Crossing the line and too much information!  Effective Nov. 1, 2018 Cal. Rule of Professional Conduct 1.2.1.

The issue is if a lawyer knowingly choses a form, that is outdated, because he likes that it contains a clause beneficial to the client, but that clause has been made unenforceable (i.e. illegal) due to a statute or case law, the lawyer breached his fiduciary duties and the Code of Professional Conduct.  This issue is common in leases, contracts, promissory notes, etc.  Especially issues such as binding arbitration, choice of law, choice of venue, forfeiture of deposits, issues regarding a party filing bankruptcy, waiver of the right to jury trial, usury.  How about clients in the cannabis business?  It is illegal under federal law, and the client’s business may also be illegal under local laws (e.g. no valid permit).  What do you do when they ask you for assistance with a lawful component of their “illegal” business?  Is the lawyer acting unethically to draft an employment agreement, or employee handbook for an unlicensed cannabis business?  This is in addition to other grounds for Attorney’s liability for crimes, such as federal laws prohibiting conduct that aiding, abetting, violation of U.S. anti-money laundering laws 18 U.S.C. Sections 1956 and 1957 or assisting in a fraudulent conveyance “asset protection” estate plan.

Another issue is should the attorney limit the information obtained from a client?  Will a talkative client disclose a conflict of interest or an illegal transaction?  Balancing obtaining sufficient information to competently provide legal services,  conflicts of interest, and knowing too much!  See the ABA’s Suggestion as to information obtained from new clients.

Rule 1.2.1 Advising or Assisting the Violation of Law
(a) A lawyer shall not counsel a client to engage, or assist a client in conduct that the
lawyer knows* is criminal, fraudulent,* or a violation of any law, rule, or ruling of a
tribunal.
(b) Notwithstanding paragraph (a), a lawyer may:
(1) discuss the legal consequences of any proposed course of conduct with a
client; and
(2) counsel or assist a client to make a good faith effort to determine the
validity, scope, meaning, or application of a law, rule, or ruling of a
tribunal.

Conformed pages Complaint Finally, common sense prevails in Santa Monica “related to housing laws”!  In the Federal (9th Circuit) case of Salisbury v. City of Santa Monica (2021)  What is even more entertaining, is the video argument.  Check it out: Salisbury Video of Oral Argument  Judge Bea is so cool and old school, really knows how to get to the point!

This case was about a non-tenant, who stayed in a mobile home after his father died.  He wanted a parking space closer to his mobile home.  Instead he got booted out!  The Ninth U.S. Circuit Court of Appeals on Friday affirmed a summary judgment in favor of the City of Santa Monica by in a case brought by a man whose spinal condition which made his walking painful who was denied permission to park his car next to his mobile home, on a city mobile home park.  The man did NOT have a  lease nor paid any rent.

Senior Circuit Judge Carlos Bea wrote the city (as a lessor) had no duty under the federal Fair Housing Amendments Act of 1988 (“FHAA”) to accommodate plaintiff Lawrence Salisbury’s disability.  Salisbury’s father had occupied the space in the Mountain View Mobile Home Park from 1974 until his death in 2013, and Plaintiff’s father had paid rent.  The City had tried to get the Plaintiff to vacate since 2011.  A prior state court action by Salisbury to block eviction was dismissed on procedural grounds.

The Law of FHAA was found to not apply e.g. no standing.  While the FHAA makes it it unlawful makes “[t]o discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap” or “[t]o discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection with such dwelling, because of a handicap.”  this Plaintiff was simply NOT a tenant.

“The relevant operative language of the FHAA bars discrimination “in the sale or rental” of a dwelling, “in the terms, conditions, or privileges of sale or rental of a dwelling,” and “in the provision of services or facilities in connection with such dwelling.”

Partners, and spouses, can lose title insurance if they transfer title out of their names or the entity in which they took title without first obtaining the proper title insurance Endorsement.  The most common endorsement is called a Residence Held in Trust Endorsement (HO 05 43)  If the transferor signs a grant deed, he is deemed to make the covenants described in Civ. Code § 1113, “and none other.” Id. If the person who signs a grant deed breaches any of the covenants set forth in the statute, he is not going to have any title insurance coverage, because title insurance does not protect the insured against his own acts.

Recently-issued title insurance policies, may provide coverage even though the insured transfers his interest into a revocable trust.   But be safe, ask for a trust endorsement.

Title Insurance Issues
 Need an endorsement for successors and transferees, e.g. successor trustee coverage. Obtain an endorsement on your title insurance policy;
 Obtain endorsement form CLTA 107.9 for transfer to revocable trusts or HO 05 43
 Obtain expanded coverage on your title insurance policy to include coverage for trustees and successor trustees; or
 Obtain a new CLTA/ALTA Homeowner’s Policy of Title Insurance from 1998 to present.

See also Kwok v. Transnation Title Ins. Co. (2009) 170 Cal.App.4th 1562
This California Court of Appeals case involved a transfer of title of real property by use of a grant deed. A grant deed “grants” or “conveys” title to real property from the grantor to the grantee. This is also the mechanism for funding revocable trusts established through Trust Agreements under California Probate Code §15200(b). In the Kwok v. Transnation Title Ins. Co. case, several individuals owned a limited liability company (LLC), and the LLC was the owner on title of a parcel of real property. The LLC (through it owners) transferred the LLC’s interest in the real property to the revocable trusts of the owners of the LLC. The court held that this transfer constituted a voluntary act not covered by their title insurance contracts, which consequently terminated their title insurance coverage. After Kwok, voluntary transfers of real property to a revocable trust may terminate title insurance for the real property under the terms of some title insurance policy provisions.

Residential leases, in any facility where a person “resides”, cannot contain a mandatory arbitration clause.  The plain language of Civil Code Section 1953 states that waivers of litigation rights in a lease or rental agreement are void as public policy, and Civil Code section 1940 extends these rights to tenants, lessees, boarders, or others of a “dwelling unit.”  This has been extended to senior care facilities because they also “reside” there.  See Harris v. University Village Thousand Oaks CCRC, LLC (2020) 49 Cal.App.5th 847

Another case on the same arbitration issue, concerning a tort claim for bed bugs, also held tenant’s cannot be forced to arbitrate.  See Williams v. 3620 W. 102nd Street, Inc. (2020) 53 Cal.App.5th 1087

Also, don’t forget, possibly the federal arbitration act could apply, if it involves interstate commerce, which is the prerequisite for the federal Act’s application. (Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 657

Title VI of the Civil Rights Act of 1964 was clearly extended to protect Jews as “a nationality”.  However, while thousands of year ago that may be a true statement, perhaps as early as King Solomon’s time, Jews have lived in other nations.  Today, and for hundres, if not over two thousand years, Jews do not consider themselves a nationality, a religion and perhaps a culture.  The policy is that “Discrimination against Jews may give rise to a Title VI violation when the discrimination is based on an individual’s race, color, or national origin.”  It seems the impetus was this was to take combat anti-Israel sentiments and divestment movements on college campuses by requiring colleges and universities to treat those movements as discriminatory or risk losing their funding.

https://www.cnn.com/2019/12/10/politics/trump-order-judaism-nationality/index.html?fbclid=IwAR1fEZHVlwYjHgnSgwSPLE8DQMDVoeGAoMuIxG0c6L-aY5pI6LPbANmQpN8

Does this Federal Court’s ruling mean that Jews are “not white”?  Shaare Tefila Congregation v. Cobb, 481 U.S. 615 (1987)

The U.S. Supreme Court held in a case where a synagogue was painted with anti-Semitic slogans  and symbols, a lawsuit was filed in Federal District Court, alleging that the desecration violated 42 U.S.C. § 1982. The trial court dismissed petitioners’ claims, and the Court of Appeals affirmed, holding that discrimination against Jews is not racial discrimination under § 1982.  This law was enacted as part of the 1866 Civil Rights Act.  42 USC §1982 provides: All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.

However, the U.S. Supreme Court reversed.  It held that a charge of racial discrimination within the meaning of § 1982 cannot be made out by alleging only that the defendants were motivated by racial animus. It is also necessary to allege that that animus was directed toward the kind of group that Congress intended to protect when it passed the statute. P. 481 U. S. 617.  The Court explained that Jews can state a § 1982 claim of racial discrimination, since they were among the peoples considered to be distinct races, and hence within the protection of the statute at the time it was passed. It doe snot matter that the defendants are also part of what today is considered the Caucasian race citing Saint Francis College v. Al-Khazraji, ante, p. 481 U. S. 604. Pp. 481 U. S. 617-618.

It is also worth reading a law review article on this case such as that by Racial Discrimination under 42 U.S.C. 1982_ Proof or Perceptions by Christopher E. Celichowski

 

 

 

The home owner should make sure the contract contains an “option to terminate—time of the essence” clause. In Call v. Alcan Pac. Co., 251 Cal. App. 2d 442  (3d Dist. 1967) the court considered such a clause. This type of clause provides that if the contractor does not prosecute the work diligently, the owner may give written notice, and that if the contractor does not then resume work in a diligent manner, the owner may take over the job. The owner, with such a contract clause, has what amounts to an option to terminate the contract if the contractor delays the work.

Logically, the 4 year statute of limitations of Civil Code §387(1) applies to breach of a promissory note secured by a deed of trust.  But foreclosure on the deed of trust is not limited to the “normal” statute of limitations.  In Trenk v. Soheili, (Dec. 2020) B295434, (Los Angeles County Super. Ct. No. PC058343), the court analyzed the 10/60 year rule of Civil Code ╘880.020.  In 2001 a lawyer was sued for malpractice, he settled in 2003 agreeing to pay $100,000 secured by a deed of trust on his community property house.  The promissory note gave him three years to pay.  He paid $25,000 then stopped payments.  He owed $75,000.   In 2018 the plaintiff/creditor began foreclosure proceedings.  The debtor field an action to quiet title in the residence citing the statute of limitations and the Marketable Record Title Act (Civ. Code, § 880.020 et seq.) barred enforcement of the trust deed.  The trial court agreed.  The judgment was affirmed on appeal, but for different reasons.

The appellate court held that a power of sale in a trust deed is enforceable even if the statute of limitations has run on the underlying obligation if the trust deed does not state the last date for payment under the promissory note.  See Civil Code section 882.020,
subdivision (a)(2).  The key is if a date is set forth in the deed of trust for the last payment/due date.  The creditor may have 10 years, or would have 60 years to exercise the power of sale in the trust deed if no due date is stated.  It is also possible under Civil Code Section 882.020, subdivision (a)(3) to extend the applicable time period by 10 years by recording a “notice of intent to preserve the security interest.”

Read Civil Code section 882.020, subdivision (a)(1) provides that a power of sale may not be used to enforce a lien after 10 years from the last date fixed for payment, if that date is “ascertainable from the recorded evidence of indebtedness.”  Remember, Don’t confuse a judicial foreclosure (which has a statute of limitations) with a non-judicial which does not.

It is also good that Mr. Trenk, was married.  The Court of Appeal found that the power of sale is not enforceable for another reason. The Residence presumptively is community property. The wife did not execute the trust deed, she has the power to void it.  Fam. Code, § 1102, subd. (a)

Editor’s note: I have met Mr. Trenk, he’s a very nice guy, but he really should have paid his debt.

 

It is confusing which eviction notice to use and when the money is due, or not due, under the current Covid-19 eviction rules.  This chart may help point you in the right direction.  But use a lawyer, these are only basic instructions.  Click here to download this chart: Which Covid Forms to serve