Court Opinion

ID: 6326105
Source: CourtListenerOpinion
Date Created: 2022-03-23 19:02:08.540849+00
Date Added: 2024-06-11T09:22:08.516119
License: Public Domain

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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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          IN THE COURT OF APPEAL OF THE STATE OF
                        CALIFORNIA

                          SECOND APPELLATE DISTRICT

                                            DIVISION FOUR

 ZENGPENG FENG et al.,                                                                B308695

             Plaintiffs and Appellants,                                               (Los Angeles County
                                                                                      Super. Ct. No. 19PSCV00291)
             v.

 LONE OAK FUND LLC et al.,

             Defendants and Respondents.

           APPEAL from judgments of the Superior Court of Los
Angeles County, Peter A. Hernandez, Judge. Reversed and
remanded with directions.
     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.

                               2
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

                              3
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.

                             4
       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

                              5
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

                              6
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

                              7
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.

                              8
“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.

                               9
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.’”

                                10
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

                             11
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

                              12
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

                              13
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

                             14
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

                              15
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

                             16
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.)

                               17
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.)

                                       18
            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)].)

                                19
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

                              20
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.

                              21
                         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.

                             22