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California Real Property Remedies and Damages

This compact, thorough, and well-organized book contains all the tools you need for resolving fraud and breach of contract actions, title disputes, and litigating other real estate issues.

This compact, thorough, and well-organized book contains all the tools you need for resolving fraud and breach of contract actions, title disputes, and litigating other real estate issues.

  • Rescission and reformation
  • Cancellation of instruments
  • Quieting title and slander of title
  • Lis pendens procedures
  • Specific performance
  • Partition; constructive trusts
  • ADR for real property disputes
  • Nuisance and trespass
  • Landslide liability
  • Fraud and nondisclosure; breach of seller-buyer contracts
OnLAW RE94440

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This compact, thorough, and well-organized book contains all the tools you need for resolving fraud and breach of contract actions, title disputes, and litigating other real estate issues.

  • Rescission and reformation
  • Cancellation of instruments
  • Quieting title and slander of title
  • Lis pendens procedures
  • Specific performance
  • Partition; constructive trusts
  • ADR for real property disputes
  • Nuisance and trespass
  • Landslide liability
  • Fraud and nondisclosure; breach of seller-buyer contracts

1

Rescission

Perry D. Mocciaro

  • I.  INTRODUCTION  1.1
  • II.  NATURE OF REMEDY
    • A.  Statutory Basis  1.2
    • B.  Distinguished From Other Remedies
      • 1.  Cancellation of Instrument  1.3
      • 2.  Reformation  1.4
      • 3.  Damages Resulting From Fraud  1.4A
    • C.  Application to Real Property Contracts
      • 1.  Purchase Agreements  1.5
      • 2.  Instruments of Conveyance  1.6
      • 3.  Installment Land Contracts  1.7
      • 4.  Leases  1.8
      • 5.  Secured Loans
        • a.  Common Law and Statutory Fraud  1.8A
        • b.  Predatory Lending; Statutory Remedies  1.8B
  • III.  GROUNDS FOR RESCISSION
    • A.  Mutual Consent (CC §1689(a))  1.9
    • B.  Unilateral Rescission (CC §1689(b))
      • 1.  Mistake
        • a.  Mistake May Be Mutual or Unilateral  1.10
        • b.  Pleading and Proof Requirements for Mistake  1.11
      • 2.  Fraud
        • a.  Fraud May Be Actual or Constructive  1.12
        • b.  Pleading and Proof Requirements for Fraud  1.13
        • c.  Exculpatory Provisions  1.14
      • 3.  Undue Influence  1.15
      • 4.  Duress and Menace  1.16
      • 5.  Failure of Consideration  1.17
      • 6.  Illegality; Prejudice to Public Interest  1.18
      • 7.  Enumerated Statutes  1.19
    • C.  Special Statutory Grounds for Rescission
      • 1.  Home Solicitation Contracts
        • a.  California Law  1.20
        • b.  Federal Law  1.21
      • 2.  Home Equity Sales Contracts  1.22
      • 3.  Residential Purchase and Sale Contracts  1.23
      • 4.  Subdivided Lands Act
        • a.  Purchase of Lot  1.24
        • b.  Purchase of Time-Share  1.25
      • 5.  Subdivision Map Act  1.26
      • 6.  Interstate Land Sales  1.27
      • 7.  Truth in Lending  1.28
      • 8.  Sales Under California Property Tax Law  1.28A
  • IV.  TACTICAL CONSIDERATIONS: RESCISSION VERSUS DAMAGES
    • A.  Election of Remedies Required  1.29
      • 1.  Waiver of Rescission Remedy  1.29A
      • 2.  Exceptions to Waiver  1.29B
      • 3.  Rescission of Entire Contract Required  1.29C
      • 4.  Intervening Third-Party Rights  1.29D
      • 5.  Timing of and Pleading Election  1.29E
    • B.  Executory Versus Fully Executed Contracts  1.30
    • C.  Measure of Recovery  1.31
  • V.  NOTICE OF RESCISSION
    • A.  Notice Requirements
      • 1.  Method  1.32
      • 2.  Delay in Giving Notice  1.33
      • 3.  Offer to Restore Consideration  1.34
    • B.  Form: Notice of Rescission (General Form)  1.35
    • C.  Form: Attorney’s Letter Giving Notice of Rescission (Real Property Sale)  1.36
  • VI.  ACTIONS FOR RELIEF
    • A.  Procedural Considerations
      • 1.  Type of Action  1.37
      • 2.  Asserting Rescission Defensively  1.38
      • 3.  Defendants  1.39
      • 4.  Jurisdiction and Venue  1.40
      • 5.  Entitlement to Jury Trial  1.41
      • 6.  Purchaser’s Lien  1.42
      • 7.  Lis Pendens; Third Parties’ Rights  1.43
    • B.  The Complaint
      • 1.  Essential Allegations  1.44
      • 2.  Form: Complaint for Relief Based on Rescission  1.45
    • C.  Measure of Recovery
      • 1.  Restitution and Consequential Damages  1.46
        • a.  Seller’s Damages  1.47
        • b.  Buyer’s Damages  1.48
      • 2.  Attorney Fees to Prevailing Party  1.49
      • 3.  Punitive Damages  1.50
    • D.  Defenses
      • 1.  Statute of Limitations  1.51
      • 2.  Waiver  1.52
      • 3.  Estoppel  1.53
      • 4.  Laches  1.54
      • 5.  Holder-in-Due-Course Doctrine  1.54A
    • E.  Insurance Considerations  1.55
    • F.  Judgment
      • 1.  Contents  1.56
      • 2.  Form: Judgment Rescinding Contract  1.57
  • VII.  RESCISSION ACTION CHECKLISTS
    • A.  Checklist: Facts to Ascertain Before Drafting Pleadings  1.58
    • B.  Checklist: Applicability of Special Rescission Statutes  1.59
    • C.  Checklist: Documents to Obtain  1.60
    • D.  Checklist: Preliminary Investigation and Determinations  1.61
    • E.  Checklist: Factors to Consider and Discuss With Client  1.62
    • F.  Checklist: Procedural Considerations  1.63

2

Reformation

Perry D. Mocciaro

  • I.  INTRODUCTION  2.1
  • II.  NATURE OF THE REMEDY
    • A.  Common Law and Statutory Basis  2.2
    • B.  Purpose and Type of Action  2.3
    • C.  Reformation Used Defensively  2.4
    • D.  Related Remedies  2.5
    • E.  Documents Subject to Reformation  2.6
    • F.  Grounds for Reformation
      • 1.  Fraud  2.7
      • 2.  Mistake  2.8
        • a.  Mutual Mistake  2.9
        • b.  Unilateral Mistake  2.10
        • c.  Third-Party Mistake  2.11
        • d.  Examples of Terms Revised by Reformation Action  2.12
  • III.  PROCEDURAL CONSIDERATIONS
    • A.  Jurisdiction  2.13
    • B.  Venue  2.14
    • C.  Parties
      • 1.  Plaintiffs  2.15
      • 2.  Defendants  2.16
    • D.  Jury Trial  2.17
    • E.  Lis Pendens  2.18
  • IV.  THE COMPLAINT
    • A.  Allegations  2.19
      • 1.  Facts Concerning Agreement  2.20
      • 2.  Incorrect Representation by Writing  2.21
      • 3.  Pleading Grounds for Reformation  2.22
        • a.  Mutual Mistake  2.23
        • b.  Unilateral Mistake  2.24
        • c.  Fraud  2.25
      • 4.  Pleading Around Defenses  2.26
        • a.  Statute of Limitations  2.27
        • b.  Laches  2.28
        • c.  Plaintiff’s Lack of Negligence  2.29
      • 5.  Consideration  2.30
      • 6.  Other Causes of Action; Prayer  2.31
    • B.  Form: Complaint for Reformation  2.32
  • V.  DEFENSES
    • A.  Waiver and Ratification  2.33
    • B.  Void or Illegal Contract  2.34
    • C.  Lack of Consideration  2.35
    • D.  Plaintiff’s Negligence  2.36
    • E.  Statute of Limitations  2.37
    • F.  Laches  2.38
  • VI.  HEARING THE CASE; JUDGMENT
    • A.  Admissibility of Evidence  2.39
    • B.  Burden of Proof: Clear and Convincing Evidence  2.40
    • C.  Judgment
      • 1.  Statement of Decision  2.41
      • 2.  Scope and Effect of Judgment  2.42
      • 3.  Form: Judgment on Complaint for Reformation of Contract  2.43
      • 4.  Recording Judgment  2.44
    • D.  Reformation by Arbitration  2.45
  • VII.  CHECKLIST: REFORMATION  2.46

3

Damages for Fraud and Nondisclosure

David B. Dimitruk

  • I.  INTRODUCTION  3.1
    • A.  Types of Fraud; Rescission Option  3.2
    • B.  Common Fraud Situations  3.3
    • C.  Remedies; Liability Insurance  3.4
  • II.  CONTRACT AND TORT STATUTORY DEFINITIONS
    • A.  Fraud Separated Into Contract and Tort Statutory Framework  3.5
      • 1.  Fraud Under Contract Statutes  3.6
      • 2.  Fraud Under Tort Statutes  3.7
      • 3.  Fraud Under Statutes Regulating Real Estate Licensees  3.7A
    • B.  Implications of Statutory Framework
      • 1.  Reconciling Fraud Under Contract and Tort Law  3.8
      • 2.  Conduct as Breach of Contract or Tort  3.9
      • 3.  Election of Remedies Rule  3.10
  • III.  CONDUCT CONSTITUTING FRAUD
    • A.  Misrepresentation of Past or Present Fact  3.11
      • 1.  Expressions of Opinion  3.12
      • 2.  Fraud After Contract Formation  3.13
      • 3.  Negligent Misrepresentation  3.14
    • B.  Nondisclosure, Suppression, and Concealment  3.15
      • 1.  Partial Disclosure  3.16
      • 2.  Negligent Nondisclosure
        • a.  Seller and Broker Liability  3.17
        • b.  Third Party Liability  3.17A
    • C.  Promissory Fraud  3.18
      • 1.  Parol Evidence Rule  3.19
      • 2.  The Fraud Exception to the Parol Evidence Rule  3.19A
      • 3.  No Negligent Promissory Fraud  3.20
    • D.  Constructive Fraud and Fiduciary Duties  3.21
      • 1.  The “Any Breach of Duty” Component  3.22
      • 2.  The Intent Component  3.23
      • 3.  The “Gains an Advantage” Component  3.24
      • 4.  The “Specially Declares to Be Fraudulent” Alternative  3.25
      • 5.  Plaintiff’s Reliance in Constructive Fraud Cases  3.26
      • 6.  Elements of Fiduciary or Confidential Relationship  3.27
      • 7.  Burden of Proof and Presumptions  3.28
    • E.  Breach of Statutory and Regulatory Disclosure Requirements  3.29
      • 1.  Duties Associated With Residential Sellers
        • a.  Real Estate Transfer Disclosure Statement  3.30
        • b.  Other Disclosure Duties  3.31
      • 2.  Duties Associated With Brokers
        • a.  Duty to Visually Inspect and Disclose  3.32
        • b.  Duty of Accuracy in Representations and Statements  3.32A
        • c.  Duties to Disclose and Confirm Agency Relationship
          • (1)  Nature of Agency Relationship  3.32B
          • (2)  Agency Roles and Terminology  3.32C
          • (3)  Dual Agency  3.32D
          • (4)  Changing Agency Relationships  3.32E
          • (5)  Agency Disclosure and Confirmation Requirements  3.32F
          • (6)  Failure to Disclose or Confirm Agency Relationship  3.32G
        • d.  Additional Disclosure Duties  3.33
      • 3.  Duties Associated With Nonresidential Sellers  3.33A
      • 4.  Duties Associated With Lenders  3.33B
      • 5.  Duties Regarding “Arrangers of Credit”  3.34
    • F.  Violation of Other Statutes and Regulations  3.35
  • IV.  ELEMENTS OF FRAUD  3.36
    • A.  Defendant’s Intent  3.37
    • B.  Plaintiff’s Reliance  3.38
      • 1.  Justifiable Reliance  3.39
      • 2.  Investigation  3.40
      • 3.  Plaintiff’s Negligence  3.40A
    • C.  Causation  3.41
    • D.  Changed Circumstances  3.42
    • E.  Damages When Buyer Is Victim
      • 1.  The Three Rules  3.43
      • 2.  Measure of Damages Compared  3.44
      • 3.  Actual Value Means Market Value
        • a.  Proving Market Value  3.45
        • b.  Use of Opinion Testimony  3.46
        • c.  Methods of Establishing Value  3.47
      • 4.  Additional Damages  3.48
        • a.  Labor  3.49
        • b.  Repairs and Improvements  3.50
        • c.  Expenses  3.51
        • d.  Lost Profits  3.52
        • e.  Personal Injuries and Emotional Distress  3.53
        • f.  Interest  3.54
        • g.  Punitive Damages and Statutory Penalties  3.55
        • h.  Attorney Fees  3.56
      • 5.  Fraud by Fiduciaries
        • a.  Intentional Torts  3.57
        • b.  Negligent Misrepresentation  3.57A
        • c.  Misrepresentation of Material Fact Unrelated to Property Value  3.57B
      • 6.  Damages Versus Equitable Remedies  3.58
    • F.  Damages When Seller Is Victim
      • 1.  Same Remedies and Defenses  3.59
      • 2.  Special Lost Profits Rule  3.60
  • V.  LITIGATION CONSIDERATIONS
    • A.  Pleading Requirements  3.61
    • B.  Statute of Limitations  3.62
    • C.  Burden of Proof  3.63
    • D.  Notice Issues  3.64
    • E.  Affirmative Relief and Fraud as Defense  3.65
    • F.  Rents  3.66
    • G.  Selling Property; Involuntary Foreclosure  3.67
    • H.  Contract Performance  3.68
    • I.  Potential Defendants  3.69
      • 1.  Sellers and Their Predecessors  3.70
      • 2.  Seller’s Spouse  3.71
      • 3.  Brokers  3.72
      • 4.  Experts  3.73
      • 5.  Lenders  3.74
      • 6.  Escrow Agents  3.75
      • 7.  Agents and Co-Conspirators  3.76
    • J.  Defenses
      • 1.  Statute of Limitations; Laches  3.77
      • 2.  Exculpatory Clauses  3.78
        • a.  Promissory Fraud  3.79
        • b.  Recitals  3.80
        • c.  Warranties  3.81
        • d.  “As-Is” Clauses  3.82
        • e.  Representation and Integration Clauses  3.83
      • 3.  Waiver and Estoppel  3.84
      • 4.  Plaintiff’s Ratification  3.85
      • 5.  Setoff  3.86
      • 6.  Mitigation  3.87
      • 7.  Antideficiency  3.88
    • K.  Offers to Settle  3.88A
    • L.  Indemnity and Contribution  3.89
      • 1.  Contractual Indemnity  3.89A
      • 2.  Equitable Indemnity  3.89B
      • 3.  Partial Equitable Indemnity and Comparative Fault
        • a.  Degree of Fault Affects Indemnity Obligation  3.89C
        • b.  Joint and Several Liability Required  3.89D
        • c.  Differing Duties of Care Do Not Impede Indemnity Rights  3.89E
    • M.  Real Estate Recovery Fund  3.90
    • N.  Manufactured Home Recovery Fund  3.90A
  • VI.  FORM: MULTITHEORY COMPLAINT FOR FRAUD AND ALTERNATIVE REMEDIES  3.91
  • VII.  FORM: MULTITHEORY COMPLAINT FOR BREACH OF FIDUCIARY DUTY AND RELATED CAUSES OF ACTION  3.92

4

Damages for Breach of Seller-Buyer Contracts

David B. Dimitruk

Jane L. O’Hara Gamp

  • I.  INTRODUCTION  4.1
  • II.  CONTRACT FORMATION
    • A.  Elements to a Contract Claim  4.2
    • B.  Legality, Validity, and Enforceability  4.3
    • C.  Negotiations, Offers, and Acceptances  4.4
      • 1.  Question of Degree  4.5
      • 2.  Correspondence and Letters of Intent  4.6
      • 3.  Illusory Promises and Agreements to Agree  4.7
      • 4.  The Duty to Negotiate  4.8
      • 5.  Offers and Acceptances  4.9
    • D.  Writings and the Statute of Frauds  4.10
    • E.  Integration Clauses  4.10A
  • III.  CONTRACT ESSENTIALS AND INTERPRETATION  4.11
    • A.  Intent and Interpretation  4.12
    • B.  The Laws Are a Part of Contracts  4.13
    • C.  Sales Contract Essential Elements  4.14
      • 1.  Parties  4.15
      • 2.  Price  4.16
      • 3.  Property  4.17
      • 4.  Time and Manner of Payment  4.18
    • D.  Consideration  4.19
      • 1.  Promissory Estoppel  4.20
      • 2.  Illusory Promises  4.21
    • E.  Certainty and Ambiguity  4.22
    • F.  Covenants and Conditions  4.23
    • G.  Parol Evidence Rule  4.24
    • H.  Standard Form Real Property Contracts  4.25
    • I.  The Home Equity Sales Contract Act  4.26
  • IV.  IMPLIED DUTY OF GOOD FAITH AND FAIR DEALING  4.27
  • V.  PERFORMANCE AND BREACH
    • A.  Determining Breach  4.28
    • B.  Termination and Cancellation  4.29
    • C.  Time of the Essence  4.30
    • D.  Date of Breach  4.31
    • E.  Anticipatory Breach  4.32
    • F.  Ability to Perform and Tender of Performance  4.33
    • G.  Causation  4.34
  • VI.  BRINGING A DAMAGES ACTION
    • A.  Nature of Action; Jurisdiction; Venue
      • 1.  Legal or Equitable Nature of the Action  4.35
      • 2.  Jurisdiction  4.36
      • 3.  Venue  4.37
    • B.  Strategies for Establishing Breach
      • 1.  Breach Defined  4.38
      • 2.  Enforcing Time for Performance  4.39
      • 3.  Satisfying or Waiving Conditions  4.40
      • 4.  Tendering Performance in Sales Contracts  4.41
      • 5.  Alleging and Proving Anticipatory Breach  4.42
    • C.  Inadequacy of Remedies  4.43
    • D.  Election of Remedies  4.44
    • E.  Quasi-Contractual Remedies  4.44A
  • VII.  SELLER’S BREACH
    • A.  Buyer’s First Steps After Seller’s Breach  4.45
    • B.  Buyer’s Damages
      • 1.  General Damages Under CC §3306  4.46
      • 2.  Damages for Breach Other Than Failure to Convey Title  4.47
      • 3.  Prejudgment Interest  4.48
      • 4.  Attorney Fees  4.49
        • a.  Determining Prevailing Party; Offsets  4.49A
        • b.  Waiver; Effect of Dismissal  4.49B
        • c.  Third-Party Rights to Attorney Fees  4.49C
        • d.  Attorney Fees as Damages  4.49D
        • e.  Parties Appearing In Pro Per or In Forma Pauperis; Pro Bono Representation  4.49E
      • 5.  Punitive Damages; Emotional Distress  4.50
      • 6.  Costs of Suit  4.50A
    • C.  Seller’s Defenses
      • 1.  Invalid Contract  4.51
        • a.  Incomplete, Indefinite and Uncertain Agreement  4.52
        • b.  Statute of Frauds  4.53
        • c.  Illusory Agreements  4.54
        • d.  No Acceptance  4.55
        • e.  Broker’s Lack of Authority to Bind Seller  4.56
      • 2.  Other Contract Violations  4.57
      • 3.  Nonoccurrence of Conditions Precedent  4.58
      • 4.  Seller’s Good Faith Not a Defense  4.59
      • 5.  Statute of Limitations  4.60
    • D.  Special Considerations in Installment Land Contracts
      • 1.  Prerequisites for Relief  4.61
      • 2.  Relief in Absence of Contract Provisions  4.62
    • E.  Damages for a Violation of the Home Equity Sales Contract Act  4.63
  • VIII.  BUYER’S BREACH
    • A.  Purchase Agreement and Installment Land Contract Distinguished  4.64
    • B.  Breach of Purchase and Sale Agreement  4.65
      • 1.  Seller’s Remedies
        • a.  First Steps After Breach  4.66
        • b.  Disposition of Deposit
          • (1)  Defining or Liquidating Damages  4.67
          • (2)  No Liquidated Damages Clause
            • (a)  Failure of Condition  4.68
            • (b)  Buyer’s Breach  4.69
          • (3)  Liquidated Damages
            • (a)  Agreements Executed Before July 1, 1978  4.70
            • (b)  Agreements Executed on or After July 1, 1978  4.71
              • (i)  Residential Real Property  4.72
              • (ii)  Nonresidential Real Property  4.73
        • c.  Seller’s Damages
          • (1)  General Damages Under CC §3307  4.74
          • (2)  Effect of Market  4.75
          • (3)  Discounting Price to Cash Equivalent  4.76
          • (4)  Proof of Damages  4.77
          • (5)  Special Damages
            • (a)  Resale Expenses  4.78
            • (b)  Broker’s Commission  4.79
            • (c)  Other Expenses  4.80
      • 2.  Buyer’s Defenses and Offsets
        • a.  Antideficiency Bar  4.81
        • b.  Other Defenses and Offsets  4.82
    • C.  Breach of Installment Land Contract
      • 1.  Seller’s Remedies
        • a.  Quiet Title; Ejectment  4.83
        • b.  Judicial Sale; Power of Sale  4.84
        • c.  Recovery of Damages Limited
          • (1)  If Seller Elects Foreclosure  4.85
          • (2)  If Seller Elects Quiet Title and Restitution  4.86
          • (3)  Past Installment Payments as Damages  4.87
      • 2.  Buyer’s Counter-Remedies
        • a.  Restitution  4.88
        • b.  Reinstatement  4.89
        • c.  Redemption  4.90
    • D.  Bid-Chilling and Breach in Foreclosure Auction Sales  4.90A
  • IX.  FORM: COMPLAINT FOR DAMAGES FOR BREACH OF CONTRACT  4.91
  • X.  FORM: MULTITHEORY COMPLAINT FOR SPECIFIC PERFORMANCE; ALTERNATIVELY FOR DAMAGES FOR BREACH OF CONTRACT, DECLARATORY RELIEF, AND JUDICIAL FORECLOSURE  4.92

5

Specific Performance

Mark R. Hartney

Charles D. Jarrell

  • I.  INTRODUCTION
    • A.  Nature of Remedy; Scope of Chapter  5.1
    • B.  When Available  5.2
    • C.  Other Specific Relief Compared
      • 1.  Judgment for Possession  5.3
      • 2.  Reformation  5.4
      • 3.  Availability of Provisional Remedies  5.5
  • II.  PREREQUISITES TO SPECIFIC PERFORMANCE
    • A.  Inadequate Remedy at Law
      • 1.  Statutory Presumption for Agreements to Transfer Real Property  5.6
        • a.  Applying Presumption to Seller Action Against Buyer  5.7
        • b.  Applying Presumption in Postsale Actions  5.7A
      • 2.  Analyzing Adequacy of Legal Remedy in Nonsale Actions  5.7B
    • B.  Adequate Consideration; Just and Reasonable Contract  5.8
    • C.  Sufficient Certainty
      • 1.  Certainty of Material Terms  5.9
      • 2.  Extrinsic Evidence and Conduct of Parties  5.10
      • 3.  Different Standard for Breach of Contract  5.11
      • 4.  Effect of Subordination Clauses  5.12
      • 5.  Examples—Contract Sufficiently Certain  5.13
      • 6.  Examples—Contract Not Sufficiently Certain  5.14
    • D.  Performance of Conditions; Tender of Performance  5.15
    • E.  Contracts Not Subject to Specific Performance  5.16
      • 1.  Personal Service Obligations  5.17
      • 2.  Party Has No Power to Perform  5.18
      • 3.  Agreement to Procure Third Person’s Act or Consent  5.19
  • III.  PREPARING THE ACTION
    • A.  Tactical Considerations
      • 1.  Seller’s Perspective  5.20
      • 2.  Buyer’s Perspective  5.21
      • 3.  Burden of Proof  5.22
      • 4.  Possible Trial Priority  5.23
      • 5.  No Right to Jury Trial  5.24
    • B.  Procedural Considerations
      • 1.  Jurisdictional Requirements
        • a.  Subject Matter Jurisdiction  5.25
        • b.  Venue  5.26
      • 2.  Parties  5.27
    • C.  Pleading and Proof
      • 1.  Elements of Action  5.28
      • 2.  Pleading Particular Elements
        • a.  Adequacy of Consideration; Just and Reasonable Contract  5.29
        • b.  Damages, Attorney Fees, and Costs  5.30
        • c.  Whether Contract Is Written or Oral  5.31
        • d.  Compensation Incidental to Specific Performance  5.32
    • D.  Availability of Lis Pendens  5.33
    • E.  Form: Complaint for Specific Performance  5.34
  • IV.  DEFENSES
    • A.  Defenses Applicable to Contract Actions Generally  5.35
      • 1.  Statute of Frauds; Signed Agreement  5.36
      • 2.  Statute of Limitations  5.37
    • B.  Equitable Defenses
      • 1.  Unclean Hands  5.38
      • 2.  Laches  5.39
      • 3.  Relief Against Forfeiture  5.40
    • C.  Statutory Defenses  5.41
    • D.  Disfavored Defenses
      • 1.  Lack of Mutuality of Remedy  5.42
      • 2.  Continuing Acts Requiring Supervision  5.43
  • V.  JUDGMENT
    • A.  Types of Judgments
      • 1.  Judgment for Seller Stated Alternatively  5.44
      • 2.  Judgment for Buyers  5.45
      • 3.  Conditional Judgment  5.46
    • B.  Drafting Judgment
      • 1.  Checklist: Ancillary and Alternative Remedies  5.47
      • 2.  Form: Conditional Judgment for Specific Performance  5.48
    • C.  Enforcement of Judgment
      • 1.  Methods  5.49
      • 2.  Effect of Appeal on Enforcement  5.50

6

Cancellation of Instruments

Cynthia K. Long

  • I.  INTRODUCTION  6.1
  • II.  NATURE OF REMEDY
    • A.  Equitable and Legal Remedy  6.2
    • B.  Instruments Subject to Cancellation  6.3
    • C.  Partial Cancellation  6.4
    • D.  When Cancellation Necessary  6.5
    • E.  When Cancellation Not Necessary
      • 1.  Instrument Void on Its Face  6.6
      • 2.  Contract Extinguished by Mutual Cancellation or Destruction  6.7
      • 3.  Instrument Terminated by Its Own Provisions  6.8
    • F.  Need for Additional Remedies  6.9
    • G.  Cancellation Distinguished From Other Remedies
      • 1.  Rescission  6.10
      • 2.  Quiet Title  6.11
      • 3.  Reversing Lien Priority  6.11A
  • III.  GROUNDS FOR CANCELLATION
    • A.  Mental Incompetence
      • 1.  Judicially Determined Mental Incapacity  6.12
      • 2.  Mental Weakness  6.13
    • B.  Minority  6.14
    • C.  Illegality  6.15
    • D.  Fraud
      • 1.  By Misrepresentation  6.16
      • 2.  By Nondisclosure  6.17
      • 3.  Void Versus Voidable Instruments  6.18
    • E.  Undue Influence  6.19
    • F.  Duress and Menace  6.20
    • G.  Mistake  6.21
    • H.  Abuse of Confidential Relationship  6.22
    • I.  Conveyance by One Spouse of Community Real Property  6.23
    • J.  Nondelivery of Deed  6.24
    • K.  Forgery  6.25
  • IV.  NOTICE AND OFFER TO RESTORE BENEFITS
    • A.  When Required  6.26
    • B.  When Not Required  6.27
  • V.  PROCEDURE FOR OBTAINING JUDICIAL CANCELLATION
    • A.  Initiating the Action
      • 1.  Lis Pendens and Attachment  6.28
      • 2.  Jurisdiction and Venue  6.29
      • 3.  Parties
        • a.  Necessary Parties  6.30
        • b.  Proper Parties  6.31
      • 4.  Jury Trial  6.32
      • 5.  Necessary Allegations  6.33
      • 6.  Form: Complaint for Cancellation of Instrument and for Damages  6.34
    • B.  Defenses
      • 1.  Statute of Limitations  6.35
      • 2.  Laches  6.36
      • 3.  Estoppel  6.37
      • 4.  Plaintiff Equally at Fault  6.38
      • 5.  Affirmance and Waiver  6.39
      • 6.  Defendant a Bona Fide Purchaser or Encumbrancer  6.40
    • C.  Judgment
      • 1.  Scope of Relief  6.41
      • 2.  Form: Judgment and Statement of Decision  6.42
      • 3.  Reconveyance Order; Recording Judgment  6.43

7

Quieting Title

Paul Weinberg

  • I.  INTRODUCTION  7.1
  • II.  NATURE OF REMEDY
    • A.  The Quiet Title Action (CCP §§760.010–765.060)  7.2
      • 1.  Resolving Adverse Claims  7.3
      • 2.  Establishing Title by Adverse Possession  7.4
        • a.  Occupancy is Adverse to Present Possessory Interest  7.4A
        • b.  Color of Title  7.4B
        • c.  Tax Payments Required to Acquire Title  7.4C
        • d.  Adverse and Hostile Possession Need not be Intentional  7.4D
        • e.  Difference Between Adverse Possession and Prescriptive Easement  7.4E
      • 3.  In Rem Effect  7.5
      • 4.  Examples of Quiet Title Relief  7.6
      • 5.  Special Statutory Quiet Title Actions  7.7
    • B.  Strategic and Tactical Considerations
      • 1.  Advantages and Disadvantages  7.8
      • 2.  Equitable or Legal Remedy?  7.9
      • 3.  Availability of Title Insurance  7.10
    • C.  Related Causes of Action  7.11
      • 1.  Reformation  7.12
      • 2.  Cancellation of Instrument  7.13
      • 3.  Declaratory Relief  7.14
      • 4.  Ejectment  7.15
      • 5.  Restoration of Lost or Destroyed Instrument  7.16
      • 6.  Damages  7.17
      • 7.  Injunctive Relief  7.18
      • 8.  Slander of Title  7.19
    • D.  Effect of Void Judgment  7.19A
  • III.  REQUISITES OF A QUIET TITLE ACTION
    • A.  Plaintiff Must Stand on Strength of Own Title  7.20
    • B.  Legal Title Generally Required  7.21
    • C.  Remedy Applies to Both Legal and Equitable Interests  7.22
    • D.  Possession Not Required  7.23
  • IV.  LITIGATING A QUIET TITLE ACTION
    • A.  Factual Investigation; Litigation Guaranty  7.24
    • B.  Procedural Considerations
      • 1.  Jurisdiction and Venue  7.25
      • 2.  Lis Pendens  7.26
      • 3.  Parties
        • a.  Plaintiffs  7.27
        • b.  Defendants  7.28
      • 4.  Entitlement to Jury  7.29
    • C.  Preparing Complaint
      • 1.  Essential Allegations  7.30
        • a.  Real Property Description  7.31
        • b.  Nature and Basis of Plaintiff’s Title  7.32
        • c.  Adverse Claims  7.33
        • d.  Effective Date of Plaintiff’s Title  7.34
        • e.  Prayer  7.35
      • 2.  Miscellaneous Allegations
        • a.  Equitable Title; Fraud of Defendant  7.36
        • b.  State Lands Contracts  7.37
        • c.  Caption; Fictitious Parties; Unknown Defendants  7.38
        • d.  In Rem Effect Against All Unknown Defendants  7.39
        • e.  Named Party’s Claim Unknown or Uncertain  7.40
      • 3.  Form: Complaint to Quiet Title  7.41
    • D.  Service of Process  7.42
    • E.  Defendant’s Responsive Pleadings
      • 1.  Answer  7.43
      • 2.  Defenses  7.44
        • a.  Statute of Limitations  7.45
        • b.  Laches  7.46
        • c.  Fraud  7.47
        • d.  Estoppel  7.48
        • e.  Cross-Complaint  7.49
    • F.  Trying the Case
      • 1.  Default Judgment Requires Evidentiary Hearing  7.50
      • 2.  Court’s Special Powers  7.51
      • 3.  Burden of Proof  7.52
      • 4.  Presumptions  7.53
      • 5.  Dismissal and Nonsuit  7.54
    • G.  Judgment
      • 1.  Statement of Decision  7.55
      • 2.  Effect  7.56
      • 3.  Scope  7.57
      • 4.  Costs; Attorney Fees  7.58
      • 5.  Form: Judgment Quieting Title  7.59
      • 6.  Recording the Judgment  7.60

8

Partition

J. Michael Phelps

Andrew J. Wiegel

  • I.  INTRODUCTION  8.1
  • II.  NATURE OF REMEDY
    • A.  Governing Statutes  8.2
    • B.  Methods and Purpose  8.3
    • C.  Court’s Authority to Grant Relief  8.4
    • D.  Appointment of Receiver  8.5
    • E.  Physical Division of Property Versus Sale  8.6
    • F.  Equitable Proceeding  8.7
    • G.  Voluntary Partition  8.8
  • III.  PROPERTY INTERESTS SUBJECT TO PARTITION
    • A.  Cotenancies  8.9
    • B.  Life Tenant and Remainder Interests; Successive Estates  8.10
    • C.  Liens  8.11
    • D.  Rights to Use and Enjoyment; Easement Rights  8.12
    • E.  Community Property  8.13
    • F.  Partnerships  8.14
    • G.  Homesteads  8.15
    • H.  Condominiums  8.16
    • I.  Property Subject to Trust  8.17
    • J.  Limitations Imposed by Subdivision Map Act  8.18
  • IV.  INITIATING A PARTITION ACTION
    • A.  Practical Considerations
      • 1.  Factual Investigation  8.19
      • 2.  Preliminary Report and Litigation Guaranty  8.20
    • B.  Procedural Considerations
      • 1.  Applicability of Civil Statutes and Court Rules  8.21
      • 2.  Jurisdiction and Venue  8.22
      • 3.  Joinder of Additional Causes of Action  8.23
      • 4.  Plaintiffs
        • a.  Who Has Right to Maintain Action  8.24
          • (1)  Life Tenant or Remainder Holder  8.25
          • (2)  Trustee and Co-Owner  8.26
          • (3)  Executor or Administrator of Estate  8.27
        • b.  Actual Possession or Right to Possession  8.28
        • c.  Effect of Mortgage  8.29
      • 5.  Defendants
        • a.  All Persons Claiming Interests  8.30
        • b.  Lienholders  8.31
        • c.  Holders of Future Estates  8.32
        • d.  Persons With Minor Interests  8.33
        • e.  Lessees  8.34
  • V.  PREPARING AND FILING COMPLAINT
    • A.  Allegations  8.35
      • 1.  Caption and Introductory Clause  8.36
      • 2.  Description of Property  8.37
      • 3.  Multiple Plaintiffs  8.38
      • 4.  Defendant Allegations  8.39
        • a.  Defendants Dead or Believed Dead  8.40
        • b.  All Persons Unknown  8.41
      • 5.  Plaintiff’s Interest  8.42
      • 6.  Interests That Will Be Materially Affected  8.43
      • 7.  Estate on Which Partition Is Sought  8.44
      • 8.  Partition by Sale  8.45
      • 9.  Partition of Successive Interests  8.46
      • 10.  Partition by Appraisal  8.47
      • 11.  Title Report  8.48
      • 12.  Declaratory Relief  8.49
      • 13.  Prayer for Relief  8.50
    • B.  Form: Multitheory Complaint for Partition and Related Causes of Action  8.51
    • C.  Service of Process  8.52
    • D.  Lis Pendens  8.53
  • VI.  RESPONSIVE PLEADINGS  8.54
    • A.  The Answer  8.55
    • B.  Defendants With Less Than Ownership Interests  8.56
    • C.  Defenses
      • 1.  Statute of Limitations  8.57
      • 2.  Waiver and Estoppel  8.58
  • VII.  OBTAINING JUDGMENT FOR PARTITION
    • A.  Uncontested Actions
      • 1.  Settlement by Stipulation  8.59
      • 2.  Partition by Appraisal  8.60
      • 3.  Default Judgment  8.61
    • B.  Resolving Partition in Urban TICs  8.62
    • C.  Contested Actions
      • 1.  Preparation for Trial; Requesting Appointment of Referee  8.63
      • 2.  Trial
        • a.  Right to Jury  8.64
        • b.  Entry of Interlocutory Judgment  8.65
        • c.  Conduct of Trial  8.66
        • d.  Determination of Interests of Parties  8.67
        • e.  Deciding Manner of Partition  8.68
        • f.  Statement of Decision  8.69
        • g.  Form: Statement of Decision  8.70
      • 3.  Interlocutory Judgment
        • a.  Content  8.71
        • b.  Form: Interlocutory Judgment  8.72
  • VIII.  PROCEEDINGS AFTER ENTRY OF INTERLOCUTORY JUDGMENT
    • A.  Court’s Supervision of Referee  8.73
    • B.  Proceedings Before the Referee  8.74
      • 1.  Partition by Division  8.75
      • 2.  Partition by Sale  8.76
      • 3.  Partition by Appraisal  8.77
    • C.  Confirmation of Referee’s Report
      • 1.  Partition by Division  8.78
      • 2.  Partition by Sale  8.79
      • 3.  Partition by Appraisal  8.80
    • D.  Orders After Confirmation of Referee’s Report
      • 1.  Interim and Final Accounts of Referee  8.81
      • 2.  Orders Concerning Sale Proceeds and Successive Estates  8.82
      • 3.  Costs of Partition
        • a.  Compensation and Expenses of Referee and Third Persons  8.83
        • b.  Expenses and Attorney Fees for Common Benefit  8.84
        • c.  Valuation and Apportionment  8.85
        • d.  Payment and Liens  8.86
      • 4.  Form: Order to Confirm Sale, Finalize Close of Escrow, Approve Fees of Referee and Referee’s Attorney, and Discharge Referee  8.87
    • E.  Final Judgment
      • 1.  Statutory Requirements  8.88
      • 2.  Persons Bound  8.89
    • F.  Appeal  8.90

9

Slander of Title

Cynthia K. Long

  • I.  INTRODUCTION
    • A.  Definition; Scope of Chapter  9.1
    • B.  Parties and Property Interests Protected  9.2
  • II.  ELEMENTS OF SLANDER OF TITLE
    • A.  Disparagement  9.3
    • B.  Publication  9.4
    • C.  Falsity  9.5
    • D.  Privileges  9.6
      • 1.  Absolute Privilege
        • a.  Statutory Basis  9.7
        • b.  Scope of Privilege Under CC §47(b)  9.8
          • (1)  Lis Pendens  9.9
          • (2)  Arbitration Testimony  9.10
          • (3)  Assessment Liens  9.11
        • c.  Conduct Not Protected by Privilege  9.12
      • 2.  Conditional Privilege
        • a.  Statutory Basis  9.13
        • b.  Malice Required  9.14
      • 3.  Alternative Remedies for Publication of Privileged Communications  9.15
    • E.  Recoverable Damages  9.16
    • F.  Injunctive Relief  9.16A
  • III.  BRINGING THE ACTION
    • A.  Joinder of Other Causes of Action  9.17
    • B.  Checklist: Facts and Documents  9.18
    • C.  Jurisdiction and Venue  9.19
    • D.  Form: Complaint for Damages for Slander of Title  9.20
  • IV.  DEFENSES
    • A.  Statute of Limitations  9.21
    • B.  Truth  9.22
    • C.  Privilege; Lack of Malice  9.23
    • D.  Equitable Defenses  9.24
  • V.  CRIMINAL SANCTIONS  9.25

10

Ejectment

Robert C. Thorn

  • I.  INTRODUCTION  10.1
  • II.  NATURE OF THE REMEDY
    • A.  Statutory and Common Law Basis  10.2
    • B.  When Appropriate  10.3
    • C.  Distinguished From Other Remedies
      • 1.  Unlawful Detainer  10.4
      • 2.  Forcible Entry or Detainer  10.5
      • 3.  Quiet Title  10.6
      • 4.  Injunctive Relief; Damages  10.7
  • III.  REQUISITES OF EJECTMENT ACTION
    • A.  Present Right to Possession  10.8
      • 1.  Superior Title  10.9
      • 2.  Prior Actual Possession  10.10
    • B.  Ouster and Withholding of Possession  10.11
  • IV.  INITIATING EJECTMENT ACTION
    • A.  Jurisdiction and Venue  10.12
    • B.  Parties
      • 1.  Plaintiffs  10.13
      • 2.  Defendants  10.14
    • C.  Separate Parcels  10.15
    • D.  Joinder of Causes of Action  10.16
    • E.  The Complaint
      • 1.  Essential Allegations
        • a.  Plaintiff’s Right to Possession  10.17
        • b.  Description of Property  10.18
        • c.  Damages  10.19
      • 2.  Form: Complaint for Ejectment, Declaratory Relief, Quiet Title, and Damages  10.20
    • F.  Lis Pendens  10.21
    • G.  Service of Process  10.22
  • V.  RESPONSIVE PLEADINGS
    • A.  Answer  10.23
    • B.  Demurrer  10.24
    • C.  Cross-Complaint  10.25
    • D.  Particular Defenses
      • 1.  Statute of Limitations  10.26
      • 2.  Contractual Rights  10.27
      • 3.  Adverse Possession  10.28
      • 4.  Title in Third Person  10.29
      • 5.  Waiver  10.30
      • 6.  Indispensable Parties  10.31
      • 7.  Defendant Not in Possession  10.32
      • 8.  Abandonment  10.33
      • 9.  Supplemental Pleadings  10.34
  • VI.  TRIAL
    • A.  Entitlement to Jury Trial  10.35
    • B.  Interlocutory Order and Restraining Orders  10.36
    • C.  Burden of Proof
      • 1.  Plaintiff  10.37
      • 2.  Defendant  10.38
    • D.  Verdict or Statement of Decision  10.39
    • E.  Judgment  10.40
      • 1.  Title  10.41
      • 2.  Description  10.42
      • 3.  Costs and Attorney Fees  10.43
      • 4.  Form: Judgment  10.44
      • 5.  Enforcement  10.45
    • F.  Appeal  10.46

11

Remedies for Nuisance and Trespass

Stephen L. R. McNichols

  • I.  INTRODUCTION  11.1
  • II.  NUISANCE
    • A.  General Definition  11.2
    • B.  Nuisance Per Se  11.3
    • C.  Categories of Nuisance Under CC §3479  11.4
      • 1.  Objective Standard Under CC §3479  11.5
      • 2.  Balancing Equities Required Under CC §3479  11.6
    • D.  Public Nuisance
      • 1.  Definition; Examples  11.7
      • 2.  Standing  11.8
    • E.  Private Nuisance
      • 1.  Definition  11.9
      • 2.  Threat of Future Injury  11.10
      • 3.  Blockage of Air, Light, or View  11.11
    • F.  Nuisance That Is Both Public and Private  11.12
    • G.  Distinction Between Temporary or Continuing Nuisances and Permanent Nuisances
      • 1.  Importance of Classification for Selection of Remedies  11.13
      • 2.  Factors  11.14
      • 3.  Election by Plaintiff  11.15
      • 4.  Courts’ Preference for Continuing Nuisance  11.16
    • H.  Distinction Between Nuisance or Trespass and Inverse Condemnation  11.16A
  • III.  TRESPASS
    • A.  Definition  11.17
    • B.  Distinction Between Nuisance and Trespass  11.18
  • IV.  ENCROACHMENT  11.19
  • V.  REMEDIES FOR PUBLIC NUISANCE  11.20
  • VI.  REMEDIES FOR PRIVATE NUISANCE AND TRESPASS  11.21
    • A.  Right to Self-Help  11.22
    • B.  Injunction  11.23
    • C.  Tort Measure of Damages  11.24
      • 1.  Continuing Nuisance  11.25
      • 2.  Permanent Nuisance  11.26
      • 3.  Continuing Trespass  11.27
      • 4.  Permanent Trespass  11.28
    • D.  Damage, Destruction, or Removal of Fixtures or Personal Property  11.29
    • E.  Injury to Persons  11.30
    • F.  Lost Profits  11.31
    • G.  Attorney Fees  11.32
    • H.  Prejudgment Interest  11.33
    • I.  Punitive Damages  11.34
    • J.  Statutory Limitations on Recovery  11.35
  • VII.  DEFENSES
    • A.  Comparative Fault  11.36
    • B.  Statutes of Limitations and Repose
      • 1.  Public Nuisance and Trespass  11.37
      • 2.  Private Nuisance and Trespass  11.38
        • a.  Permanent Nuisance and Trespass  11.39
        • b.  Continuing Nuisance and Trespass  11.40
          • (1)  Actions for Construction Defects  11.40A
          • (2)  Nuisance Actions Under CERCLA  11.40B
          • (3)  Special Rules for Pollution Cases  11.41
    • C.  Laches  11.42
    • D.  Coming to the Nuisance
      • 1.  Former Common Law Defense  11.43
      • 2.  Statutory Defenses  11.43A
    • E.  Consent  11.44
    • F.  Balancing the Equities  11.45
    • G.  Due Care  11.46
    • H.  Use Consistent With Applicable Zoning  11.47
    • I.  Separation of Powers, Immunity, and Preemption  11.48
    • J.  Scope of Injunction  11.49
  • VIII.  RELATED ACTIONS  11.50
  • IX.  FORM: COMPLAINT FOR DAMAGES AND FOR INJUNCTION (NUISANCE, INFLICTION OF EMOTIONAL DISTRESS, AND/OR TRESPASS)  11.51

12

Landslide and Subsidence Liability

Carol K. Watson

  • I.  INTRODUCTION
    • A.  Landslide and Subsidence Defined  12.1
    • B.  Preliminary Steps for Plaintiff’s Counsel  12.2
    • C.  Chapter Scope  12.3
    • D.  Mediation Requirements for Construction Defect Litigation  12.3A
  • II.  LIABILITY OF DEVELOPER AND ITS AGENTS
    • A.  Potential Defendants
      • 1.  Owners and Developers  12.4
      • 2.  Lenders  12.5
      • 3.  Tract and Other Design Engineers  12.6
      • 4.  Soils Engineers; Geologists  12.7
      • 5.  Architects; Designers  12.8
      • 6.  Contractors  12.9
    • B.  Theories of Liability
      • 1.  Negligence  12.9A
        • a.  Owners and Developers  12.10
        • b.  Lenders  12.11
        • c.  Engineers  12.12
        • d.  Architects  12.13
        • e.  Building Contractors  12.14
      • 2.  Strict Liability in Tort
        • a.  Manufacturers of Defective Housing  12.15
        • b.  Developers of Defective Lots  12.16
      • 3.  Breach of Warranty
        • a.  Seller’s Warranty of Land Stability  12.17
        • b.  Warranty of Fitness of Materials Used in Construction Project  12.18
        • c.  Warranty in Contracts to Perform Services  12.19
      • 4.  Failure to Comply With Regulatory Legislation
        • a.  Statutory Requirements  12.20
        • b.  Remedies for Failure to Comply  12.21
        • c.  Local Ordinances  12.22
    • C.  Defenses
      • 1.  Statutes of Limitation and Repose; Effect of SB 800 (2002)  12.22A
        • a.  Negligence and Strict Liability  12.23
        • b.  Breach of Warranty  12.24
        • c.  Violation of Real Estate Laws  12.25
        • d.  Statutes of Repose
          • (1)  Patent Defects  12.26
          • (2)  Latent Defects  12.27
      • 2.  Disclaimers  12.28
      • 3.  Comparative Negligence; Assumption of Risk  12.29
      • 4.  Reliance on Building Inspection  12.30
    • D.  REMEDIES
      • 1.  Negligence and Strict Liability  12.31
      • 2.  Punitive Damages  12.32
  • III.  LIABILITY OF FORMER PROPERTY OWNERS AND THEIR AGENTS
    • A.  Potential Defendants
      • 1.  Sellers and Their Agents  12.33
      • 2.  Real Estate Agents
        • a.  General Fraud Liability  12.34
        • b.  Claims Against Insolvent Brokers and Salespeople; Real Estate Fund  12.35
      • 3.  Engineers; Architects; Contractors; Others
        • a.  Incorrect Professional Advice as Fraud  12.36
        • b.  Claims Against Contractors’ Bonds  12.37
      • 4.  Lenders; Escrow Agents  12.38
    • B.  Theories of Liability
      • 1.  Fraudulent Representations
        • a.  “Sales Talk”  12.39
        • b.  Representations of “Solid Ground”  12.40
        • c.  Warranty of Soil Stability Distinguished  12.41
      • 2.  Negligent Misrepresentation  12.42
      • 3.  Nondisclosure
        • a.  One Having Duty to Disclose  12.43
        • b.  Nondisclosure of Fill or Other Soil Conditions  12.44
      • 4.  Failure to Disclose Fully  12.45
      • 5.  Constructive Fraud  12.46
      • 6.  Rescission for Mistake
        • a.  Mistake of Fact  12.47
        • b.  Mistake of Law  12.48
    • C.  Defenses
      • 1.  Statutes of Limitation; Laches
        • a.  Fraud and Mistake  12.49
        • b.  Claims Against Insolvent Brokers, Salespeople, and Contractors’ Bonds  12.50
      • 2.  Untimely Notice of Rescission  12.51
      • 3.  “As Is” and Other Exculpatory Clauses  12.52
      • 4.  Waiver of the Fraud  12.53
      • 5.  Fraud as Purchaser’s Defense to Seller’s Action
        • a.  Land Sales Contract  12.54
        • b.  Deed of Trust; Enjoining Foreclosure Sale  12.55
      • 6.  Comparative Negligence; Indemnity  12.56
      • 7.  Purchaser’s Inspection Performed  12.57
      • 8.  Purchaser’s Neglect of Legal Duty  12.58
      • 9.  Approval of Fill by Official Inspectors  12.59
    • D.  Remedies Available
      • 1.  Election of Remedies  12.60
      • 2.  Actions for Damages
        • a.  Damages for Buyers as Victims of Fraud  12.61
        • b.  Damages for Negligent Misrepresentation  12.62
      • 3.  Rescission Remedies  12.63
      • 4.  Additional Recovery  12.64
        • a.  Value of Improvements Made by Purchaser  12.65
        • b.  Architect’s Fees; Sales Program Expenses; Closing Costs; Other Expenses  12.66
        • c.  Conversion Cost  12.67
        • d.  Personal Injury; Mental Anguish  12.68
        • e.  Prejudgment Interest  12.69
        • f.  Exemplary Damages  12.70
        • g.  Attorney Fees  12.71
      • 5.  Seller’s Setoffs; Rental Value  12.72
  • IV.  LIABILITY OF ADJOINING PROPERTY OWNERS
    • A.  Theories of Liability
      • 1.  Nuisance  12.73
      • 2.  Trespass  12.74
      • 3.  Negligence  12.75
      • 4.  Lateral and Subjacent Support  12.76
      • 5.  Ultrahazardous Activities  12.77
      • 6.  Tortious Diversion of Surface Water  12.78
    • B.  Defenses
      • 1.  Statutes of Limitations; Laches; Accrual  12.79
      • 2.  Prescription  12.80
      • 3.  Act Authorized by Statute  12.81
      • 4.  Consent; “Coming to the Nuisance”  12.82
      • 5.  Comparative Negligence  12.83
    • C.  Relief Available
      • 1.  Compensatory Damages
        • a.  Trespass; Ultrahazardous Activity; Private Nuisance  12.84
        • b.  Lateral Support  12.85
        • c.  Lost Profits; Discomfort; Mental Distress  12.86
      • 2.  Punitive Damages  12.87
        • a.  Culpability of Conduct  12.87A
        • b.  Examples  12.87B
        • c.  Appellate Review of Punitive Damages Awards  12.87C
      • 3.  Injunction  12.88
      • 4.  Nuisance Remedies
        • a.  Abatement by Government  12.89
        • b.  Criminal Proceedings  12.90
        • c.  Abatement by Private Person  12.91

13

Lis Pendens

Michael D. Berk

Dean J. Zipser

M. Steven Andersen

Clark C. Kelley

  • I.  INTRODUCTION
    • A.  Overview of Procedure; Scope of Chapter  13.1
    • B.  History of Current Statutes  13.2
    • C.  Constitutionality of Statutes  13.3
    • D.  Deciding Whether to Record Notice
      • 1.  Advantages  13.4
      • 2.  Disadvantages and Liabilities  13.5
      • 3.  Other Provisional Remedies
        • a.  Used in Addition to Lis Pendens  13.6
        • b.  Used Alternatively to Lis Pendens  13.6A
      • 4.  Ethical Considerations  13.7
  • II.  NATURE AND EFFECT OF LIS PENDENS
    • A.  Constructive Notice of Pending Action
      • 1.  Notice Binds Subsequent Purchasers and Encumbrancers  13.8
        • a.  Recording Date of Notice Establishes Priority  13.9
        • b.  Notice Does Not Create Priority Otherwise Lacking  13.10
        • c.  Notice Does Not Prohibit Subsequent Conveyances  13.11
      • 2.  Effect on Prior Purchasers and Encumbrancers
        • a.  Recorded and Unrecorded Prior Interests  13.12
        • b.  Priority Over Unrecorded Executory Contract of Sale  13.13
    • B.  Duration of Lis Pendens  13.14
    • C.  Actual or Inquiry Notice of Pending Action  13.15
    • D.  Seller’s Duty to Disclose Pending Action  13.16
  • III.  WHEN NOTICE IS AUTHORIZED OR REQUIRED
    • A.  Authorized in Action Asserting “Real Property Claim”
      • 1.  Statutory Requirements  13.17
      • 2.  Actions That Constitute Real Property Claims  13.18
    • B.  Authorized by Statute in Certain Actions  13.19
    • C.  Required by Statute in Specified Actions  13.20
    • D.  Actions for Which Notice Held Ineffective  13.21
    • E.  Use in Federal Actions  13.22
    • F.  Use in Sister-State Courts  13.22A
  • IV.  CHECKLIST: PREPARING, MAILING, RECORDING, AND FILING NOTICE  13.23
  • V.  PREPARATION OF NOTICE
    • A.  Drafting Considerations  13.24
    • B.  Names of Parties
      • 1.  Designation by Real Names  13.25
      • 2.  Fictitious Defendants  13.26
      • 3.  Names in Body of Notice  13.27
    • C.  Separate Notice Required for Cross-Action  13.28
    • D.  Amendment of Pleading  13.29
    • E.  Description of Property  13.30
    • F.  Other Formal Requirements
      • 1.  Form and Format of Court Papers  13.31
      • 2.  Signature  13.32
    • G.  Title Insurance; Litigation Guaranty  13.33
  • VI.  SERVICE OF NOTICE
    • A.  By Registered or Certified Mail  13.34
    • B.  Proof of Service  13.35
  • VII.  RECORDING AND FILING NOTICE
    • A.  Time for Recording  13.36
    • B.  Place for Recording  13.37
    • C.  Filing With Court  13.38
    • D.  When Recording Takes Effect  13.39
    • E.  Checking Index and Updating Litigation Guaranty  13.40
  • VIII.  MOTION FOR UNDERTAKING BY CLAIMANT AS CONDITION OF MAINTAINING NOTICE (CCP §405.34)
    • A.  Procedure for Obtaining Undertaking  13.41
    • B.  Nature and Amount of Undertaking; Enforcement  13.42
    • C.  Modifying Undertaking  13.43
  • IX.  EXPUNGEMENT: TACTICS AND PROCEDURES
    • A.  Tactical Considerations
      • 1.  Alternatives for Expungement Relief  13.44
      • 2.  Court Must Evaluate Merits of Case on Expungement Motion  13.45
      • 3.  Undertaking From Claimant or Owner  13.46
    • B.  Who May Make Motion  13.47
    • C.  When Motion May Be Made
      • 1.  At Any Time After Lis Pendens Has Been Recorded  13.48
      • 2.  After Entry of Judgment  13.49
      • 3.  While Appeal Is Pending  13.50
      • 4.  After Initial Denial of Motion  13.51
    • D.  Notice Requirements  13.52
    • E.  Burden of Proof  13.53
    • F.  Evidentiary and Discovery Issues  13.54
    • G.  Costs and Attorney Fees  13.55
  • X.  GROUNDS FOR EXPUNGEMENT
    • A.  Summary of Different Grounds  13.56
    • B.  Notice Fails to Comply With Filing and Service Requirements (CCP §405.23)  13.57
    • C.  Pleading Does Not Contain Real Property Claim (CCP §405.31)  13.58
      • 1.  Applicable Standard; Required Showing  13.59
      • 2.  Amending Complaint to Assert Real Property Claim  13.60
      • 3.  Burden of Proof  13.61
      • 4.  Standing to Record Lis Pendens  13.62
      • 5.  Particular Actions  13.63
        • a.  Attorney Fees  13.64
        • b.  Breach of Contract  13.65
        • c.  Cancellation of Instrument  13.66
        • d.  Constructive Trust on Real Property  13.67
        • e.  Ejectment  13.68
        • f.  Equitable Lien  13.69
        • g.  Foreclosure of Chattel Mortgage  13.70
        • h.  Conveyances Subject to the Voidable Transactions Act  13.71
        • i.  Easement  13.72
        • j.  Judicial Foreclosure  13.73
        • k.  Leasehold Interest  13.74
        • l.  Marital Dissolution  13.75
        • m.  Mechanics Lien  13.76
        • n.  Money Damages  13.77
        • o.  Personal Property  13.78
        • p.  Prescriptive Easement  13.79
        • q.  Quiet Title Action  13.80
        • r.  Reformation  13.81
        • s.  Rescission  13.82
        • t.  Specific Performance  13.83
        • u.  Trustee Sale  13.84
        • v.  Validation of Reclamation Assessments  13.85
      • 6.  No Undertaking If Action Not Based on Real Property Claim  13.86
    • D.  Failure to Establish Probable Validity of Claim (CCP §405.32)
      • 1.  Overview  13.87
      • 2.  Nature of Motion and Hearing  13.88
      • 3.  Applicable Standards
        • a.  Claimant Has Burden of Proof  13.89
        • b.  Establishing Probable Validity  13.90
      • 4.  No Undertaking If Claimant Does Not Establish Probable Validity  13.91
  • XI.  EXPUNGEMENT ORDER
    • A.  Drafting Considerations  13.92
    • B.  When Order Is Effective  13.93
    • C.  Effect of Recording Certified Copy of Order  13.94
    • D.  Expunged Notice May Not Be Recorded Again Without Leave of Court  13.95
  • XII.  EXPUNGEMENT CONDITIONED ON OWNER’S FURNISHING OF UNDERTAKING (CCP §405.33)  13.96
    • A.  Tactical Considerations  13.97
    • B.  Elements of Expungement Motion Under CCP §405.33  13.98
    • C.  When “Adequate Relief” Can Be Secured by Undertaking  13.99
    • D.  Nature and Amount of Undertaking
      • 1.  Basic Bond Principles Apply  13.100
      • 2.  Amount of Expungement Undertaking  13.101
    • E.  Written Findings Not Required  13.102
    • F.  Objecting to Undertaking  13.103
    • G.  Modifying Undertaking  13.104
    • H.  Enforcing Undertaking  13.105
  • XIII.  REMEDIES AFTER MOTION FOR UNDERTAKING OR EXPUNGEMENT
    • A.  Review by Writ of Mandate  13.106
    • B.  Advancement or Special Setting for Trial  13.107
  • XIV.  TERMINATION
    • A.  Effect of Termination  13.108
    • B.  Methods of Termination  13.109
      • 1.  By Judgment  13.110
      • 2.  By Settlement  13.111
      • 3.  By Dismissal  13.112
      • 4.  By Withdrawal
        • a.  Statutory Requirements (CCP §405.50)  13.113
        • b.  Effect of Withdrawal  13.114
        • c.  Rerecording Notice After Withdrawal  13.115
  • XV.  FORMS
    • A.  Form: Notice of Pendency of Action (Lis Pendens)  13.116
    • B.  Form: Motion to Expunge Notice of Pendency of Action; Alternatively, to Require Plaintiff to File Undertaking  13.117
    • C.  Form: Order Granting Motion to Expunge Notice of Pendency of Action With Alternative Conditioning Grant of Motion on Owner’s Furnishing of Undertaking  13.118
    • D.  Form: Order Denying Motion to Expunge Notice of Pendency of Action and Granting Motion to Require Undertaking  13.119
    • E.  Form: Notice of Withdrawal of Notice of Pendency of Action  13.120

14

Alternative Dispute Resolution for Real Property Actions

Linda DeBene

Malcolm Sher

  • I.  INTRODUCTION
    • A.  Why Alternative Dispute Resolution?  14.1
    • B.  Chapter Scope  14.2
  • II.  STATUTORY ADR REQUIREMENTS
    • A.  Mandatory Requirements Relating to Homeowners’ Associations  14.3
    • B.  Construction Defect Litigation  14.4
      • 1.  Calderon Procedures  14.4A
      • 2.  Right to Repair Act (SB 800)  14.4B
    • C.  Elective or Directive Statutory Schemes Providing for ADR
      • 1.  Cost of Maintaining Easement (CC §845)  14.5
      • 2.  Administrative Proceedings (Govt C §11420.10)  14.6
      • 3.  Real Estate-Related Conduct Charged as Misdemeanor (Pen C §§14150–14156)  14.7
      • 4.  Other Statutory ADR Requirements  14.7A
    • D.  General Civil Mediation and Arbitration Programs
      • 1.  Statutes and Court Rules  14.8
      • 2.  Local Rules  14.9
      • 3.  County Bar Programs  14.10
  • III.  CONTRACT PROVISIONS
    • A.  Contractual Mandatory Mediation
      • 1.  Residential Purchase Contract Documents  14.11
      • 2.  Construction Contracts  14.12
      • 3.  Insurance Policies
        • a.  Examining Policies  14.13
        • b.  Submediations of Insurance Disputes  14.14
      • 4.  Bank Loan Documents  14.15
    • B.  Contractual Binding Arbitration  14.16
      • 1.  Residential Real Estate Purchase Contracts  14.17
      • 2.  Real Estate Licensee Commission Disputes  14.18
      • 3.  Commercial Real Estate  14.19
      • 4.  Real Estate Listing Contracts  14.20
      • 5.  Residential Home Building and Improvement Contracts  14.21
      • 6.  Construction Contracts  14.22
      • 7.  Title Policy Documents  14.23
      • 8.  Insurance Policies  14.24
      • 9.  Bank Lending Documents  14.25
      • 10.  CC&Rs for Common Interest Communities  14.25A
  • IV.  PROCEDURAL OPTIONS AFTER DISPUTE ARISES
    • A.  Participation at Arbitration  14.26
    • B.   Avoiding Piecemeal Arbitration  14.26A
    • C.  Obtaining a Provisional Remedy  14.26B
    • D.  Avoiding Waiver of a Claim  14.26C
    • E.  Mediation  14.27
    • F.  Litigation  14.28
    • G.  Minitrial Procedures  14.29
  • V.  ADR IN CONJUNCTION WITH COURT ACTIONS
    • A.  Special Master Appointments
      • 1.  By Stipulation and Order in Complex Cases  14.30
      • 2.  By Agreeing to “Referee” as Special Master Under CCP §638  14.31
    • B.  Mediation  14.32
      • 1.  Consent Requirements for Settlement  14.32A
      • 2.  Confidentiality of Settlement; Waiver  14.32B
    • C.  Arbitration  14.33
    • D.  Minitrials  14.34
    • E.  Reference by Agreement (CCP §638)  14.35
    • F.  Reference by Court Order (CCP §639)  14.36
    • G.  Discovery Referee (CCP §639; Cal Rules of Ct 3.920–3.932)  14.37
  • VI.  DUAL FORUM AND ENFORCEABILITY ISSUES IN RESIDENTIAL PURCHASE CONTRACTS
    • A.  Real Estate Professional Issues
      • 1.  Arbitration Clause Inserted by Real Estate Professionals  14.38
      • 2.  Potential ADR Disclosure Obligations  14.38A
      • 3.  Enforceability of Arbitration Clause  14.38B
        • a.  Choice of Law and Preemption Issues  14.38C
        • b.  Policy Considerations  14.38D
    • B.  Developer/Homebuilder Issues  14.39
    • C.  Leases  14.39A
  • VII.  ARBITRATION PRACTICE POINTS: OBTAINING AND PROTECTING YOUR AWARD
    • A.  Ascertain How Parties Arrived at Arbitration
      • 1.  Is There a Contract? What Rules Apply?  14.40
      • 2.  Arbitrability of Disputes Regarding the Transfer Disclosure Statement  14.40A
      • 3.  Is It Court Ordered? What Statutes Apply?  14.41
      • 4.  Is It Voluntary and Binding? To What Have the Parties Agreed?  14.42
        • a.  Was the Party Aware of the Arbitration Clause in the Contract?  14.42A
        • b.  Is the Arbitration Clause Adhesionary or Unconscionable?  14.42B
        • c.  Was the Arbitration Clause Induced by Fraud or Duress?  14.42C
        • d.  What Is the Scope of the Arbitration Clause?  14.42D
          • (1)  Determination of Whether Arbitration Is Binding  14.42E
          • (2)  Determination of Issues to Be Arbitrated  14.42F
          • (3)  Determination of Procedural Disputes  14.42G
      • 5.  Who Decides Arbitrability: Court or Arbitrator?  14.42H
      • 6.  Waiving Right to Arbitrate  14.42I
    • B.  Attacking the Arbitration Award
      • 1.  Award Procured by Corruption, Fraud, or Undue Means  14.43
      • 2.  If Arbitrator Exceeds Powers  14.44
        • a.  Arbitrator Corruption or Misconduct  14.45
        • b.  Conduct of Proceedings  14.46
        • c.  Discovery Sanctions  14.47
      • 3.  Availability of Other Remedial Relief  14.48
    • C.  Errors Must Be Raised Immediately  14.48A
    • D.  Agreements to Allow Judicial Review  14.48B
    • E.  Making a Record: Documenting the Parties to Arbitration  14.49
    • F.  Binding Third Parties  14.50
    • G.  Availability of Punitive Damages  14.51
    • H.  Attorney Fee Awards  14.52
  • VIII.  MEDIATION POINTS
    • A.  Confidentiality of Proceedings  14.53
    • B.  Preliminary Considerations in Real Estate Cases
      • 1.  Ascertain How Parties Arrived at Mediation
        • a.  Is There a Contract? What Rules Apply?  14.54
        • b.  What Is Part of Contract and What Is Not?  14.55
      • 2.  Effect of Party’s Refusal to Mediate  14.56
      • 3.  Voluntary Nature of Mediation  14.57
      • 4.  Statutory Premediation Requirements  14.57A
    • C.  Winning at Mediation
      • 1.  Objective: Identify Reasons for Mediation
        • a.  Obtain Best Possible Result or Settlement  14.58
        • b.  Facilitate Communication Among Parties  14.59
        • c.  Minimize Impairment of Ongoing Relationships  14.60
        • d.  Help Parties Evaluate Risk/Rewards of Litigating to Conclusion  14.61
        • e.  Handle Client Expectations  14.62
        • f.  Obtain Neutral Third Party Assessment  14.63
      • 2.  What Is “Winning”?
        • a.  Eliminate Exposure or Risk From Trial  14.64
        • b.  Resolve Issues That Might Not Be Determined at Trial  14.65
        • c.  Lessen Risk of Avoidance of Payment of Judgment  14.66
        • d.  Satisfy Parties’ Specific Needs  14.67
      • 3.  Premediation Questions
        • a.  Who Should Be at the Table?  14.68
        • b.  What Are Appropriate Qualifications and Style of Mediator?  14.69
        • c.  What Is the Neutral’s Role?  14.70
        • d.  Is the Mediator Truly Neutral?  14.70A
        • e.  Should There Be a Preliminary Information Exchange?  14.71
        • f.  Prepare a Premediation Statement of Law and Fact  14.72
        • g.  Should a Premediation Conference Be Held?  14.73
    • D.  Barriers to Effective Mediation
      • 1.  Lack of Preparation or Information
        • a.  Knowing the Law  14.74
        • b.  Conducting Limited Discovery  14.75
        • c.  Preparing Client for Mediation  14.76
        • d.  Preparing Client to Compromise  14.77
        • e.  Preparing Client to Speak  14.78
      • 2.  Problems in Negotiation Process  14.79
      • 3.  Emotions and Lack of Trust  14.80
      • 4.  Negotiating Representatives  14.81
      • 5.  Lack of Settlement Plan  14.82
      • 6.  Attorney-Client Issues  14.83
      • 7.  Disagreements About Likely Outcome  14.84
      • 8.  Linkage to Other Disputes  14.85
    • E.  Special Challenges to Mediating Broker Cases
      • 1.  High-End Litigation  14.85A
      • 2.  Multiple Parties  14.85B
      • 3.  Emotional Issues  14.85C
      • 4.  Availability of Insurance Coverage  14.85D
      • 5.  Difficult Settlement  14.85E
      • 6.  Taxation Issues  14.85F
      • 7.  Attorney Fees  14.85G
    • F.  Keeping Negotiations Moving When Parties Are Ready to Quit  14.86
    • G.  Documenting the Settlement  14.87
    • H.  Dismissing the Case—CCP §664.6 Considerations  14.88

15

Constructive Trusts, Resulting Trusts, and Equitable Liens

Florrie Young Roberts

  • I.  CONSTRUCTIVE TRUSTS
    • A.  Introduction; Purpose  15.1
    • B.  Statutory Basis for Remedy  15.2
    • C.  Requirements for Imposition of Constructive Trust  15.3
      • 1.  Existence of Res  15.4
      • 2.  Plaintiff’s Right to Res  15.5
      • 3.  Wrongful Acquisition of Res by Defendant  15.6
        • a.  Fraud  15.7
        • b.  Accident or Mistake  15.8
        • c.  Undue Influence  15.9
        • d.  Violation of Trust  15.10
          • (1)  Existence of Confidential Relationship  15.11
          • (2)  Examples: Conduct Constituting Violation of Trust  15.12
            • (a)  Fiduciary Buying Property for Self  15.13
            • (b)  Breach of Oral Promise to Convey Property  15.14
            • (c)  Title Contrary to Parties’ Intent  15.15
            • (d)  Property Conveyed for Benefit of Another  15.16
        • e.  Other Wrongful Acts  15.17
          • (1)  Inequitable Conduct  15.18
          • (2)  Criminal or Tortious Conduct  15.19
          • (3)  Breach of Promise to Devise Property  15.20
    • D.  Property Over Which Constructive Trust May Be Obtained
      • 1.  Property Wrongfully Taken From Plaintiff  15.21
      • 2.  Property Acquired in Exchange for Wrongfully Taken Property
        • a.  Tracing Requirement  15.22
        • b.  Presumptions When Tracing Funds  15.23
        • c.  Propriety of Lis Pendens  15.24
    • E.  Mechanics of Constructive Trust  15.25
    • F.  Advantages of Constructive Trust Over Damages Remedy  15.26
      • 1.  Recovery of Specific Property  15.27
      • 2.  Benefit of Appreciated Value  15.28
      • 3.  Recovery of Property Conveyed to Third Party  15.29
      • 4.  Priority Over Other Creditors  15.30
      • 5.  Ease of Enforcing Judgment  15.31
    • G.  Litigation Concerns
      • 1.  Adequate Legal Remedy  15.32
      • 2.  Statute of Frauds  15.33
      • 3.  Statute of Limitations
        • a.  Applicable Statute of Limitations  15.34
        • b.  Accrual of Cause of Action  15.35
      • 4.  Equitable Defenses  15.36
        • a.  Unclean Hands  15.37
        • b.  Laches  15.38
      • 5.  Burden of Proof  15.39
      • 6.  Lis Pendens  15.40
        • a.  Real Property Claim Required  15.41
        • b.  When Tracing Involved or Money Damages Sought  15.42
          • (1)  Cases Permitting Lis Pendens  15.43
          • (2)  Cases Expunging Lis Pendens  15.44
          • (3)  Actions Under Uniform Voidable Transactions Act  15.45
        • c.  Policy Concerns  15.46
  • II.  RESULTING TRUSTS
    • A.  Introduction
      • 1.  Purpose  15.47
      • 2.  Distinguished From Constructive Trust  15.48
    • B.  Examples: Resulting Trust Imposed
      • 1.  When Consideration Given by Plaintiff and Title Acquired by Defendant  15.49
        • a.  Intent Requirement  15.50
        • b.  Types of Consideration  15.51
        • c.  Consideration Given at Time of Purchase  15.52
      • 2.  When Resulting Trust Arises From Express Trust  15.53
    • C.  Advantages of Resulting Trust  15.54
    • D.  Litigation Concerns
      • 1.  Statute of Frauds  15.55
      • 2.  Statute of Limitations  15.56
      • 3.  Burden of Proof  15.57
      • 4.  Equitable Defenses  15.58
      • 5.  Lis Pendens  15.59
  • III.  EQUITABLE LIENS
    • A.  Introduction  15.60
    • B.  Benefits of Equitable Lien Over Money Judgment
      • 1.  Secured Creditor Status  15.61
      • 2.  Priority Over Other Creditors  15.62
      • 3.  Recovery of Property Transferred to Third Party  15.63
    • C.  How Equitable Liens Are Enforced  15.64
      • 1.  Enforcement Through Foreclosure
        • a.  Sale if Defendant Does Not Pay Amount Due  15.65
        • b.  Timing of Foreclosure Sale  15.66
      • 2.  Enforcement on Voluntary Sale  15.67
      • 3.  Other Methods of Enforcement  15.68
      • 4.  Deficiency Judgment  15.69
    • D.  Necessity of Res  15.70
    • E.  Examples: Equitable Lien Imposed  15.71
      • 1.  Defectively Created Security Interest  15.72
      • 2.  Intent to Secure Obligation With Property Interest
        • a.  Evidence of Intent Required  15.73
        • b.  Payment of Debt From Sale Proceeds  15.74
      • 3.  To Prevent Unjust Enrichment  15.75
        • a.  If Constructive Trust Would Also Be Proper  15.76
        • b.  If Constructive Trust Would Not Be Proper  15.77
          • (1)  Property Not Acquired Solely With Plaintiff’s Assets  15.78
          • (2)  Improvements Made to Defendant’s Property  15.79
          • (3)  Other Situations Not Justifying Constructive Trust  15.80
    • F.  Equitable Lien May Be Imposed With Conditions  15.81
    • G.  Litigation Concerns
      • 1.  Statute of Frauds  15.82
      • 2.  Statute of Limitations  15.83
      • 3.  Equitable Defenses  15.84
      • 4.  Lis Pendens  15.85

CALIFORNIA REAL PROPERTY REMEDIES AND DAMAGES

(2d Edition)

August 2019

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH01

Chapter 1

Rescission

01-035

§1.35

Notice of Rescission (General Form)

01-036

§1.36

Attorney’s Letter Giving Notice of Rescission (Real Property Sale)

01-045

§1.45

Complaint for Relief Based on Rescission

01-057

§1.57

Judgment Rescinding Contract

01-058

§1.58

Checklist: Facts to Ascertain Before Drafting Pleadings

01-059

§1.59

Checklist: Applicability of Special Rescission Statutes

01-060

§1.60

Checklist: Documents to Obtain

01-061

§1.61

Checklist: Preliminary Investigation and Determinations

01-062

§1.62

Checklist: Factors to Consider and Discuss With Client

01-063

§1.63

Checklist: Procedural Considerations

CH02

Chapter 2

Reformation

02-032

§2.32

Complaint for Reformation

02-043

§2.43

Judgment on Complaint for Reformation of Contract

02-046

§2.46

Checklist: Reformation

CH03

Chapter 3

Damages for Fraud and Nondisclosure

03-091

§3.91

Form: Multitheory Complaint for Fraud and Alternative Remedies

03-092

§3.92

Form: Multitheory Complaint for Breach of Fiduciary Duty and Related Causes of Action

CH04

Chapter 4

Damages for Breach of Seller-Buyer Contracts

04-091

§4.91

Form: Complaint for Damages for Breach of Contract

04-092

§4.92

Form: Multitheory Complaint for Specific Performance; Alternatively for Damages for Breach of Contract, Declaratory Relief, and Judicial Foreclosure

CH05

Chapter 5

Specific Performance

05-034

§5.34

Complaint for Specific Performance

05-047

§5.47

Checklist: Ancillary and Alternative Remedies

05-048

§5.48

Conditional Judgment for Specific Performance

CH06

Chapter 6

Cancellation of Instruments

06-034

§6.34

Complaint for Cancellation of Instrument and for Damages

06-042

§6.42

Judgment and Statement of Decision

CH07

Chapter 7

Quieting Title

07-041

§7.41

Complaint to Quiet Title

07-059

§7.59

Judgment Quieting Title

CH08

Chapter 8

Partition

08-051

§8.51

Multitheory Complaint for Partition and Related Causes of Action

08-070

§8.70

Statement of Decision

08-072

§8.72

Interlocutory Judgment

08-087

§8.87

Order to Confirm Sale, Finalize Close of Escrow, Approve Fees of Referee and Referee’s Attorney, and Discharge Referee

CH09

Chapter 9

Slander of Title

09-018

§9.18

Checklist: Facts and Documents

09-020

§9.20

Complaint for Damages for Slander of Title

CH10

Chapter 10

Ejectment

10-020

§10.20

Complaint for Ejectment, Declaratory Relief, Quiet Title, and Damages

10-044

§10.44

Judgment

CH11

Chapter 11

Remedies for Nuisance and Trespass

11-051

§11.51

Form: Complaint for Damages and for Injunction (Nuisance, Infliction of Emotional Distress, and/or Trespass)

CH13

Chapter 13

Lis Pendens

13-023

§13.23

Checklist: Preparing, Mailing, Recording, and Filing Notice

13-116

§13.116

Notice of Pendency of Action (Lis Pendens)

13-117

§13.117

Motion to Expunge Notice of Pendency of Action; Alternatively, to Require Plaintiff to File Undertaking

13-118

§13.118

Order Granting Motion to Expunge Notice of Pendency of Action With Alternative Conditioning Grant of Motion on Owner’s Furnishing of Undertaking

13-119

§13.119

Order Denying Motion to Expunge Notice of Pendency of Action and Granting Motion to Require Undertaking

13-120

§13.120

Notice of Withdrawal of Notice of Pendency of Action

 

Selected Developments

August 2019 Update

Rescission

In PG&E v Superior Court (Butte Fire Cases) (2018) 24 CA5th 1150, the court held as a matter of law that the utility could not have acted with the requisite malice in connection with the 2015 wildfire caused by a tree contacting overhead power lines. See §§1.50, 12.87B.

Fraud and Nondisclosure

Proof of the scope of a broker’s duty (or a breach of that duty) does not necessarily need to be established by expert testimony if knowledge of such duty generally rests within the common knowledge of laypersons. Ryan v Real Estate of the Pac. (2019) 32 CA5th 637. See §§3.15, 3.32, 3.63.

Civil Code §2079.21 was amended to provide that a dual agent may not, without express permission of the seller, disclose to the buyer any confidential information obtained from the seller. Likewise, a dual agent may not, without express permission of the buyer, disclose to the seller any confidential information obtained from the buyer. “Confidential information” includes facts relating to a client’s financial position, motivations, bargaining position, or other personal information that may impact price, such as whether a seller is willing to accept a price lower than the listing price or whether a buyer is willing to pay more than the price offered. CC §2079.21(c), (d). See §§3.32D, 12.43.

When both sides obtain affirmative relief such that there are “mixed results,” a court may find that neither side has prevailed for purposes of recovering attorney fees and costs. Marina Pacifica Homeowners Ass’n v Southern Cal. Fin. Corp. (2018) 20 CA5th 191. See §§3.32D.

Quieting Title

In Hansen v Sandridge Partners, L.P. (2018) 22 CA5th 1020 the court explained that a judgment quieting title due to adverse possession establishes an “estate” in land whereas a quiet title judgment for prescriptive easement only establishes a right to “use” land. The necessary evidence for establishing a successful claim for adverse possession is similar to that for prescriptive easement, but an adverse possession claimant must prove payment of all property taxes for a 5-year period. Due to an inability to prove payment of property taxes, some claimants have sought to obtain prescriptive easements that provide them with exclusive rights to the use of property (which would for all practical purposes be the same as receiving title based on adverse possession). The determining factor in whether a claim is for adverse possession or prescriptive easement is not determined by the name used in the cause of action but rather by whether the claimant seeks relief similar to an “estate” instead of an easement that amounts to a mere use of property. If a claimant seeks relief similar to an “estate” then that claimant will be required to meet all of the requirements for adverse possession even if the claim is designated as one for prescriptive easement. See §§7.4E, 7.9.

Partition

In Summers v Superior Court (2018) 24 CA5th 138, the court held that when the ownership interests of the parties are in dispute, the court must determine those interests before ordering partition. A court cannot properly enter an interlocury judgment for partition first and thereafter adjudicate the parties’ respective interests in the property. See §§8.67, 8.68.

Lis Pendens

In Integrated Lender Servs., Inc. v County of Los Angeles (2018) 22 CA5th 867, the court held that if a county has a restitution order against a criminal defendant but does not have an order levying against a particular piece of real property, then the county’s lis pendens is not effective to gain rights to surplus proceeds following a foreclosure by a senior encumbrancer. See §13.18.

Alternative Dispute Resolution

In McMillin Albany LLC v Superior Court (2018) 4 C5th 241, the court held that the procedures provided by the Right to Repair Act (CC §§895–945.5), also known as SB 800, are not the exclusive methods for addressing all construction defects; SB 800 expressly excludes from its requirements claims arising out of fraud or breach of contract. It also excludes claims for personal injury arising out of construction defects. But excepting these limited exclusions, claims seeking recovery for construction defect damages are subject to the Act’s prelitigation procedures regardless of how they are pled. Before the adoption of SB 800, no common law cause of action existed for purely economic loss due to construction defects. In adopting SB 800, the legislature provided a new statutory basis for recovery of economic loss damages due to construction defects. The legislature retained the status quo with respect to recovery for personal injuries caused by construction defects, and the legislature replaced common law methods of recovery arising from property damage due to construction defects with the new statutory scheme. See §14.4B.

The law which requires disputes be submitted to binding arbitration upon agreement of the parties may be unavailable if a party cannot prove the party’s own assent to a binding arbitration provision. In Juen v Alain Pinel Realtors, Inc. (2019) 32 CA5th 972, a broker moved to compel arbitration by producing a copy of the listing agreement in which the seller (but not the broker) had initialed the binding arbitration provisions of the contract. The original listing agreement had been destroyed after 5 years under the broker’s document retention policy. Even though the broker testified that the arbitration clause would have been initialed, the court ruled such testimony insufficient to prove that the arbitration clause actually had been initialed and the court denied the broker’s motion to compel arbitration. See §14.11.

A contractual right to compel arbitration will be subject to the same requirements as other contractual rights; a contractual right to compel arbitration will not be enforced if the contract which includes it is unenforceable because it violates public policy. In Sheppard, Mullin, Richter & Hampton, LLP v J-M Mfg. Co. (2018) 6 C5th 59, a large law firm, in violation of the professional rules of conduct, simultaneously represented, in unrelated matters, two clients who were adverse to each other. The California Supreme Court held that even though both clients had signed broad conflict waivers, those waivers were ineffective because the firm had failed to disclose a known conflict. As a result, the firm’s engagement letter (which contained a binding arbitration provision) was unenforceable and the firm lacked the ability to compel arbitration of its fee dispute with one of the client. See §14.40.

In Henry Schein, Inc. v Archer & White Sales, Inc. (2019) __ US __, 139 S Ct 524, the U.S. Supreme Court ruled that under the Federal Arbitration Act the issue of whether a dispute is subject to binding arbitration is to be decided by the arbitrator and not the courts when the parties have agreed that the issue of arbitrability is to be decided by the arbitrator, even when there are no grounds to support the claim that the dispute falls within the types of claims that are subject to the binding arbitration agreement. See §14.42H.

Legislation was adopted requiring legal counsel to provide each client with a printed disclosure about mediation confidentiality as soon as reasonably possible before the mediation. Senate Rules Committee Analysis of SB 954 (Aug. 21, 2018). The required disclosure (provided in Evid C §1129(d)) must be printed in 12-point type on a page that is not attached to any other documents provided to the client and must be signed by both the client and the attorney. Evid C §1129(c). This disclosure ensures that the client understands that the mediation proceeding is confidential and that no statements made at mediation may be used or relied on in any subsequent legal proceedings. The disclosure is not made inadmissible or protected from disclosure by Evid C §1119. Evid C §1122(a)(3). See §14.57A.

In Mesa RHF Partners, L.P. v City of Los Angeles (2019) 33 CA5th 913, the court held that three statutory requirements must be satisfied before a court will enforce a settlement agreement under CCP §664.6. The parties must have requested during the pendency of the case that the court retain jurisdiction (and not after the case has been dismissed), the parties themselves must have requested that the court retain jurisdiction, and the request must be made in a writing signed by the parties or made by the parties orally before the court. See §14.88.

About the Authors

M. STEVEN ANDERSEN, co-author of chapter 13, is a partner in Andersen, Hilbert & Parker, LLP, San Diego. He received his B.A. from Brigham Young University and his J.D. in 1975 from the University of California, Hastings College of the Law. Mr. Andersen specializes in real estate, business, commercial, insurance, and employment litigation, with an emphasis in real property title litigation. He is a member of the Association of Business Trial Lawyers, San Diego Chapter, and is on the real property panel of the American Arbitration Association.

LESLIE A. BAXTER, annual update author from 2004 to 2018, is a partner with Randick O’Dea & Tooliatos, LLP, in Pleasanton. She received her B.A. from the University of California, Berkeley, her M.P.A. from California State University, Hayward, and her J.D. in 1990 from the University of California, Hastings College of the Law. Ms. Baxter represents plaintiffs and defendants in contractual and corporate disputes, real estate transaction disputes, environmental cleanup, and litigation on matters pertaining to land development, permitting, and environmental review.

MICHAEL D. BERK, co-author of chapter 13 and update author, is in private practice in Beverly Hills and was formerly a partner in Greenberg Glusker, LLP, Los Angeles. He received his B.A. from the University of California, Berkeley, and his J.D. in 1967 from the University of California, Los Angeles, School of Law. Mr. Berk specializes in real estate, banking, and business litigation. He was a co-author of CEB’s former practice book on lis pendens law and has lectured for CEB on the subject of real property remedies.

LINDA DeBENE, author of chapter 14, is a member of JAMS in Walnut Creek and is the principal in Linda DeBene, Inc., PLC, Danville. She received her B.A. from Stetson University and her J.D. in 1971 from Stetson University College of Law. Ms. DeBene specializes in real property and commercial transactions and litigation, with current emphasis on ADR processes. She was specially recognized for Service to the Judicial System by the Contra Costa Bar Association.

DAVID B. DIMITRUK, author of chapter 3 and co-author of chapter 4, is a sole practitioner in Irvine. He received his undergraduate degree from California State University, Fullerton, and his J.D. in 1976 from Western State University School of Law. Mr. Dimitruk specializes in real estate transactions and litigation and has lectured for CEB on the subject of real property remedies.

JANE L. O’HARA GAMP, co-author of chapter 4, is currently Dean at San Francisco Law School and was formerly a partner with Murphy, Pearson, Bradley & Feeney, San Francisco and Sacramento. A graduate of San Francisco Law School in 1985, she served on its Board of Directors for many years before becoming Dean. She received her B.A. from Santa Clara University. Ms. Gamp specialized in professional liability defense, including real estate litigation and risk prevention training for brokers and agents. She was also a mediator and an arbitrator with the American Arbitration Association.

MARK R. HARTNEY, co-author of chapter 5, is a partner with Allen, Matkins, Leck, Gamble & Mallory, LLP, Los Angeles. He received his B.A. from University of California, Los Angeles, and his J.D. in 1988 from University of California, Davis, School of Law. Mr. Hartney specializes in commercial litigation, emphasizing real property and construction disputes.

CHARLES D. JARRELL, co-author of chapter 5, is an associate with Allen, Matkins, Leck, Gamble & Mallory, LLP, Los Angeles. He received his B.A. from New Mexico State University and his J.D. in 1994 from the University of Southern California. He specializes in commercial litigation, emphasizing real estate disputes.

CLARK C. KELLEY, co-author of chapter 13, was formerly an attorney with Andersen, Buck & Mann, LLP, San Diego. He received his B.A. from Brigham Young University and his J.D. from Salmon P. Chase College of Law, Northern Kentucky University. Mr. Kelley was admitted to practice in California in 1995 and specializes in real property litigation.

CYNTHIA K. LONG, author of chapters 6 and 9, was formerly a partner in Bothel & Long, San Francisco, and is Senior Vice-President & Regional Counsel for Old Republic Title Company, San Francisco. She received her undergraduate degree from the University of Michigan and her J.D. in 1979 from Golden Gate University School of Law. Ms. Long specializes in real property litigation. She is a fee arbitrator for the California Bar and local bar associations. She is a speaker for CEB real property programs and has contributed to other CEB real property books.

STEPHEN L. R. McNICHOLS, author of chapter 11 and annual update author between 2001 and 2006, currently heads his own law firm and was a partner with McNichols, Randick, O’Dea & Tooliatos, LLP, in Pleasanton. He received his B.A. from Pomona College and his J.D. in 1968 from University of California, Berkeley, School of Law. Mr. McNichols specializes in real property and business litigation. He writes articles for CEB’s Real Property Law Reporter and other legal journals.

PERRY D. MOCCIARO, author of chapters 1 and 2, is a partner in Cox, Castle & Nicholson, Los Angeles. He received his B.A. from the University of Southern California and his J.D. in 1975 from University of California, Berkeley, School of Law. Mr. Mocciaro specializes in real property litigation and franchising matters. He lectures for CEB on real property remedies and serves as an arbitrator for the American Arbitration Association. In 2002, he was appointed to CEB’s Real Property Practice Group Advisory Committee.

GREGORY S. NERLAND, annual update author since 2009, is Of Counsel to Akawie & LaPietra, Walnut Creek. He received his A.B. from Dartmouth College in 1986 and his J.D. from the University of California, Hastings College of the Law, in 1989. Mr. Nerland specializes in litigation involving real estate transactions; mold and other environmental exposure, injury, and property claims; landlord-tenant disputes; and insurance coverage issues.

J. MICHAEL PHELPS, co-author of chapter 8, is a sole practitioner in San Francisco. He received his B.A. with honors from Princeton University and his J.D. in 1975 from the University of California, Hastings College of the Law. Mr. Phelps specializes in real property litigation and represents owners on evictions and wrongful eviction lawsuits, tenancies-in-common, and dispute resolution. He is listed in the Bar Register of Preeminent Lawyers and serves as the attorney for the Colonial and Antebellum Bench and Bar, the California Society of Mayflower Descendants, and other lineage societies.

FLORRIE YOUNG ROBERTS, author of chapter 15, is a professor of law at Loyola Law School, Los Angeles, where she taught Property for more than 25 years and also regularly teaches Remedies and Pretrial Civil Procedure. She received her B.A. from Stanford University and her J.D. from the University of Southern California. Prior to her teaching career, Ms. Roberts was a partner in the Los Angeles firm of Beardsley, Hufstedler & Kemble specializing in business litigation. She is active in the real property sections of the State Bar and the Los Angeles County Bar Association.

MALCOLM SHER, annual update author between 2004 and 2006, is a principal in Law Office of Malcolm Sher in Walnut Creek. After earning his law degree from London University in 1969, he practiced in England and Wales before moving to California and gaining admission to the California Bar in 1976. He specializes in business and real estate litigation, emphasizing the representation of real estate professionals, lawyers, and CPAs. As a certified mediator and arbitrator, Mr. Sher devotes a significant part of his practice to ADR. Since 1990, he has acted as a pro tem judge in both Contra Costa and Alameda counties and is a fee arbitrator for both the California Bar and local bar associations.

ROBERT C. THORN, author of chapter 10, is a partner in Kimball, Tirey & St. John, LLP, San Diego. He received his B.A. from San Diego State University and his J.D. in 1980 from California Western School of Law. Mr. Thorn specializes in real property transactions and litigation with an emphasis in commercial landlord-tenant and bankruptcy (representing creditors). He is a frequent speaker at CEB real property law programs and was given the Institute for Real Estate Management Key Award in January 2000.

CAROL K. WATSON, author of chapter 12, is currently employed at Kaiser Permanente, Oakland, and was formerly a shareholder in McInerney & Dillon, PC, Oakland. She received her B.A. from the University of North Texas and her J.D. in 1987 from the University of California, Hastings College of the Law. She advised on a wide variety of business matters with an emphasis on construction and other real property matters, including landslide and subsidence law. Ms. Watson updated the former landslides liability book for CEB before working on the new edition of this book. As a litigator, she handled all types of construction industry legal problems and represented general contractors, subcontractors, and sureties.

PAUL WEINBERG, author of chapter 7, is a sole practitioner in Irvine. He received his B.A. from the University of California, San Diego, and his J.D. in 1975 from the University of San Diego School of Law. Mr. Weinberg specializes in real property law with an emphasis in title disputes, leasing, and development matters, and has an active real estate mediation practice. He is a frequent speaker at CEB programs and contributes articles to CEB’s Real Property Law Reporter. He teaches at the University of California, Hastings College of the Law.

ANDREW J. WIEGEL, co-author of chapter 8, is a principal in Wiegel Law Group, PLC, San Francisco. He received his B.A. from San Francisco State University and his J.D. in 1977 from Golden Gate University School of Law. Mr. Wiegel represents a variety of clients in real property litigation and specializes in rent control, tenancy-in-common, and landlord-tenant law. He contributed articles to CEB’s Real Property Law Reporter and wrote several sections in California Landlord-Tenant Practice (2d ed Cal CEB).

DEAN J. ZIPSER, co-author of chapter 13, is a member of Manatt Phelps & Phillips, LLP, Costa Mesa. He received his B.A. from the University of California, Los Angeles, and his J.D. in 1980 from Stanford University School of Law. Mr. Zipser specializes in civil litigation, with an emphasis in real estate, intellectual property, construction, and business disputes. He was a co-author of CEB’s former practice book on lis pendens law. He has served as a board member for the Association of Business Trial Lawyers, Orange County Chapter, and the Orange County Bar Association.

About the 2019 Update Authors

ROBERT B. JACOBS, the update author of chaps 3–5, 7–8, and 14, is an attorney, mediator, and arbitrator based in Livermore. He received his B.A. in English in 1984 and his J.D. in 1987 from Brigham Young University. He has litigated real estate disputes and conducted real estate transactions for more than 30 years. He received mediation training in 2016 from Northwestern University in Chicago, Illinois, and serves on mediation panels for the Contra Costa and Santa Clara Superior Courts, as well as for the Bar Association of San Francisco and California Lawyers for the Arts.

GREGORY S. NERLAND is the update author of chaps 1–2, 6, 9–13, and 15. See biography in the About the Authors section of this book.

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