Court Opinion

ID: 3199056
Source: CourtListenerOpinion
Date Created: 2016-04-29 00:03:00.331881+00
Date Added: 2024-06-11T14:28:58.166590
License: Public Domain

Filed 4/28/16 Malasky v. Malasky CA1/3
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                       FIRST APPELLATE DISTRICT

                                                DIVISION THREE

HANK MALASKY,
         Plaintiff and Appellant,
                                                                     A143448
v.
MARTIN MALASKY, et al.,                                              (Marin County
                                                                     Super. Ct. No. CIV1401290)
         Defendants and Respondents.

         Plaintiff Hank Malasky sued his sons Martin and Garrett for damages in a dispute
over payment of a secured promissory note he executed in their favor. Plaintiff appeals
in propria persona after the court sustained a demurrer to his complaint without leave to
amend.1 He challenges the ruling on the demurrer and the award of attorney fees to
defendants. We affirm.
                                               I. BACKGROUND
         Plaintiff and his former wife, Sandra Esposito, executed a promissory note dated
May 17, 2010, for the sum of $60,000 plus six percent interest per annum payable to
defendants. The note stated that it was given “[f]or valuable consideration,” and
provided for payment of attorney fees to the prevailing party in any legal action to

         1
        An order sustaining a demurrer without leave to amend is not an appealable
order. (Hill v. City of Long Beach (1995) 33 Cal. App. 4th 1684, 1695.) The appeal lies
from an order or judgment dismissing the case, neither of which appears to have been
entered here. Nevertheless, we will deem the order on the demurrer to include a
judgment of dismissal, and reach the merits of the appeal. (Melton v. Boustred (2010)
183 Cal. App. 4th 521, 527, fn. 1.)

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enforce the note’s terms. The note was secured by a deed of trust on real property owned
by plaintiff and Esposito in Tiburon. The deed of trust provided that “Borrower shall pay
when due the principal of, and interest on, the debt evidenced by the note,” and that
“Borrower’s obligations and liability shall be joint and several.” The deed of trust
required maintenance of insurance for the property, and included other typical covenants
such as those against waste and creation of senior liens.
       The complaint alleges that, contrary to the terms of the note, it was not given for
any consideration. The complaint states that plaintiff and Esposito were sued in 2010 for
a debt owed to a law firm. Plaintiff and Esposito gave defendants the note and deed of
trust “to attempt to protect $60,000 in equity which they believed they had in the
Property” from the potential judgment creditor. When the lawsuit settled, there was no
longer any need to protect that equity. Esposito conveyed her interest in the property to
plaintiff, and plaintiff contracted to sell it. Plaintiff asked defendants to cancel the note
and deed of trust but they refused. Instead, they made a demand for payment of the
outstanding balance of the note from the escrow for the sale, which was set to close on
the day the complaint was filed.
       The complaint set forth causes of action for unjust enrichment, fraud, and breach
of contract/declaratory relief. The unjust enrichment cause of action was based on an
alleged lack of consideration for the note. The fraud and breach of contract causes of
action were based on defendants’ alleged agreement to deposit the amount owed on the
note into an attorney’s trust account until a court determined whether plaintiff was liable
for the debt.
       Defendants demurred on the ground that the complaint failed to state facts
sufficient to constitute a cause of action. In support of the demurrer, defendants
requested judicial notice of the judgment on reserved issues in plaintiff and Esposito’s
divorce, under which plaintiff “assume[d] responsibility for the student loans for the
parties’ children (approximately $56,000)” and debts on property, and the parties were
“free to compromise/resolve liabilities they have assumed.” Defendants also requested

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judicial notice of plaintiff’s counsel’s declaration that the escrow company had paid
defendants $74,005.48 from the proceeds of the sale of the Tiburon property.
       The trial court sustained the demurrer to the unjust enrichment cause of action
without leave to amend, finding that the claim was untenable because it was “based on
allegations inconsistent with the express recital in the promissory note that states it was
given ‘For valuable consideration.’ ” The demurrer to the fraud cause of action was
sustained without leave to amend “based on the failure to allege reasonable reliance and
damages. As there appears to have been no true ‘dispute’ concerning the sons’
entitlement to the $60,000 plus interest, the alleged representations to deposit the funds in
trust and engage in a resolution process with plaintiff were gratuitous and resulted in no
damage to plaintiff.” The demurrer to the breach of contract/declaratory relief claim was
based in part on “lack of consideration for the alleged agreement to resolve disputes
regarding the funds” paid to defendants from the Tiburon escrow.
                                     II. DISCUSSION
       In opposition to the demurrer in the trial court, plaintiff stated that the $60,000
promissory note was “unrelated” to $56,000 in student loans he and Esposito, and
ultimately he alone, agreed to pay for the benefit of defendants. On appeal, plaintiff says
the opposite, stating that the note was signed to cover the obligation to pay the student
loans. The note, he now says, was “a funding method for [this] obligation” that he
assumed in the divorce judgment. He characterizes his agreement in the divorce to
assume sole responsibility for the loans as a “novation” of the note and deed of trust.
Under this “new agreement, [he has] continued to pay the loans to the government lender,
for which the administrator was Granite State Management (‘Granite’),” and defendants
“never paid any consideration for the ‘new’ [divorce agreement] by which [he] obtained
funds from Granite.” Defendants are receiving a windfall according to plaintiff because
the parents agreed to cover only $56,000 of their student loans, two-thirds of the total,
and defendants can use amounts recovered on the note to pay off the share of student
loans they agreed to cover themselves.

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        Plaintiff has no tenable theory for reversing the ruling on the demurrer. If the
divorce settlement was a novation, it was only between plaintiff and Esposito.
Defendants were not parties to the settlement. All of plaintiff’s causes of action hinge on
his contention that he was not liable on the note, but he has no valid defense to that
liability. He claims the note was given without consideration, and the truth of that
alleged fact must be accepted for purposes of the demurrer. However, the note’s recital
to the contrary is controlling. When a written instrument is the foundation of a cause of
action, “[t]he recitals [in the instrument], if contrary to allegations in the pleading, will be
given precedence, and the pleader’s inconsistent allegations as to the meaning and effect
of an unambiguous document will be disregarded.” (4 Witkin, Cal. Procedure (5th ed.
2008) Pleading, § 431, p. 564; see also Parsons v. Bristol Development Co. (1965) 62
Cal. 2d 861, 865 [“[e]xtrinsic evidence is ‘admissible to interpret the instrument, but not
to give it a meaning to which it is not reasonably susceptible’ [citations], and it is the
instrument itself that must be given effect”].)
       Nor has plaintiff identified any reason to reverse the award of attorney fees. He
argues that the note and its attorney fee provision were extinguished by his divorce
settlement, but as we have explained, the note remained an enforceable obligation.
                                    III. DISPOSITION
       The judgment of dismissal and the attorney fee award are affirmed.

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                                  _________________________
                                  Siggins, J.

We concur:

_________________________
McGuiness, P.J.

_________________________
Pollak, J.

Malasky v. Malasky, A143448

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