Facts

Plaintiffs Paula and Abel Moreno filed a suit against defendant Evelyn W. Kelly. Kelly was the titleholder of a residential property located in Rowland Heights. Since the purchase of the property in 2003, Kelly's niece, Paula and her husband, Abel lived at the property. In 2012, Kelly attempted to evict the plaintiffs.

The Morenos filed a complaint against Kelly and her caretaker, Salvador Hinojosa, for, among other things, quiet title, breach of contract, promissory estoppel, interference and partition.

Kelly filed a cross-complaint for quiet title, and financial elder abuse. Kelly also filed an unlawful detainer action against the Morenos to evict them. The court issued an order consolidating the unlawful detainer action with the civil action filed by the parties against each other.

PLAINTIFF'S CONTENTIONS:
The Morenos contended that for more than 10 years, Paula had a loving relationship with her aunt Kelly, who lives in Rowland Heights. As Kelly's age advanced and she required more attention, Paula took it upon herself to take care of her aunt, including taking her to doctor appointments, purchasing her groceries and prescriptions, and providing her with companionship. The Morenos also moved in with Kelly and took care of her in her home in Rowland Heights for six months.

In 2003, plaintiffs contended, Kelly asked Paula to sell their home in Covina and move closer to her so she could provide more care. The Morenos were reluctant to do so because they could not afford a house in Kelly's neighborhood. Kelly induced the Morenos to sell their house in Covina and deposit any money received from the sale of their Covina house into a new house in Kelly's neighborhood. Kelly offered to provide the balance of the required down payment as an advanced inheritance so that the Morenos could purchase a property close to her. In reliance on Kelly's promises, the Morenos agreed.

In 2003, the Morenos sold their house in Covina and moved to Rowland Heights near Kelly. The Morenos received $87,481 from the sale proceeds of their Covina property and used $72,341 towards the down payment for the purchase of the Rowland Heights property. Kelly advanced the balance of the down payment in the sum of $125,000. Right before the closing of the purchase of their new home, plaintiffs claimed, Kelly told the Morenos that she had a close relationship with her bank and could therefore obtain a better interest rate for a loan for the new home. However, she stated that in order to do so, the property must be solely under her name. Plaintiffs contended that Kelly told them that she would hold legal title to the property on their behalf and for their benefit and use. The Morenos trusted Kelly and agreed that Kelly would hold nominal legal title while the Morenos would be the actual owners of the property. Kelly further told the Morenos that upon her death, legal title would also pass to them.

The Morenos moved into the property, and for 11 years made the mortgage payments, paid for all property taxes, and all the hazard insurance premiums. Plaintiffs also claimed they paid for all upkeep, maintenance and repair of the property, and put in over 300 hours of work for substantial improvements to the property. Plaintiffs claimed they took the federal mortgage interest deduction reserved for homeowners when filing their taxes with Kelly's consent and acknowledgment.

Plaintiffs claimed that defendant Salvador Hinojosa, who is approximately 40 years younger than Kelly, started establishing a personal relationship with Kelly. Plaintiffs claimed he introduced himself as a financial advisor and began his scheme to cut off the Morenos from Kelly's life. He moved in, lived with Kelly, and plaintiffs claimed he began convincing Kelly to accuse the Morenos of wrongdoing and to renege on her agreement with the Morenos as to the ownership of the property. In order to punish the Morenos for the purported wrongdoing, plaintiffs claimed, Kelly betrayed the Moreno's trust and decided to commence an unlawful detainer action to evict the Morenos. Plaintiffs claimed this was the first time Kelly characterized the Morenos ownership of the property as a tenancy.

DEFENDANT/CROSS-COMPLAINANT'S CONTENTIONS:
Kelly argued that she contributed 100 percent of the down payment for the purchase of the property, and that the Morenos had no evidence of contributing any money towards the purchase of the same. Kelly contended that at no time did she promise the Morenos any ownership or interest in the property.

Kelly also contended that the only agreement between her and the Morenos was that the Morenos could occupy the property as tenants and make the mortgage payments as rent. Kelly claimed that the Morenos failed to make the mortgage payments in a timely manner and that the property went into foreclosure causing damages to Kelly.

Kelly further claimed that the Morenos impersonated Kelly and instructed the lender to send all statements to them instead of Kelly and that they unsuccessfully attempted to modify the mortgage by pretending to be Kelly. Also, Kelly claimed that she discovered that in 2012, the Morenos had stolen Kelly's identity in order to open various credit card accounts, which they failed to pay, obtained access to Kelly's email account, stole Kelly's mink coat, diamond ring and power washer and has refused to return them to Kelly.

Hinojosa denied any wrongdoing.

Result

The court held that Kelly was incompetent because she could not hear, read or understand the questions or provide meaningful responses during testimony and cross-examination. Due to the ruling, the parties reached a settlement. Plaintiffs' motion to strike Kelly's entire testimony and all evidence admitted as a result of her testimony, was granted. The parties agreed that the property should be listed for sale and the Morenos shall continue living at the property. Upon the sale of the property, Kelly would pay to the Morenos the total sum of $175,000, plus 50 percent of the gross sales price of the property over $750,000. The Morenos and Kelly would alternate making the mortgage and insurance payments until the property is sold. Both the Morenos and Kelly agreed for each to pay $5,000 to Hinojosa for reimbursement of costs in exchange for a mutual release. The cases, including the unlawful detainer action, were dismissed with prejudice, while the court maintained jurisdiction to enforce the terms of the settlement agreement pursuant to CCP section 664.6.