In the published portion of this decision, we address the primary issue in this appeal—whether a trust deed securing a promissory note issued in connection with a family law judgment may expire under provisions of the Marketable Record Title Act (MRTA; Civ. Code, § 880.020 et seq.) despite Family Code section 291, which provides that a family law judgment is enforceable until paid in full. Appellant Betty Louise Stein argues the trial court erred in ruling that she could not enforce the trust deed under the MRTA after more than 10 years had elapsed since the note secured by the trust deed had matured. She contends that the purpose of the Family Code is thwarted by allowing the security for the family law judgment to expire under the MRTA.
We conclude that the trial court properly harmonized the Family Code provision and the MRTA by holding that the debt evidenced by the note and secured by the deed of trust is still owed even though the note had expired under the MRTA and the deed of trust was no longer enforceable. We also reject respondent Wayne Robert Schelb's argument that the family law judgment should not be enforced under the terms of Family Code section 4, subdivision (h).
In the nonpublished portion of this opinion, we conclude that Mr. Schelb's argument that the trial court erred by failing to address his claim that a modification of the family law judgment constituted an accord and satisfaction is unsupported by the evidence and is contrary to the terms of the modification. The trial court did not abuse its discretion in determining there was no prevailing party to warrant an award of attorney fees.
The parties entered into a factual stipulation for trial from which we take portions of this summary. Betty Louise Stein
Pursuant to the modification, Mr. Schelb made the required payments from 1991 to 1993. Between 1997 and 1999, he made only quarterly payments. The amount and purpose of those payments were disputed. He made no payments to Ms. Stein after 1999.
Mr. Schelb and his current wife, Janice Bartholomew Schelb, sued Ms. Stein in December 2006. A first amended complaint was filed in February 2007. They alleged that their trust (the Wayne Schelb and Janice Bartholomew Trust) owned the fee interest in the Maclay property; in 2006 they decided to refinance the Maclay property to satisfy various debts, some of which were secured by the Maclay property; negotiations with Ms. Stein about the family law judgment and the secured note to be paid by Mr. Schelb were unsuccessful; and the Schelbs were unable to close the refinance of the property because of Ms. Stein's second trust deed. They alleged causes of action for cancellation of instruments, quiet title, injunction, declaratory judgment, intentional and negligent misrepresentation, and slander of title. Ms. Stein responded with a cross-complaint against Mr. Schelb and the title company for foreclosure of the deed of trust on the Maclay property. The cross-complaint was amended to name Interbay Funding, LLC, the company through which the Schelbs were refinancing, as a cross-defendant.
Motions for summary judgment by the Schelbs and Interbay were denied. While the litigation was pending, Interbay funded the Schelbs' refinance of the Maclay property. Encumbrances on the property other than that held by Ms. Stein were paid off. Interbay was aware of the promissory note and deed of trust in favor of Ms. Stein when it made the loan to the Schelbs.
The trial court issued a statement of decision following a court trial. It concluded that the MRTA governs the deed and note, and that they had expired under its terms. But it also held that the family law judgment remains in full force and effect under Family Code section 291 (section 291). The Schelbs were given judgment against Ms. Stein on their first and second
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The paramount issue in this case is whether the MRTA applies to family court money judgments governed by section 291. The parties have not cited and we have not found authority directly addressing this issue. We review the trial court's interpretation of the two statutory schemes de novo. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 311 [93 Cal.Rptr.3d 559, 207 P.3d 20].)
In enacting the recommendation of the Law Revision Commission, the Legislature declared: "`Interests in real property . . . created at remote times, whether or not of record, often constitute unreasonable restraints on alienation and marketability of real property because the interests are no longer valid or have been abandoned or have otherwise become obsolete. [¶] . . . Such interests . . . produce litigation to clear and quiet titles, cause delays in real property title transactions, and hinder marketability of real property. [¶] . . . Real property title transactions should be possible with economy and expediency. The status and security of recorded real property titles should be determinable to the extent practicable from an examination of recent records only.' ([Civ. Code,] § 880.020, subd. (a)(2), (3), & (4), italics added.)" (Severns v. Union Pacific Railroad Co., supra, 101 Cal.App.4th at pp. 1219-1220.) The Legislature expressly provided that the MRTA was to be "liberally construed to effect the legislative purpose." (Civ. Code, § 880.020, subd. (b).)
Where a deed of trust or other security interest expires under the MRTA, it is rendered "unenforceable by any means commenced or asserted thereafter and is equivalent for all purposes to a certificate of satisfaction, reconveyance, release, or other discharge of the security interest, and execution and recording of a certificate of satisfaction, reconveyance, release, or other discharge is not necessary to terminate or evidence the termination of the security interest. . . ." (Civ. Code, § 882.030.) Civil Code section 880.240 lists certain interests which are not subject to expiration under the MRTA; family law judgments are not among them.
The present version of section 291, enacted in 2006, also is the product of a report and recommendation by the California Law Revision Commission. (Recommendation: Enforcement of Judgments Under the Family Code (Nov. 2005) 35 Cal. Law Revision Com. Rep. (2005) p. 161 (hereafter Law Revision Commission Report).) The Law Revision Commission sought to reduce confusion created by three different rules governing the period for enforcement of a money judgment or judgment for possession of property under the Family Code. (Id. at pp. 163-164.) The three rules identified by the Commission were: "(1) A judgment for possession or sale of property is subject to the ten-year enforcement period and renewal procedure provided by general enforcement of judgments law [former § 291]. [¶] (2) A judgment for support is enforceable until paid in full and is not subject to the equitable defense of laches . . . . The judgment may be renewed to update the amount owed on the judgment [Fam. Code, former § 4502]. [¶] (3) A non-support money judgment has no stated time period for enforcement and is not subject to the judgment renewal procedure or any exemption from laches [Code Civ. Proc., § 683.020]." (Id. at p. 165, fns. omitted.)
The Legislature expressly acknowledged existing law regarding the enforcement of a judgment after the death of the judgment creditor or debtor,
In addition to these principles, we also apply the established rule that "a specific statutory provision relating to a particular subject controls over a more general provision. That rule obtains even though the general provision standing alone is sufficiently broad to include the subject to which the specific statute relates. (Civ. Code, § 3534.) `In the construction of a statute the intention of the Legislature . . . is to be pursued, if possible; and when a general and particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it.' (Code Civ. Proc., § 1859.) `[I]t is . . . settled that when a special and a general statute are in conflict, the former controls. (Code Civ. Proc., § 1859.)'" (Hughes Electronics Corp. v. Citibank Delaware, supra, 120 Cal.App.4th at p. 270.)
The MRTA expressly is confined to security interests in real property. Nothing in its language addresses the enforceability of the underlying obligation secured by the deed of trust or note on real property. As we have discussed, Civil Code section 882.030 provides that an expired security
In contrast, section 291 addresses family law judgments and orders rather than any security instrument. The MRTA was in effect when the Legislature enacted the present version of section 291 in 2006. Subdivision (e) of section 291 expressly states that the statute does not supersede the law governing enforcement of a judgment after a judgment debtor or creditor dies. A similar exception could have been made for security instruments coming within the MRTA, but was not. "`We must assume that the Legislature knew how to create an exception if it wished to do so . . . .' (City of Ontario v. Superior Court (1993) 12 Cal.App.4th 894, 902 [16 Cal.Rptr.2d 32].)" (California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 349 [45 Cal.Rptr.2d 279, 902 P.2d 297].)
Subdivision (h) of section 4 of the Family Code allows the court to apply either the new Family Code or the old law "to the extent reasonably necessary" to mitigate "substantial interference" with the rights of the parties in connection with an event that occurred before the operative date of the Family Code.
Mr. Schelb's argument is based on an assumption that he would have fared better under the law in effect before passage of the new version of section 291 in 2006 because Ms. Stein would have had to renew the judgment within 10 years. The law prior to 2006 does not support this argument.
Former section 291, enacted in 2000, provided: "A judgment or order for possession or sale of property made or entered pursuant to this code is subject to the period of enforceability and the procedure for renewal provided by Chapter 3 (commencing with Section 683.010) of Division 1 of Title 9 of Part 2 of the Code of Civil Procedure." (See Assem. Bill No. 2126 (2005-2006 Reg. Sess.) as introduced Feb. 21, 2006, italics added.) Section 683.020 of the Code of Civil Procedure provides a 10-year period of enforceability for judgments. But former section 291 was expressly limited to a judgment for possession or sale of property. The court in In re Marriage of
In Wilcox, the family court had entered an order directing the former husband to make payments to his former wife because of his default on payments required by the judgment of dissolution. The Court of Appeal held that this order was "unequivocally a money judgment" under Code of Civil Procedure section 680.270 which defines "`money judgment'" as "`that part of a judgment that requires the payment of money.'" (In re Marriage of Wilcox, supra, 124 Cal.App.4th at p. 499.) In a footnote, the court concluded that the former husband's argument would fail even if the judgment were premised on his failure to satisfy property equalization payments: "Numerous money judgments result from property disputes of one form or another, but this certainly does not render them judgments for the possession or sale of property." (Id. at p. 499, fn. 10.)
We are satisfied that the judgment here was not a "judgment or order for possession or sale of property" within the meaning of former section 291, and therefore, Ms. Stein was not required to enforce it within 10 years under that statute. The legislative history of Assembly Bill No. 2126 of the 2005-2006 regular session, which repealed and reenacted section 291 supports this conclusion. An analysis of Assembly Bill No. 2126 prepared for the Senate Judiciary Committee examined the existing law regarding enforcement of family law judgments or orders. It noted that a judgment for possession or sale of property is subject to a 10-year enforcement period under former section 291. (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 2126 (2005-2006 Reg. Sess.) as amended Apr. 20, 2006, p. 2.) It also noted that a judgment for child, family, or spousal support is enforceable until paid in full and is exempt from any requirement that judgments be renewed. (Ibid., citing Fam. Code, former § 4502.) The analysis expressly addressed the existing law as to enforceability of family law money judgments not for support: "
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The judgment is affirmed. The parties are to bear their own costs on appeal.
Willhite, J., and Suzukawa, J., concurred.