Facts

Sometime in late 1989 or early 1990, Epifania Lizaso became ill. She had no health insurance and so she contacted Leo Shapiro, an attorney, to help her transfer assets so that she could qualify for Medicaid. The plan was that she would transfer real property she owned, located at 1250 through 1256 5th Avenue in Los Angeles, to her sons, defendant Manuel Lizaso Jr. and plaintiff James Lizaso.

Shapiro sent a letter to James and Manuel Lizaso on April 5, 1990, explaining that the transfer required that Epifania Lizaso hold a quitclaim deed signed by her sons in case they did not perform in accordance with the agreement. Manuel Lizaso signed the agreement, note, and deed. James Lizaso did not.

According to defense counsel: The transfer of the 5th Avenue properties was in the form of a sale of the property for monetary consideration. The consideration was not paid by Manuel Lizaso to Epifania Lizaso. Manuel Lizaso testified at trial that after they entered into the transaction, it was agreed between the two of them that instead of Manuel actually paying the consideration, that Epifania could continue to collect the rental income from the property even though she was no longer the owner of the property.

In Epifania Lizaso's will, she left the 5th Avenue properties to her sons in equal shares. However, the will stated that if Manuel Lizaso refused to re-convey the property to her estate, then only James Lizaso would take title. A claim of $182,888 was also submitted against the estate by the California Department of Health Services.

PLAINTIFF'S CONTENTIONS:
James Lizaso testified at trial that he did not sign the agreement, note, and deed because he believed that the transfer amounted to fraud.

DEFENDANT'S CONTENTIONS:
Manuel Lizaso claimed that the Epifania Lizaso sold him the property for $85,000. He claimed that they agreed that she would have a life estate whereby she continued to reside on the property and accept rent payments, and Manuel Lizaso would make the $250,000 in repairs that were needed. The defendant maintains that there was no evidence at trial that there was anything improper, illegal, or fraudulent about the transfer of property.

Result

The court found in favor of James Lizaso, holding that Manuel Lizaso breached the agreement, rescinding the contract, and declaring the deed void.

Other Information

An appeal is currently pending.