Pacific 26 Management v. Tarquinio CA2/2 ( 2022 )

Filed 11/30/22 Pacific 26 Management v. Tarquinio CA2/2
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
PACIFIC 26 MANAGEMENT, B316409
LLC,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No. 20SMCV01320)
v.
ROBERT TARQUINIO,
individually and as trustee, etc.,
Defendants and
Appellants.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Mark H. Epstein and Bruce G. Iwasaki, Judges.
Affirmed.
Law Office of Patrick Thomas Santos and Patrick Santos
for Defendants and Appellants.
Law Offices of Saul Reiss, Saul Reiss and Fay Pugh for
Plaintiff and Respondent.
Defendant and appellant Robert Tarquinio, individually
and as trustee of The House of Tarchnas Living Trust (appellant),
appeals from the October 21, 2021 unlawful detainer judgment
entered against him and in favor of plaintiff and respondent
Pacific 26 Management, LLC (respondent). On November 19,
2021, we issued an order temporarily staying the October 21,
2021 judgment pending further order of this court.
We affirm the judgment. We dissolve the temporary stay
imposed pursuant to our November 19, 2021 order and remand
the matter to the trial court to determine the amount of
additional unpaid rent appellant owes respondent as holdover
damages.
BACKGROUND
Current unlawful detainer action
Appellant was the owner of certain residential real
property located at 1048 Chelsea Avenue in Santa Monica,
California (the property). The property was encumbered by a
deed of trust as security for a $3.65 million loan. The loan went
into default, the lender foreclosed on the deed of trust, and a
trustee’s sale was held. Respondent was the successful bidder at
the trustee’s sale and became the owner of the property pursuant
to a trustee’s deed upon sale. Appellant continued to occupy the
property following the trustee’s sale, and respondent commenced
this unlawful detainer action against appellant in September
2020.
A one-day court trial was initially set for January 19, 2021.
The parties engaged in discovery and filed trial written briefs.
On January 19, 2021, at appellant’s request, the trial was
continued to February 8, 2021. The trial court and the parties
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conferred, and the court instructed the parties to address the
issue of the validity of respondent’s title at the next hearing. The
court stated: “It is the defendant’s burden to prove a colorable
claim and legitimate question as to whether title is an issue. [¶]
If no such claim is proven, the Court will proceed with the case as
an Unlawful Detainer matter.” On February 8, 2021, the trial
was again continued, at appellant’s request, to February 11,
2021.
The parties filed briefs on the issue of the validity of
respondent’s title, and on February 11, 2021, they argued that
issue before the trial court. The trial court found that respondent
had met its prima facie burden of establishing the validity of its
title to the property and that appellant had failed to show that
respondent had engaged or participated in any fraud. The court
ruled that the unlawful detainer trial would proceed after lunch
that day.
During the lunch break, appellant filed a written request
for one-day leave to file a quiet title action against respondent.
The trial court denied the request on the ground that there was
no evidence of respondent’s involvement in any fraud.
Trial commenced on the afternoon of February 11, 2021.
The parties submitted documentary evidence. Respondent’s
principals and appellant also testified. Appellant argued that the
notice of default upon which the trustee’s sale was based was
fraudulent and that respondent and its principals knew of the
fraud. Respondent argued that a standard nonjudicial
foreclosure sale had occurred and that the trustee’s deed upon
sale afforded conclusive presumptions about the validity of the
sale.
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At the trial court’s direction, the parties submitted closing
briefs. In his closing brief, appellant asked for the first time that
the trial court stay the unlawful detainer action and consolidate
it with a quiet title action appellant had filed against respondent
and others. Concurrently with his closing brief, appellant filed a
declaration regarding newly discovered evidence and a request
for judicial notice of the quiet title and rescission action he had
filed against the lenders and respondent on February 22, 2021.
Respondent objected and moved to strike the declaration and
request for judicial notice.
On April 30, 2021, the trial court directed the parties to
return on May 17, 2021, for further argument. At the May 17,
2021 hearing, after hearing argument from the parties, the trial
court denied appellant’s request for judicial notice and to present
additional evidence.
On September 3, 2021, appellant filed a notice of related
cases, asserting that the fraud action he had filed against
respondent and others in Los Angeles Superior Court case
No. 21STCV06748 was related to the unlawful detainer action.
Respondent objected on the grounds that the notice was untimely
and that the two cases were not related. On September 9, 2021,
the trial court issued a minute order ruling that appellant’s civil
action against respondent was not a related case.
The trial court issued a final statement of decision on
October 21, 2021. Judgment was entered that same day. The
judgment awarded possession of the property to respondent and
rent in the amount of $15,000 per month in holdover damages.
Appellant filed this appeal on October 29, 2021. Appellant
subsequently filed a petition for writ of supersedeas, and on
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November 19, 2021, we issued an order staying execution of the
unlawful detainer judgment pending further order of this court.
Civil action
Appellant commenced a separate civil action, Los Angeles
Superior Court case No. 21STCV06748, against respondent and
others in February 2021 for fraud, wrongful foreclosure, and
quiet title, alleging he was defrauded of his title to the property
by the lenders and other affiliated parties. Appellant did not
serve respondent with the summons and complaint in that action
until February 2022.
Respondent demurred to appellant’s first amended
complaint. On April 8, 2022, the court sustained the demurrer
and granted appellant 20 days leave to amend. As to appellant’s
quiet title cause of action, the court ruled that appellant’s claim
that respondent was not a bona fide purchaser of the property
was barred by the unlawful detainer judgment unless appellant
could allege facts showing that respondent had actual notice of
the purported fraud. The court emphasized that “[a] mere
unsubstantiated statement” concerning respondent’s knowledge
of the fraud “is not sufficient.”
Appellant filed a second amended complaint, to which
respondent again demurred. On July 26, 2022, the court
sustained the demurrer without leave to amend as to all causes of
action. With regard to appellant’s quiet title cause of action, the
court found that appellant’s amended pleading failed to address
the res judicata effect of the unlawful detainer action. The court
noted that appellant’s second amended complaint asserted the
same arguments he had raised in the unlawful detainer action
and that the doctrine of res judicata barred appellant from
relitigating the issue of respondent’s status as a bona fide
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purchaser. The court similarly found that appellant failed to
state a claim against respondent for fraud or wrongful foreclosure
and struck appellant’s request for exemplary damages and
attorney fees. On August 17, 2022, while this appeal was
pending, judgment in the civil action was entered in respondent’s
favor.
DISCUSSION
Appellant’s sole contention on appeal is that the trial court
erred by not staying the unlawful detainer action pending
resolution of his quiet title action against respondent and by not
consolidating the two actions. We review a trial court’s ruling on
a motion for a stay under the abuse of discretion standard.
(Bains v. Moores (2009) 172 Cal.App.4th 445, 480.) The abuse of
discretion standard also applies to a ruling on a motion to
consolidate. (Todd-Stenberg v. Dalkon Shield Claimants Trust
(1996) 48 Cal.App.4th 976, 978-979.)
The record discloses no abuse of discretion. Appellant filed
no motion to stay and no motion to consolidate in the trial court
below. The trial court accordingly was never presented with the
opportunity to exercise its discretion in that regard. (See
Archibald v. Cinerama Hotels (1976) 15 Cal.3d 853, 860.)
Appellant cites no authority that would impose on the trial court
a sua sponte duty to stay the unlawful detainer action or to
consolidate it with the civil action. Appellant’s untimely and
procedurally improper request to stay the action, made for the
first time in his closing trial brief, did not oblige the trial court to
rule on the request.
We reject appellant’s contention that failure to stay the
unlawful detainer action deprived him of his due process right to
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litigate his claims against respondent. The record shows that
appellant had the opportunity to fully and fairly litigate
respondent’s status as a bona fide purchaser in the unlawful
detainer action. The parties engaged in discovery, filed extensive
written briefing on the issue of respondent’s knowledge and
participation in the lender’s alleged fraud, and argued the issue
before the trial court. Plaintiff also presented documentary
evidence and witness testimony concerning respondent’s status
as a bona fide purchaser. The trial court found that appellant
“was unable to point to any credible evidence to demonstrate that
[respondent] was not a bona fide purchaser for value. . . . And, to
the extent that there was any such credible evidence, the Court
finds [respondent’s] contrary evidence to be more credible.”
Asuncion v. Superior Court (1980) 108 Cal.App.3d 141 and
Mehr v. Superior Court (1983) 139 Cal.App.3d 1044, which
appellant cites as support for his position, are distinguishable.
The defendants in both those cases attempted to raise affirmative
defenses of fraud in an unlawful detainer action by consolidating
the unlawful detainer action with a concurrent civil action they
had filed against the lender. (Mehr, at p. 1047; Asuncion, at
p. 143.) Appellant in this case did not serve respondent with the
summons and complaint in his civil fraud action until after the
unlawful detainer action had concluded. Appellant had ample
opportunity to fully and fairly litigate the issue of respondent’s
bona fide purchaser status in the unlawful detainer action.
Respondent’s position, moreover, was again vindicated in
appellant’s civil fraud action. That action concluded while this
appeal was pending, and a judgment was entered in respondent’s
favor. The court in that civil action ruled that appellant failed to
state a fraud claim against respondent. The court rejected
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appellant’s allegation that respondent engaged in a conspiracy to
defraud given the absence of any specific allegations of wrongful
conduct by respondent or any allegations that would support a
“reasonable inference” that respondent was aware of a purported
scheme to defraud appellant. Both the trial court in the unlawful
detainer action and the court in the civil fraud action reached the
same result—that there is no merit to appellant’s claims against
respondent for fraud and no basis for challenging respondent’s
title to the property as a bona fide purchaser for value.
Appellant fails to establish any abuse of discretion.
DISPOSITION
We affirm the judgment. We dissolve the temporary stay of
the judgment imposed pursuant to our November 21, 2021 order
and remand the matter to the trial court to determine the
amount of additional rent appellant owes to respondent as
holdover damages. Respondent is awarded its costs of appeal.
________________________
CHAVEZ, J.
We concur:
________________________
LUI, P. J.
________________________
HOFFSTADT, J.
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