Coachella Valley Water Dist. v. McMaken CA4/2 (2014) · DecisionDepot
Coachella Valley Water Dist. v. McMaken CA4/2
California Court of Appeal Jan 16, 2014 No. E053851Unpublished
Filed 1/16/14 Coachella Valley Water Dist. V. McMaken CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
COACHELLA VALLEY WATER DISTRICT, E053851 Plaintiff and Respondent, (Super.Ct.No. CIVSS816045) v. OPINION JOAN McMAKEN as Trustee, etc.,
Defendant and Respondent;
JAMES GERARD et al., Defendants and Appellants;
NICHOLAS GERARD et al.,
Defendants in Intervention and Respondents.
APPEAL from the Superior Court of San Bernardino County. David Cohn, Judge.
Affirmed.
Mahaffey & Associates and Douglas L. Mahaffey for Defendants and Appellants.
1
Farmer & Ridley, Richard D. Cleary; Oliver, Sandifer & Murphy, Duff Murphy,
and Jennifer L. Pancake for Defendant and Respondent.
Dabney B. Finch; Lieberg, Oberhansley, Strohmeyer & Garn and William H.
Strohmeyer for Defendants in Intervention and Respondents.
I
INTRODUCTION
In this eminent domain action, appellants and defendants James Gerard and
Patricia Gerard (referred to collectively as James Gerard) appeal summary judgment
entered against them and in favor of defendants and respondents, Joan C. McMaken,
actions are special proceedings, in which the rules of pleading (§§ 1250.320 and
1260.220) are streamlined “by making it possible for defendants having conflicting
interests in property condemned by a public agency to litigate their adverse claims to the
condemnation award without the necessity of filing cross-complaints.” (Penzner, at p.
423.) As defendants in the eminent domain action, both McMaken and James Gerard
filed answers to the complaint stating the extent of their interests in the Property. Under
section 1250.320, subdivision (a), this was all that was required to be pled by those
claiming an interest in the property. McMaken was not required to allege affirmative
defenses against codefendants’ claims in her answer to the eminent domain complaint.
(Penzner, at p. 423.)
Even though McMaken did not include in her answer the statute of frauds as an
affirmative defense, it was clear from the nature of the eminent domain action and the
respondents’ answers to the complaint that they were claiming an interest in the
condemnation proceeds and opposing any conflicting interests. Furthermore, James
Gerard was on notice of the statute of frauds defense to his claim because the Gerard sons
alleged it in their answer and McMaken raised it in her motion for summary judgment.
“[‘I]t would be unfair to ground a ruling on the inadequacy of the pleadings if the
pleadings, read in the light of the facts adduced in the summary judgment proceeding,
give notice to the plaintiffs of a potentially meritorious defense.” (FPI Development, Inc.
v. Nakashima (1991) 231 Cal.App.3d 367, 384-385; Thornton v. Victor Meat Co. (1968)
260 Cal.App.2d 452, 461.)
19
As to the merits of McMaken’s summary judgment motion, McMaken met her
burden of producing evidence that James Gerard’s claim was barred by the statute of
frauds, and James Gerard failed to refute the statute of frauds bar.
(1) Cooney’s Sale of a 50 Percent Ownership Interest in the Property to Richard
It is undisputed James Gerard’s interest in the Property is founded on Richard’s
purchase of a 50 percent interest in the Property from Cooney in 1987. A copy of a grant
deed dated March 3, 1987, and recorded on April 1, 1987, shows that title to the Property
was transferred to Cooney. A written agreement, entitled, “SALE AGREEMENT,” dated
March 30, 1987, states that it was agreed between Cooney and Richard that: “1) Cooney
hereby sells to GERARD 50% ownership interest in the parcels [the Property] for the
sum of $40,500. [¶] 2) Said sale is subject to the Option Agreement between Cooney
and Meyer dated March 1, 1987. [¶] 3) As a matter of convenience, title to the
properties shall remain in Dennis Cooney’s name. [¶] 3A) Cooney agrees that should he
become married, he will obtain a quit claim deed from his spouse. [¶] The decision for
disposition of the property shall rest solely with Dennis Cooney.” The Sale Agreement
was signed by both Richard and Cooney.
Cooney’s transfer to Richard of a 50 percent ownership interest in the Property is
further reflected in a written agreement signed by Cooney and his wife, Kathryn Cooney,
on December 1, 1989, stating that the Property, “which is owned by Richard Gerard and
Dennis Cooney, should it be sold, the initial $80,000.00 goes to Richard Gerard. The
remainder over and above the initial $80,000.00 is to be divided as per the original
Agreement. In case of the death of Dennis Cooney, Kathryn Wayman Cooney will see
20
that this transaction takes place.” It was agreed Richard would be paid the initial $80,000
because this the approximate amount he paid to fund the purchase of the Property.
(2) Alleged Oral Transfer of Property to James
James Gerard argues that his 50 percent interest in the Property is not barred by
the statute of frauds because his interest is founded solely on Richard’s assignment to
James of his partnership interest in receiving profits from the sale of the Property. James
Gerard acknowledges that “[i]t is undisputed that the Gerards[’] claim that they are
assignees of Rick Gerard’s interest arising from the Sale Agreement between Cooney and
Rick Gerard.” James Gerard argues that the Sale Agreement “formed a joint venture or
resulting trust to share in the profits, not a conveyance of real property interest. As such
the Statute of Frauds does not prohibit a verbal assignment from Rick to James of Rick’s
share.” James Gerard has failed to cite any evidence supporting this contention.
As explained in Kaljian v. Menezes (1995) 36 Cal.App.4th 573, a joint venture or
partnership agreement to share the profits from a transaction involving real estate is not
required to be in writing. (Id. at p. 585.) However, an agreement to transfer a real
property interest from one joint venturer to another contravenes the statute of frauds if not
in writing. (Id. at pp. 586-587.) Regardless of whether Cooney and Richard formed a
joint venture or partnership, it is undisputed the statute of frauds bars James Gerard’s
interest in the condemnation proceeds because his claim is founded on an oral agreement
transfer to James, of Richard’s 50 percent ownership interest in the Property under the
Sale Agreement. The Sale Agreement is not a partnership or joint venture agreement
merely to share the profits from the sale of the Property. Richard’s right to profits from
21
the sale of the Property was founded on his purchase under the Sale Agreement of a 50
percent ownership interest in the Property. It is undisputed that, even if the Sale
Agreement created a joint venture or partnership, the agreement provided for the sale of a
50 percent ownership interest in real property to Richard, and therefore the statute of
frauds applied to Richard’s subsequent oral agreement in 1989 to transfer that interest in
the Property under the Sale Agreement to James.
(3) James Gerard’s Efforts to Claim Richard’s Interest in the Property
After Richard’s death in July 1990, James Gerard initiated various litigation,
claiming a 50 percent ownership interest in the Property under the Sale Agreement. In
October 2005, James Gerard filed a complaint for partition and imposition of a
constructive trust against McMaken. James Gerard also filed a notice of lis pendens
giving notice that he had filed an action asserting a real property claim to the Property.
James Gerard alleged in his complaint for partition that he and his wife “are the assignees
of [Richard] who assigned all his right, title and interest to plaintiff James N. Gerard, a
married man, to that certain contract dated March 30, 1987 between Rick Gerardo [sic]
and Dennis Cooney.” James Gerard also alleged that, pursuant to the terms of the Sale
Agreement, Cooney sold to Richard a 50 percent ownership interest in the Property for
the sum of $40,500. Richard “also loaned to Dennis Cooney the other portion of the
purchase price totaling $40,000. Richard Gerard assigned his full 50% to James Gerard
who now is the owner of 50% of the profits from the sale of the Subject Property.”
James Gerard further alleged that James and his wife, “as assignees of Richard Gerard
own in Fee Title an undivided 50% interest in and to the Subject Property.”
22
James Gerard later amended his partition complaint, omitting the allegation that he
had a 50 percent ownership interest in the Property, and replacing it with allegations that
James Gerard’s interest in the Property consisted solely of a partnership interest in the
profits from the sale of the Property. In February 2009, James Gerard dismissed his
complaint for partition after the trial court issued a tentative ruling granting McMaken’s
motion for summary judgment based in part on the statute of frauds barring James
Gerard’s claim to an interest in the Property. James Gerard’s amended complaints for
partition misconstrue the Sale Agreement as a partnership agreement. The terms of the
Sale Agreement do not create a partnership. The sale agreement simply states that
Richard purchased a 50 percent ownership interest in the Property.
Meanwhile, in October 2007, James Gerard also filed a verified petition for an
order to convey real property under Probate Code section 850, and request for equitable
relief (probation petition). James Gerard alleged the following facts. In 1990, Richard
assigned to James the Sale Agreement. Under the Sale Agreement, Cooney and Meyer
agreed to sell Richard a 50 percent ownership interest in the Property and profits derived
from the sale of the Property in excess of the $80,000 purchase price. Richard told James
he was “going to immediately unconditionally transfer certain assets to [James]. He then
transferred all his significant assets, including all rights, and interests in the profits of the
Subject Property and all rights arising out of the Subject Contract [Sale Agreement] to
[James]. He communicated clearly and unequivocally that as of that moment he was
divesting himself permanently of all rights thereto. He delivered a copy of the Subject
Contract to [James], turned over the keys to a safe deposit box where the original was
23
located and instructed [James] to empty the safe deposit box and take permanent
possession of all its contents.” James Gerard alleged that from that point onward, James
exercised full ownership rights over the Sale Agreement, and the other assets transferred
to him, and that Cooney had written multiple documents confirming that he recognized
James’s ownership interest in the Property.
James Gerard filed an amended probate complaint, retreating from his previous
allegations that he had a 50 percent ownership interest in the Property and alleged he was
entitled to disbursement of his share of joint venture proceeds arising out the Sale
Agreement, which was allegedly a “joint venture agreement.” In September 2009, James
Gerard dismissed the probate action. James Gerard again attempts to construe the Sale
Agreement as something other than an agreement to sell Richard a 50 percent ownership
interest in the Property. The Sale Agreement is neither a partnership agreement nor a
joint venture agreement. “A joint venture has been broadly defined as an association of
two or more persons who combine their property, money, efforts, skill or knowledge to
carry out a single business enterprise with the objective of realizing a profit. [Citations.]
(Simmons v. Ware (2013) 213 Cal.App.4th 1035, 1054.) The Sale Agreement does not
state that the parties to the agreement were creating a partnership or joint venture.
Cooney was merely transferring a 50 percent interest in the Property to Richard in
exchange for Richard’s payment of $40,500.
James Gerard acknowledged in his initial complaint for partition, his initial
probate petition, and his answer to the instant eminent domain action that the Sale
Agreement was simply a real property sale agreement, in which Cooney agreed to sell to
24
Richard a 50 percent ownership interest in the Property. This real property interest was
the basis of James Gerard’s allegation in his answer to the eminent domain action that,
“[i]n compliance with Code of Civil Procedure § 1250.320, [James Gerard] states [James
and his wife] are claimants to a fifty percent interest in the real property.” James Gerard
is bound by his allegation in his answer that the basis of his claim to condemnation
proceeds is his 50 percent ownership interest in the real Property. James Gerard’s alleged
interest in the Property is invalid and unenforceable under the statute of frauds.
Furthermore, James testified that, based on the Sale Agreement, he believed Richard
orally transferred to James his 50 percent ownership interest in the Property, resulting in
James becoming an owner of a 50 percent interest in the Property. James acknowledged
that Richard never put in writing or signed a document confirming that Richard was
transferring his rights to the Property under the Sale Agreement.
McMaken met her burden of establishing that the Sale Agreement was not a
partnership or joint venture agreement to share the proceeds from the sale of the Property.
Rather, under the Sale Agreement, Cooney transferred a 50 percent ownership interest in
the Property to Richard, and that interest was what Richard orally assigned to James.
Since the assignment of Richard’s ownership interest in the Property was verbal, and not
in writing, it is unenforceable and barred by the statute of frauds as a matter of law.
(4) James Gerard’s Opposition to Summary Judgment
The burden shifted to James Gerard to produce evidence of specific facts showing
a triable issue refuting the statute of frauds bar. James Gerard failed to meet his burden.
James Gerard concedes his interest in the condemnation proceeds is founded on an oral
25
agreement. It is undisputed that the oral agreement was to transfer Richard’s 50 percent
ownership interest in the Property. That oral agreement is unenforceable under the
statute of frauds as a matter of law. It is thus undisputed James Gerard has no valid,
enforceable interest in the condemnation proceeds.
Apparently recognizing the statute of frauds impediment, James Gerard bases his
right to condemnation proceeds on construing the Sale Agreement as a partnership
agreement to share the proceeds in the sale of the Property. But James Gerard has failed
to provide any evidence supporting this contention. None of the documents cited by
James Gerard establish that under the Sale Agreement Richard merely received a
partnership interest in the sale proceeds, as opposed to receiving an ownership interest in
the Property.
James Gerard relied on the following evidence in support of his contention the
statute of frauds did not apply because Richard orally assigned to James his partnership
interest in 50 percent of the profits from the sale of the Property, rather than a real
property interest in the Property: (1) Cooney’s notes prepared in connection with his
divorce, regarding potential sale proceeds disbursements related to the sale of the
Property. The spreadsheet notes state that $40,000 of the anticipated proceeds would be
paid to Richard, with an additional $20,000 paid to Richard’s “brother,” if found; (2) An
accounting statement by Meyer, dated August 1, 1999, of the anticipated profits from the
pending sale of the Property. The accounting statement indicates that James had an
interest in the Property proceeds based on the notation: “After tax Cash(excluding Rick’s
Bro).”; (3) Cooney’s handwritten instructions, dated September 19, 2001, stating that in
26
his will he was leaving Richard’s brother, James, $100,000. Cooney stated that, if James
could not be found or had died, the money was not to go to any of Richard’s other heirs,
including his sons. The money would go to Cooney’s sister, McMaken.; (4) Cooney’s
handwritten note, regarding anticipated sale proceeds from the Property and disbursement
of the proceeds, which states “Rick Gerard’s brother gets $40,000”; (5) A letter dated
April 4, 2003, from McMaken to James, stating that Cooney died and had instructed in
his trust to pay James $100,000 as a gift, in remembrance of James’s brother, Richard,
who was a friend of Cooney.
None of these documents refutes the fact that James Gerard’s interest in the
Property is barred by the statute of frauds. These documents do not establish that Richard
transferred to James a partnership interest or joint venture interest in the Property sale
proceeds, as opposed to a 50 percent ownership interest in the Property under the Sale
Agreement. James Gerard’s reliance on Bates v. Babcock (1892) 95 Cal. 479, for the
proposition that Richard’s interest in the Property sale proceeds was transferable to James
in the absence of a written agreement, is misplaced because there is no evidence that the
Sale Agreement was merely a partnership agreement to share the proceeds from the sale
of the Property. It is undisputed the Sale Agreement transferred a 50 percent ownership
interest in the Property to Richard. This ownership interest would have entitled him to 50
percent of the profits from the sale of the Property, regardless of any partnership
agreement.
Since there was no written agreement transferring Richard’s ownership interest in
the Property to James, it is unrefuted that James Gerard’s claim to the Property is
27
unenforceable and barred by the statute of frauds. Under Civil Code section 1624,
subdivision (a), “The following contracts are invalid, unless they, or some note or
memorandum thereof, are in writing and subscribed by the party to be charged or by the
party’s agent: [¶] . . . [¶] (3) An agreement for . . . the sale of real property, or of an
interest therein.”
In addition, section 1971 provides: “No estate or interest in real property . . . nor
any power over or concerning it, or in any manner relating thereto, can be created,
granted, assigned, surrendered, or declared, otherwise than by operation of law, or a
conveyance or other instrument in writing, subscribed by the party creating, granting,
assigning, surrendering, or declaring the same, . . .” Civil Code section 1091 further
provides: “An estate in real property, other than an estate at will or for a term not
exceeding one year, can be transferred only by operation of law, or by an instrument in
writing, subscribed by the party disposing of the same, or by his agent thereunto
authorized by writing.” Under these statutory provisions, Richard could not legally
transfer his real property interest in the Property to James, unless he did so by means of a
signed writing. It is undisputed there was no signed writing.
Regardless of whether Richard and Cooney formed a partnership or joint venture,
it is undisputed Richard had an ownership interest in the Property under the Sale
Agreement, and James Gerard’s claim to the condemnation proceeds is founded on
Richard’s oral representation that James was to receive that interest in the Property.
James Gerard cannot circumvent the statute of frauds by converting his original claim,
that he had an ownership interest in the real Property, to an equitable one based on a
28
partnership interest in the proceeds from the sale of the Property under the Sale
Agreement. James testified that he did not believe Cooney and Richard were entering
into a partnership agreement when they executed the Sale Agreement. Since the transfer
of Richard’s ownership interest in the Property to James is unenforceable under the
statute of frauds, James Gerard has no right to any of the condemnation proceeds as a
matter of law. Therefore summary judgment was proper.
V
DISPOSITION
The judgment is affirmed. Respondents McMaken and the Gerard sons are
awarded their costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
CODRINGTON J.
We concur:
HOLLENHORST Acting P. J.
MILLER J.
29
AI Brief
AI-generated · verify before citing
Holding. The court held that an oral assignment of an ownership interest in real property is unenforceable under the statute of frauds, thereby barring the claimant from receiving condemnation proceeds.
Issues
Whether an appeal is moot when the appellant fails to appeal a stipulated apportionment judgment in an eminent domain action.
Whether an oral assignment of an interest in real property is subject to the statute of frauds.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“it is undisputed that James Gerard was orally assigned a 50 percent ownership interest in the Property and, since the assignment was not in writing and concerned a real property interest, the assignment is unenforceable under the statute of frauds.”
“summary judgment against James Gerard because his claim to the Property and condemnation proceeds is barred by the statute of frauds as a matter of law.”