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Ricketts v. McCormack

September 24, 2009

DEBORAH A. RICKETTS ET AL., PLAINTIFFS AND APPELLANTS,
v.
CONNY B. MCCORMACK ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County, Carolyn B. Kuhl, Judge. Affirmed. (Los Angeles County Super. Ct. Nos. BC318044/BC366355).

The opinion of the court was delivered by: Perluss, P. J.

CERTIFIED FOR PUBLICATION

Civil Code section 2941(section 2941) imposes certain obligations on the parties to a secured real estate loan transaction to promptly clear title to the encumbered property after satisfaction of the loan. As part of this process, section 2941, subdivision (c), requires a county recorder to "stamp and record" within two business days from the day of receipt in proper form and with all required fees a full reconveyance or certificate of discharge confirming the satisfaction of the obligation secured by a deed of trust.*fn1 What does section 2941, subdivision (c)s stamp-and-record requirement mean?

Contending the Legislature intended the county recorder to stamp, record and index a full reconveyance within two business days of receipt of the form, Deborah Ricketts and Joel Rosenberg filed putative class action lawsuits on behalf of all persons harmed by the failure of the County of Los Angeles and its Registrar-Recorder, Conny B. McCormack (collectively County), to fulfill their statutory duties. Following a bench trial, the trial court rejected Rickettss and Rosenbergs interpretation of the statute and entered judgment in favor of the County. We agree indexing is a distinct function, separate from recording a document, and is not part of section 2941, subdivision (c)s stamp-and-record requirement. Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Alleging the County routinely fails to stamp and record reconveyances presented to them within two business days as required by section 2941, subdivision (c), Ricketts filed a verified class action complaint on July 6, 2004, seeking issuance of a writ of mandate ordering the County to comply with its statutory duties and the recovery of damages on behalf of all class members and forfeiture of $500 per violation, as authorized by section 2941, subdivision (d).*fn2 The complaint contained a separate cause of action, also seeking class-wide monetary relief, alleging the County had violated its duty under Government Code section 27201 et seq. to record, index and make available to the public within a reasonable time documents affecting title to real property located in Los Angeles County.

The trial court dismissed the two causes of action seeking damages and forfeitures based on Rickettss failure to comply with the government claims presentation requirement. (See Gov. Code, § 900 et seq.)*fn3 Shortly thereafter, the trial court granted Rosenbergs motion for leave to file a class action complaint in intervention. Rosenbergs complaint contained a cause of action petitioning for mandamus relief, similar to Rickettss, alleging the County failed to stamp and record reconveyances within two days of receipt. He also attempted to allege a cause of action for imposition of a constructive trust for wrongfully detained statutory penalties. The County successfully demurred to the cause of action for imposition of a constructive trust, leaving essentially identical petitions for mandamus relief as the only claims in the case.

In August 2006 Ricketts moved for summary judgment on her mandamus claim, arguing the stamp-and-record requirement of section 2941, subdivision (c), required reconveyances to be entered into the recorders general index within the statutory twoday period, so that they would be readily available to individuals conducting a computerized title search. Inexplicably, the Countys lawyer conceded the stamp-and- record requirement included indexing. Because indexing was not always completed within the two-day period,*fn4 the court granted the motion and on March 7, 2007 entered a judgment in favor of Ricketts for issuance of a writ of mandate commanding the County "to record and index reconveyances or certificates of discharge within two business days of receipt."

After associating in new counsel, the County moved for a new trial on the ground the writ of mandate was overbroad. In particular, the County now argued section 2941, subdivision (c), required only that the reconveyance be stamped and recorded, not indexed, within the two-day period. On May 7, 2007 the court granted the motion for a new trial. Ricketts did not appeal the courts ruling.

In December 2007 Ricketts and Rosenbergs petitions for a writ of mandate were tried to the court. The County contended a reconveyance is recorded within the meaning of section 2941 when it is accepted for recording by the recorder (that is, the reconveyance is presented in the correct form and with the proper fee) and the recorder applies a permanent recording number. Ricketts and Rosenberg argued the reconveyance is not recorded until it is indexed and a digital image of the reconveyance document is made available to the public. In a tentative decision issued on May 8, 2008, the court denied the claim, concluding the phrase "stamp and record" could not reasonably be understood to require indexing within the two-day period prescribed by section 2941, subdivision (c). Instead, a reconveyance is recorded "when the Recorder endorses on a reconveyance the order of receipt, the day and time of receipt and the amount of fees paid."

In reaching its decision, the court made the following factual findings about the recorders practices: "A document examiner reviews the reconveyance to determine whether or not it meets all recording requirements. If the reconveyance does meet those requirements, the document examiner creates an entry for the document in the Enterprise Recording Archive ("ERA) system. The ERA system calculates the fees payable and prints out a sheet with a temporary examination number ("TEN) and bar code. Thereafter, a cashier scans the bar code, bringing up a computer screen displaying the entries for the reconveyance that the examiner made in the ERA system. The cashier makes sure the check received with the reconveyance matches the fees due as indicated in the ERA system. If the fees are correct, the cashier accepts the check and generates a "lead sheet. The lead sheet includes the following: (1) the eleven-digit permanent recording number assigned to the reconveyance, (2) a bar code, (3) the number of pages of the document, (4) the date and time of the transaction, (5) the TEN, (6) the amount of fees paid, (7) how the document arrived (e.g., counter, mail), (8) a transaction number, (9) the seal of the County of Los Angeles, and (10) the words "Recorded/Filed in Official Records [¶] Recorders Office, Los Angeles County, California. At this point, the Recorder considers the recording process to be complete."

Moreover, once a lead sheet is generated and the reconveyance is stamped with the legend "Recorded/Filed in Official Records," a member of the public may obtain a certified copy of the reconveyance. Although the trial court viewed this evidence as irrelevant to its conclusion that the County had complied with section 2941, subdivision (c), the court also found certified copies of the reconveyance could be obtained from the point of filing if the requestor has the recording number assigned to the document or within 24 hours by reviewing "grey film" or "blotter film" pending the entry of a digital image of the document into the indexed database. Finally, the trial court found reconveyances are routinely stamped and recorded (with very few exceptions) within two business days of receipt.

The courts tentative decision became final 10 days after it was issued when none of the parties submitted objections. (See Cal. Rules Court, rule 3.1590 et seq.) Judgment was ...


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