Etelaei v. First Gen. Bank
| Decision Date | 18 June 2019 |
| Docket Number | B287186 |
| Parties | FOROUGH ETELAEI, as Trustee, et al., Plaintiffs, Cross-defendants and Appellants, v. FIRST GENERAL BANK, Defendant, Cross-complainant and Respondent. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC519769)
APPEAL from the judgment of the Superior Court of Los Angeles County, Marc R. Marmaro, Judge. Reversed.
Paul M. Hittelman; Greines, Martin, Stein & Richland and Marc J. Poster for Plaintiffs, Cross-defendants and Appellants.
Cunningham, Treadwell & Bartelstone, Francis J. Cunningham III and David S. Bartelstone for Defendant, Cross-complainant and Respondent.
____________________ Forough Etelaei, as trustee of the Toufer Arrowroot Trust, and Shahzad Khaligh1 appeal from a judgment entered in favor of First General Bank (the Bank) on Etelaei and Khaligh's third amended complaint and the Bank's cross-complaint arising out of a loan transaction that encumbered property held in trust for Khaligh. Etelaei and Khaligh alleged Benjamin Toufer fraudulently executed a deed of trust on the property to secure a home equity line of credit from the Bank. The third amended complaint sought cancellation of the deed of trust and notice of default recorded on the property. The Bank in its cross-complaint sought to quiet title and declaratory relief, declaring the deed of trust valid and enforceable.
The trial court entered judgment after granting the Bank's motion for summary adjudication of the Bank's 26th affirmative defense of ratification, finding Khaligh had ratified Toufer's loan transaction with the Bank, regardless of whether she authorized the loan in the first instance. In addition, the court granted the Bank's motion for judgment on the pleadings on its cross-complaint based on the court's ruling on the motion for summary adjudication finding ratification.
Etelaei and Khaligh contend there are triable issues of material fact as to whether Khaligh ratified Toufer's loan transaction. We agree and reverse the judgment.
On August 31, 2001 Khaligh purchased a single-family residence on Arrowroot Lane in Rancho Palos Verdes (the Property). On February 6, 2008 Khaligh transferred title of the Property to Toufer for the purchase price of $952,000. Toufer paid $457,000 in cash, borrowed $285,000 from a private lender, Schaefer Funds, and borrowed the rest from Khaligh's family members. Khaligh transferred title to Toufer in order to acquire funds to settle a judgment against her. Khaligh and Toufer verbally agreed Khaligh would continue to be the exclusive beneficial owner of the Property, and Toufer would hold title in trust for Khaligh's exclusive use and benefit. They also agreed Toufer's title was nominal and he would transfer title back to Khaligh at her request. On March 31, 2008 Toufer transferred title back to Khaligh by a quitclaim deed, which was not recorded.
Khaligh's sister, Shahla Sina, paid $287,000 to Schaefer Funds to repay the loan on behalf of Khaligh. In addition, Sina paid Toufer $151,000 on behalf of Khaligh.
By early 2012 Toufer had recouped all but $250,000 of the amount he had paid to Khaligh in February 2008. According to Khaligh, at that time she and Toufer agreed to seek a new loan of no more than $500,000, from which Toufer would receive $250,000 to repay the amount Khaligh owed him, with the remainder going to Khaligh to service her debts while she sought employment. Khaligh declares she and Toufer agreed he wouldnot enter into a loan transaction without her authorization and consent.
In mid-November 2012 an appraiser came to the Property, and Khaligh answered the appraiser's questions about the Property. Toufer and the appraiser refused to tell Khaligh the name of the lender or the amount and terms of the proposed loan.
In late 2012 Toufer applied to the Bank for a home equity line of credit with a credit limit of $990,000, which the Bank approved. As part of the transaction, Toufer signed a home equity line of credit agreement with the Bank. He also executed a deed of trust on the Property in favor of the Bank to secure repayment of the loan, which was recorded on December 13, 2012. On December 18, 2012 the Bank advanced Toufer $700,000 on the line of credit (the loan or 2012 loan). The next day Toufer withdrew the funds from his checking account with the Bank.
According to Khaligh, she did not know about Toufer's loan from the Bank until December 21, 2012, when she received at her home a copy of the loan closing statement. She called Toufer and her sisters, Sina and Hayedeh Khaligh,2 seeking information about the loan. Hayedeh told Khaligh she thought Toufer had received $700,000 from the Bank; Toufer refused to tell Khaligh how much money he received. Khaligh demanded Toufer cancel the loan and return the money to the Bank. She requested a meeting with Toufer and her sisters, and they agreed to meet on December 28 at Hayedeh's house. At that meeting, Khalighagain asked Toufer to cancel the loan and confirmed he had no authority to obtain a loan without her approval. She requested Toufer go with her to the escrow office on the following Monday to sign documents to transfer title of the Property to a trust to protect her interest.
On December 27, 2012 Khaligh called the Bank and spoke with Jeanette Lin, the Bank's senior vice president. Khaligh notified Lin that Toufer had fraudulently obtained the loan without her authority. Lin said the Bank would "freeze" the loan to prevent further withdrawals. On December 31, 2012 Lin sent a letter to Toufer at the Property's address, stating in part, The letter notified Toufer his credit line was "temporarily suspended, and we reserve our right to call the loan if we do not receive [a] Notarized Affidavit from both you and Shahzad Khaligh reaffirming your authority of subject loan request."
On December 31, 2012 Khaligh met with Toufer, Hayedeh, and David Gibson at Gibson's escrow office. At the start of the meeting, Toufer executed a quitclaim deed transferring title of the Property to Etelaei as trustee of the Toufer Arrowroot Trust. Gibson notarized the deed and handed it to Khaligh. Khaligh asked Toufer to acknowledge and Gibson to notarize a "special power of attorney" Toufer had signed on August 30, 2010, appointing Khaligh as an agent and "attorney-in-fact" for Toufer, and authorizing Khaligh to act "in any lawful way in order to obtain any permit/s including but not limited to the execution of any and all documents necessary or advisable with respect to the [P]roperty . . . , and the expenditure of any and all fundsnecessary for the payment of expenses in connection with such matters." Gibson notarized the document.
Khaligh states that at the meeting she also demanded Toufer not to "touch" the loan or any of the loan proceeds. She represented she intended to continue to take tax deductions for the property taxes she paid and the interest payments she made on the 2008 loans. Further, Khaligh confirmed she would be responsible for any capital gains taxes incurred by Toufer arising from the transfer of the property. Khaligh and Toufer also discussed the costs of a future refinancing. Khaligh claims they did not discuss Toufer's initial withdrawal of $700,000, his payments from the loan amount to Sina, or whether Toufer's transfer of title back to Khaligh was consideration for Toufer keeping the remainder of the loan proceeds. After this discussion, Khaligh left the meeting to distribute Christmas gifts to Gibson's staff.
A few minutes later, Hayedeh came out of the meeting room and gave Khaligh two copies of a document. According to Khaligh, Hayedeh told her the document was a typed list of Khaligh's instructions to Toufer that Gibson had prepared. Khaligh states she did not read the agreement before signing two copies of it because she believed the document reflected her instructions during the meeting.
The December 31, 2012 agreement (Agreement), which is on David Gibson Escrow Co., Inc., letterhead, states:
After signing the Agreement, Khaligh went to her car. Khaligh claims it was then that she read the Agreement. While Khaligh was sitting in her car, Hayedeh approached her and asked why she was crying. Khaligh inquired about Toufer's payment of $328,000 to Sina as indicated by the Agreement. Hayedeh informed Khaligh that earlier that day Sina had taken Toufer to...
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