Abstract of Judgment: Enforceable Upon Revival of Corporate Powers

  In Longview International, Inc. v. Stirling the Court of Appeal for the Sixth District concludes that the recording of an abstract of judgment is a procedural act that is retroactively validated once a suspended corporation’s powers are reinstated.

  An abstract of judgment recorded when a corporation is suspended for failure to pay franchise taxes is not void. At the time of recording, even though a corporation is suspended, the abstract of judgment is capable of being enforced upon the corporation obtaining a revival of its corporate powers. Revival retroactively validates the lien and makes the abstract enforceable.

  The fact that revival occurred after the transfer of property is of no merit. A recorded abstract that complies with all statutory requirements is not void and provides notice to the transferee that the judgment lien may be enforced upon revival of the corporation’s powers.

Same Creditor: Sold-Out Junior May Obtain Deficiency Judgment Following Nonjudicial Foreclosure of Senior Lien

  In Black Sky Capital, LLC v. Cobb, the California Supreme Court holds that Code of Civil Procedure section 580d—that prevents a foreclosing creditor at a nonjudicial foreclosure sale from collecting a deficiency judgment—does not prevent the same creditor holding two deeds of trust on the same property from recovering a deficiency judgment when its junior lien is extinguished by the nonjudicial foreclosure of its senior lien. Continue reading

1-Year Statute of Limitations: Malicious Prosecution Action Against Attorney

  The First Appellate District, in Connelly v. Bornstein, adds to the line of cases holding that a malicious prosecution action against an attorney is governed by Code of Civil Procedure section 340.6(a). That section imposes a one-year statute of limitations for actions “against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services.”

  The result is contrary to the statute of limitation applicable to other litigants of a malicious prosecution claim. Other litigants are subject to the more general two-year statute of limitation set forth at Code of Civil Procedure section 335.1, applicable to injury to a person caused by the wrongful act or neglect of another.

“Trust Transfer Deed” Fails to Accomplish Transmutation

  A “Trust Transfer Deed” that purportedly granted husband’s interest in real property to wife failed to accomplish a transmutation.

  Pursuant to Family Code section 852(a) a transmutation is not valid unless made in writing by an express declaration by the party adversely affected. To satisfy the “express declaration” requirement the writing must state on its face that the characterization or ownership of the property is being changed. Extrinsic evidence is not permitted to prove an ambiguous writing. Therefore, the express declaration must unambiguously indicate a change in character or ownership of property for a valid transmutation. Continue reading

Foreclosure: Record Trustee’s Deed Before Serving 3-Day Notice

  When real property is purchased at a foreclosure sale, it is frequently necessary for the new owner to institute unlawful detainer proceedings to recover possession. Is it necessary for the Trustee’s Deed Upon Sale to record before a valid 3-day notice to quit is served?

  In Dr. Leevil, LLC v. Westlake Health Care Center, the California Supreme Court answered this question in the affirmative. In reversing the Court of Appeals, the Court held that duly perfected title, including the recording of the Trustee’s Deed Upon Sale, is required before a valid 3-day notice to quit may be served.

  Practice tip: after purchase at a foreclosure sale, duly perfect title and do not serve a 3-day notice to quit before the trustee’s deed records.

 

Anti-SLAPP Motion: Unavailable in Limited Civil Cases

  In writ proceedings, the Second Appellate District reverses the Los Angeles Superior Court Appellate Division and holds that a special motion to strike, or anti-SLAPP motion, pursuant to Code Civil Procedure section 425.16 may not be brought in a limited civil case. Continue reading

Failure to Oppose Demurrer: Mandatory Relief from Dismissal Available

  The First Appellate District reverses the trial court and holds that the court was obligated to grant relief under the mandatory provision of Code of Civil Procedure section 473(b), where plaintiff presented a sworn declaration from his counsel attesting that counsel mistakenly failed to respond to the demurrer by timely filing an amended complaint.  Continue reading

Transmutation By Interspousal Transfer Grant Deed

  The Court of Appeals determines that a standard interspousal transfer grant deed (ITGD) meets the requirements for a transmutation of the character of marital property under Family Code section 852.

  Section 852 provides in pertinent part: “(a) A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.” Continue reading

Attorney Fees: Quantum Meruit Fees Allowed Despite Actual Undisclosed Conflict

  The California Supreme Court agrees with the Court of Appeals in Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Company, Inc. and holds that an actual undisclosed conflict of interest renders an attorney fee agreement, including the arbitration clause, unenforceable against public policy.

  Contrary to the Court of Appeals, however, it concludes that the ethical violation does not “categorically disentitle the law firm from recovering the value of the services it rendered to the manufacturer.” Principals of equity may entitle the law firm to “some measure of compensation” as determined by the trial court.

Anti-SLAPP: Must Bring Motion Within 60 Days of Earliest Complaint

  The California Supreme Court holds that under Code of Civil Procedure section 425.16 (the anti-SLAPP statute) a defendant must move to strike a cause of action within 60 days of service of the earliest complaint that contains a cause of action to which it is directed, unless the court grants discretionary relief and permits late filing under subdivision (f). (Newport Harbor Ventures LLC v. Morris Cerullo World Evangelism.)