Casonhua v. Wash. Mut. Bank

Filed 10/26/10 Casonhua v. Washington Mutual Bank CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified forpublication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publicationor ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIASECOND APPELLATE DISTRICTDIVISION SEVENYVONNE CASONHUA et al.,ADMINISTRATORS FOR THE ESTATEOF FLORENCE SIMS, DECEASED, andTHE ESTATE OF DAVID SIMS,DECEASEDPetitioners and Appellants,v.WASHINGTON MUTUAL BANK(currently known as J.P. Morgan Chase),Successor-in-Interest to Long BeachMortgage Company,Defendant and Respondent.B218606B218608(Los Angeles CountySuper. Ct. No. BA287823)APPEAL from judgments of the Superior Court of Los Angeles County. RevaGoetz, Commissioner. Reversed and remanded.Larson & Associates and Larry Larson, for Petitioners and Appellants.Horton & Debolt, Barton E. Debolt and Partick G. Bollig, for Defendant andRespondent.

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INTRODUCTION

In 2003, Sheron Berry recorded a grant deed that gave her title to a residentialproperty previously owned by the Sims Family Trust. The deed appeared to be signed by

Berry‟s grandmother, Florence Sims, who passed away seven months before Berry

recorded the deed. Berry later obtained a loan from Washington Mutual, which shesecured with a deed of trust to the property. After Berry defaulted on the loan,Washington Mutual initiated foreclosure proceedings.

Shortly thereafter, Florence Sims‟s step

-daughter, Yvonne Casonhua, and herhusband, James Casonhua, filed two complaints against Berry, Washington Mutual andothers, alleging that Berry fraudulently obtained the deed thereby voiding the deed in itsentirety. The first complaint was brought on behalf of the Estate of Florence Sims and

the second was brought on behalf of the Estate of David Sims, who was Florence‟s

husband. Washington Mutual demurred to both complaints, arguing that, as a bona fide

encumbrancer, it was entitled to rely on Berry‟s deed of trust. The trial court agreed,concluding that, under the facts pleaded in both complaints, Berry‟s grant deed was

voidable but not void and, as a result, Washington Mutual retained good title. The courtsustained the demurrers without leave to amend and entered judgments in favor of Washington Mutual. The Casonhuas timely appealed the judgments.

We reverse the trial court‟s orders

sustaining the demurrers and conclude that the

Casonhuas have pleaded claims that, if proven at trial, would void Berry‟s deed in itsentirety thereby nullifying Washington Mutual‟s interest in the property.

FACTUAL AND PROCEDURAL BACKGROUNDA.

Allegations in the Complaint

1.

Events Preceding the Plaintiffs’ Lawsuits

Florence and David Sims owned two parcels of real property, which included apersonal residence (the Residence Property) and a two-unit income property (the Income

Property; collectively “the Properties”). In 1991, the Simses established the Sims Family

Trust, which was funded with the Residence Property and the Income Property.

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According to the terms of the Trust, upon the Simses‟ death, the Residence Property was

to be distributed to Florence

Sims‟s daughter, Shirley Traylor, and the Income Propertywas to be distributed to David Sims‟s daughter, Yvonne Casonhua. David died shortly

after the Trust was created, leaving Florence

–

then 86 years old

–

as the sole trustee.Shortly after her h

usband‟s death, Florence began to exhibit symptoms of

dementia. As her medical condition deteriorated, Florence developed a confidentialrelationship with her granddaughter, Sheron Berry, who helped Florence make medicaldecisions. In December of 2001, Florence provided Berry with a power of attorney. Twoweeks later, Florence was diagnosed with dementia; she died in April of 2003.After Florence died, Berry recorded two grant deeds that conveyed the ResidenceProperty and the Income Property from the Sims Family Trust to Berry. The grant deeds

indicate that Florence transferred the Properties to Berry as “bona fide gifts.” The grant

deeds were purportedly signed by Florence in January of 2002.Between 2004 and 2006, Berry used the Properties to secure several loans. In2006, she obtained a $440,000 loan from Washington Mutual Bank secured by a deed of trust to the Income Property.

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Later that year, Berry obtained a loan in the amount of $361,000 from Avelo Mortgage, LLC, which she secured with a deed of trust to theResidence Property.

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In early 2008, Berry defaulted on both loans and Washington Mutual and Aveloinitiated foreclosure proceedings. Yvonne Casonhua became aware that Berry hadobtained title to the Properties after the lenders affixed notices of foreclosure to eachproperty.

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Berry initially obtained her loan on the Income Property from Long BeachMortgage Company. Washington Mutual is the successor-in-interest to Long BeachMortgage Company and the current lender of record for the Income Property.Washington Mutual is currently known as J.P. Morgan.

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Berry initially obtained her loan on the Residence Property from New CenturyMortgage. Avelo is the successor-in-interest to New Century Mortgage and the currentlender of record for the Residence Property.