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Keywords

lawsuitappealtrialmotionbankruptcycivil procedureliensmotion to dismiss

contractplaintiffappealtrialmotionmotion to dismiss

Related Cases

Reddick v. Mortgage Electronic Registration Systems, Inc., Not Reported in Cal.Rptr., 2014 WL 5425577

Facts

In 2001, Reddick and Truhett purchased property, with Truhett taking title in his name only. After their relationship ended in 2002, Reddick vacated the property, and a forged deed was recorded in 2004 transferring her interest to Truhett. Truhett subsequently refinanced the property multiple times, leading to a dispute over the validity of the deeds and the equitable lien claimed by MERS. Reddick filed a lawsuit in 2007, which was complicated by Truhett's bankruptcy filing in 2009.

In 2001, Reddick and Truhett, an unmarried couple, decided to purchase real property on Hallman Lane in Oakdale and that Truhett would take title to the property in his name only. Reddick provided some funds toward the down payment and $10,000 to remodel and upgrade the property.

Issue

Did the trial court err in its calculation of the equitable lien awarded to MERS and in denying MERS's motion to dismiss Reddick's complaint for failure to bring the case to trial within five years?

Reddick appeals, contending the trial court erred in its determination of the amount of property taxes, insurance, and prejudgment interest awarded. MERS cross-appeals, contending the trial court erred when it denied its pre-trial motion to dismiss Reddick's complaint based on the failure to bring the case to trial within five years of the filing of the complaint.

Rule

The court applied the principles of equitable subrogation and the legal rate of interest on equitable liens, as well as the tolling provisions under California Code of Civil Procedure for cases affected by bankruptcy.

The holder of an equitable lien may be entitled to interest on its lien at the legal rate. (Katsivalis v. Serrano Reconveyance Co. (1977) 70 Cal.App.3d 200, 214–215 (Katsivalis); Civ. Code, § 3288 [“In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury.”].)

Analysis

The court found that Reddick's signature on the 2004 deed was forged, rendering it void. It awarded MERS an equitable lien based on the amounts paid to discharge prior liens and for property taxes and insurance. The court determined that interest on the lien was appropriate at the legal rate, regardless of Reddick's possession of the property, as she never legally lost her ownership interest.

The trial court “determine[d] that interest at the legal rate and payment of insurance and property taxes while plaintiff had exclusive possession of the property is legally appropriate and justified.”

Conclusion

The court affirmed the trial court's judgment, finding no error in the calculation of the equitable lien or in the denial of MERS's motion to dismiss.

The judgment is affirmed.

Who won?

MERS prevailed in the case as the court upheld the equitable lien awarded to it and denied Reddick's appeal regarding the lien's calculation.

MERS contends Reddick's claims are not reviewable because she failed to present any evidence or argument at trial regarding the method of calculating interest.

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