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Court of Appeal:
Evidence Shows Alleged Debt Was Satisfied in 1999, Though Lien on Residence Still Existed
By a MetNews Staff Writer
The Court of Appeal for this district yesterday affirmed a 2021 order denying a motion to confirm the validity of a lien against a Los Angeles residence arising from a 1995 debt in the amount of $141,000, holding that evidence shows that the debt was extinguished in 1999.
Justice John Shepard Wiley Jr. of Div. Eight said that Los Angeles Superior Court Judge Peter Hernandez correctly concluded satisfaction of the debt from what meager evidence exists: a 1999 docket entry in a Los Angeles action relating to the debt showing that the case was settled and deed of reconveyance reflecting that all sums secured by the deed of trust on a San Francisco residence “have been fully paid.”
There was no such document relating to the Los Angeles residence, on which the creditor, Panrox International (USA), Inc., also had a Penrod deed of trust.
Panrox was represented in litigation with Ann Hon and Herman Yee by commercial debt collection attorney Ronald P. Slates. That lawyer bowed out of the case in 1996 and, Wiley wrote, “disappeared from this matter for a quarter of a century.” Panrox went out of business in about 1998 and it was suspended as a corporation by the state in 2001.
In 2020, in litigation between Hon and Tee, the court ruled that the Los Angeles residence would be split between the parties; a title search was ordered; the lien surfaced; Slates was informed of it; Panrox was resuscitated; Slates claimed there was no evidence the debt was ever paid; Hernandez rejected the contention; Panrox, through Slates and another lawyer, appealed.
Wiley’s Opinion
“It is true this deed of full reconveyance is as to the San Francisco house only, and there is no similar reconveyance deed as to the Los Angeles house,” Wiley wrote, adding:
“The simple explanation is neglect: someone dropped the ball. Someone forgot to follow through on the settlement by filing a parallel negation of the lien on the Los Angeles house. Trial judges of experience routinely see these kinds of omissions by lawyers, because everyone makes mistakes. (Judges of course are no exception.) A mistake is the best explanation for the persistence of the long-outstanding but long-ago satisfied Panrox lien on the Los Angeles house.”
He observed:
“This is a problem with litigating about events from decades ago: memories fade, people die, corporations dissolve, businesses fail, files are sent to storage and then to landfill, and evidence disappears. Grain by grain, time buries the past. As the poet said, the lone and level sands stretch far away.”
The jurist went on to say:
“There is so much we do not know. What we do know points to one conclusion: the trial court was right to deduce the parties satisfied the $141,000 debt in 1999.”
Contentions Addressed
Addressing Panrox’s contentions, he said:
“Panrox cites Evidence Code section 635, which states that an obligation possessed by the creditor is presumed not to have been paid. This presumption is rebuttable….The trial court properly found the evidence rebutted it.
“In the same vein, Panrox insists the defense of payment is affirmative and must be established by evidence. So it was: the record of settlement and Yang’s deed of full reconveyance established this defense. When Panrox insists ‘neither Yee nor Hon could offer any evidence of payment or other satisfaction of the underlying debt,’ Panrox slights the decisive evidence that convinced the trial court and that convinces us and all objective observers. Besides completing a settlement that satisfied Panrox’s demand, what other motive could Yang possibly have had to create a deed of full reconveyance—a document so contrary to Panrox’s interest at the time? Panrox is silent on this point, and its silence devastates its argument.”
The case is Yee v. Panrox International (USA), Inc., B321037.
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