Reversing a Trial Court Judgment

Reversal Of Trial Court Judgment in Property Ownership Dispute

Updated on August 3, 2022

Dispute over Ownership of Real Property

In the recent case of McMillin v. Eare, the Court of Appeal ended up reversing a trial court judgment involving a family and marital dispute over ownership of real property on the grounds that, inter alia, the judgment interfered with the jurisdiction of the family law court and incorrectly determined that conditional delivery of certain deeds were valid. This case raises interesting questions regarding the concurrent jurisdiction of the civil and family law court and the role Civil Code section 1056 plays when a written instrument is given with oral conditions.

McMillin arose out of a petition for dissolution between Joshua McMillin (“Joshua”) and Som Eare (“Som”) and two parcels of real property: (1) a rental income fourplex located in Long Beach; and (2) a single family residence located in Anaheim. In 2013, Som filed a petition for dissolution and obtained a restraining order which entitled her to exclusively use and occupy the Anaheim property pending trial, subject to her requirement to contribute towards the mortgage. As part of that order: (1) the parties stipulated that Som’s company, Maga View, Inc., held title to the Anaheim property at one point during the marriage; and (2) the family law court found the issue of property ownership to be an issue for trial.

Filing the Complaint

Before the dissolution action was concluded, Joshua’s mother, Sharon McMillin, filed a civil complaint against Joshua and Som to essentially quiet title to the Long Beach and Anaheim property. Specifically, Sharon claimed that she was the true owner of the Long Beach property because Joshua failed to comply with certain conditions she had attached to the grant deed she executed to convey the Long Beach property to Joshua. With respect to the Anaheim property, Sharon claimed that Joshua, through a series of transfers involving his sister, Sarah, and Som, was holding title in trust for her benefit as the true beneficial owner of the that property. As to both properties, Sharon claimed that she did not intend for Joshua to have any interest in the properties until he purchased them or her death.

ALSO READ  California Supreme Court Says Regulatory Taking Ripe

The Cross-Complaint

In Sharon’s civil action, Som later filed a cross-complaint against Jason, Sharon, and Sarah. However, the trial court ultimately entered judgment against Som on the cross-complaint, finding her not credible. With respect to Sharon’s complaint, the trial court ruled in April 2019 that: (1) Som’s claim she purchased the properties were not credible; (2) Sharon did not intend to transfer title to Joshua with respect to the Long Beach or Anaheim properties when she gave the deed to him; and (3) Som breached her fiduciary duty to Sharon when she recorded deeds to transfer the subject properties. Som appealed.

Meanwhile, in September 2018, the family law court entered a judgment of dissolution which determined that, inter alia, all issues regarding the properties and related transaction not resolved in the civil case would be reserved for adjudication in the family law case. This included, but was not limited to, issues related to the right for reimbursement and characterization of the entities that held title to the subject properties.

ALSO READ  Evictions Following Non-Judicial Foreclosure Sale

Reversing a Trial Court Judgment

The Court of Appeal ended up reversing the trial court judgment as to Sharon’s breach of fiduciary duty claim against Som. As the Court of Appeal explained, the trial court abused its discretion when it amended the constructive trust cause of action to state a cause of action for breach of fiduciary duty after the close of evidence because Code of Civil Procedure section 576 permits a judge to amend a pleading at any time before or after the commencement of trial, but not after conclusion of trial.

The Court of Appeal also reversed the trial court’s judgment regarding the quiet title related claims. With respect to the Long Beach property, it was undisputed that there was an oral condition attached to the delivery of the deed from Sharon to Joshua. However, under Civil Code section 1056, which requires an express statement of a condition on the instrument, the oral condition was ineffective. With respect to the Anaheim property, the Court of Appeal similarly found that the oral condition, though undisputed, was not effective to prevent the transfer of legal title under Civil Code section 1056. Based on the foregoing, the Court of Appeal determined that title was validly transferred to Joshua for both properties.

Conclusion

Lastly, the Court of Appeal determined that the trial court’s determination that no other person besides Sharon had any interest in the subject properties interfered with the family law court’s jurisdiction to character community property interest. Undisputed Evidence at trial showed that Joshua and Som lived in the Anaheim property and paid the mortgage. The family law judgment entered in 2018 specifically included that all issues related to reimbursement were within the purview of the family law court. Based thereon, the Court of Appeal reversed the judgment and remanded the matter to the trial court to allow Som to raise her reimbursement claims in the family law court.

ALSO READ  What are the Different Ways you can Hold Title for Your Property in California?

Schorr Law, APC has experience with all types of ownership disputes, including complicated family disputes with accounting issues, Purchase Sale DisputesEasement Disputes , Mortgage Deed Disputes, Commercial Lease Disputes. To see if you qualify for a free 30-minute consultation regarding your matter, please contact us by phone, email, or send us a message through our contact form.

Also Read –

Scroll