loved ones love money?

[doots]

California law.
Looking for opinions on what you would do in this situation?

Approximately 30 years ago my patents loaned $2500.00 to my mothers twin sister and her husband. This loan was never paid back but my parents were assured by both my aunt and uncle that if the loan was not paid back they would be given a city lot that was of equal value. This lot was worth approximately $2500.00 when the loan was made and today is worth approximately $40k which is about the exact amount the loan would also be worth with interest. My father passed away saying that we (me & my brother) need to collect on that loan, now my mother is not able to handle this due to advanced Parkinson's. My brother and I feel an obligation to collect this money for the trust my parents had set up for my mothers care.

About 6-months ago we decided to collect on this loan and talked it over with our aunt who said as she has for the last 30 years "go ahead and take the lot". We started to proceed with this action and arraigned to sell it to the neighbor. The son of my aunt and uncle got wind of this and now has advised his parents to not honor the lot obligation to our parents. Instead they wrote us a check for the original loan amount of $2500.00 (which we returned), we feel this was a slap in the face. Then they proceeded to sell the lot to the same people we had sold it to. Now they refused to talk to us about the loan in any meaningful way, my uncle says the loan was between my father and him not us (I guess his idea is that he out lived my father so he does not owe it), my aunt says that her husband is now handling it, and the son sits back and advises his failing parents, knowing that this will go to his inheritance if he can pull this off.

We went to a lawyer for legal advice and he said that the breach of contract occurred when they wrote us the check for the original loan amount of $2500.00. He feels we have 2 years to pursue this breach of contract and that we can not go after the land because that has to be a written contract however we can go after the loan plus interest which is worth $40k today, we would be satisfied with either.

We would like ideas on this because it is not only a legal issue -its an issue of tearing what was once a close family apart. My brother and I have been very upset by this and feel there has been an injustice against our family. ANY IDEAS! Do we have a chance in court? What is the next step?
thanks-Denny

 

[I AM ALWAYS LIABLE]

My response:

Did you keep a copy of the $2,500.00 check ?

IAAL

 

[doots]

Yes we have a copy of the returned check.

 

[I AM ALWAYS LIABLE]

My response:

Excellent !

Then your aunt and uncle just re-opened the Statute of Limitations, thereby starting the clock all over again !

That's incredible, that after 30 years, when the Statute of Limitations had long ago expired, that you relatives actually started it over ! Hey, their son was really a bright lightbulb for them !

Your attorney is both correct, and wrong.

Your attorney is correct in that it starts the clock all over again. However, the Statutory time limit from the date of the check is 4 years, not 2. That's because Auntie and Uncle memorialized the debt in writing (the check), and written debts in California have a 4 year Statute from the date the debt is acknowledged (the date on the check).

So, your attorney is also correct in that you can get the entire amount of $2,500.00 plus all of the accumulated interest from this transaction, provided of course, that you can find the original paperwork concerning the loan.

Good luck to you. Go get 'em !

IAAL

 

[doots]

To-I AM ALWAYS LIABLE

This is great! I was on the edge of my chair when reading your advice, that is-until I got to the original paper work part? Hopefully you do not mean we need paper work from 30 years ago? I am sorry to say this was a family loan and done on less than a handshake. Does this change the outlook in the eyes of the law?

Thanks for all your help; this is a great web site. If we decide to pursue this would you take it on a percentage basis?

Denny

 

[I AM ALWAYS LIABLE]

To-I AM ALWAYS LIABLE

This is great! I was on the edge of my chair when reading your advice, that is-until I got to the original paper work part? Hopefully you do not mean we need paper work from 30 years ago? I am sorry to say this was a family loan and done on less than a handshake. Does this change the outlook in the eyes of the law?

Thanks for all your help; this is a great web site. If we decide to pursue this would you take it on a percentage basis?

Denny

My response:

Yikes !

Jeez, "on a handshake" ? This is not good.

You should have kept the $2,500.00.

Your attorney is still wrong then. You see, I was under the impression that there was a written contract out there someplace. If this was an "Oral" agreement, then your attorney would be correct in that Oral Agreements have a 2 year S.O.L.

But, one thing your attorney overlooked . . . and that is the California "Statute of Frauds".

30 years ago, that Statute (still in amended existence today) required that any contract for $250.00 or more, and which would not be completed within a years' time, had to be in writing in order to be enforceable.

So, even if they wrote you a check, that check cannot dimminish the Statute of Frauds, nor the fact that such a contract had to be in writing, from the beginning.

Does the check say anything on it, like "payment of loan" or something else to show that it was for payment of that old debt ?

Application of the statute of frauds may have draconian consequences in some instances. As a result, judicially formulated exceptions to the statutory rules have evolved to alleviate the harsh consequences of the statute and to render it inapplicable in certain circumstances.

Equitable estoppel operates to relieve oral contracts from the statute of frauds and makes them binding where: (1) the defendant represents by words or conduct that he or she will stand by the agreement and the plaintiff detrimentally relies on this representation [Moore v Day (1954) 123 Cal App 2d 134, 266 P2d 51]; or (2) unconscionable injury to the plaintiff or unjust enrichment of the defendant would result from a refusal to enforce the agreement [Tenzer v Superscope, Inc. (1985) 39 Cal 3d 18, 216 Cal Rptr 130, 702 P2d 212; see Monarco v Lo Greco (1950) 35 Cal 2d 621, 220 P2d 737 (statute does not apply to prevent enforcement of oral agreement to devise property to family member who had agreed in return to work in family business); Witkin, 1 Summary of California L., Contracts §§321 – 325 (9th ed.)].

When relying on a party’s representations to overcome the statute of frauds, a plaintiff must make the threshold showing of a serious change of position. The requirement is more than a mere formality. Detriment that amounts to merely an inconvenience does not justify enforcement of the contract. [See Isaac v A & B Loan Co. (1988, 2nd Dist) 201 Cal App 3d 307, 247 Cal Rptr 104 (seller of real property could raise statute of frauds as defense since buyers failed to show detrimental reliance)]

Where the owner of real property has changed his or her position in reliance on an oral purchase offer, the buyer may be estopped from avoiding the contract on the basis of the statute of frauds. [Kipperman v. Dixson (In re Diego’s Inc.)(1996, CA9) 88 F.3d 775(bankruptcy trustee had turned down other offers and ended up selling at a substantial loss)] The court distinguished mere loss of the sale, which is not a sufficient detriment for estoppel, from the loss of other definite sale opportunities.

A seller trying to enforce an oral contract for the sale of real property must be prepared to present evidence of other actual sale offers or opportunities.
In addition, executed oral agreements are exempt from the statute. Where a bilateral oral contract has been fully executed by one party, the remaining promise is outside the statute of frauds and the party who has performed may enforce the agreement against the other party. [Dutton v Interstate Invest. Corp. (1941) 19 Cal 2d 65, 119 P2d 138]
Although an estate or interest in real property, other than a lease for a term of 1 year or less, can be created only by a signed writing [CCP §1971], this does not abridge the power of any court to compel the specific performance of an agreement in case of partial performance of the agreement [CCP §1972]. Partial performance in this context generally means that the purchaser or lessee has taken actual, open, and notorious possession of the property. [Engasser v Jones (1948) 88 Cal App 2d 171, 198 P2d 546] While possession alone may be sufficient to constitute partial performance [Calanchini v Branstetter (1890) 84 Cal 249, 24 P 149], payment of the purchase price or a portion of it does not, without possession, avoid application of the statute of frauds [Anderson v Stansbury (1952) 38 Cal 2d 707, 242 P2d 305]. The partial performance must relate to an already existing oral agreement to sell or lease real property. [See Paul v Layne & Bowler Corp. (1937) 9 Cal 2d 561, 71 P2d 817 (part performance of agreement to make lease in future is not sufficient for relief under CCP §1972 as it did not relate to transfer of interest in land)]

The requirement that an estate or interest in real property or a lease for more than 1 year be in writing [CCP §1971] also does not affect the creation of a constructive trust over real property, nor prevent any trust from arising or being extinguished by implication or operation of law. [CCP §1972] To avoid the requirement of a writing on this ground, the plaintiff must plead the violation of a fiduciary or other confidential relationship or some other act amounting to constructive or actual fraud. The mere failure to perform under an oral contract for the transfer of an interest in real property does not make the agreement enforceable as a constructive trust. [Mazzera v Wolf (1947) 30 Cal 2d 531, 183 P2d 649 (failure to establish fiduciary relationship prevents enforcement of oral promise to convey)]

If the fraud of one of the contracting parties prevents a contract within the statute of frauds from being reduced to writing, the contract may be enforceable against the fraudulent party. Any other party who is led by the fraud to believe that the contract is in writing and acts on that belief to his or her prejudice may enforce the contract against the fraudulent party. [CC §1623] Further, even where an oral agreement is unenforceable as a contract, the misled party may bring a separate action for fraud. [Tenzer v Superscope, Inc. (1985) 39 Cal 3d 18, 216 Cal Rptr 130, 702 P2d 212 (plaintiff who relied on false oral promise to pay 10 percent finder’s fee entitled to bring action for fraud)]

Although under certain circumstances a joint venture agreement is not within the statute of frauds even though it involves real property, the statute of frauds does apply, and a writing is therefore required, if the joint venture agreement involves a transfer of title, or an interest in the property, from one joint venturer to another. [Kaljian v. Menezes (1995, Cal.App. 5th Dist.) 36 Cal.App.4th 573, 42 Cal.Rptr.2d 510]

The 4-year statute of limitations in CCP §337(1) generally applies to an action for breach of a written real property sale agreement whether the relief sought is damages or specific performance. [McAuliffe v Foglesong (1961, 2nd Dist) 193 Cal App 2d 525, 14 Cal Rptr 397 (seller’s action); see Reiner v Hermann (1947) 79 Cal App 2d 543, 180 P2d 385 (buyer’s action)]

A cause of action for breach of contract generally accrues at the time of breach. However, there are exceptions to this rule. For example, where a contract may be construed as a continuing promise in which each failure to perform constitutes a new breach giving rise to a new cause of action, an aggrieved party may sue after the initial breach. [For discussion of exceptions to accrual of cause of action for contract breach, see 3 Witkin, California Proc. (3d ed.), Actions §§374 et seq.]

The 2-year statute of limitations for actions based on an unwritten contract governs an oral agreement for the sale of land. [CCP §339(1)] The statute begins running only on an unequivocal repudiation of the contract. [Kidd v Kidd (1964) 61 Cal 2d 479, 39 Cal Rptr 203, 393 P2d 403]

Actions for rescission of written real property contracts are usually subject to a 4-year limitations period under CCP §337(3). However, the 3-year limitations period in CCP §338(d) may apply where the ground for rescission is fraud or mistake. [Leeper v Beltrami (1959) 53 Cal 2d 195, 1 Cal Rptr 12, 347 P2d 12, 77 ALR2d 803]

Where a party seeks rescission of an oral agreement, the 2-year statute applies under CCP §339(3). The period of limitations begins to run from the date on which the facts entitling the party to rescind occur. However, where there is fraud or mistake, the period commences to run only when the aggrieved party discovers the facts constituting the fraud or mistake. [CCP §337(3)]

The statute of limitations for an action for relief based on fraud or mistake is 3 years. The cause of action does not accrue until the discovery by the aggrieved party of the facts constituting the fraud or mistake. [CCP §338(d)] Where the statutory period expires prior to the filing of the plaintiff’s complaint, the plaintiff must show ignorance of the facts constituting the fraud, the circumstances of discovery of the facts, when the facts were discovered, and why they were not discovered earlier. A party defending against a cause of action for fraud where the statute has expired may show that circumstances known to the plaintiff would have put a reasonably prudent person on inquiry. This is a question of fact. [Stevens v Marco (1956, 2nd Dist) 147 Cal App 2d 357, 305 P2d 669]

IAAL

[Edited by I AM ALWAYS LIABLE on 05-09-2001 at 11:33 PM]

 

[doots]

Hi-again

this is better than a day time soap (never watch them) I am up then down, etc.

Maybe up again-the check says " for debt to chet" Chet is my father, deceased.

hopefully the snake son is not as smart as he thinks?

thanks-denny

(on the edge of my chair)

 

[I AM ALWAYS LIABLE]

Hi-again

this is better than a day time soap (never watch them) I am up then down, etc.

Maybe up again-the check says " for debt to chet" Chet is my father, deceased.

hopefully the snake son is not as smart as he thinks?

thanks-denny

(on the edge of my chair)

My response:

Boy, you're not kidding !

Up, down, up, down.

Okay, make sure you read my above response, but I think you might have a leg to stand on now, because of this (quoted from above response):

"Equitable estoppel operates to relieve oral contracts from the statute of frauds and makes them binding where: (1) the defendant represents by words or conduct that he or she will stand by the agreement and the plaintiff detrimentally relies on this representation [Moore v Day (1954) 123 Cal App 2d 134, 266 P2d 51]"

Take all this information to your attorney, and see what he thinks your chances are in this matter, and in light of the above.

I will help to avenge Chet's death even if I have to die doing it !

Let me know !

IAAL

 

[LegalBeagle]

I am curious.. how could our poster prove that the loan was given 30 years ago and not recently?

 

[doots]

Hi-I AM ALWAYS LIABLE

Thanks for the advice, we will now have your information to review with them. Hopefully we can make Chester proud? To bad he could not collect when alive but the twins said they would take care of it and he could not come between them, one trusting twin (my mom-one gready twin my aunt).
May take a few weeks but I will get back to you.

P.S. just remembered we have a letter (nasty one) from the snake son! In the letter he says " as we all know Ruth & Chet (my parents) made a loan of $2500.00 dollars to Dick & Leila (his parents) 25-30 yrs. ago. Dick and Leila verbally pledged a portion of their land as good faith for non-repayment.This pledge was at Dick and Leila's insistence and not a requirement of the loan,(so he say's). At this time Dick and Leila will repay the $2500.00 owed your mother and the orginal agreement between Ruth, Dick and Leila will be closed.

Does this help?

Many thanks-denny

LegalBeagle-we have no proof exactly when the loan was made but all agree about 30 years ago. We never questioned it because my aunt (mom's twin sister) always assured my parents and even me and my brother that the loan was made and that there would be no problem with trading for the land. Now that the son has become involved she is following his lead and less in favor of honoring the land deal, now say the owe the $2500.00 only. We do have a few family members that may recall that a loan was made. I have also documented 3 conversations that she did say "she always felt the lot was ours". In addition to that I have her husband on a tape recorder stating that he did tell my father "to take the lot many times but he never did and that the deal was between my father and him not us us (boys)". Legal or not if they do not come up with some compensation this still stinks-learned even though they were like our second parents money rules.

P.S. have letter from son received 10/13/00 stating parents owed money, details above.- thanks

 

[LegalBeagle]

P.S. just remembered we have a letter (nasty one) from the snake son! In the letter he says " as we all know Ruth & Chet (my parents) made a loan of $2500.00 dollars to Dick & Leila (his parents) 25-30 yrs. ago. Dick and Leila verbally pledged a portion of their land as good faith for non-repayment.This pledge was at Dick and Leila's insistence and not a requirement of the loan,(so he say's). At this time Dick and Leila will repay the $2500.00 owed your mother and the orginal agreement between Ruth, Dick and Leila will be closed.

Does this help?

Oh yes.. That son has really screwed things up for his parents. Good luck!

 

[I AM ALWAYS LIABLE]

My response:

Denny, don't "review" this information with them ! Never tip your hand.

They've already made their decision by sending you the $2,500.00, and they won't budge. The above information is technical legal theory, and should be reviewed by your attorney only - - at this time.

What people don't understand, they will ignore. As such, they won't budge. So, before you make any new demands, take all of your documentation (as mentioned by you), along with the above law, to your attorney for final review.

Then, if your attorney feels that it's a strong enough case, then let your attorney take the next step to "contact" them; e.g., filing and serving a Summons and Complaint for Breach of Contract and Quiet Title.

Good luck, Denny.

IAAL

 

[doots]

thanks to all for the help, I will quit bugging you now. I will post the results as they unfold.

thanks again-denny

If something new comes up on your end let me know.

[Edited by doots on 05-10-2001 at 04:19 PM]