Fed. DEPOSIT Ins. Corp. v. DINTINO

• Decision Date: 02 October 2008
• Docket Number: No. D051447.,D051447.
• Citation: 167 Cal.App.4th 333,84 Cal.Rptr.3d 38
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff and Respondent, v. Richard K. DINTINO, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

167 Cal.App.4th 333

84 Cal.Rptr.3d 38

FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff and Respondent,

v.Richard K. DINTINO, Defendant and Appellant.

No. D051447.

Court of Appeal, Fourth District, Division 1, California.

Sept. 9, 2008.

Rehearing Denied Oct. 2, 2008.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

COPYRIGHT MATERIAL OMITTED.

Charles D. Jarrell, Allen, Matkins, Leck, Gamble & Mallory, Los Angeles, CA, for Plaintiff and Respondent.

Darren J. Quinn, Law Offices of Darren J. Quinn, Del Mar, CA, for Defendant and Appellant.

McDONALD, J.

Defendant Richard K. Dintino appeals a judgment entered in favor of plaintiff IndyMac Bank, F.S.B. (Bank) in its action against him arising out of his nonpayment of a home loan. ¹ The trial court granted Dintino's motion for summary adjudication of Bank's breach of contract cause of action, but denied his motion for summary adjudication of Bank's causes of action for unjust enrichment and money lent. The parties then stipulated to a bench trial on their briefs on the sole issue of the amount of damages due Bank on its unjust enrichment cause of action. The court entered judgment for Bank in the amount of $268,177.61, plus prejudgment interest of $147,007.30. The court subsequently denied Dintino's motion for an award of attorney fees he incurred in defending against Bank's breach of contract cause of action.

On appeal, Dintino contends the trial court erred by denying: (1) his motion for summary adjudication of Bank's unjust enrichment cause of action because it is barred by the Code of Civil Procedure section 338, subdivision (d), ² three-year statute of limitations; (2) his motion for summary adjudication of Bank's money lent cause of action because it, together with Bank's breach of contract cause of action, is barred pursuant to the one-action rule of section 726; (3) his motion for summary judgment based on his affirmative defense of unclean hands; and (4) his motion for an award of attorney fees incurred in defending against Bank's breach of contract cause of action.

FACTUAL AND PROCEDURAL BACKGROUND

On or about June 11, 1999, Dintino borrowed $270,400 from ICON Mortgage, Inc., (ICON) to fund his purchase of residential real property located at 4755 Panorama Drive, San Diego (Property). The loan was evidenced by Dintino's execution of a note in that amount (Note). The Note was secured by a deed of trust (Trust Deed) on the Property. The Trust Deed was executed by Dintino on June 15 and recorded with the San Diego County Recorder on June 18. On or about June 16, ICON executed a corporation assignment of deed of trust (Assignment), transferring all of its beneficial interest in the Trust Deed (and presumably the Note) to INMC Mortgage Holdings, Inc. (predecessor in interest to Bank). On December 9, the Assignment was recorded with the San Diego County Recorder.

On July 23, 1999, Bank transferred all of its interest in the Note to WAMU Mortgage Securities Corp. (WAMU). ³ On December 6, pursuant to Bank's request, T.D. Service Company, successor trustee of the Trust Deed (Trustee), executed a full reconveyance (Reconveyance) of its interest in the Trust Deed. On December 9, the Reconveyance was recorded with the San Diego County Recorder.

On or about August 18, 2000, Dintino executed a grant deed (Grant Deed) transferring the Property to Paul L. Stricker. On August 30, the Grant Deed was recorded with the San Diego County Recorder. However, on Dintino's sale of the Property to Stricker, none of the sale proceeds were used to pay the unpaid principal balance of the Note (i.e., $268,177.61). Instead, all of the net proceeds from the sale were paid to Dintino.

After paying all prior monthly installments on the Note, Dintino did not pay the monthly installment due on September 1, 2000, which installment was subject to a late charge if not paid by September 15. ⁴ Prior to that September installment, Dintino had paid all monthly installments between seven and 18 days after their respective due dates. After August 2000, Dintino did not pay any further installments on the Note. On or about October 24, WAMU apparently received a letter from Dintino informing it of his sale of the Property. ⁵ Bank apparently received a copy of that letter on October 25. In or about May 2003, Bank repurchased the Note from WAMU in response to WAMU's demand based on the absence of a first lien position trust deed.

On September 5, 2003, Bank filed the instant action against Dintino alleging causes of action for: (1) breach of contract; (2) money lent; and (3) unjust enrichment. Dintino filed an answer, asserting the affirmative defenses that Bank's claims were barred by: (1) applicable statutes of limitations (e.g., §§ 337, 338 & 339); (2) the antideficiency statutes, including the one-action rule (§§ 580 et seq., 726); and (3) the doctrine of unclean hands.

In March 2006, Bank and Dintino each filed a motion for summary judgment or, in the alternative, summary adjudication. Dintino argued there were no triable issues of material fact regarding: (1) his section 726 one-action rule defense to Bank's causes of action for breach of contract and money lent; and (2) his statute of limitations defense to Bank's cause of action for unjust enrichment. Bank argued there were no triable issues of material fact regarding all three of its causes of action and that it therefore was entitled to judgment as a matter of law or, at least, summary adjudication on some of its causes of action.

On September 11, the trial court issued a minute order denying Bank's motion and granting, in part, Dintino's motion. The order stated:

“[Bank's] Motion for Summary Judgment is denied. [Bank has] not carried [its] initial burden of proof to show by admissible evidence entitlement to recovery on each cause of action pled. The One Action Rule, [§ ] 726, bars [Bank] from recovering on an action on the [Note] as [a] matter of law.... [Bank's] alternative Motion for Summary Adjudication of Issues[ ] is also denied. The [cause of action] on the [Note] is barred by application of the One Action Rule. Material issues of fact remain on the causes of action for money lent and unjust enrichment as to the amount of damages. It is a disputed question of fact whether the damages suffered by [Bank] are those argued by [Bank] to be $374,459.26....

“[Dintino's] Motion for Summary Judgment is denied pursuant to [§ ] 437c [, subd.] (p)(2) as he has not shown any affirmative defense to the [Bank's] cause

of action for money lent or unjust enrichment. [Citations.] Unclean hands does not apply because he who would seek equity must do equity and it is undisputed [Dintino] never paid off the loan.... [Dintino's] legal affirmative defense that a three year Statute of Limitations bars the cause of action for unjust enrichment is not applicable. The applicable Statute of Limitations is four (4) years because this action arises out of a written contract. [§ ]337. Moreover, even if a three (3) year statute could be said to apply, it would not begin to run until [Bank] discovered the fraud or mistake leading to the unjust enrichment, i.e.[,] that Dintino had received proceeds from the sale of the [P]roperty and would not repay the Note. The Bank did not learn of the sale of the [P]roperty until at the earliest 10/25/00. Further, the Bank could not know Dintino was not going to make the 9/00 payment until at least 9/15/00, when such payment would be late.

“[Dintino's] alternative Motion for Summary Adjudication of Issues is granted as to the cause of action on the [Note] for the reasons stated above, but is denied as to the causes of action for money lent and unjust enrichment. A party benefiting from a mistake of another, in this case [Bank's] reconveyance of a Deed of Trust, is not entitled to retain what amounts to a windfall. [Citation.] The amount of any such windfall remains to be determined.”

On October 31, the parties filed with the trial court their stipulation for a bench trial by briefs (Stipulation), which stated in part:

“2. WHEREAS, absent an indication to the contrary by the Court, the Parties read the [trial court's summary judgment motion] Ruling to restrict the sole issue at trial to be the ‘amount of damages' sustained by [Bank] on its claim for unjust enrichment, and that no other evidence is relevant at trial.

“3. WHEREAS the Parties stipulate for the purpose of this trial that: [¶] ... [¶] (d) The unpaid principal balance of the Loan to [Dintino] was $268,177.61 as of September of 2000; [¶] (e) Lawyers Title Company [presumably the escrow holder] paid none of this unpaid principal balance to [Bank] in connection with the close of escrow on August 30, 2000 on the sale of the Property. [¶] The net proceeds of the sale of the Property (after payment by Lawyers Title Company of settlement charges, existing mortgages and taxes) were distributed to Dintino.

“4. WHEREAS, without waiver of any rights to appeal or otherwise seek review of the Court's [summary judgment motion] Ruling, the Parties stipulate and agree that the trial of this action may be based upon written briefs, upon the agreed-upon facts as stipulated herein. The Parties further stipulate and agree that the written briefs that will be submitted shall solely address the amount of damages sustained by [Bank] on its claim for unjust enrichment. ... [¶] ... [¶] The parties will seek clarification from the Court whether the ‘amount of damages' determination will encompass something other than the unpaid principal.

“5. WHEREAS, notwithstanding the foregoing, the Parties specifically reserve all rights to appeal or otherwise seek review of the Court's [summary judgment motion] Ruling, as well as any judgment entered following the trial of this action.” (Italics added.)

On February 14, 2007, following submission by the parties of their trial briefs, the trial court entered judgment in favor of Bank in the amount of $268,177.61 principal, plus...