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Luna v. Brownell

June 11, 2010

GLORIA LUNA ET AL. PLAINTIFFS AND APPELLANTS,
v.
ERICA BROWNELL, INDIVIDUALLY AND AS CO-TRUSTEE, ETC., ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County, Mitchell L. Beckloff, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC359144).

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

CERTIFIED FOR PARTIAL PUBLICATION*fn1

INTRODUCTION

This case presents the following issue: If real property is transferred by a quitclaim deed to the trustee of a trust that has not been formed, is the deed void? We shall conclude that under the circumstances of this case, the deed is not void and is deemed delivered as of the date the trust was formed.

This is a family dispute over real property located at 112 South Russell Avenue in Monterey Park (the Property). Plaintiffs and appellants Gloria M. Luna (Gloria) and Ann Brownell (Ann) are the sisters of Alfonso Luna (Al), now deceased. Defendant and respondent Erica Brownell (Erica) is Ann's granddaughter and the successor trustee of the Luna Trust (the Trust). Defendant and respondent Frank J. Valdez (Valdez) was Al's attorney.

Shortly before Al's death, Gloria and Ann signed four grant deeds transferring the Property to Al as an individual and as the trustee of the Trust. Al then executed a quitclaim deed transferring his interest in the Property as an individual to himself as trustee of the Trust. Al subsequently created the Trust.

Less than a week after Al's death, plaintiffs commenced this action. Plaintiffs challenged the validity of the grant deeds and quitclaim deed on numerous grounds. After a bench trial, the superior court entered a judgment in defendants' favor. We affirm.

In the published portion of this opinion, we reject plaintiffs' argument that the quitclaim deed was void because the Trust was not formed as of the date the deed was signed. In the unpublished portion of this opinion, we shall address plaintiffs' remaining arguments.

FACTUAL AND PROCEDURAL BACKGROUND

On September 6, 1983, Al executed an individual grant deed transferring the Property to Gloria, Ann, Marcus M. Luna (Marcus)*fn2, and himself, as joint tenants. This deed was recorded on September 24, 1984.

There apparently was no consideration for the transfer of most of Al's interest in the Property to his siblings. The siblings understood that the Property belonged to Al, but it was placed in all of their names so that if Al died, the Property would simply pass on to his sisters and brother.*fn3

On August 8, 2006, Gloria and Ann each executed two grant deeds. One set of grant deeds transferred plaintiffs' interest in the Property to Al as an individual. The other set of grant deeds transferred plaintiffs' interest in the Property to Al as the trustee of the Trust. Attorney Valdez drafted two sets of deeds on Al's behalf because he "wasn't sure which type of transfer should occur at that time." There was no consideration given to plaintiffs for executing the grant deeds.

The grant deeds were executed during a meeting at the home of Gloria and Ann. At that meeting, Gloria, Ann, Al, Valdez's paralegal David J. Pantoja (Pantoja), notary public Steven Perez (Perez), and a driver employed by Valdez were present. Pantoja advised Gloria and Ann that they would be signing deeds giving the Property back to Al. Gloria and Ann stated that the Property was Al's, and that he could do what he wanted with it.

On August 13, 2006, Al executed a quitclaim deed transferring his interest in the Property as an individual to himself as trustee of the Trust.

On August 29, 2006, Al executed the declaration of trust for the Trust. The declaration of trust stated that Al was the trustee, and that the successor trustees were Valdez, Valdez's law office, and Erica. The beneficiaries of the Trust were Erik Brownell, Sr., Erik Brownell, Jr. and Erica.*fn4

On September 8, 2006, the grant deeds transferring plaintiffs' interest in the Property to Al as trustee of the Trust were recorded. The quitclaim deed transferring Al's interest in the Property, as an individual to Al, as trustee of the Trust, was also recorded. The grant deeds transferring plaintiffs' interests in the Property to Al as an individual were not recorded.

Al died on September 19, 2006. Less than a week later, on September 25, 2006, plaintiffs filed the complaint in this action.

The complaint set forth causes of action for (1) revocation/cancellation on grounds of lack of intent/mistake, (2) revocation on grounds of undue influence, (3) revocation on grounds of fraud, (4) negligent misrepresentations, (5) quiet title, (6) constructive trust for real property, (7) personal property claims, (8) breach of fiduciary duty, (9) conspiracy, (10) permanent injunction, and (11) accounting. At trial, plaintiffs pursued the first, third, fourth, fifth and sixth causes of action, but did not pursue the remaining causes of action.

The superior court held a one day bench trial on June 23, 2008. On August 19, 2008, the court issued a ruling in defendants' favor.

In its ruling, the court summarized the testimony of the witnesses at the trial, including the testimony of notary public Perez. The court noted that Perez testified as follows: "Mr. Perez heard Mr. Patoja explain the Grant Deeds to Ms. [Gloria] Luna and Ms. [Ann] Brownell. He also heard Mr. Patoja explain why the deeds were needed. Mr. Perez heard Mr. Patoja explain to Ms. Luna and Ms. Brownell that they were releasing any interest they might have in the Property. Mr. Perez believed that the women were not asserting any interest in the Property. They also voiced no objection to signing the deeds."

The court found Perez to be "credible." By contrast, the court "found the testimony of both plaintiffs unreliable and often not credible."

With respect to plaintiffs' argument that the deeds were void because the Trust was not formed on the date the deeds were executed, the court stated the following: "[I]n a situation where a property transfer has been made to one who has no legal existence, there is authority in some jurisdictions that provides as a matter of equity, such a deed is ...


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