Gonzalez v. Michelucci-Hardrick, D053582 (Cal. App. 1/13/2010)

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MANUEL GONZALEZ, Individually and as Trustee, etc., et al., Plaintiffs and Appellants, v. ELAINA MARIA MICHELUCCI-HARDRICK et al., Defendants and Respondents.

D053582.

Court of Appeals of California, Fourth Appellate District, Division One.

January 13, 2010.

Appeal from judgments of the Superior Court of San Diego County, No. GIC880968, Judith F. Hayes, Judge. Affirmed in part; reversed in part.

Not to be Published in Official Reports

IRION, J.

Manuel Gonzalez, individually and as trustee for Laurie Valadez, and Laurie Valadez sued defendants NMS Realty/Mortgage Corporation dba Pacific Fidelity Funding and dba Access Realty ("NMS"); Elaina Maria Michelucci-Hardrick, and her husband, William Hardrick (together, "the Hardricks"); Karin Jordan; Harold Lear; GMAC Mortgage, LLC ("GMAC"); and Wells Fargo Bank, N.A. ("Wells"), alleging they were victims of a rescue/refinance equity theft scheme in which they lost their home. The trial court sustained demurrers, without leave to amend, brought by defendants to each of the causes of action of the operative amended complaint filed January 23, 2008 (the complaint). Gonzalez and Valadez appeal.

We affirm the judgment in favor of GMAC and Wells. We also affirm the judgment with respect to Valadez because she lacks standing. We conclude, however, that the complaint alleges facts sufficient for Gonzalez, individually and as trustee for Valadez, to state causes of action against Michelucci-Hardrick and NMS for breach of contract, breach of fiduciary duty, fraud, negligent infliction of emotional distress and unfair business practices, but not for violation of the Truth in Lending Act (TILA) (15 U.S.C. § 1601 et seq.) or usury. Accordingly, we reverse, in part, the judgment in favor of Michelucci-Hardrick and NMS.

I FACTUAL AND PROCEDURAL BACKGROUND

Our factual summary is based on the material facts alleged in the complaint and judicially noticed documents. Because this appeal arises from the sustaining of a demurrer, we assume the truth of all facts properly pleaded by the appellants and treat relevant matters that were the subject of judicial notice as having been pleaded. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)

The Parties and the Property At Issue

Gonzalez and Valadez lived in a home at 3440 Ediwhar Avenue in San Diego ("the property"). Valadez acquired title to the property in 1999. In 2004, the mortgage on the property was refinanced, and Valadez transferred title to the property to Gonzalez on instructions of the lender, Ameriquest, who is not a party to this appeal. Thereafter, Gonzalez held title to the property for himself and in trust for Valadez.

The Hardricks were employees of NMS. Although Hardrick was not a licensed real estate agent, NMS allowed him to work with Michelucci-Hardrick at Access Realty, the name under which NMS conducted its realty business. Hardrick knew Valadez's family, and knew that Gonzalez held the property in trust for Valadez. He conveyed that information to NMS and Michelucci-Hardrick.

The "Refinancing" Transactions

In December 2004, Hardrick, acting on his own behalf and as an employee of NMS, contacted Gonzalez about refinancing the property. Both Hardrick and Michelucci-Hardrick assured Gonzalez that they could assist him in finding a new loan with a better interest rate. At the time, Gonzalez owed $356,000 on the Ameriquest loan, which bore an interest rate of 10.5 percent. Hardrick told Gonzalez to stop making payments to Ameriquest because all further loan payments would be made through the refinancing transaction. However, the Hardricks could not get a new loan funded and, by May 2005, the property was in default and on the verge of foreclosure.

The Hardricks and NMS then "concocted a plan to illegally refinance" the property. The Hardricks and NMS told Gonzalez to transfer the property to defendant Jordan, who would get a loan at a 6 percent interest rate, assisted by defendant Lear. The Hardricks and NMS promised Gonzalez that he and Valadez could keep their home, that he would get title to the property after four months of making timely payments on the refinance loan and that his credit would be repaired. Pursuant to the scheme, Gonzalez signed a real estate purchase agreement with a lease-to-own option and transferred title to the property to Jordan by grant deed on May 4, 2005. The deed was recorded on June 16, 2005.¹

Thereafter, in conjunction with the purported scheme, Jordan "refinanced" the property in her name, executing a deed of trust in favor of Paul Financial, LLC, to secure a loan for $356,000 ("the Jordan loan") at a 6 percent interest rate. The deed of trust was recorded on June 16, 2005. The refinancing resulted in a prepayment penalty on the Ameriquest loan and other charges.

Jordan's "refinancing" produced $80,000 in cash proceeds from the equity in the property, after deduction of a prepayment penalty and other charges. Hardrick opened a joint bank account in his and Gonzalez's names with $20,000 of the loan proceeds, and used the funds for his personal benefit and to make payments on the Jordan loan for about eight months. The remaining proceeds were kept by NMS, Michelucci-Hardrick and others as sales and mortgage commissions.

At some point, GMAC and Wells succeeded to Paul Financial's interest on the Jordan loan, with Wells holding title as trustee. The Jordan loan was in default and GMAC/Wells initiated foreclosure proceedings on the property. GMAC allowed Gonzalez and Valadez to make a reinstatement payment of $18,650.51 to cure the default. However, after no additional payments were made on the loan, GMAC and Wells foreclosed upon the property. Wells acquired title to the property under a trustee's deed upon sale, which was recorded on October 25, 2007.

Lawsuit

Gonzalez and Valadez filed suit against NMS and the Hardricks as well as their previous lender, Ameriquest. After NMS and Michelucci-Hardrick successfully demurred to the initial and first amended complaints, Gonzalez and Valadez filed the operative second amended complaint on January 23, 2008, adding GMAC and Wells as defendants.² Michelucci-Hardrick and NMS demurred, as did Wells and GMAC, and Jordan. In a minute order dated May 16, 2008, the trial court sustained the general and special demurrers of NMS, Hardrick, GMAC and Wells, and the general demurrer of defendant Jordan, all without leave to amend. The court entered judgment of dismissal as to GMAC and Wells on June 12, 2008. NMS and Michelucci-Hardrick served a "Notice of Dismissal of Complaint with Prejudice," which was not filed with the court. On June 25, 2008, they filed and served an order signed by the trial court stating NMS and Michelucci-Hardrick were dismissed from the action.³ On August 13, 2008, Gonzalez and Valadez filed their notice of appeal.

II JURISDICTIONAL ISSUES

At the outset, we address two issues potentially affecting our appellate jurisdiction: (1) whether an appealable judgment exists as to defendant Jordan; and (2) whether the appeal was timely.

A. The Court's Jurisdiction Does Not Encompass the Nonappealable Order Sustaining Jordan's Demurrer

Gonzalez and Valadez seek review of the trial court's order sustaining Jordan's demurrer without leave to amend.

In order for this court to review that ruling, there must be an appealable judgment. (Doran v. Magan (1999) 76 Cal.App.4th 1287, 1292.) The trial court's May 16, 2008, minute order sustaining Jordan's demurrer without leave to amend was not an appealable order, as only a judgment entered on such an order can be appealed. (I. J. Weinrot & Son, Inc. v. Jackson (1985) 40 Cal.3d 327, 331; Code Civ. Proc., § 904.1.) Our independent review of the trial court record reveals no judgment or signed-and-filed dismissal order which would be considered a judgment in favor of Jordan.⁴ Accordingly, we lack appellate jurisdiction to consider the trial court's ruling as to defendant Jordan.

B. The Appeal Is Timely as to the Order Dismissing Michelucci-Hardrick and NMS

Michelucci-Hardrick and NMS contend we should dismiss the appeal as untimely.

Under California Rules of Court, rule 8.104(a),⁵ a notice of appeal must be filed on or before the earliest of: "(1) 60 days after the superior court clerk mails the party filing the notice of appeal a document entitled `Notice of Entry' of judgment or a file-stamped copy of the judgment, showing the date either was mailed; [¶] (2) 60 days after the party filing the notice of appeal serves or is served by a party with a document entitled `Notice of Entry' of judgment or a file-stamped copy of the judgment, accompanied by proof of service; or [¶] (3) 180 days after entry of judgment."⁶

Courts adhere strictly to the literal requirements of the rule, consistently holding that the required "`document entitled "Notice of Entry"' . . . must bear precisely that title." (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 903 (Alan), citation omitted [construing rule 8.104(a)(1)]; Sunset Millennium Associates, LLC v. Le Songe, LLC (2006) 138 Cal.App.4th 256, 260 [applying rule 2, predecessor to rule 8.104].) In order to trigger the 60-day period under rule 8.104(a)(2) then, the document served by the party must be entitled "notice of entry."

Michelucci-Hardrick and NMS contend the notice of appeal was untimely because it was filed more than 60 days after they served a "Notice of Dismissal" on June 13, 2008. We disagree. The notice of dismissal was not "a document entitled `Notice of Entry,'" as the rule requires, and was insufficient to trigger the time for filing a notice of appeal. (Rule 8.104(a)(2); see Alan, supra, 40 Cal.4th at p. 903.)

The court entered judgment as to Michelucci-Hardrick and NMS by order dismissing them from the action on June 25, 2008.⁷ Gonzalez and Valadez filed their notice of appeal on August 13, 2008, within 180 days of that date.⁸ Therefore, Gonzalez and Valadez's appeal was timely filed. (Rule 8.104(a)(3).)

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