Filed 3/23/22 Feng v. Lone Oak Fund CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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.

IN THE COURT OF APPEAL OF THE STATE OF 

CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

ZENGPENG FENG et al.,

Plaintiffs and Appellants,

v.

LONE OAK FUND LLC et al.,

Defendants and Respondents.

 B308695

 (Los Angeles County

 Super. Ct. No. 19PSCV00291)

APPEAL from judgments of the Superior Court of Los 

Angeles County, Peter A. Hernandez, Judge. Reversed and 

remanded with directions.
2

MagStone Law and Dezhan Li for Plaintiffs and 

Appellants Zengpeng Feng, Jixiang Feng and Yongxiang 

Feng.

Garrett & Tully, Robert Garrett, Candie Y. Chang, Zi 

C. Lin, and Sonia Plesset Edwards for Defendants and 

Respondents Lone Oak Fund LLC and Royal Business Bank.

Fidelity National Law Group and Kevin R. Broersma

for Defendant and Respondent Qualfax, Inc.

______________________________________

INTRODUCTION

Appellants Zengpeng Feng and his sons Jixiang Feng 

and Yongxiang Feng1 sued respondents Lone Oak Fund, 

LLC (Lone Oak), Qualfax, Inc. (Qualfax), and Royal Business 

Bank (Royal) (among others), seeking to quiet title to two 

pieces of real property (one owned by Jixiang and one owned 

by Yongxiang) or, failing that, to establish an equitable lien 

against the properties. Appellants alleged that, without 

their knowledge or consent, both properties were 

encumbered with deeds of trust in favor of respondents, 

securing loans respondents made to entities unaffiliated 

with appellants. Additionally, in 2019, Qualfax initiated a 

1 Because appellants share a surname, we refer to them by 

their first names.
3

nonjudicial foreclosure sale at which it purchased Jixiang’s 

property.

In the proceedings below, Lone Oak and Qualfax 

moved for judgment on the pleadings and Royal demurred.

Relying on documents they asked the court to judicially 

notice, all argued the operative complaint failed to state 

causes of action against them because they were bona fide

encumbrancers. The court granted both motions, sustained 

the demurrer without leave to amend, and subsequently 

entered judgments in respondents’ favor. On appeal, 

appellants contend both that the court erred in granting the

motions and sustaining the demurrer, and that regardless, 

we should remand because they can amend their operative 

complaint to state a cause of action.

We conclude we need not determine whether the court 

erred in granting the motions for judgment on the pleadings 

or in sustaining the demurrer because appellants have 

demonstrated a reasonable possibility that they can amend 

the operative complaint to state a cause of action against 

each respondent. We therefore reverse the judgments and 

remand the matter to permit them to do so.

STATEMENT OF RELEVANT FACTS

A. The First Amended Complaint

Appellants filed a complaint in March 2019, and a first 

amended complaint (FAC) in June 2019. The FAC alleged

that defendant Fai Wong aided appellants, “Chinese 
4

nationals who have limited knowledge of English,” with their 

purchase of real property in the United States, including the 

two properties at issue in this appeal. As with other 

properties Wong acquired for appellants, Wong purchased 

these properties through Golden Ocean Investment (a 

company controlled by Wong and his wife) using money 

provided by appellants; Golden Ocean then sold the 

properties to appellants for more than it paid. Specifically, 

Golden Ocean purchased a property on Via Santa Cruz 

Avenue in Whittier (the Santa Cruz Property) which was 

sold to Jixiang, and a property on Finisterra Place in 

Hacienda Heights (the Finisterra Property) which was sold 

to Yongxiang. 

The FAC went on to allege that in January 2015, 

without appellants’ knowledge or consent, the Santa Cruz 

Property was transferred to a company called Global Panda, 

which permitted respondent Lone Oak to record a 

“mortgage” against it. In November 2015, Royal recorded a 

“mortgage lien” against the Finisterra Property. In January 

2017, Global Panda transferred the Santa Cruz Property to a 

company called Global Travel & Cultural Entertainment, 

and in November 2017, Global Travel permitted Lone Oak to 

record another “mortgage lien” against the Santa Cruz 

Property. Four days later, Qualfax extended a loan to Global 

Travel, also secured by a deed of trust recorded against the 

Santa Cruz Property. In January 2019, Qualfax conducted a 

nonjudicial foreclosure and took possession of the Santa 

Cruz Property. 
5

Based on these allegations, appellants sought to quiet 

title to the Santa Cruz Property and the Finisterra Property 

in their favor. In the alternative, appellants asked the court 

to impose equitable liens against the properties in the 

amounts appellants provided to purchase them, and deem 

those liens superior to any other liens established against 

the properties after the money was provided. Appellants 

also sought injunctive relief. 

B. Qualfax Moves for Judgment on the 

Pleadings

In October 2019, Qualfax moved for judgment on the 

pleadings, arguing that because the allegations in the FAC, 

along with recorded documents that Qualfax asked to be 

judicially noticed, established that Qualfax was a bona fide

encumbrancer, appellants could not state causes of action for 

quiet title or equitable lien against it. Specifically, Qualfax 

argued that a recorded document demonstrated that in 2014, 

Jixiang executed a power of attorney (the 2014 POA) naming 

defendant Liming Jiang his attorney-in-fact, which granted

Jiang the power to transfer title to the Santa Cruz Property. 

Other recorded documents demonstrated that Jiang 

subsequently transferred title to Global Panda, which in 

turn transferred title to Global Travel, and Global Travel 

encumbered the Santa Cruz Property with a deed of trust 

securing a $300,000 loan Qualfax had extended to Global 

Travel (the Qualfax DOT). Because Global Travel had title 
6

to the Santa Cruz Property, Qualfax did not need appellants’ 

agreement to issue the loan or secure it with the Qualfax 

DOT. 

In December 2019, appellants opposed Qualfax’s 

motion, arguing that because Jixiang had granted Jiang only 

a “limited special power of attorney” and Jiang transferred 

the Santa Cruz Property without Jixiang’s knowledge or 

consent, equity mandated that title should be quieted in 

their favor. Appellants also argued that Qualfax should 

have questioned whether Jiang was truly acting with 

Jixiang’s authority, both because the grant deeds to Global 

Panda and Global Travel contained a statement that the 

conveyances were to “‘secure a debt,’” and because Jiang 

transferred title to Global Panda, a corporation controlled by 

Jiang’s husband (defendant Wong). Qualfax countered that 

nothing in appellants’ opposition suggested Qualfax was 

anything but “an arms-length lender and a bona fide 

encumbrancer . . . .” 

In December 2019, the court issued a minute order 

stating that, pursuant to a written stipulation, the hearing 

on the motion was continued to March 9, 2020. On March 9, 

2020, the court continued the hearing to July 28, 2020, at 

8:30 a.m. 

C. Substitution of Counsel

On March 16, 2020, appellants’ attorney moved to be 

relieved as counsel. On April 9, 2020, each appellant filed a 
7

substitution of counsel form, electing to represent himself. 

The address each provided for himself was the address of 

attorney Michael Smith (attorney Smith) in Las Vegas, 

Nevada. 

D. Lone Oak Moves for Judgment on the 

Pleadings

On April 20, 2020, Lone Oak filed its own motion for 

judgment on the pleadings and request for judicial notice, 

making the same arguments Qualfax made in its motion

(i.e., that the 2014 POA authorized Jiang to transfer title to 

the Santa Cruz Property, and that because Global Travel 

had title when the Lone Oak deed of trust (Lone Oak DOT)

was recorded, Lone Oak did not need appellants’ 

authorization). The motion was served electronically on 

attorney Smith. 

On April 22, 2020, the court set both Lone Oak’s 

motion and Qualfax’s motion for hearing on July 28, 2020, at 

1:30 p.m., and stated “Any briefs not yet filed will be due in 

accordance with the new hearing date(s).” On June 5, 2020, 

Lone Oak electronically served notice of the court’s minute 

order on attorney Smith. 

E. Royal Demurs

On July 1, 2020, Royal demurred to the FAC, 

contending the FAC failed to state a claim against it, 

because judicially noticeable documents established Royal 
8

was a bona fide encumbrancer of the Finisterra Property. 

Specifically, Royal contended that in July 2015, Yongxiang 

executed a power of attorney (the 2015 POA) appointing Fai 

Wong as his attorney-in-fact, which granted Wong the power 

to encumber the Finisterra Property. Wong, in turn,

authorized Royal to record a deed of trust against the 

Finisterra Property (the Royal DOT) to secure a $1,680,000 

loan made to Yongxiang.2 In light of the 2015 POA, Royal 

contended, it did not need appellants’ agreement to issue the 

loan or secure it with the Royal DOT. Royal electronically 

served its filings on attorney Smith, who later admitted 

receiving them.

On July 2, 2020, the court set Royal’s demurrer to be 

heard on July 28, 2020, at 1:30 p.m. On July 7, 2020, Royal 

electronically served notice of this order on attorney Smith. 

F. Lone Oak and Qualfax Refile Their Motions

On June 22, 2020, Lone Oak refiled its motion for 

judgment on the pleadings; nine days later, Qualfax refiled 

its motion. With the exception of the dates, the refiled 

motions were identical to the initial ones. Lone Oak

electronically served its pleadings on attorney Smith, and 

Qualfax both electronically served attorney Smith, and sent 

the pleadings via overnight delivery to “Zhengjun Wang” and 

2 The Royal DOT states the loan was made to Global Travel, 

not Yongxiang. 
9

“Baohua Wang” c/o attorney Smith.

3 Smith later admitted 

he received these motions. 

On July 21, 2020, Lone Oak filed a notice of 

non-opposition, which was served electronically on attorney 

Smith. The next day, Qualfax also filed a notice of 

non-opposition, which was served electronically and via 

overnight mail to attorney Smith. 

G. Judgment

On July 28, 2020, the court heard both motions and the 

demurrer. After noting that no appellant had appeared, the 

court granted the motions and sustained the demurrer 

without leave to amend, ordered respondents to provide the 

court with proposed judgments, and set an order to show 

cause why the case should not be dismissed. Qualfax 

e-mailed a notice of this order to attorney Smith. 

On August 24, 2020, the court entered a judgment in 

favor of Lone Oak and Qualfax, and another judgment in 

favor of Royal. Notices of entry of both judgments were 

electronically served on attorney Smith. 

On October 23, 2020, through new counsel, appellants 

appealed both judgments. They also responded to the court’s 

3 The Wangs are plaintiffs and appellants in a case involving 

very similar facts; Lone Oak and Qualfax are also defendants and 

respondents in that case and, at the time, like appellants, the 

Wangs were representing themselves, but had given their 

address as “c/o” attorney Smith.
10

order to show cause, attesting that they had failed to oppose 

respondents’ motions and demurrer because they had not 

received actual notice of the motions and demurrer, and 

because they believed attorney Smith, who was their 

attorney in a related case, would take care of their disputes. 

The response additionally contended both Jixiang and 

Yongxiang were unaware of the nature of the 2014 POA and 

2015 POA when they signed them. Jixiang submitted a 

declaration in which he stated he believed the 2014 POA 

“would allow the attorney-in-fact to lease or manage the 

Santa Cruz property.” Yongxiang submitted a similar 

declaration, claiming he believed the 2015 POA “would allow 

the attorney-in-fact Fai Wang [sic] to lease, rent out and 

take care of the Finisterra property for me.” The court 

discharged the order to show cause. 

H. Requests for Judicial Notice on Appeal

In July 2021, appellants requested we judicially notice 

a proposed second amended complaint (Proposed SAC), 

which was attached to a motion for relief from judgment that 

appellants had filed after their notice of appeal.4 The 

Proposed SAC contains allegations that both Jixiang and 

Yongxiang believed the powers of attorney “would authorize 

4 The request for judicial notice is accompanied by a 

declaration from counsel attesting that the court took appellants’ 

motion off calendar “because ‘[t]he Court finds this matter is 

currently on Appeal and has no jurisdiction.’”
11

Fai [Wong] and his associate to manage or lease the Santa 

Cruz Property under Jixiang’s name” and “the Finisterra 

Property under Yongxiang’s name,” but that “because of the 

fraud of Fai [Wong] and his associates,” appellants were 

rendered “unaware of the nature of the document[s]” they 

signed. Additionally, the Proposed SAC alleges that Wong 

and Jiang “owed a fiduciary duty” to appellants, who “placed 

[in them] a special trust and confidence . . . .” 

In September 2021, both Lone Oak and Royal 

requested we judicially notice a declaration from attorney 

Smith submitted with appellants’ motion for relief from 

judgment. The declaration admitted attorney Smith 

received the motions for judgment on the pleadings filed by 

Lone Oak and Qualfax and the demurrer filed by Royal. 

We grant the requests made by appellants and Lone 

Oak. We deny as redundant the request made by Royal.

DISCUSSION

Appellants contend the court erred when it granted 

Lone Oak and Qualfax’s motions and sustained Royal’s 

demurrer, arguing that the pleadings and judicially noticed 

documents failed to establish that respondents were bona 

fide encumbrancers. Appellants additionally contend that 

they must be granted leave to amend the FAC because there 

is a reasonable possibility that they can state a cause of 

action against each respondent. Because we conclude that 

appellants have demonstrated they can amend to state a 

cause of action against each respondent, we need not 
12

determine whether the court erred in granting the motions 

for judgment on the pleadings or in sustaining the demurrer.

A. Appellants May Demonstrate Their Ability to 

Amend on Appeal

“‘“In the case of either a demurrer or a motion for 

judgment on the pleadings, leave to amend should be 

granted if there is any reasonable possibility that the 

plaintiff can state a good cause of action.”’ [Citation.] The 

plaintiff has the burden of showing what amendment can be 

made, and how it will change the legal effect of the pleading, 

so that it states a cause of action. [Citation.] A plaintiff can 

even make this showing for the first time on appeal.” 

(Ventura Coastal, LLC v. Occupational Safety & Health 

Appeals Bd. (2020) 58 Cal.App.5th 1, 32-33; see also Code 

Civ. Proc., § 472c, subd. (a) [“When any court makes an order 

sustaining a demurrer without leave to amend the question 

as to whether or not such court abused its discretion in 

making such an order is open on appeal even though no 

request to amend such pleading was made”]; Palm Springs 

Tennis Club v. Rangel (1999) 73 Cal.App.4th 1, 7 [“plaintiff 

need not request leave to amend in order to preserve on 

appeal the issue of whether the court abused its discretion in 

sustaining a demurrer without leave to amend (Code Civ. 

Proc., § 472c)”]; MacIsaac v. Pozzo (1945) 26 Cal.2d 809, 816 

[“section 472c of the Code of Civil Procedure . . . provides 

that the question whether the trial court abused its 
13

discretion in sustaining a demurrer without leave to amend 

‘is open on appeal even though no request to amend such 

pleading was made.’ [Citation.] Since the reason for the 

rule is the same on a motion for judgment on the pleadings, 

the same result should obtain”].)

Appellants did not request leave to amend their FAC, 

either in the only written opposition they submitted (in 

response to Qualfax’s initial motion for judgment on the 

pleadings), or at the hearing on the motions (at which they 

did not appear). Respondents therefore contend we should 

not remand to permit appellants to amend because they 

failed to meet their burden below to demonstrate how they 

could amend successfully. Of course, we do not fault the 

trial court for failing to consider a pleading (the Proposed 

SAC) that was not before it, or for not considering arguments 

appellants failed to make below. Nevertheless, the issue 

before us is whether they have made the requisite showing 

on appeal. As explained below, we conclude they have.

B. Appellants Have Demonstrated a Reasonable 

Possibility of Successfully Amending

1. Quiet Title

Appellants contend that if permitted to amend their 

operative complaint, they would allege that both the 2014 

POA and 2015 POA were void, rendering each respondent’s 

deed of trust similarly void. Specifically, appellants intend 

to allege that Jixiang and Yongxiang were “‘unaware of the 
14

nature of’” the powers of attorney they signed “because of the 

fraud of Fai [Wong] and his associates,” which would 

constitute “fraud in the inception,” rendering void the 

powers of attorney, and any transactions resulting 

therefrom. (See, e.g., Hotels Nevada v. L.A. Pacific Center, 

Inc. (2006) 144 Cal.App.4th 754, 763 [“California law 

distinguishes between fraud in the ‘inducement’ of a contract 

and fraud in the ‘execution’ or ‘inception’ of a contract”];

Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 

Cal.4th 394, 415 (Rosenthal) [fraud in the inception or 

execution “‘“goes to the inception or execution of the 

agreement, so that the promisor is deceived as to the nature 

of his act, and actually does not know what he is signing, or 

does not intend to enter into a contract at all, mutual assent 

is lacking, and [the contract] is void”’” (italics omitted)];

Estate of Stephens (2002) 28 Cal.4th 665, 672 [when 

attorney-in-fact acts without authority under invalid power 

of attorney, attempted action is void, and any conveyance 

under such circumstances is void]; Trout v. Taylor (1934) 220 

Cal. 652, 656 [“Numerous authorities have established the 

rule that an instrument wholly void, such as an undelivered 

deed, a forged instrument, or a deed in blank, cannot be 

made the foundation of a good title, even under the equitable 

doctrine of bona fide purchase”].)

Respondents counter that because Jixiang and 

Yongxiang admittedly knew they were signing powers of 

attorney, any alleged ignorance as to the documents’ 

contents would not render them void. They further argue 
15

that because the documents unambiguously described the 

powers being granted to Jiang and Wong, appellants’ claim 

of ignorance provides no “escape from being bound [by the 

documents’ terms].” We disagree.

We find our Supreme Court’s decision in Rosenthal 

instructive. In Rosenthal, most of the 24 plaintiffs were 

customers of Great Western Bank who had invested in 

mutual funds sold by Great Western Financial Securities 

Corporation. (Rosenthal, supra, 14 Cal.4th at 403.) When 

the value of the funds decreased, the plaintiffs sued, alleging 

that “representatives of both corporations led them to believe 

that the GWFSC representatives actually worked for GWB, 

that funds sold by GWFSC were, or were as secure as, 

insured deposits with GWB, and that the GWFSC funds 

were backed by GWB or by the United States Government.” 

(Ibid.) When the defendants moved to compel arbitration 

based on an agreement the plaintiffs had signed, the 

plaintiffs claimed those agreements were void due to fraud 

in the inception. (Ibid.) While our Supreme Court rejected 

most of these claims, it found a few were potentially 

meritorious. (Id. at 423-427.)

Two such claims were those of an 81-year-old Italian 

immigrant who spoke “‘only a few words of English’” and 

could not “‘read English at all,’” and her daughter who could 

“‘speak and understand simple English,’” but could not “‘read 

English very well at all,’” and had “difficulty reading 

‘complicated words or legal terms.’” (Rosenthal, supra, 14 

Cal.4th at 427.) Both were depositors at Great Western 
16

Bank. (Ibid.) The daughter received a call from someone 

stating he was with “‘Great Western,’” and could help them 

earn higher returns. (Ibid.) When mother and daughter met 

with the individual, the mother informed him of her limited 

ability to understand English. (Ibid.) He then purportedly 

read aloud a contract to them in English -- with the daughter 

translating for the mother -- without ever mentioning an 

arbitration clause. (Ibid.) Both plaintiffs then signed the 

contract without reading it. (Ibid.) This happened a second 

time, with a different representative, when they increased 

their “‘deposit’” into this new “‘account.’” (Ibid.) Our 

Supreme Court held that this narrative, if true, “would 

establish facts sufficient to show reasonable reliance as an 

element of fraud in the execution of the client agreements. 

In light of plaintiffs’ prior relationship with GWB, which 

they were led to believe was also the employer of [the two 

representatives], their limited ability to understand English, 

and [the representatives’] representations that their oral 

recitals accurately reflected the terms of the agreements, 

plaintiffs would not have been negligent in relying on the 

GWFSC representatives instead of reading the agreements 

themselves. (See C. I. T. Corporation v. Panac [(1944)] 25 

Cal.2d [547,] 553-560 [plaintiffs’ functional illiteracy in 

English, together with other party’s misrepresentations 

regarding the character of the written contract, incomplete 

oral reading of the agreement, and urgings that plaintiffs 

sign it without reading it themselves or obtaining 

independent advice, held sufficient to support finding of 
17

fraud in the inception].) Under these circumstances, we 

conclude, the alleged fraud of GWFSC’s representatives, if 

true, would have deprived [these plaintiffs] of a reasonable 

opportunity to learn the character and essential terms of the 

documents they signed.” (Rosenthal, supra, 14 Cal.4th at 

428.)5

We find appellants similarly situated to the

above-discussed plaintiffs in Rosenthal. Appellants alleged 

that they are “Chinese nationals who have limited 

knowledge of English . . . .” They also intend to allege in an 

amended complaint that Wong and Jiang were fiduciaries in 

whom appellants placed special trust and confidence, but 

that as a result of Wong’s and Jiang’s “fraud,” appellants 

were led to believe the powers of attorney they signed 

operated to authorize Wong and his associates merely to 

manage or lease the two properties, not to transfer title.

Qualfax does not dispute that Wong and Jiang owed 

appellants a fiduciary duty, and both Lone Oak and Royal 

5 Our Supreme Court also noted that a plaintiff’s “limited 

facility with English” was insufficient on its own to constitute 

fraud in the inception. (Rosenthal, supra, 14 Cal.4th at 431.) It 

found, in the case of two other plaintiffs with limited English 

skills who did not tell the representative they were unable to 

read the contracts, and who did not allege that the representative 

“purported to read the contract to them or to explain its full 

contents orally,” that the “failure to take measures to learn the 

contents of the document they signed is attributable to their own 

negligence, rather than to fraud on the part of GWFSC or its 

representatives.” (Ibid.)
18

acknowledge that “the pleadings contain numerous 

allegations that Wong and his entities were fiduciaries, and 

that Appellants provided them with the necessary agency 

authority and Power of Attorney to act on their behalf.” 

“If the parties were in a fiduciary relationship in which 

the defendant owed the plaintiff a duty to explain the terms 

of a proposed contract between them, a breach of that duty 

may constitute constructive fraud and establish fraud in the 

execution.” (Mt. Holyoke Homes, L.P. v. Jeffer Mangels 

Butler & Mitchell, LLP (2013) 219 Cal.App.4th 1299, 1308.) 

We conclude that appellants can sufficiently allege 

circumstances that, if true, would render void the 2014 POA

and 2015 POA, which would in turn render void the 

transactions resulting therefrom.

6

6 Respondents cite several appellate court cases to support 

their contention that the 2014 POA and 2015 POA are not void. 

Though we would be bound to follow Rosenthal regardless, we 

find their cases inapposite. (Erickson v. Bohne (1955) 130 

Cal.App.2d 553, 554, 557 [grant deed void when signed by person 

“physically and mentally ill and wholly incapable of transacting 

business” who “did not know she was signing a deed to said real 

property and had no intention of signing such a deed”]; Stewart v. 

Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1589

[“Plaintiff has cited no California cases (and we are aware of 

none) that stand for the extreme proposition that a party who 

fails to read a contract but nonetheless objectively manifests his 

assent by signing it—absent fraud or knowledge by the other 

contracting party of the alleged mistake—may later rescind the 

agreement on the basis that he did not agree to its terms” (italics 

added)]; Casey v. Proctor (1963) 59 Cal.2d 97 [mistakenly cited as 

539 Cal.App.2d. 97], 104-105 [plaintiff not excused from 

(Fn. is continued on the next page.)
19

2. Equitable Lien

“In general, equity will create a lien on property where 

this is necessary to accomplish substantial justice and 

protect creditors. Thus, courts will construe the existence of 

equitable liens where the parties have erroneously created a 

defective mortgage . . . or, even in the absence of any 

agreement, where it is necessary to prevent unjust 

enrichment . . . .” (Grappo v. Coventry Financial Corp.

(1991) 235 Cal.App.3d 496, 509 (Grappo).)

Appellants contend that if they can prove respondents 

were not bona fide encumbrancers, “they may also prove 

their third cause of action [for] Equitable Lien, at least 

against Qualfax, who is in possession of the Santa Cruz

Property.” Qualfax does not dispute this. Lone Oak and 

Royal, however, cite Grappo to argue that “[c]ourts will 

impose an equitable lien in situations where parties intend 

to create a mortgage to secure a loan, but for a defect in the 

creation[,] no mortgage has been created.” But a defective 

mortgage is but one example of when an equitable lien may 

be appropriate. Under Grappo, an equitable lien is 

ignorance of scope of release agreement absent “contention that 

he was unable to read, or prevented from reading, the release 

before signing it”]; Brookwood v. Bank of America (1996) 45 

Cal.App.4th 1667, 1674 [“‘No law requires that parties dealing at 

arm’s length have a duty to explain to each other the terms of a 

written contract, particularly where, as here, the language of the 

contract expressly and plainly provides for the arbitration of 

disputes arising out of the contractual relationship’” (italics 

added)].)
20

appropriate when “necessary to accomplish substantial 

justice and protect creditors.” (Grappo, supra, 235 

Cal.App.3d at 509.) Appellants have alleged a situation 

where equity could require the imposition of a lien on the 

properties for the amounts appellants paid for them.

Respondents also argue, “to the extent that Plaintiffs 

are claiming an equitable lien based on the purchase price 

they paid for” both properties, “the merger of their lien with 

their fee interest in the property would extinguish the lien 

and would be invalid against” the Lone Oak DOT and the 

Royal DOT. But appellants currently do not have a fee 

interest in the Santa Cruz Property -- Qualfax purchased the 

property at a nonjudicial foreclosure sale. Should appellants 

gain a fee interest through this lawsuit, no equitable lien 

will be needed, as appellants specifically request an 

equitable lien only “[i]n the event full title is not quieted in 

favor of the Plaintiffs in the Properties.” 

As for the Finisterra Property, while there are no 

allegations that title was transferred from Yongxiang, it is 

undisputed that it is still encumbered by the Royal DOT. In 

the Proposed SAC, appellants request that the court quiet 

title as to the Royal DOT, but ask in the alternative that 

they be granted an equitable lien against the Finisterra 

Property in the amount of the purchase price they provided, 

and that this lien be deemed superior to the Royal DOT. 

“[M]erger of the lien and ownership of the property in one 

person or entity extinguishes the lien, unless it is necessary 

for the protection of the buyer’s rights that the lien be 
21

sustained.” (Alliance Mortgage Co. v. Rothwell (1995) 10 

Cal.4th 1226, 1235, italics added.) Here, depending on the 

ultimate facts proven, equity could require the court to 

impose a lien on the Finisterra Property in the amount of the 

purchase price appellants provided, and deem the lien 

superior to the Royal DOT.

3. Injunction

Appellants also intend to allege a cause of action for an 

injunction. “An injunction is a remedy, not a cause of 

action.” (Venice Coalition to Preserve Unique Community 

Character v. City of Los Angeles (2019) 31 Cal.App.5th 42, 

54.) Nevertheless, despite the inapt pleading, we are aware 

of nothing that would prevent appellants from requesting 

the remedy of an injunction if tethered to a suitable cause of 

action.
22

DISPOSITION

The judgments in favor of respondents are reversed. 

On remand, appellants are granted leave to file an amended 

complaint. Respondents may challenge any such amended 

complaint in any manner permitted by law. In the interests 

of justice, the parties shall bear their own costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL

REPORTS

 MANELLA, P. J.

We concur:

WILLHITE, J.

COLLINS, J.