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James D. Ferguson v. Kenneth Swanstrom et al

August 17, 2012

JAMES D. FERGUSON, PLAINTIFF AND RESPONDENT,
v.
KENNETH SWANSTROM ET AL., DEFENDANTS AND APPELLANTS.



(Super. Ct. No. 08 CV 0006)

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

Ferguson v. Swanstrom

CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Defendants appeal from the trial court's judgment of quiet title in favor of plaintiff and cancellation of a real property installment sales agreement, a grant deed, and a purported deed of trust. They raise numerous grounds of appeal but have failed to include a reporter's transcript. We are thus left with deciding only issues of law or those apparent from the face of the pleadings. (Kompf v. Morrison (1946) 73 Cal.App.2d 284, 286.) So limited, we review defendants' claims they were wrongly denied a jury trial, the trial court's judgment is erroneous under the one-action rule of Code of Civil Procedure section 726, and the court failed to provide a requested statement of decision. We affirm the judgment.*fn1

FACTS

By written agreement dated January 28, 2004, plaintiff agreed to sell to defendants, subject to a life estate in plaintiff, real property located in Salyer, Trinity County. The purchase price was $90,000, payable as follows: one $3,000 down payment due January 4, 2004, followed by monthly installments of $300, without interest. Upon payment of all sums due under the agreement, plaintiff would convey title to defendants.

Paragraph 4 of the sales agreement provides that if defendants breach, plaintiff may, following 10 days' notice, "terminate this contract at once." Paragraph 4 also states that in the event of such a breach, plaintiff may retain all monies paid by defendants under the agreement.

On October 30, 2006, nearly three years after the parties executed the sales agreement, the parties recorded a grant deed by which plaintiff transferred title in the property to defendants, subject to his life estate. This occurred even though the sales agreement stated title would not be transferred until the full purchase price was paid.

Also on October 30, 2006, the parties recorded the first page of a short form deed of trust. This deed of trust purported to transfer title in the property from defendants to a trustee, with power of sale, and naming plaintiff as beneficiary, for the purpose of securing payment of a promissory note in the amount of $90,000 for plaintiff's benefit. The deed of trust is not signed by any of the parties. No promissory note was attached, but a copy of the signed sales agreement was attached. Although recorded in 2006, the deed of trust was dated January 28, 2004, the same date affixed to the sales agreement.

The record also contains a promissory note made by defendants to plaintiff's benefit in the amount of $90,000. The note is dated January 28, 2004, but defendants did not sign it until October 30, 2006. The sum is due and payable along the same terms contained in the sales agreement. The entire balance is due and payable upon default by defendants and election by plaintiff on 10 days' notice. There is no evidence in the record before us that this note was ever attached to a deed of trust or recorded.

Plaintiff filed this action in 2008 for cancellation of the sales agreement and the grant deed, quiet title, and declaratory relief. He alleged defendants had failed to (1) pay $2,000 of the $3,000 down payment; (2) provide plaintiff with a promissory note for the $90,000 obligation; and (3) provide plaintiff with a deed of trust in a proper format. He alleged he had made written demand to defendants to cure the deficiencies on July 20 and September 7, 2007, but he received no direct response. Pursuant to the terms of the sales agreement, plaintiff elected to terminate the agreement by letter dated December 17, 2007.

Defendants, acting in pro per at trial and before us, answered and filed a cross-complaint. After the court sustained a demurrer and motion to strike against the cross-complaint, the cross-complaint was left with four causes of action: breach of an oral agreement to pay one-half of the attorney fees incurred in drawing up the deed and other papers and having them recorded; breach of an oral agreement to pay one-half of the utility bills assessed on the property, with damages totaling over $500; specific performance of the sales agreement; and declaratory relief.

Neither in their answer nor cross-complaint did defendants plead for relief under the so-called one-action rule (§ 726, subd. (a)). That rule in general requires a creditor who holds a security interest in real property to exhaust his security in cases of debtor default, i.e., to pursue foreclosure on the lien in lieu of filing an action against the debtor personally.

However, prior to trial, defendants brought a motion for sanctions pursuant to the one-action rule to terminate any security interest plaintiff had in the property under the recorded deed of trust as a result of his electing to sue defendants personally and not exhaust the security. The trial court denied the motion. Defendants had asked for a statement of ...


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