206 Cal. App. 4th 201
Cal. Ct. App.2012Background
- McGurk sued to quiet title against New Century, which held a deed of trust on her property, and filed a lis pendens in May 2006.
- New Century assigned the deed of trust to Deutsche Bank in 2008, but the assignment was not recorded before McGurk’s lis pendens and she was unaware of the transfer.
- McGurk dismissed New Century from McGurk I during the automatic bankruptcy stay, intending to pursue New Century in bankruptcy court rather than seek relief from stay.
- McGurk obtained a judgment quieting title in May 2008, without resolving New Century’s interest; Deutsche Bank later recorded its assignment in 2008 and pursued declaratory relief.
- The trial court granted McGurk’s 631.8 judgment on the premise that Deutsche Bank’s interest was bound by the quiet title judgment, but the court ultimately remanded for further proceedings.
- The appellate court reversed the judgment and remanded to determine whether New Century’s deed of trust was a valid encumbrance on the property, given the timing of the lis pendens and assignment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a quiet title judgment bind an assignee not litigated in the action? | McGurk: assignee bound by judgment since interest existed and lis pendens bound later claimants. | Deutsche Bank: assignee should be bound if arising from the assignor’s claim and recorded timing; not bound if interest not adjudicated. | No; assignee not bound because interest not adjudicated in McGurk I. |
| Does timing of lis pendens and recording determine binding on a subsequent assignee? | McGurk: assignee bound if interest arose before/during lis pendens. | Deutsche Bank: binding depends on whether the claim was of record or known at lis pendens time. | Binding depends on whether the assignor’s interest was adjudicated or exempt; here it was exempt. |
| Can Deutsche Bank’s claim prevail when New Century’s interest was not litigated and New Century was dismissed before judgment? | McGurk: dismissal precludes binding on Deutsche Bank. | Deutsche Bank: it took subject to the quiet title judgment; dismissal did not bind it. | Remand necessary to determine validity of New Century’s deed of trust as encumbrance. |
| What is the proper disposition on appeal given the partial bench trial and lack of complete briefing? | McGurk sought judgment on the record. | Deutsche Bank sought full consideration of evidence and closing briefs. | Judgment reversed; remand for completion of bench trial consistent with opinion. |
Key Cases Cited
- Lee v. Silva, 197 Cal. 364 (Cal. 1925) (nonparties with record interest not bound by judgments against others)
- Evarts v. Jones, 127 Cal.App.2d 623 (Cal. App. 1954) (predecessor-conveyance conclusive rules and notice interests)
- Harbour Vista, LLC v. HSBC Mortgage Services Inc., 201 Cal.App.4th 1496 (Cal. App. 2011) (in rem quiet title framework; broad description of judgment scope)
- Torrez v. Gough, 137 Cal.App.2d 62 (Cal. App. 1955) (assignment after lis pendens can bind successors against the judgment)
- Swartfager v. Wells, 53 Cal.App.2d 522 (Cal. App. 1942) (binding effects on purchasers after lis pendens)
- Page v. W. W. Chase Co., 145 Cal. 578 (Cal. 1904) (predecessor authority on dismissal and binding judgments)