Overview of Trenk v. Soheili Trenk v. Soheili (2020) 58 Cal.App.5th 1033 is a California Court of Appeal decision (Second District, Division 3) that addresses the enforceability of a deed of trust on real property held by a married couple, particularly when only one spouse executes the instrument.
The case clarifies the interplay between community property presumptions, joint tenancy titling, and the statute of limitations for enforcing security interests. It is frequently cited in quiet title actions challenging mortgage validity, especially in scenarios involving non-signing spouses or chain-of-title defects, as it reinforces that encumbrances on presumptively community property require spousal joinder to be valid.
Facts
In 2003, Joseph Trenk (a lawyer) settled a malpractice lawsuit with his former client, Morteza Sohyly, by agreeing to pay $100,000 via a promissory note secured by a deed of trust on the Trenks’ Granada Hills residence, acquired in 1988 during their marriage. The property was titled in both Joseph and his wife Dinah Trenk’s names as joint tenants.
Only Joseph signed the promissory note and deed of trust; Dinah did not execute either document. Maryam Soheili (Sohyly’s wife) was named as the beneficiary on the deed of trust. Joseph made sporadic payments, including initial ones from May to December 2003 and one in October 2017, but still owed approximately $75,000 by 2018.
In January 2018, the Soheilis initiated nonjudicial foreclosure proceedings under the deed of trust.
The Trenks responded by filing a quiet title lawsuit, alleging the deed of trust was unenforceable due to the statute of limitations and other defects.
Procedural History
The trial court (Los Angeles County Superior Court) held a bench trial and issued a statement of decision quieting title in favor of the Trenks. It ruled the deed of trust unenforceable because the four-year statute of limitations (Code Civ. Proc., § 337, subd. (a)) had expired on the underlying promissory note, and foreclosure was also barred under the Marketable Record Title Act (Civ. Code, § 880.020 et seq.).
The Soheilis appealed, arguing the power of sale in the deed of trust survived the statute of limitations on the debt and that the property was separate or joint tenancy property not subject to community property rules.
Issues
The appeal primarily raised two issues:
- Is a deed of trust enforceable via nonjudicial foreclosure when executed by only one spouse on property presumptively held as community property, despite being titled as joint tenancy?
- Does the statute of limitations on the underlying promissory note bar enforcement of the power of sale in the deed of trust, or does a longer enforcement period apply under California’s recording statutes?
Holding
The Court of Appeal affirmed the trial court’s judgment quieting title in the Trenks’ favor, but on different grounds. It held that the deed of trust was voidable (and thus unenforceable) because the property was presumptively community property under Family Code section 760, Dinah Trenk did not join in executing it, and the Soheilis failed to rebut the community property presumption.
As a result, Dinah had the unilateral power to void the instrument under Family Code section 1102.
The court did not reach a final ruling on the statute of limitations for the power of sale, noting it was moot due to the voidability finding, but it clarified that such powers generally survive the limitations period on the underlying debt.ReasoningCommunity Property and Joint Tenancy
- Presumption of Community Property: Property acquired during marriage (post-1975) is presumptively community property under Family Code section 760, regardless of the form of title (e.g., joint tenancy). This presumption prevails over the “form of title” rule in Evidence Code section 662, as affirmed in In re Brace (2020) 9 Cal.5th 903. The Soheilis did not introduce evidence at trial to rebut this (e.g., no agreement showing separate property intent), so the court treated the residence as community property.
- Requirement of Spousal Joinder: Under Family Code section 1102, subdivision (a), both spouses must join in executing any instrument that encumbers or conveys community real property. Since Dinah did not sign, the deed of trust was voidable at her election. Merely titling the property as joint tenancy does not transmute community property into separate property without a written agreement under Family Code section 852, subdivision (a). The court rejected the argument that joint tenancy titling alone evidenced intent to hold as separate property.
- Impact on Third Parties: Even as third-party beneficiaries, the Soheilis could not enforce a voidable instrument against Dinah’s objection.
Statute of Limitations and Power of Sale
- General Rule: California law allows enforcement of a deed of trust’s power of sale even after the statute of limitations expires on the underlying promissory note (e.g., Ung v. Koehler (2004) 118 Cal.App.4th 887; Nicolopulos v. Superior Court (2003) 106 Cal.App.4th 304). This preserves the security interest as a lien on the property.
- Applicable Period Under Recording Laws: The Marketable Record Title Act (Civ. Code, § 882.020) governs: A 10-year enforcement window applies if the final maturity date is ascertainable from the recorded deed of trust (subd. (a)(1)); otherwise, a 60-year period from recording applies (subd. (a)(2)). Here, the deed of trust did not specify the note’s maturity date (and the note itself was unrecorded), triggering the 60-year period. However, this analysis was unnecessary because the community property defect rendered the entire instrument unenforceable.
- The trial court’s reliance on the four-year note limitations period was error, but harmless given the alternative ground for affirmance.
Key Precedent and ImplicationsTrenk v. Soheili establishes important precedents in California real property and family law:
- Strengthening Community Property Protections: It underscores that the community property presumption is robust and difficult to rebut without clear evidence, prioritizing spousal equality in encumbrances over titling formalities. This protects non-signing spouses in quiet title actions, even against third-party lenders or beneficiaries.
- Voidability of Unilateral Encumbrances: Nonjudicial foreclosures based on deeds signed by only one spouse on community property can be voided, providing a defense in foreclosure challenges. This has implications for historical loans where spousal signatures were overlooked.
- Statute of Limitations Clarification: Reinforces that powers of sale endure beyond debt limitations periods, but only if the underlying instrument is valid. It also specifies when the 60-year “catch-all” period applies, aiding predictability in title searches.
- Broader Impact: Cited in subsequent cases (e.g., Soheyly v. Trenk (2022) B316782) for similar quiet title disputes. In contexts like the Vallejo litigation, it supports arguments to void deeds of trust lacking full spousal joinder, potentially quieting title against defective assignments or securitizations.
For the full opinion, see the California Courts website or legal databases like Westlaw/Lexis. This case highlights the need for lenders to verify spousal signatures on marital property to avoid unenforceability risks.