Filed 10/16/15 Miani v. Barance CA1/5
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                  DIVISION FIVE


YOLANDA MIANI et al.,
         Plaintiffs and Appellants,
                                                                     A142581
v.
LABIB MAJID BARANCE et al.,                                          (San Francisco City and County
                                                                     Super. Ct. No. CGC 10 497904)
         Defendants and Respondents.


         Mi Casa Capital Corporation (Mi Casa)1 introduced Yolanda Miani to Labib
Majid Barance. Miani loaned Barance $129,375, secured by a third deed of trust, junior
to $2.4 million in senior loans. Barance sought refinancing for the senior loans, and
Mi Casa suggested that Miani subordinate her loan to the new loans, which totaled $2.65
million. She refused. Mi Casa then induced Miani to sign documents representing that
they were necessary to permit her to be paid in full. Miani was unaware that the
documents effected a subordination of her loan. Thereafter, one of the senior refinancers
foreclosed on Barance’s property and Miani’s security lien was extinguished.
         After a bench trial, the court found Mi Casa had committed an unfair business
practice and ordered it to pay Miani the origination and processing fee it earned in the
refinancing. Miani appeals, arguing the court should have reinstated her security interest




         1
         Mi Casa also does business as UniBank Capital Corporation. We refer to both
entities as Mi Casa.


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in the property, and declared it first in priority.2 We hold the trial court did not abuse its
discretion in fashioning an equitable remedy and affirm.
                                    I.     BACKGROUND
       The following evidence from the trial record supports the trial court’s posttrial
findings.
       In January 2006, Barance bought a building on Treat Avenue in San Francisco
(Property) and opened an automotive repair business. To finance the purchase, he
obtained a $2.15 million loan from Owens Mortgage Investment Fund (Owens) and
$250,000 from Steve and Jeannine Kurtela, the prior building owners. The loans were
secured by first and second deeds of trust respectively.
       Mi Casa is a residential mortgage broker. Around the time of the Owens and
Kurtela loans, Christopher O’Dell, a Mi Casa loan officer, helped Miani purchase a
home. O’Dell told Miani about an investment opportunity with Barance and helped her
take out a line of credit against the equity in her new home so she could loan money to
Barance. In July 2006, Miani loaned Barance $129,375 at 13 percent interest with full
payment due in October 2006. Barance executed a promissory note for the loan as well
as a deed of trust (July DOT), which Miani understood was in third position after the
Owens and Kurtela liens. Miani received two loan payment checks from Barance’s auto
repair business that were rejected for insufficient funds, and she received no payment at
all in October 2006. She contacted Barance about the missed payment, and he said he
had no money to pay her.




       2
        Miani’s husband, Cesar, also made a loan to Barance in the amount of $28,000.
Cesar’s lien also was extinguished by the senior refinancer’s foreclosure. He was a
coplaintiff below. The trial court entered judgment against Barance on the amounts due
on Cesar’s loan and denied the remainder of Cesar’s claims. Although Cesar is identified
as an appellant here, he raises no argument on appeal relevant to his claims. Any
separate claims Cesar might have are therefore deemed abandoned, and we discuss
only the arguments raised on behalf of Miani herself. (Behr v. Redmond (2011)
193 Cal.App.4th 517, 538.)


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       Because Barance was also having trouble making his payments on the Owens and
Kurtela loans, he approached Mi Casa for refinancing assistance. Mi Casa referred
Barance to Lone Oak Fund, LLC (Lone Oak), and Lone Oak in turn referred part of the
refinancing to a pension fund, CVA Pension FBO A.S. Abbasi (Abbasi). O’Dell told
Miani about the attempted refinancing and suggested she extend her loan to Barance.
Miani said she wanted payment in full. O’Dell also asked Miani to subordinate her deed
of trust to the refinancing liens, but she repeatedly refused to do so.
       Nevertheless, in October 2006, Barance executed a new note for Miani’s loan with
an extended term, secured by a new deed of trust (October DOT). In November, O’Dell
asked Miani to come to his office to sign what O’Dell described as “the paperwork that I
needed to sign to get repaid.” The documents included a “Substitution of Trustee and
Full Reconveyance” (Reconveyance). Later in November, Miani received by mail a copy
of the October DOT, which had been recorded on November 20 (November DOT) with
the following handwritten language added to the October DOT: “This Deed of Trust is
3rd and subordinate to a 1st and 2nd Deed of Trust recording concurrently herewith.”
Miani never authorized anyone to make that modification and she was surprised to learn
that her loan was third in priority to new financing. Deeds of trust securing a $2.25
million loan by Lone Oak and a $400,000 loan by Abassi (a total of $2.65 million in
financing) held the first and second secured positions. When the Lone Oak and Abbasi
loans closed in late November 2006, the proceeds were used to pay off the Owens and
Kurtela loans as well as a $61,224.48 liability to the Internal Revenue Service. Mi Casa
received a $23,860 origination and processing fee. Representatives of Lone Oak and
Abbasi testified at trial that these entities would not have loaned Barance these funds if
Miani’s lien had remained in first position.
       In April and October 2007, Miani received two loan payment checks that were
rejected for insufficient funds. She received a total of three payments of about $1,400
each in October, November, and December 2006. Miani attempted to foreclose in
October and November 2008, but did not have the ability to pay off the priority liens.
Abassi successfully foreclosed at about that time, extinguishing Miani’s junior lien.


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Miani filed this lawsuit in March 2010 against Barance, Mi Casa, Lone Oak, Abbasi and
related entities.
                            Statement of Decision and Judgment
       The trial court issued a statement of decision following trial. On the first cause of
action for breach of the loan contract, the court awarded Miani judgment against Barance
for $129,375 minus the three $1,400 payments made by Barance, plus interest, attorney
fees and costs.
       On the third cause of action (alleged against all defendants) for violation of the
unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.),3 the court found:
“The [Lone Oak and Abbasi] money would not [have been] funded without their liens
recorded as first and second. Mr. O’Dell was informed of these lien requirements by the
new lenders and asked [Miani] to extend her 7/27/06 loan to Mr. Barance or sign a
substitution of trustee and full reconveyance and agree to a new loan with Mr. Barance
and record her new lien. [Miani] told Mr. O’Dell she only wanted her money back and
would not agree to a reconveyance. [¶] . . . Employees of [the title and escrow company]
emailed to employees of [Mi Casa] that [Miani] must sign a [reconveyance] on her lien
for the escrow to close . . . . Mr. O’Dell phoned [Miani] to return to [the Mi Casa] office
and sign additional documents so she could get paid in full on her loan. She signed [the
Reconveyance] at Mr. O’Dell’s instruction without reading the document. There was no
hand writing above the [Property] address [on the associated deed of trust].
[¶] Mr. O’Dell had a personal and professional with Mrs. Miani. Before this signing, he
helped her refinance her home in Redwood City. With Mi Casa Capital as the real estate
agent and broker, he helped her buy a home in Union City with the refinance funds. With
equity from the Union City home he encouraged her to get a line of credit and make a
loan to the Defendant Barance. The court finds [Miani] reasonably relied on
Mr. O’Dell’s statements and was not at fault by not reading [the Reconveyance]. [¶] The
words ‘This Deed of Trust is 3rd and subordinate to a 1st and 2nd Deed of Trust

       3
           Undesignated statutory references are to the Business and Professions Code.


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recording concurrently herewith’ on page one of [the deed of trust] was forged.
[Barance] and [Miani] were not told of the writing and did not consent. This handwriting
is a forgery and the deed is void. [¶] The court finds against Mi Casa . . . . [Miani] signed
[the deed of trust] [sic] because of statements by Mi Casa . . . [employees] when they
knew the statements were not true and escrow would not close unless her lien remained a
third lien on the property. The escrow fee to Mi Casa . . . of $22,860.00 [sic] at the
escrow closing is awarded to . . . Miani plus interest, costs per a cost bill.” The judgment
later entered by the court does not declare the deed of trust void, but simply awards Miani
$22,860 from Mi Casa plus interest and costs.
       The court resolved the remaining causes of action against Miani.4 Miani appeals.
Only Lone Oak and Abbasi (hereafter Respondents) have filed a respondents’ brief.
                                     II.    DISCUSSION
       Miani does not contest any of the trial court’s factual findings. Instead, she argues
the remedy imposed for her UCL claim was inadequate. She argues that the trial court
should have either declared the Reconveyance void and restored the July DOT, or
declared the July DOT (or the November DOT) first in priority over the Lone Oak and
Abassi deeds of trust.
       Miani argues the trial court should have declared the Reconveyance void because
Miani executed the document without realizing what it was. She relies on case law
holding that 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.” (Schiavon v. Arnaudo Brothers
(2000) 84 Cal.App.4th 374, 378, italics added (Schiavon).) “If the reconveyance was


       4
         Miani’s third amended complaint alleged causes of action against the various
defendants for breach of contract, breach of implied covenant of good faith and fair
dealing, unfair competition, accounting, intentional misrepresentation, unjust enrichment,
fraudulent concealment in violation of lending statutes, common counts, a claim for
money due, declaratory relief, and violation of the Consumer Legal Remedies Act.


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void, it would have no effect even against a subsequent bona fide purchaser. [Citations.]
If the reconveyance was voidable, however, it may have been subject to cancellation and
rescission as against the trustee, but could be relied upon by a subsequent bona fide
purchaser for value . . . .” (Ibid., italics added.) In Schiavon, a request for a
reconveyance was forged, but the reconveyance itself was executed by a trustee “with full
awareness of the effect of the act.” (Id. at p. 379.) Thus, the deed was voidable but not
void as against the defendant, a bona fide purchaser, and the trial court properly refused
to set aside the reconveyance. (Id. at pp. 376, 379.) Here, on the other hand, there was
no separate request for a reconveyance, followed by a reconveyance that was executed by
the trustee. Instead, Miani alone executed a “Substitution of Trustee and Full
Reconveyance.” That is, she substituted herself in as trustee and then personally
reconveyed the deed of trust. The trial court found that she executed this document
without reading it, reasonably relying on O’Dell’s representation that she needed to
execute the document to be paid in full. That is, she executed the document “unaware of
the nature of what . . . she [was] signing.” (Id. at p. 378.) Under Schiavon, Miani argues,
the Reconveyance was void even against Lone Oak and Abbasi, who were bona fide
purchasers for value.
       The problem with this argument is that Miani prevailed on an unfair competition
cause of action under the UCL, not an action to set aside a fraudulent conveyance. (See
Schiavon, supra, 84 Cal.App.4th at p. 378 [“Plaintiffs seek to cancel the reconveyance of
their deed of trust . . . [even though] defendant was a bona fide purchaser for value, with
no knowledge of the underlying fraud . . .”].) The trial court here ruled that Miani’s fraud
claims were time barred, but the UCL claim was not because of the longer limitations
period (§ 17208). Under the UCL the court has broad discretion in fashioning an
appropriate remedy. (§ 17203.) We review the relief ordered by the trial court, therefore,
not for legal error under Schiavon but for an abuse of discretion in fashioning a remedy
for the UCL violation.
       “UCL remedies are cumulative to remedies available under other laws (§ 17205)
and, as section 17203 indicates, have an independent purpose—deterrence of and


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restitution for unfair business practices. [Citation.] . . . [¶] The court’s discretion is very
broad. Section 17203 does not mandate restitutionary or injunctive relief when an unfair
business practice has been shown. Rather, it provides that the court ‘may make such
orders or judgments . . . as may be necessary to prevent the use or employment . . . of any
practice which constitutes unfair competition . . . or as may be necessary to restore . . .
money or property.’ [Citation.] That is, as our cases confirm, a grant of broad equitable
power. A court cannot properly exercise an equitable power without consideration of the
equities on both sides of a dispute.” (Cortez v. Purolator Air Filtration Products Co.
(2000) 23 Cal.4th 163, 179–180.)
       We discern no abuse of discretion. The court found no evidence that Lone Oak
and Abbasi conspired with Mi Casa to defraud Miani, and it entered no judgment against
either Lone Oak or Abbasi. The court thus impliedly found Lone Oak and Abbasi were
bona fide purchasers of the Property with no knowledge of the fraudulent reconveyance
of Miani’s July DOT. Were the Reconveyance set aside, Lone Oak and Abbasi would
suffer impairment of their security interests despite no wrongdoing on their part. Leaving
the Reconveyance in place, on the other hand, left Miani in the same position she had
held before the November 2006 refinancing—in a third security position, albeit with an
additional $250,000 in secured debt ahead of her. We see no evidence that the additional
amount of senior debt materially affected Miani’s position as a junior secured creditor.
The evidence was that Barance was already unable to pay the senior obligations. Owens
and the Kurtelas had been pursuing foreclosure before the November 2006 refinancing
and Miani did not have the funds necessary to pay off those superior liens and thus
foreclose on her interest in the Property before the refinancing. Moreover, Lone Oak and
Abbasi would not have refinanced the loans with Miani’s deed of trust in first position.
Therefore, even in the absence of fraud by Mi Casa, Miani’s security interest would
likely have been lost through foreclosure by Owens or the Kurtelas, just as it ultimately
was by the Abbasi foreclosure. The underlying debt was not extinguished, and Miani
obtained judgment against Barance for the full amount due—the only remedy against the
borrower available to any sold out junior lien holder. Although Miani was technically


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“made whole” by the money judgment, the court also required Mi Casa to disgorge its
fees in favor of Miani as a consequence of its misconduct. The trial court did not abuse
its discretion in weighing the equities of the case and fashioning this remedy.
       Miani also argues the court should have granted her claim for a judicial
declaration that the Reconveyance was void. Declaratory relief is also discretionary.
(Code Civ. Proc., § 1061.) Moreover, the relief Miani sought in her declaratory relief
cause of action was the same relief she impliedly sought in her time-barred fraud cause of
action. A declaratory relief action is time-barred if the limitations period has run on a
cause of action for breach of the underlying obligation. (Snyder v. California Ins.
Guarantee Assn. (2014) 229 Cal.App.4th 1196, 1208.) The court, therefore, also did not
abuse its discretion in denying declaratory relief.
                                    III.   DISPOSITION
       The judgment is affirmed. Miani shall bear Lone Oak and Abbasi’s costs on
appeal.




                                                  _________________________
                                                  BRUINIERS, J.


WE CONCUR:


_________________________
JONES, P. J.


_________________________
SIMONS, J.




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