Hoffman v. Retallick et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
SANMILL PACIFIC, INC., No. 05-12757
Debtor(s).
______________________________________/
TIMOTHY W. HOFFMAN, Trustee,
Plaintiff(s),
v. A.P. No. 08-1092
KENDRA RETALLICK, et al.,
Defendant(s).
_______________________________________/
Memorandum on Motion to Dismiss
_________________
The complaint alleges that in 2002 Sanmill Pacific, Inc., purchased the real property at 4519 Dry
Creek Road in Napa. It further alleges that in 2003 defendant Kendra Retallick executed and recorded a
deed purporting to convey title to the property from Sanmill to its sole officer and shareholder, Virginia
Sanborn. Sanmill filed a Chapter 11 petition in 2005 and plaintiff Timothy Hoffman was appointed trustee
when it converted to Chapter 7 in 2007.
The complaint alleges that the 2003 deed was never effective to transfer the property, so it is still
owned by the Sanmill estate. It further alleges that the deeds of trust given to defendants Chase Bank and
Washington Mutual Bank in 2007 are void because they were not granted by the Sanmill estate. Hoffman
Entered on Docket
November 24, 2008
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 08-01092 Doc# 50 Filed: 11/24/08 Entered: 11/24/08 16:18:34 Page 1 of 3

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1Counsel indicated at argument that the court was less than fully learned in the law by not immediately
jumping to the conclusion that the Chase and WaMu deeds of trust rise or fall with the 2003 deed..
Nonetheless, the court would rather be considered a dunce than jump to a conclusion.
2Plaintiff makes a strong argument that the limitations period does not begin to run until discovery.
Also, Bankruptcy Code § 108 may have some effect. The court makes no ruling on these issues at this time,
as they may be moot or may involve factual disputes outside the pleadings.
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seeks a judicial declaration that the property belongs to the Sanmill estate and judgment quieting title in his
favor. Chase Bank’s motion to dismiss the complaint pursuant to FRCP 12(b)(6) is now before the court.
Chase argues that the complaint is barred by the applicable statute of limitations.
The court begins by noting that limitation issues are normally raised before trial by summary judgment
motion. They may be raised by motion to dismiss only when all the relevant dates are in the pleadings. 27A
Fed.Proc.L.Ed., Pleadings and Motions § 62:471; Bethel v. Jendoco Const. Corp., 570 F.2d 1168, 1174
(3d Cir.1978).
In this case, defendant Chase Bank has decided that the “essence” of the complaint is slander of title,
which has a three-year statute of limitations. It seeks dismissal on this ground alone.
The court first notes that according to the complaint Chase’s deed of trust was recorded in 2007, so
that the statute of limitations defense is not available to Chase. Chase’s real argument is that it is too late for
Hoffman to contest the validity of the 2003 deed. Since the validity of the Chase deed of trust is (or may be)
tied to that deed, Chase argues there can be no claim against it if it is too late to challenge the 2003 deed.1
The answer, of course, is that Chase has confused the tort of slander of title with the statutory right to
quiet title pursuant to California Code of Civil Procedure § 760.010 et seq. They are not the same thing. 53
Cal.Jur.3d, Quieting Title, § 7. Quiet title actions are equitable in nature; the doctrine of laches applies to
bar late- asserted claims. Id at § 21. To the extent there is a statute of limitations, it is probably Cal. Civ.
Proc. Code § 343.2
For the foregoing reasons, the court concludes that the three-year statute of limitations cited by Chase
does not apply to this adversary proceeding. Accordingly, its motion to dismiss will be denied. Counsel for
Case: 08-01092 Doc# 50 Filed: 11/24/08 Entered: 11/24/08 16:18:34 Page 2 of 3

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plaintiff shall submit an appropriate form of order.
Dated: November 24, 2008
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 08-01092 Doc# 50 Filed: 11/24/08 Entered: 11/24/08 16:18:34 Page 3 of 3