If it’s not in writing, does it exist?

McMillin v. Eare, 70 Cal. App. 5th 893 (2021), revisits a real property issue and a jurisdiction issue both incorrectly decided in a civil law proceeding before the Los Angeles County Superior Court. First, on the real property finding, the trial court incorrectly held oral conditions on grant deeds were effective and enforceable. Second, on a jurisdiction issue, the trial court's findings and orders in the civil law proceeding interfered with community property questions pending before the family court.

This convoluted real property case confirms the rule of law that deeds delivered, but conveyed with oral conditions, will be deemed as valid deeds free of the oral conditions.

On the real property issues in McMillin, to help her son improve his financial situation, Sharon McMillin executed a grant deed to her son, Joshua McMillin, for a fourplex in Long Beach. Sharon gave the executed deed to Joshua, giving him verbal instructions not record the deed until she died or until he purchased the property from her. Joshua agreed to the oral conditions.

Sharon also owned a single-family residence in Long Beach. Sharon went through a number of complicated conveyances on the residence, ultimately executing a grant deed conveying the residence to her daughter, Sarah McMillin. The deed to Sarah carried similar verbal instructions. Later, Sarah executed a grant deed to Joshua for the residence, giving him the same verbal instructions on the grant deed to the residence.

Throughout this time, Sarah, Joshua and Sharon all believed that Sharon was the sole owner of both properties.

In October 2013, Som Rathmeny Eare, Joshua's wife, petitioned the superior court for dissolution of her marriage to Joshua. The couple lived in the residence in Long Beach at the time, and Som got a restraining order requiring Joshua to move out. One week before filing for divorce, Som recorded the two deeds conveying the fourplex from Sharon to Joshua and the residence from Sarah to Joshua. Som recorded these deeds without Sharon's knowledge or permission.

To enforce the oral conditions on the deeds, Sharon sued Som for a variety of causes of action, including theft and fraud. The trial court found that Joshua had been holding record title to properties in constructive trust for Sharon, and that Som, Joshua, Som's company, and Sarah had no right, title or equitable interest in either property. The judgment quieting title in Sharon was entered on June 24, 2019. Som timely appealed from these trial court findings and orders.

The appellate court reversed the findings that Sharon was the owner of the properties by way of the oral conditions on the two grant deeds. Reaffirming black letter law, the McMillin court removed any doubt that a deed delivered subject to an oral condition can be valid. The court confirmed that a deed is only effective to transfer title to property when it is delivered, citing Civil Code Section 1054. Delivery requires present intent to transfer title. Ivancovich v. Sullivan, 149 Cal. App. 2d 160, 164 (1957). Civil Code Section 1056 states that delivery of a deed to a grantee or to their agent is necessarily absolute and the conveyance takes effect upon that delivery, discharged of any condition on which the delivery was made.

The McMillin court reenforced these fundamental principles of real property with authority from Witkin Summary of California Law, describing that a grantor's execution of a deed with full intent to divest themselves of the property being conveyed but delivers to a grantee with the understanding that the transfer would not take effect until the grantee performs some condition, the conveyance is inconsistent with the condition, and the grantee takes "absolutely, free from the condition." 12 Witkin, Summary of Cal. Law, Real Property, Section 310, p. 364 (11th ed. 2021).

The McMillin court also quoted Miller & Starr to explain that "the deed therefore takes effect upon delivery, and any purported condition is ignored," and "the grantee receives title free and clear of the condition." 3 Miller & Starr, Cal. Real Estate, Section 8.45, p. 8-137 (4th ed. 2021); see also Ivancovich, 149 Cal. App. 2d at 164 ("the delivery of the deed and vesting of such title occurs by operation of law even though the result may be contrary to the express stipulation of the parties").

On the family law jurisdictional issue in the McMillin case, before the dissolution action was concluded, Sharon filed a civil complaint against her daughter-in-law Som and her son Joshua to recover title to both properties. The civil action was intertwined with relief sought by Som in the dissolution action pertaining to her community property interest in the two properties. During their marriage, the community was used to make mortgage payments and retire the home equity line of credit on the family residence. The trial court findings and order in the civil case "essentially usurped" Som's ability to have her "reimbursement rights under the Family Code, claims for Epstein credit and/or Watts charges" decided by the family law court. See Marriage of Epstein, 24 Cal. 3d 76 (1979) (describing a right to be reimbursed by the other spouse for one-half of the amount of separate property funds used after the date of separation to pay a community debt); Watts v. Watts, 137 Wis. 2d 506 (1987) (describing an obligation to the other spouse for one-half of the reasonable value for the exclusive use of a community asset after date of separation).

After a family court acquires jurisdiction to divide community property in a dissolution action, no other department of the superior court may make an order adversely affecting that division. See Askew v. Askew, 22 Cal. App. 4th 942, 961-62 (1994). If such were not the law, conflicting adjudications of the same subject matter by different departments of the one court would bring about an anomalous situation and doubtless lead to much confusion. See Ford v. Superior Court, 188 Cal. App. 3d 737, 741-42 (1986).

Simply adding a family member's name to title in order to get better financing, with a verbal agreement among the family members, runs the risk of making a valid transfer of title by operation of law, contrary to the parties' intent. McMillin cautions that oral understandings between family members regarding transfers of title to real property are not effective in creating either a condition on a deed or a loophole to property ownership. A deed transferring title to property, no matter what the unwritten arrangements are behind the scenes, is an effective transfer of that property according to the face of the deed. 