Walter Maretzki, Gisela Maretzki v. Elizabeth Hengstler, individually and as executor of the Estate of Arthur Hengstler Sr., David Hengstler, et al.
Published: Jun. 15, 2002 | Result Date: May 31, 2001 | Filing Date: Jan. 1, 1900 |Case number: 00CC06875 Bench Decision – $30,000
Facts
The defendants owned real estate in Dana Point. In order to become judgment proof they recorded approximately
11 deeds of trust against their Dana Point property, falsely evidencing interests in the property held by their
employees and family members. One such trust deed, in the amount of $55,000, was recorded in 1978 on the
Dana Point property in favor of the defendantÆs father, although no consideration had been given. Years later,
the Dana Point property was put up for auction by judgment creditors of Hengstler pursuant to a fraud
judgment entered against him.
Just prior to the auction, the defendant Crevier obtained an assignment of that fraud judgment, giving Crevier a
right to sell the property via auction to satisfy the judgment. The plaintiffs appeared at the public auction with
an interest in purchasing the Dana Point property. The defendant Crevier represented to the plaintiffs orally and
in writing that there were several "liens" recorded against the Dana Point property, but that these liens were
not valid as they were simply placed there to make the defendant Hengstler appear judgment proof.
The plaintiffs and Crevier entered into a written agreement whereby Crevier stated that he was in the process of
removing the bogus liens, and that in the event he was unable to remove them, that Crevier would bear the
costs of removing and/or satisfying the liens to provide the plaintiffs with clear title to the Dana Point property.
After execution of the written agreement with Crevier, and based thereon, the plaintiffs successfully bid and
purchased the Dana Point property. The defendant Crevier thereafter represented to the plaintiffs that he had
obtained a judgment voiding the Hengstler $55,000 deed of trust and presented the plaintiffs with the
judgment. However, without the plaintiffsÆ knowledge, that same judgment was thereafter vacated by the court
upon learning that Crevier had not properly served Hengstler in that action. Crevier did not disclose this fact
and failed thereafter to void the $55,000 Hengstler deed of trust.
A few months after the plaintiffs took possession of the Dana Point property, the defendant HengstlerÆs
executrix, Elizabeth Hengstler, made a demand upon the plaintiffs in the amount of $550,000 for satisfaction of
the $55,000 Hengstler deed of trust, including interest for 20 years. Prior to this demand, which only occurred
once the Dana Point property was sold to innocent third-party plaintiffs herein, no prior demands for payment
had been made on the note, and no promissory note or prior payments on the alleged debt had been exchanged
between Hengstler as debtor and the father as lien holder. In addition, Elizabeth Hengstler, as executrix, had
failed to list this deed of trust as an asset of the decedent HengstlerÆs estate during probate. Initially, the
plaintiffÆs lender (the plaintiff-in-intervention in this action) filed an action against Hengstler and the plaintiff
herein seeking a preliminary injunction against Hengstler. However, this action was dismissed in lieu of the
plaintiffs herein filing this complaint to void the Hengstler deed of trust.
Other Information
After trial, the defendant entered into a stipulated judgment in favor of the plaintiffs in the amount of $30,000 as reimbursement for the plaintiffÆs costs in bringing this action to invalidate the Hengstler deed of trust. As to the defendants Hengstler, the court entered judgment in favor of the plaintiffs, granting quiet title to the Dana Point property, and determining that the $55,000 Hengstler deed of trust (and other such deeds) was a sham fraudulently recorded against the property without consideration. The sole purpose being to defraud their creditors into believing that Hengstler was judgment proof. The Hengstler defendants filed an appeal in this action on the issue of the statute of limitations, contained in C.C.P. Section 366.2. This appeal is currently in the briefing stage.
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