Filed 10/26/10 Casonhua v. Washington Mutual Bank CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

YVONNE CASONHUA et al.,

ADMINISTRATORS FOR THE ESTATE

OF FLORENCE SIMS, DECEASED, and

THE ESTATE OF DAVID SIMS,

DECEASED

Petitioners and Appellants,

v.

WASHINGTON MUTUAL BANK

(currently known as J.P. Morgan Chase),

Successor-in-Interest to Long Beach

Mortgage Company,

Defendant and Respondent.

B218606

B218608

(Los Angeles County

Super. Ct. No. BA287823)

APPEAL from judgments of the Superior Court of Los Angeles County. Reva

Goetz, Commissioner. Reversed and remanded.

Larson & Associates and Larry Larson, for Petitioners and Appellants.

Horton & Debolt, Barton E. Debolt and Partick G. Bollig, for Defendant and

Respondent.

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INTRODUCTION

In 2003, Sheron Berry recorded a grant deed that gave her title to a residential

property previously owned by the Sims Family Trust. The deed appeared to be signed by

Berry‟s grandmother, Florence Sims, who passed away seven months before Berry

recorded the deed. Berry later obtained a loan from Washington Mutual, which she

secured with a deed of trust to the property. After Berry defaulted on the loan,

Washington Mutual initiated foreclosure proceedings.

Shortly thereafter, Florence Sims‟s step-daughter, Yvonne Casonhua, and her

husband, James Casonhua, filed two complaints against Berry, Washington Mutual and

others, alleging that Berry fraudulently obtained the deed thereby voiding the deed in its

entirety. The first complaint was brought on behalf of the Estate of Florence Sims and

the second was brought on behalf of the Estate of David Sims, who was Florence‟s

husband. Washington Mutual demurred to both complaints, arguing that, as a bona fide

encumbrancer, it was entitled to rely on Berry‟s deed of trust. The trial court agreed,

concluding that, under the facts pleaded in both complaints, Berry‟s grant deed was

voidable but not void and, as a result, Washington Mutual retained good title. The court

sustained the demurrers without leave to amend and entered judgments in favor of

Washington Mutual. The Casonhuas timely appealed the judgments.

We reverse the trial court‟s orders sustaining the demurrers and conclude that the

Casonhuas have pleaded claims that, if proven at trial, would void Berry‟s deed in its

entirety thereby nullifying Washington Mutual‟s interest in the property.

FACTUAL AND PROCEDURAL BACKGROUND

A. Allegations in the Complaint

1. Events Preceding the Plaintiffs’ Lawsuits

Florence and David Sims owned two parcels of real property, which included a

personal residence (the Residence Property) and a two-unit income property (the Income

Property; collectively “the Properties”). In 1991, the Simses established the Sims Family

Trust, which was funded with the Residence Property and the Income Property.

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According to the terms of the Trust, upon the Simses‟ death, the Residence Property was

to be distributed to Florence Sims‟s daughter, Shirley Traylor, and the Income Property

was to be distributed to David Sims‟s daughter, Yvonne Casonhua. David died shortly

after the Trust was created, leaving Florence – then 86 years old – as the sole trustee.

Shortly after her husband‟s death, Florence began to exhibit symptoms of

dementia. As her medical condition deteriorated, Florence developed a confidential

relationship with her granddaughter, Sheron Berry, who helped Florence make medical

decisions. In December of 2001, Florence provided Berry with a power of attorney. Two

weeks later, Florence was diagnosed with dementia; she died in April of 2003.

After Florence died, Berry recorded two grant deeds that conveyed the Residence

Property and the Income Property from the Sims Family Trust to Berry. The grant deeds

indicate that Florence transferred the Properties to Berry as “bona fide gifts.” The grant

deeds were purportedly signed by Florence in January of 2002.

Between 2004 and 2006, Berry used the Properties to secure several loans. In

2006, she obtained a $440,000 loan from Washington Mutual Bank secured by a deed of

trust to the Income Property.1 Later that year, Berry obtained a loan in the amount of

$361,000 from Avelo Mortgage, LLC, which she secured with a deed of trust to the

Residence Property.2

In early 2008, Berry defaulted on both loans and Washington Mutual and Avelo

initiated foreclosure proceedings. Yvonne Casonhua became aware that Berry had

obtained title to the Properties after the lenders affixed notices of foreclosure to each

property.

1 Berry initially obtained her loan on the Income Property from Long Beach

Mortgage Company. Washington Mutual is the successor-in-interest to Long Beach

Mortgage Company and the current lender of record for the Income Property.

Washington Mutual is currently known as J.P. Morgan.

2 Berry initially obtained her loan on the Residence Property from New Century

Mortgage. Avelo is the successor-in-interest to New Century Mortgage and the current

lender of record for the Residence Property.

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2. The Casonhua’s Lawsuit and Washington Mutual’s Demurrer

In 2008, Yvonne Casonhua and her husband, James Casonhua, filed two,

essentially identical complaints against Berry, Washington Mutual, Avelo and Jerral E.

Wesley, who notarized Berry‟s grant deeds. The first suit was brought on behalf of the

Estate of Florence Sims (the Florence Sims Complaint) and the second was brought on

behalf of the Estate of David Sims (the David Sims Complaint).3 The complaints allege

that Florence‟s conveyances to Berry are void under a variety of different legal theories.

The Casonhuas‟ first claim, which is pleaded against all of the Defendants, alleges that

Berry forged Florence‟s signature on the grant deeds, thereby rendering them void. The

second and third claims, which are also pleaded against all of the Defendants, allege that,

if Florence did sign the grant deeds, they are nonetheless void because Florence “lacked

the mental capacity to execute the deeds” or, alternatively, Florence was “unaware of the

nature and effect of the deeds.” The Florence Sims Complaint includes an additional

claim, which is pleaded against Berry only, alleging that Berry “exerted undue influence

over [Florence] and substituted her will for [Florence‟s] in the distribution of [Florence‟s]

estate by causing the donative transfer of [Florence‟s] property to [Berry.]” This claim

does not appear in David Sims‟s Complaint.4

Washington Mutual demurred to both complaints, arguing that, as a bona fide

encumbrancer, it was justified in relying on Berry‟s deed to the Income Property

3 Although the record suggests that the two actions were related in the trial court,

they were never consolidated into a single action. Because the pleadings and briefings

filed in each case are essentially identical, we consider the appeals together.

4 The complaints contain numerous additional claims that are not directly relevant

to this appeal, including four causes of action that derive from the claims seeking to void

Berry‟s deed (quiet title, constructive trust, accounting and declaratory relief). Both

complaints also include a claim for conversion against Berry. The Florence Sims

Complaint additionally asserts a claim against Berry for Elder Financial Abuse and a

claim against Berry and the notary, Wesley, for conspiring to defraud Florence Sims‟s

Estate.

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regardless of how she had obtained it.5 Washington Mutual also demurred on the ground

that the Plaintiffs‟ verified complaints contained inconsistent factual allegations.

Specifically, Washington Mutual asserted that because the Plaintiffs alleged that Berry

had obtained the deeds through undue influence, they were barred from alternatively

alleging that Berry had forged the deeds or fraudulently induced Florence to sign them.

Finally, Washington Mutual asserted that the Plaintiffs‟ claims were untimely and vague.

At the demurrer hearing, the trial court stated that it was “inclined to sustain the

demurrers without leave to amend,” explaining that “Washington Mutual is a bona fide

encumbrancer, and I just don‟t see how they can be shown to be anything but based on

what I have seen pled [sic].” In response, Plaintiffs‟ counsel asserted that Washington

Mutual‟s status as a bona fide encumbrancer was only relevant if Berry‟s deed to the

Income Property was deemed voidable, rather than void. Counsel further contended that,

under several theories pleaded in the complaints, the deed was wholly void, thereby

nullifying Washington Mutual‟s subsequently obtained deed of trust to the property. The

trial court rejected the argument:

PLAINTIFF‟S COUNSEL: It‟s undisputed if you have a forged deed, the

deed is void.

THE COURT: No, it‟s not. It‟s voidable it‟s a voidable deed in this

particular set of circumstances and that seems to be in accord with the

holding in the Fallon versus Triangle Management case. It‟s not void, it‟s

voidable.

PLAINTIFF‟ COUNSEL: It‟s my understanding that if we won based on

undue influence, it would be voidable. But if it‟s a forged deed, it‟s void to

the world, including all subsequent encumbrancers.

THE COURT: How would Washington Mutual have any idea that this is a

forged deed? How would they know? How are they going to know that

they can‟t rely on the recorded documents?

5 Washington Mutual‟s demurrer was filed in relation to the Plaintiffs‟ second

amended complaints. The record indicates that the trial court had previously sustained

demurrers against the Plaintiffs‟ first amended complaints with leave to amend. The

record does not contain any documents describing the basis for the court‟s ruling.

6

. . . .

I don‟t know of any authority that puts . . . responsibility onto the bank . . .

to go beyond a recorded deed. And in light of the holding in the Fallon

case . . . I am sustaining the demurrer without leave to amend as to all

causes of action. And I am stating the basis of my sustaining the demurrer

on the record. I am not going to be sending out any other rulings.

Three weeks after the hearing, the court entered its orders sustaining Washington

Mutual‟s demurrer to each complaint with prejudice and dismissing Washington Mutual

Bank from both cases. Plaintiffs timely appealed the judgments.

DISCUSSION

A. Standard of Review

“In reviewing the sufficiency of a complaint against a general demurrer, we are

guided by long-settled rules. „We treat the demurrer as admitting all material facts

properly pleaded, but not contentions, deductions or conclusions of fact or law.

[Citation.] We also consider matters which may be judicially noticed.‟ [Citation.]

Further, we give the complaint a reasonable interpretation, reading it as a whole and its

parts in their context. [Citation.] When a demurrer is sustained, we determine whether

the complaint states facts sufficient to constitute a cause of action. [Citation.] And when

it is sustained without leave to amend, we decide whether there is a reasonable possibility

that the defect can be cured by amendment: if it can be, the trial court has abused its

discretion and we reverse; if not, there has been no abuse of discretion and we affirm.

[Citations.] The burden of proving such reasonable possibility is squarely on the

plaintiff.‟ [Citation.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Kirwan).)

The judgment must be affirmed if any one of the grounds stated in the demurrer is

well taken, regardless of the grounds cited by the trial court in reaching its decision.

(Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) However, if facts were

alleged showing entitlement to relief under any possible legal theory, the judgment of

dismissal must be reversed. (Kirwan, supra, 39 Cal.3d at p. 318.)

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B. The Demurrers Were Improperly Sustained

To determine whether the trial court properly sustained Washington Mutual‟s

demurrers, we must review four issues. First, we review the trial court‟s conclusion that

Washington Mutual‟s status as a bona fide encumbrancer permitted it to rely on Berry‟s

deed under the claims asserted in Plaintiffs‟ complaints. Because we conclude that the

trial court erred, we must review three additional grounds Washington Mutual raised in

its demurrers, which the trial court did not reach. These additional issues include:

(1) whether Plaintiffs‟ allegation that Berry obtained the deeds through undue influence

barred them from pleading, in the alternative, that the deeds were forged or induced

through fraudulent means; (2) whether Plaintiffs‟ claims against Washington Mutual are

time barred, and (3) whether Plaintiffs pleaded their claims with sufficient certainty and

particularity.

1. The trial court improperly ruled that Washington Mutual was entitled to rely on Berry’s deed to the Income Property

The trial court ruled that, under the factual circumstances pleaded in each

complaint, Washington Mutual‟s status as a bona fide encumbrancer entitled it to rely on

Berry‟s deed to the Income Property. Although Plaintiffs concede that Washington

Mutual is a bona fide encumbrancer, they assert that they have pleaded claims that, if

successful, will render Berry‟s deed wholly void, thereby nullifying Washington

Mutual‟s interest in the property.

a. Summary of legal principles

Although a bona fide encumbrancer is entitled to rely on a deed that is voidable, it

will not retain title if the deed is found to be void. (Schiavon v. Arnaudo Brothers (2000)

84 Cal.App.4th 374, 378 (Schiavon); Wutzke v. Bill Reid Painting Service, Inc. (1984)

151 Cal.App.3d 36, 41 (Wutzke); Firato v. Tuttle (1957) 48 Cal.2d 136, 139 (Firato).)

More specifically, our courts have explained that “[i]f [a] reconveyance [i]s voidable, . . .

it may be subject to cancellation and rescission as against [the grantee], but could be

relied upon by a subsequent bona fide [encumbrancer]. . . .” (Schiavon, supra, 84

Cal.App.4th at p. 378.) In contrast, “[i]nstruments which are wholly void cannot

8

ordinarily provide the foundation for good title even in the hands of an innocent

purchaser.” (Firato, supra, 48 Cal.2d at p. 139.) Therefore, the Plaintiffs may only

assert superior title against Washington Mutual if Berry‟s deed is found to be wholly

void, but not if it is voidable.6

Generally, “[a] deed is void if the grantor‟s signature is forged or if the grantor is

unaware of the nature of what he or she is signing. [Citation.] A voidable deed, on the

other hand, is one where the grantor is aware of what he or she is executing, but has been

induced to do so through fraudulent misrepresentations. [Citation.]. The same rules

apply to the reconveyance of the property interest under a deed of trust as to the

conveyance of property by grant deed.” (Schiavon, supra, 84 Cal.App.4th at p. 378.)

Numerous holdings illustrate this legal distinction. For example, in Wutzke v. Bill

Reid Painting Service, Inc., supra, 151 Cal.App.3d 36, the court held that “a forged

document is void ab initio and constitutes a nullity; as such it cannot provide the basis for

a superior title as against the original grantor.” (Id. at p. 43.) Wutzke further explained

that “[s]ince a trust deed obtained by means of forgery is void, it follows that any claim

of title flowing from such a deed is void . . . [which includes] the title of a subsequent

purchaser or encumbrancer.” (Id. at p. 44.) Similarly, in Erickson v. Bohne (1955) 130

Cal.App.2d 553 (Bohne), the court ruled that a deed conveyed by an individual who

alleged to be “mentally ill and wholly incapable of transacting business” was void and

could not provide good title to a subsequent good faith purchaser. Other cases have

recognized that documents procured through “„fraud in the factum-that is, the sort of

fraud that procures a party‟s signature to an instrument without knowledge of its true

nature or contents . . . render [an] instrument entirely void.‟” (Wurzl v. Holloway (1996)

46 Cal.App.4th 1740, 1751; see also Bohne, supra, 130 Cal.App.2d at p. 556 [“„An

illustration of a void transaction is afforded where one . . . is induced to sign a deed when

6 Washington Mutual concedes it cannot assert rights if the deed is void, but argues

here that plaintiffs failed to properly plead that the deed was void. As set forth below, we

disagree.

9

in fact, he believes, because of fraudulent misrepresentations, that he is merely signing a

letter addressed to a third person‟”].)

In contrast, a deed is voidable, rather than void, when “the agreement was induced

by fraudulent misrepresentation or concealments which in no degree make the instrument

anything other than it purports to be.” (Bohne, supra, 130 Cal.App.2d at p. 556.) For

example, in Fallon v. Triangle Management Service, Inc. (1985) 169 Cal.App.3d 1103,

the plaintiff sought to void a deed that he had signed while under duress. (Id. at p. 1106.)

The court ruled that because the plaintiff was aware that the instrument he executed was a

deed, the deed was merely voidable and could be relied on by a bona fide purchaser.

Likewise, in Schiavon v. Arnaudo Brothers, supra, 84 Cal.App.4th 374, the court

concluded that a reconveyance that was initiated after the trustee received a forged

request for reconveyance was voidable, rather than void. The court explained that

although the request for reconveyance had been forged, the actual reconveyance was

signed by the trustee, who was entitled to convey the property and understood the nature

of the instrument that he had executed. The court differentiated decisions in which the

deed itself had been forged, explaining that, in the case before it, “the reconveyance was

executed by the designated trustee . . . who was aware of the consequences of the act but

was [induced by fraudulent misrepresentation].” (Schiavon, supra, 84 Cal.App.4th at p.

381.)

b. Plaintiffs have pleaded claims that would render the deed void

Plaintiffs‟ complaints assert three claims against Washington Mutual that seek to

void Berry‟s deed to the Income Property and any subsequent title flowing from that

voided deed. First, Plaintiffs seek to void the deed on the ground that Berry forged

Florence‟s signature on the grant deed. Second, Plaintiffs allege, in the alternative, that

Florence lacked the mental capacity to understand the nature of her acts when Berry

induced her to sign the deed. Third, Plaintiffs contend that Florence‟s “signature[] was

caused by the fraud of [Berry] in that [Berry] failed to explain to or inform [Florence]

regarding the nature and effect of the deeds, despite the fact that [Florence] was not

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capable of understanding the nature and effect of the deeds due to her mental condition

and incapacity.”

Contrary to the trial court‟s ruling, Berry‟s deed would be rendered void under all

three of these factual circumstances. First, as Wutzke made clear, “a forged document is

void ab initio and constitutes a nullity.” (Wutzke, supra, 151 Cal.App.3d at p. 43.)

Second, Bohne concluded that a deed is void if the conveyor lacked the capacity to

understand the nature of his or her actions. (Bohne, supra, 130 Cal.App.2d at pp. 555-

557.) Third, several cases have held that a deed is void if the grantor signs “an

instrument without knowledge of its true nature or contents.” (Wurzl, supra, 46

Cal.App.4th at p. 1751.) As stated in Bohne, a transaction is void if “one, at the time

totally incapacitated from attending to business, is induced to sign a deed when in fact, he

believes, because of fraudulent misrepresentations, that he is . . . signing a [document that

is not a deed].‟” (Bohne, supra, 130 Cal.App.2d at p. 556.) Plaintiffs‟ first three claims

fall squarely within these holdings and, as a result, they have adequately pleaded claims

that, if proven, would nullify Washington Mutual‟s deed of trust to the Income Property.

The trial court reached a different conclusion, explaining that there were two

reasons why it believed Plaintiffs had failed to assert a cognizable claim against

Washington Mutual. First, the court asserted that, pursuant to Fallon v. Triangle

Management Service, Inc., supra, 169 Cal.App.3d 1103, Washington Mutual‟s status as a

bona fide encumbrancer entitled it to rely on Berry‟s deed. Second, it concluded that

because Berry had recorded her grant deed, Washington Mutual‟s subsequent deed of

trust to the property could not be challenged. Both of the trial court‟s conclusions are

erroneous.

First, the facts alleged in Fallon v. Triangle Management Service, Inc., supra, 169

Cal.App.3d 1103, differ significantly. The plaintiff in Fallon alleged that he had signed a

deed while under “severe mental and emotional strain caused by threats and harassment.”

(Id. at p. 1106.) In other words, the plaintiff was aware that the instrument he executed

was a deed and that it would convey title, but contended that his signature had been

procured under duress. (Ibid.) The court concluded that, under such circumstances, the

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deed was voidable: “[i]f a grantor is aware that the instrument he is executing is a deed

and that it will convey his title but is induced to sign and deliver by fraudulent

misrepresentation or undue influence, the deed is voidable and can be relied upon and

enforced by a bona fide purchaser.” (Ibid.) In contrast, none of the Plaintiffs‟ claims

against Washington Mutual assert that Florence was aware that she was signing a grant

deed or understood the nature of her actions. Rather, Plaintiffs allege that Berry either

forged the document, in which case Florence did not convey the property at all, or,

alternatively, Florence lacked the capacity or knowledge to comprehend that the

document she signed was conveying property to Berry.

Likewise, the court‟s conclusion that a bona fide encumbrancer is entitled to rely

on a recorded deed, even if the deed is later deemed to be void, finds no support in the

law. Rather, “[t]he rule is well established that where the „conveying instrument is

void . . . it does not gain efficacy by recordation even in favor of an alleged party taking

in good faith, for value, and without notice.‟ [Citation.] . . . . „Recording places on file,

in a public place, the written evidence of a conveyance; if that conveyance was void for

want of delivery, forgery, lack of capacity in the grantor due to infancy or insanity, etc., it

is void still.‟ [Citation.]” (Wutzke, supra, 151 Cal.App.3d at p. 44, fn. 4.) Accordingly,

the trial court erred.

2. The Plaintiffs Were Entitled to Plead Alternative Facts

Washington Mutual argues that, even if the trial court‟s ruling was erroneous, the

demurrers should be sustained on the ground that the Plaintiffs‟ verified complaints

contain inconsistent factual assertions that preclude them from alleging that Berry

procured her deed through fraud. Specifically, Washington Mutual contends that because

the fourth cause of action in the Florence Sims Complaint (which is pleaded against

Berry only) alleges that Berry induced Florence to sign the grant deed through undue

influence, Plaintiffs may not allege in the alternative that the deed was forged or that

12

Florence lacked the mental capacity to sign the deed.7 Stated more simply, Washington

Mutual argues that because Plaintiffs assert in one claim that the deed was procured

through undue influence, which would render the deed voidable, we must ignore

Plaintiffs‟ alternative claim that the deed was procured through fraud, which would

render the deed wholly void.

Washington Mutual‟s argument mischaracterizes the rules of pleading. The

traditional rule is that “[w]here the exact nature of the facts is in doubt, or where the exact

legal nature of plaintiff's right and defendant‟s liability depend on facts not well known to

the plaintiff, the pleading may properly set forth alternative theories in varied and

inconsistent counts.” (Rader Co. v. Stone (1986) 178 Cal.App.3d 10, 29.) In such

situations, “[t]he facts are inconsistently alleged because the plaintiff does not know

which of the alternatives is true or can be established by the evidence.” (4 Witkin,

Cal. Procedure (4th ed. 1997) Pleading, § 364, p. 467.) “Tolerance for such pleading

rests on the principle that uncertainty as to factual details or their legal significance

should not force a pleader to gamble on a single formulation of his claim if the facts

ultimately found by the court, though diverging from those the pleader might have

considered most likely, still entitle him to relief.” (Blickman Turkus, LP v. MF

Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 886.)

In this case, the complaints plainly acknowledge that Plaintiffs pleaded alternative

factual theories because they were not present when Berry‟s grant deed was executed,

and, as a result, are uncertain what occurred. The Plaintiffs‟ first claim alleges that Berry

7 Although the Florence Sims second amended complaint asserts a claim for undue

influence, the Plaintiffs omitted the claim in the second amended complaint filed on

behalf of the Estate of David Sims. However, the original and first amended complaints

filed on behalf of David Sims did include an undue influence claim. Washington Mutual

argues that because the Plaintiffs previously asserted the claim in David Sims‟s earlier

complaints, we may, for the purposes of deciding this demurrer, read such an allegation

into his second amended complaint. Plaintiffs have not opposed this request and, as a

result, we assume, without deciding, that we may properly read an allegation of undue

influence into David Sims‟s second amended complaint.

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forged the deed and describes circumstantial evidence that, in Plaintiffs‟ view, support

their contention.8 Plaintiffs‟ additional claims, which allege that Berry procured the deed

through other fraudulent means or undue influence, were pleaded “in the event the Court

determines that Florence signed the [grant deeds.”]. At this early stage of the

proceedings, Plaintiffs cannot be faulted for failing to know exactly what occurred in this

case. It would therefore be improper to limit Plaintiffs‟ factual allegations in the manner

Washington Mutual proposes.

Washington Mutual correctly asserts that if a party verifies a specific factual

allegation in a complaint, it cannot simultaneously plead an inconsistent fact in the same

pleading. (Alfaro v. Community Housing Imp. System & Planning Assn., Inc. (2009) 171

Cal.App.4th 1356, 1381 (Alfaro) [“[a] plaintiff may plead inconsistent counts or causes

of action in a verified complaint, but this rule does not entitle a party to describe the same

transaction as including contradictory or antagonistic facts”]; see also Beatty v. Pacific

States S. & L. Co. (1935) 4 Cal.App.2d 692, 697 (Beatty).) The rules of pleading do “not

permit the pleader to blow both hot and cold in the same complaint on the subject of facts

of which he purports to speak with knowledge under oath.” (Beatty, supra, 4 Cal.App.2d

at p. 697; see also Manti v. Gunari (1970) 5 Cal.App.3d 442, 449[“[t]o verify

inconsistent facts alleged in a complaint indicates perjury in the matter”].) In this case,

however, the operative complaints are verified only on information and belief.

Therefore, although the Plaintiffs have verified that they believe the alleged information

to be true, they have not claimed personal knowledge of the truth of the matters asserted.

8 The complaints contend that there is “strong circumstantial evidence” indicating

that Berry forged the deeds, including the fact that: (1) Berry recorded the deeds two

years after Florence purportedly signed them and seven months after Florence died;

(2) the notary‟s journal does not contain Florence‟s thumbprint, as required under

California law; (3) the notary‟s journal has an entry dated January 2, 2002, for a “Power

of Attorney for Decedent,” which is crossed out and interlineated with “Grant Deed” in a

different type of ink; (4) during deposition testimony, the notary stated that he notarized a

power of attorney and the two grant deeds on January 2, 2002, but his journal only shows

that one document was notarized on that date.

14

(See Black‟s Law Dictionary 795 (8th ed. 2004) [defining information and belief

allegations as being “based on secondhand information that the declarant believes to be

true”].) Moreover, as discussed above, the complaints repeatedly emphasize that because

the Plaintiffs are unsure exactly what occurred when the deed was executed, they have

pleaded alternative facts to encompass all possible theories of liability. As a result, the

rule barring plaintiffs from pleading inconsistent facts that are based personal knowledge

is inapplicable here.

3. Plaintiffs’ claims are not time barred under Code of Civil Procedure Section 343 or Section 318

Washington Mutual next argues that we may affirm the trial court‟s orders

sustaining the demurrers because Plaintiffs‟ claims are barred by the statute of

limitations. “„In order for the bar of the statute of limitations to be raised by demurrer,

the defect must clearly and affirmatively appear on the face of the complaint; it is not

enough that the complaint shows that the action may be barred. [Citation.]‟ [Citations.]”

(Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972.)

Washington Mutual asserts that Plaintiffs‟ claims are governed by two different

statutes of limitations. First, it asserts that the claims fall within Code of Civil Procedure

section 343, which is “a catchall provision that provides a [four year] statute of

limitations in situations where no specific limitations period applies.” (Geneva Towers

Ltd. Partnership v. City of San Francisco (2003) 29 Cal.4th 769, 773; Code Civ. Proc.,

§ 343 [“An action for relief not hereinbefore provided for must be commenced within

four years after the cause of action shall have accrued”].) Alternatively, Washington

Mutual contends that Code of Civil Procedure section 318 applies, which requires that

persons prosecuting an action to recover real property must have possessed the property

within five years before the commencement of the action.

Plaintiffs‟ claims, however, do not fall within either section 343 or 318. It is true

that “[o]rdinarily, a suit to set aside and cancel a void instrument is governed by Sec. 343

of the Code of Civil Procedure. [Citation.] However, when the gravamen of the cause of

action stated involves fraud or a mistake, Code of Civil Procedure, sec. 338(4) [now

15

subdivision (d)], is the statute of limitations applicable.” (Zakaessian v. Zakaessian

(1945) 70 Cal.App.2d 721, 725; see also Leeper v. Beltrami (1959) 53 Cal.2d 195, 207-

208; Welsher v. Glickman (1969) 272 Cal.App.2d 134, 140 [“where the right to cancel

rests on the ground of fraud or mistake, then the three-year statute of limitations (Code

Civ. Proc. § 338, subd. 4) relating to such grounds is applicable”]; Arthur v. Davis (1981)

126 Cal.App.3d 684, 691[applying section 338, subd (d) where plaintiff “claims a right to

cancel the deed to [defendant] based on justifiable mistake as to the nature of the

document”].) Section 318, on the other hand, is limited “„to cases which involve the

features of an action in ejectment . . . . The rule clearly does not apply where the case

presents a simple question of fraud or mistake, and there is no attempt to recover

possession or establish title otherwise than by nullifying the act procured by fraud or

mistake.‟” (Cella v. Cosgro (1953) 115 Cal.App.2d 816, 821; see also Gross v. Needham

(1960) 184 Cal.App.2d 446, 454.)

As discussed in detail above, the claims Plaintiffs assert against Washington

Mutual are predicated on Berry‟s fraudulent conduct. Specifically, Plaintiffs allege that

Berry either forged the document or induced Florence to sign the deed despite the fact

that she lacked the mental capacity to understand the nature of her acts. As a result, we

conclude that section 338, subdivision (d) provides the appropriate statute of limitations

Because neither of the statutes of limitation asserted by Washington Mutual apply

in this case, the demurrers cannot be sustained on the ground that Plaintiffs‟ claims are

untimely. (Turner v. Milstein (1951) 103 Cal.App.2d 651, 659 [“When a demurrer

specifies a particular section upon which the defendant relies to defeat the action, no

other sections of the statute are pleaded, and the only question is whether the cause of

action is barred by the particular section or sections mentioned in the demurrer”] [citing

and quoting Bank of San Luis Obispo v. Wickersham (1893) 99 Cal. 655, 660]; see also

Zakaessian, supra, 70 Cal.App.2d at 725 [denying demurrer on statute of limitations

grounds because defendant erroneously asserted that claim seeking to void deed on basis

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of fraud or mistake was barred under Section 343, rather than section 338,

subdivision 4].)9

4. Plaintiffs’ Claims Contain Sufficient Factual Detail

Finally, Washington Mutual alleges that its demurrers must be sustained because

the complaints lacked certainty. Alternatively, it contends that, at a minimum, Plaintiffs‟

claims for fraud in the factum must be dismissed because they were not pleaded with

sufficient particularity. Both contentions lack merit.

a. Plaintiffs’ Complaints are not uncertain within the meaning of Code of Civil Procedure section 430.10, subdivision (f)

Washington Mutual argues that, pursuant to Section 430.10, subdivision (f),

Plaintiffs‟ complaints must be dismissed because they are “uncertain.” (See Code Civ.

Proc., § 430.10, subd. (f) [demurrer may be asserted where “[t]he pleading is uncertain.

9 Because Washington Mutual failed to assert that section 338, subdivision (d)

applies in this case, we need not determine whether Plaintiffs‟ claims would be barred

under that section. We note, however, that the Plaintiffs have pleaded facts suggesting

that their claims would, at least for the purposes of a demurrer, be deemed timely.

Section 338, subdivision (d) requires claims to be brought within three years after “the

discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” In other

words, the three year limitations period commences “when the plaintiff suspected or

should have suspected that an injury was caused by wrongdoing.” (Kline v Turner (2001)

87 Cal.App.4th 1369, 1374.) Plaintiffs‟ complaints state that “Petitioners did not

discover that title to the . . . [Residence Property] had been transferred to [Berry]” until

April of 2008, when a foreclosure notice was posted on the property. The complaint does

not contain any allegations suggesting that Plaintiffs were aware, or should have been

aware, of the fraudulent transaction at any earlier point in time. Although Washington

Mutual asserts that, under Civil Code section 1213, Plaintiffs were deemed to have

constructive notice of the deed at the time Berry recorded it, that section only applies to

subsequent purchasers and mortgagors and is therefore inapplicable here. Moreover,

while public records may impart presumptive notice under some circumstances, it not

reasonable to expect parties to actively monitor deed records to protect against the

possibility that an individual might fraudulently procure title to their property. (See

Prudential Home Mortgage Co. v. Superior Court (1998) 66 Cal.App.4th 1236, 1248.)

“„“„“[w]here no duty is imposed by law upon a person to make inquiry, and where under

the circumstances a prudent man would not be put upon inquiry, the mere fact that means

of knowledge are open to a plaintiff, and he has not availed himself of them, does not

debar him from relief when thereafter he shall make actual discovery.‟ [Citations.]”].)

17

As used in this subdivision, „uncertain‟ includes ambiguous and unintelligible”].)

Washington Mutual contends that the complaints are “uncertain” because Plaintiffs have

included “allegations of contradictory facts – set forth conditionally and in the

alternative.” Pleading inconsistent facts or legal theories does not, however, render a

complaint uncertain. (See Stockton Combined Harvester & Agricultural Works v. Glens

Falls Ins. Co. (1898) 121 Cal. 167, 170-171 [rejecting contention that complaint is

uncertain where “[i]t is not claimed that there is ambiguity or uncertainty in either count

considered alone, but the claim is that the first count is rendered ambiguous and uncertain

by reason of [inconsistent] allegations found in the second count, and vice versa”].)

Rather, “a demurrer on the grounds of uncertainty‟ . . . goes only to doubt about what the

pleader means by the facts alleged.‟ [Citation.]” (Fenton v. Groveland Community

Services Dist. (1982) 135 Cal.App.3d 797, 810, disapproved of on other grounds,

Katzberg v. Regents of University of California (2002) 29 Cal.4th 300, 328 fn. 30.)

While Plaintiffs have pleaded alternative factual theories, “the allegations are sufficiently

clear to apprise the defendant of the issues he is to meet.” (Smith v. Williams (1950) 55

Cal.2d 617, 619.)

b. Plaintiffs fraud in factum claims satisfy the particularity requirement

Washington Mutual also argues that Plaintiffs‟ claims for fraud in factum must be

dismissed because they fail to meet the particularity requirement applicable to fraud

claims. “„“In California, fraud must be pled [sic] specifically; general and conclusory

allegations do not suffice. [Citations.] . . . [¶] “This particularity requirement

necessitates pleading facts which “show how, when, where, to whom, and by what means

the representations were tendered.”‟”‟ [Citations.] (Alfaro, supra, 171 Cal.App.4th at

p. 1384.) “One of the purposes of the specificity requirement is „notice to the defendant,

to “furnish the defendant with certain definite charges which can be intelligently met.”‟

[Citation.] Less specificity should be required of fraud claims „when “it appears from the

nature of the allegations that the defendant must necessarily possess full information

concerning the facts of the controversy,” [citation]; “[e]ven under the strict rules of

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common law pleading, one of the canons was that less particularity is required when the

facts lie more in the knowledge of the opposite party. . . .”‟”‟ [Citation.]” (Ibid.)

The Plaintiffs‟ fraud in factum claims allege that Florence‟s signature on the grant

deed was “caused by the fraud of [Berry] during execution of the deed[] in that [Berry]

failed to explain to or inform [Florence] regarding the nature and effect of the deeds,

despite the fact that [Florence] was not capable of understanding the nature and effect of

the deeds due to her mental condition and incapacity; [Florence] did not in fact

understand or know the nature of the deeds (i.e., that by signing the deeds she would be

transferring her legal interest in the properties to [Berry]. Had [Florence] been informed

of the nature and effect of the deeds, and understood the nature and effect of the deeds,

she would not have executed the deeds.”

This description adequately details the particular nature of the alleged fraud.

Specifically, Plaintiffs allege that, at the time Florence executed the conveyance

document, Berry did not explain the nature or effect of the instrument despite the fact that

Florence lacked the capacity to appreciate their meaning. These allegations include detail

about who was involved, when it occurred, and the basic nature of the fraudulent act.

Washington Mutual contends that more information is necessary because, as

currently pleaded, the fraud in factum claim “rests upon allegations that Sheron Berry

failed to inform Florence Sims of that which is plainly evident on face of the Grant Deeds

in question – i.e., that such documents are grant deeds that convey title to real

property . . . .” Washington Mutual‟s argument overlooks the fact that Plaintiffs allege

that the fraud arose because, regardless of what the document said, Florence could not

understand their effect and Berry induced her to sign the deeds without explaining the

consequences of her acts.

To the extent Washington Mutual is asserting that Plaintiffs had a duty to

articulate exactly what Berry said to Florence at the time the deed was executed, we

disagree. As explained above, less specificity is required in cases where “the facts lie

more in the knowledge of the opposite party.” (Alfaro, supra, 171 Cal.App.4th at p.

1384.) Presumably, Berry, who was present when the Florence signed the deed,

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“possess[es] full information concerning the facts of the controversy.” (Ibid.) Plaintiffs,

on the other hand, are not certain what occurred because they were not present when the

deed was signed. Nor can they elicit that information from Florence. Plaintiffs were not

required provide more specific information.

DISPOSITION

We reverse the trial court‟s judgment of dismissal after sustaining Washington

Mutual‟s demurrer to the Second Amended Complaint filed on behalf of the Estate of

Florence Sims and the trial court‟s judgment of dismissal after sustaining Washington

Mutual‟s demurrer to the Second Amended Complaint filed on behalf of the Estate of

David Sims. The cases are remanded to the trial court for further proceedings. Appellants

are to recover their costs on appeal.

ZELON, J.

We concur:

PERLUSS, P. J.

JACKSON, J.