issues the appellant claims are present by citation to the record and any supporting authority.”’” (Bains v. Moores (2009) 172 Cal.App.4th 445, 455 (Bains); Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784–785.) If an appellant’s argument is not supported by citation to authorities or to the record, the court may treat the argument as forfeited. (Garcia v. Seacon Logix, Inc. (2015) 238 Cal.App.4th 1476, 1489 (Garcia).) We also deem an appellant’s argument forfeited if it was not raised in his or her opening brief. (William Jefferson & Co., Inc. v. Orange County Assessment Appeals Bd. No. 2 (2014) 228 Cal.App.4th 1, 15; see Habitat & Watershed Caretakers v. City of Santa Cruz (2013) 213 Cal.App.4th 1277, 1292, fn. 6 [“[a]rguments presented for the first time in an appellant’s reply brief are considered waived”].)

II. Forde’s Evidentiary Objections

Forde contends the trial court abused its discretion when it overruled his objections to the Simpson and Hacopian declarations. He also contends the court erred in taking judicial notice of the contents of the recorded documents tracing ownership interests in the Verdugo Property.

Forde presents no argument or legal authority to support his objections to the Simpson and Hacopian declarations. We deem any argument concerning the declarations forfeited. (Garcia, supra, 238 Cal.App.4th at p. 1489; Bains, supra, 172 Cal.App.4th at p. 455.)

We also find Forde’s remaining contention unavailing. “Where, as here, judicial notice is requested of a legally operative document . . . the court may take notice not only of the fact of the document and its recording or publication, but also facts that clearly derive from its legal effect.” (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 754 (Scott); see § 437c, subd. (b)(1).) Facts that derive from a document’s legal effect include the date of recordation and execution, the parties to the transaction, and the document’s legally operative language, “‘assuming there is no genuine dispute regarding the document’s authenticity.’” (Scott, supra, at p. 755 [“there is no allegation in the [operative] complaint that the [agreement] is not authentic”].)

In this case, Forde has not challenged the authenticity of the recorded documents or reasonably placed their content in dispute. Forde has never alleged (and certainly has produced no evidence) that the loan agreement was unenforceable or subject to cancellation or reformation; that he tendered a sum sufficient to cure the default to obtain relief from a wrongful foreclosure; or that the non-judicial foreclosure failed to transfer his ownership interest to Allan Entous. (Compare Scott, supra, 214 Cal.App.4th at pp. 755–757.) Nor has Forde established any factual basis from which we might infer that the loan agreement or foreclosure was unenforceable or void. Thus, Forde has not established an abuse of the trial court’s discretion. (Mackey, supra, 31 Cal.App.5th at p. 657.)

II. Dew Was Entitled to Judgment as a Matter of Law on Both Quiet Title Actions

Forde contends the court erred in granting summary judgment because a triable issue of fact exists that Dew was not a bona fide purchaser for value without actual or constructive notice of adverse claims when it acquired the Verdugo Property. Forde proffers two arguments in support his contention. He first argues that Dew’s own evidence establishes a triable issue of fact that Dew was actually aware of lis pendens recorded against the property. Second, Forde argues that the evidence he submitted established a triable issue of fact that Dew possessed knowledge of adverse claims.

Before we address the merits of Forde’s arguments, we note that Forde has not addressed the undivided one-third ownership interest he lost through the Allan Entous foreclosure. Forde has also failed to address the court’s order granting Dew injunctive and declaratory relief. We deem Forde’s failure to address these issues forfeited. (Bains, supra, 172 Cal.App.4th at p. 455.)

A. Governing Law on Bona Fide Purchasers for Value

A bona fide purchaser for value may seek a legal determination through a quiet title action that the title it obtained remains free and clear of any adverse interest to property. (See Hochstein v. Romero (1990) 219 Cal.App.3d 447, 451; Reiner v. Danial (1989) 211 Cal.App.3d 682, 690.) The “elements of a bona fide purchaser are payment of value, in good faith, and without actual or constructive notice of another’s rights.” (Deutsche Bank National Trust Co. v. Pyle (2017) 13 Cal.App.5th 513, 521.)

A recorded notice of pendency of action (lis pendens) may defeat a party’s status as a bona fide purchaser for value by imparting actual or constructive notice of a pending cause of action affecting title to or possession of property. (See Bishop Creek Lodge v. Scira (1996) 46 Cal.App.4th 1721, 1733–1734 [“The purpose of a lis pendens is to give constructive notice of an action affecting real property to persons who subsequently acquire an interest in that property, so that the judgment in the action will be binding on such persons”].) “The lis pendens operates in accordance with classic principles of priority: a duly recorded instrument constitutes constructive notice, and a purchaser is subject to prior interests of which he or she has actual or constructive notice. [Citations.]” (Ibid.; see § 405.24.)

A lis pendens imparts notice of pending causes of action which would, if meritorious, affect title to or right to possession of property. (§§ 405.2, 405.4.) Thus, any notice imparted by a lis pendens is “entirely eliminated” whenever the lis pendens is expunged or withdrawn, or if the claim on which the lis pendens is based is dismissed. (Knapp Development & Design v. Pal-Mal Properties, Ltd. (1987) 195 Cal.App.3d 786, 790 (Knapp); Estates of Collins & Flowers (2012) 205 Cal.App.4th 1238, 1255; see id. at p. 1254 [even if claim is dismissed not on the merits, lis pendens “‘has fully performed its office’” and “lack[s] materiality”]; 4 Miller & Starr, Cal. Real Estate (4th ed. 2019) § 10:151 [“When the action is settled, abandoned, or dismissed without a judgment being entered, the lis pendens terminates and no longer constitutes notice”]; §§ 405.60, 405.61.)

B. Dew Established That it Was a Bona Fide Purchaser for Value

Dew presented admissible evidence establishing a prima facie case that it was a bona fide purchaser for value without actual or constructive notice of pending causes of action against title to, or possession of, the property. (§ 437c, subds. (p)(1)–(p)(2).)

Before paying valuable consideration for the property, Dew became aware of lis pendens during the course of its due diligence. Though Dew knew the lis pendens had existed, Dew also knew that the lis pendens no longer clouded title to the property because they were either expunged of record, withdrawn of record, or no longer provided notice because the lawsuit(s) to which they had applied had been dismissed. (See Knapp, supra, 195 Cal.App.3d at p. 790; accord 4 Miller & Starr, Cal. Real Estate (4th ed. 2019) § 10:156 [“knowledge or notice gained from the lis pendens or the lawsuit [is] effectively purged as if it was never received or imparted”].) Thus, because Dew’s evidence established that no effective lis pendens was recorded against the property, it established a prima facie case that it was a bona fide purchaser for value without notice of adverse rights to the property.

C. Forde’s Argument Regarding the 2011 Lis Pendens is Forfeited and Without Merit

Raised as a new argument in his reply brief, Forde contends the lis pendens pertaining to Superior Court No. YC064625 continued to impart notice even though the lawsuit was dismissed. Forde points to the court’s retained jurisdiction under section 664.6 to enforce the terms of a settlement agreement as a basis for continuing notice under the lis pendens statutes.

Forde has forfeited this argument for his failure to raise it in his opening brief. (See William Jefferson & Co., Inc. v. Orange County Assessment Appeals Bd. No. 2, supra, 228 Cal.App.4th at p. 15; Habitat & Watershed Caretakers v. City of Santa Cruz, supra, 213 Cal.App.4th at p. 1292, fn. 6.)

The argument is also wrong as a matter of law. Section 664.6 authorizes parties to litigation to stipulate for settlement of the case. “[T]he court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” (§ 664.6.) A settlement under this provision “is not incidental to the management of the lawsuit; it ends the lawsuit.” (Levy v. Superior Court (1995) 10 Cal.4th 578, 583 (Levy).) “As this section reveals, a stipulated judgment is indeed a judgment” (California State Auto. Assn. Inter-Ins. Bureau v. Superior Court (1990) 50 Cal.3d 658, 664), and only contemplates retained jurisdiction as a mechanism to enforce the terms of a settlement. (Wackeen v. Malis (2002) 97 Cal.App.4th 429, 439; accord Howeth v. Coffelt (2017) 18 Cal.App.5th 126, 134; Hernandez v. Board of Education (2004) 126 Cal.App.4th 1161, 1176 [jurisdiction is “extremely limited”; a court may decide what terms the parties agreed upon but may not create material terms of an agreement].)

The retention of jurisdiction in Superior Court No. YC064625 does not mean there is a pending cause of action affecting title to or possession of real property. (§§ 405.2, 405.4; see Levy, supra, 10 Cal.4th at p. 583.) Because there was no pending cause of action following the parties’ settlement, the lis pendens “lacked materiality” and no longer imparted notice of an adverse cause of action affecting title to or possession of the Verdugo Property. (Estates of Collins & Flowers, supra, 205 Cal.App.4th at p. 1254.)

D. Forde’s Evidence Did Not Raise a Triable Issue of Fact

Finally, Forde contends the depositions of Mangassarian, Hagobian, and Hacopian created a triable issue of fact regarding Dew’s notice of clouded title. Forde is incorrect.

Mangassarian agreed that Dew needed to clear several items on the preliminary title report. His email to the seller’s agent expressed concern over clearing up the “mess” of title on the property. Nevertheless, Mangassarian testified in substance that when Dew purchased the property, title had been cleared—“If it’s clear, we buy it. If not, we don’t buy it.”

The testimony from Hagobian and Hacopian also confirms that any title issues that Dew knew about were cleared prior to its purchase of the Verdugo Property. According to Hacopian, an amended preliminary title apprised Dew that the title issues had been cleared—“whatever the amended was or whatever those things had to be done, we got a clear title.”

Forde did not meet his burden of establishing a triable issue of fact that Dew was on notice of an adverse cause of action against title to or possession to the Verdugo Property. Therefore, the court properly granted Dew’s motion for summary judgment.

DISPOSITION

The judgment is affirmed. Respondent is entitled to costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

WILLHITE, Acting P. J.

We concur:

COLLINS, J.

CURREY, J.