Brief Summary: Appellant appealed a lower court decision where it found for Plaintiff. On appeal, appellant argued that the underlying contract violated the statute of frauds and that an alteration to the deed after grantor signed voided the deed. The appellate court found the statute of frauds did not apply and upon first impression, names added to a deed after execution did not violate the original deed. Further, the lower court properly allowed in evidence even though it was not produced during discovery. The lower court decision was affirmed.

Case Summary: In 1985, a family collectively purchased five acres of land. Appellant owned 50% interest in one lot. In 1998, appellant wanted to sell his interest in the property. His uncle raised $50,000. After appellant received the money, his name remained on the property because his relatives felt appellant’s command of English benefited the family.

In 2002, appellant faced a lawsuit and sought to remove his name from the property to protect it. Appellant conveyed the property as a “gift” to Fue, his uncle’s daughter. However, after Fue signed the quit claim deed, someone added two additional names to the deed.

In 2005, appellant had Fue execute a deed reconveying the property. Fue sued. At trial, the court found that the payment of $50,000 consisted of a buy out of appellant’s interest and the conveyance was voided as to the added names.

Appellant appealed on the grounds that the original offer to sell was not in writing and violated the statutes of fraud and the altered deed should void the deed all together.

The statutes of fraud requires some form of writing when a contract is entered into for the sale of real property. Civ. Code §1624(a). The statute, however, applies primarily for evidentiary purposes. Sterling v. Taylor (2007) 40 Cal.4th 757, 766. It does not apply to executed agreements. Kirkpatrick v. Tapo Oil Co. (1956) 144 Cal.App.2d 404, 414.

At trial, parties did not dispute that appellant executed a grant deed in 2002. Because of the execution, application of the statute of frauds is in appropriate. The lower court correctly rejected appellants argument.

The court addresses the issue of names being added after the execution of a deed on first impression. Courts in the past have held where a deed is altered without grantor’s consent prior to execution, the deed is void. Montgomery v. Bank of America (1948) 85 Cal.App.2d 559, 563. However, that did not happen under the current facts.

Instead, a closer analogy occurs when a trustee alters a formerly executed deed. Instead of invalidating the deed, only the new alteration becomes invalid. Bumb v. Bennett (1958) 51 Cal.2d 294, 303. Similar with contrats; when a third party alters an existing contract, the contract remains valid while the modifications are deemed void. Walsh v. Hunt (1898) 120 Cal. 46, 53.

In the current case, someone modified the deed after its execution. Because parties properly executed the original deed, the modification should not invalidate it, instead, the lower court correctly voided the modifications while preserving the original deed.

Finally, at trial, plaintiff’s presented evidence that appellant did not receive during discovery. Appellant objected to its admission. Trial court overruled and allowed the submission of the evidence. On appeal, appellant argued the court exceeded its discretion by allowing in the evidence.

A trial court may sanction any party who misuses the discovery process by withholding evidence. Code of Civ. Pro. §2023.030(c). For the sanctions to apply the non-producing party must willfully violate a court order. Biles v. Exxon Mobil Corp. (2004) 124 Cal.App.4th 1315, 1327. Further, the trial court has broad discretion and such discretion will not be disturbed unless it exceeds the bounds of reason. Pratt v. Union Pacific Railroad Co. (2008) 168 Cal.App.4th 165, 183.

In the court proceedings, appellant never obtained a court order demanding the evidence. The appellant also failed to demonstrate that the plaintiff’s willfully failed to produce the evidence. Because appellant could not meet the basic threshold to have the court withhold the evidence, the court properly allowed it.

The lower court correctly determined that the appellant did sell his interest in the property and the deed was valid. Without any showing of violation of evidentiary rules, the appellate court affirmed the lower decision.

Brief Summary: Plaintiff sought a temporary restraining order against mandatory arbitration. Defendant argued that arbitration should be permitted pursuant to the contract entered into between plaintiff and defendant. The trial court denied plaintiff’s request and awarded attorney fees to defendant as prevailing party under the terms of the contract. Plaintiff appealed saying that attorney fees should not be awarded because the dispute was not “on the contract” and defendant failed to prevail on the final issues. The appellate court rejected plaintiff’s contention saying that the court’s liberally construe what constitutes “on the contract” and that the determination to require arbitration was a final resolution.

Case Summary: Plaintiff was a shareholder in a company along with two other shareholders. In 2004, the company laid off plaintiff as an employee. As part of their contract, if the company laid off an employee, the company could then buy back the shares held by the employee. Plaintiff argued he did not receive fair evaluation of his shares at time of the buy out.

Pursuant to the agreement, any dispute must go to arbitration. Plaintiff challenged the entire agreement saying he signed it under the pretense of fraud. Defendants continued to move forward with arbitration. Plaintiff then filed a motion with the superior court for a temporary restraining order and a request to select new arbitrators. Defendants prevailed and plaintiff appealed. The appeals court dismissed the action and remanded it back to the trial court. Defendants moved for judgment on the pleadings. The trial court granted the motion and awarded attorney fees. Plaintiff appealed again.

On appeal, plaintiff contends that the lower court did not make a ruling on the contract, and the court did not issue a final resolution; thus an award of attorney fees was not appropriate.

When a contract awards attorney fees to a prevailing party, the party recovers for any action “on the contract.” Shadoan v. World Savings & Loan Assn. (1982) 135 Cal.App.3d 97, 107. Courts liberally construe the term “on a contract,” for purposes of California Civil Code Section 1717. So long as the dispute involves a contract, it satisfies Section 1717. Blickmana Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 894.

A determination of final resolution of a matter is considered on a case by case basis. In a case where the court granted a motion to compel arbitration, the court determined that the contract contemplated litigation over the arbitration clause. Acosta v. Kerrigan (2007) 150 Cal.App.4th 1124, 1129-1130. In Ascosta, the court reasoned that even though this ruling was interim to the resolution of the overall issue, the prevailing party had a right to attorney’s fees under a separate clause in the contract. Id. at 1131-1132.

The California Supreme Court also determined where a party successfully opposed a petition to compel arbitration, even though further litigation on the merits loomed, the lower court reached a final resolution and should award attorney’s fees. Christensen v. Dewor Developments (1983) 33 Cal.3d 778, 780-781, The Supreme court agreed that the prevailing party, for purposes of an attorney fee’s award need not always prevail on the final issue in dispute. Rather, where the prevailing party achieved a resolution separate from the issue raised upon arbitration, the court may award attorney’s fees where appropriate.

In the current case, defendant prevailed on the issue as to whether or not parties had to partake in arbitration. The court’s ruling related to the contract in determining the scope of the arbitration clause, thus triggering the attorney’s fees clause. Although the court did not resolve the contractual dispute, such requirement is not needed to determine if attorney fees should be awarded. Therefore, the lower court correctly awarded attorney fees to the defendant.

Brief Summary: Plaintiff lost 6.3 million in a fraud scheme. As part of the scheme, plaintiff endorsed checks to a company that were later deposited to a different account. Plaintiff brought an action under Section 3404 of the California Commercial Code which allows for recovery if plaintiff intended the checks to be deposited by someone other than the named party. In this matter, plaintiff intended the checks to be deposited by the named party. Though an issue of fraud existed, for a claim against the bank, plaintiff could not rely on section 3404. Plaintiff appealed.

Case Summary: In 2003, Charlie Yi created a ponzi scheme by pretending to work as an agent for Carlin Equities Corporation. Mr. Yi opened up a DBA named “Carlin Co.” He then approached individuals in his community and would have the individual sign documents allegedly from Carlin Equities Corporation. The person would write a check out to either “Carlin Equities Corporation,” “Carlin Co.” or other similar names. Mr. Yi deposited the money in his Wells Fargo account. After collecting 6.3 million dollars, Mr. Yi fled the state.

After learning of the fraud, the individuals sued Wells Fargo to recover their losses. They asserted that Wells Fargo acted negligently in depositing the checks because Wells Fargo failed to confirm the signer of the checks intended the money to be deposited with Carlin Equities Corporation, not Mr. Yi. The jury found Wells Fargo did not act negligently.

Plaintiff’s appealed that the jury instructions confused jurors and inaccurately reflected the appropriate legal principles.

The case mainly focuses on the impact of the Uniform Commercial Code Section 3404. Section 3404, subdivision b(i) and (d). Section 3404 protects banks from situations where the signer of the check did not intend the named individual on the check to be the payee, and the check was endorsed by someone with a similar name as to that identified on the check. Section (d) states that the person who suffered a loss may recover from a depositary bank if the bank failed to use ordinary care in permitting the deposit the check. Section 3404 puts the burden of proving the loss onto the person suffering the loss.

The issue of intent extends even to forging of checks. Where a person forges a check, the intent relates back to the forger’s intent to extract money from the account of the individual defrauded. The bank suffers no liability under 3404 for forged checks because the forger had clear intent as to the named payee and the intended payee. The legislature drafted the language in this manner believing that the person defrauded should carry the duty to prevent such fraud, not the bank.

At the jury trial, the jurors found the instructions confusing and contradictory. Upon requesting clarification regarding the first set of instructions, the court issued a second set that led only to more confusion. Eventually the jurors returned a verdict for the defendant. Where a plaintiff is prejudiced by civil instructional error, the judgment need not be reversed unless the entire cause, including evidence, shows a miscarriage of justice. Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 580.

Here, plaintiff signed the checks and intended them to be deposited to Carlin Equities Corporation. Plaintiff also testified that he intended each variation of the name of Carlin Equities Corporation to relate back to that company. Because the intended payee and the identified party were the same, this issue did not violate Section 3404.

Plaintiff’s argue that the Bank should have detected fraud because Yi’s check lacked the term “Equities” from the name of the checks. Section 3404(d), however, does not apply, and further the bank cannot be responsible for every possible mistake made in the naming of an individual or organization on a check.

Plaintiff brought this action under Section 3404 of the California Commercial Code. Under said section, in part, that injury arises where a party intends that the check should be paid to an entity or person other than that named on the check. In this matter, the plaintiff intended the checks to be endorsed by the named party. Therefore section 3404 does not apply. Though the jury instructions did prejudice the plaintiff, such harm was not instrumental in a wrongful verdict. Therefore the lower court decision stands.

Brief Summary: Children to their father’s estate filed an action for breach of contract. The children failed to file the action within one year after their father’s death. The children tried to argue that as minors, this tolled the statute of limitation. Father’s estate filed a demur; the superior court agreed with the children and denied the estate’s demur. In response, the estate filed a writ of mandate. The appellate court took up the matter Farb. v. Superior Court and found that the statute of limitations did expire and an exception to toll the statute did not apply.

Case Summary: In 1993, Husband and Wife entered into an agreement with a surrogate mother to bear the couple’s child. In 1994, the surrogate became pregnant with twins. During the pregnancy, Husband filed for dissolution and demanded that Wife sign a declaration stating he had no children as a result of the marriage. On October 10 2006, Husband died in Texas with an estate in excess of 120,000,000. On October 31, 2007, the children, through their guardian, filed an action against the estate for Husband’s failure to uphold the original surrogate contract and provide child support to the children. Husband’s estate demurred based on statute of limitations. The lower court denied the demurrer; husband’s estate filed a writ of mandate.

The appellate court took up the issue to determine whether the one year statute of limitations elapsed prior to the children filing a complaint and whether or not it was tolled because the children were still minors.

California Code of Civil Procedure Section 366.2 states that an action against a person’s estate must be brought within one year of their death. The statute provides few exceptions. Civ. Pro. Code §336.2. The children argue that Code of Civil Procedure Section 352, which tolls actions for minors should apply.

The Court, upon reviewing Section 366.2 determined that the legislature provided for very specific exceptions to the section. Civ. Pro. Code §366.2(b). In those exceptions, the legislature omitted Section 352. Because the legislature drafted such specific exceptions, it intended to omit other tolling statutes.

The children also argued that Texas law should govern. However, the original surrogate agreement, the underlying contract for this action, states that it was formed in Los Angeles and enforced according to California Law. The court was guided by the Restatement Second of Conflict of Laws 187 which favors such provisions. Nedlloyd Lines B.V. v. Superior Court (1992) Cal. 4th 459, 465-466.

Where the children brought the action in a California court to determine the application of a California based contract, the Court had to rule based upon California code and apply the proper statute of limitation. Where the statute of limitation ran and the code limited exceptions, the children had failed to timely bring the action before the Court.

The Court, upon reviewing Section 366.2 determined that the legislature provided for very specific exceptions to the section. Civ. Pro. Code §366.2(b). In those exceptions, the legislature omitted Section 352. Because the legislature drafted such specific exceptions, it intended to omit other tolling statutes.

The children also argued that Texas law should govern. However, the original surrogate agreement, the underlying contract for this action, states that it was formed in Los Angeles and enforced according to California Law. The court was guided by the Restatement Second of Conflict of Laws 187 which favors such provisions. Nedlloyd Lines B.V. v. Superior Court (1992) Cal. 4th 459, 465-466.

Where the children brought the action in a California court to determine the application of a California based contract, the Court had to rule based upon California code and apply the proper statute of limitation. Where the statute of limitation ran and the code limited exceptions, the children had failed to timely bring the action before the Court.