California Court Holds Improperly Indexed Judgment Insufficient to Give Purchasers Notice

The California Court of Appeals recently held that the purchasers of a home were bona fide purchasers for value without notice of prior liens against the seller when the judgments were indexed against the seller using his middle name.  See Vasquez v. LBS Fin. Credit Union, 52 Cal. App. 5th 97 (2020).  In 2015, plaintiffs purchased the property at issue from Guillermo Guerrero and his wife.  In 2016, defendant contacted plaintiffs to inform them that defendant had two judgments against Guerrero from 2008 and had a lien against the property based on abstracts of judgment it recorded in the real property records under the name “Wilbert G. Guerrero.”  Plaintiffs brought this quiet title action.  At trial, plaintiffs’ expert testified that defendant recorded its judgment against “Wilbert G. Guerrero” and, because that name is not a variation of any name in the chain of title, plaintiffs did not have actual or constructive notice of the lien.  Defendant argued that the name “Wilbert Guillermo Guerrero” was handwritten at one point in the purchase agreement, which should have prompted plaintiffs or the title searchers to find the judgments indexed against “Wilbert G. Guerrero.”  After trial, the trial court found that plaintiffs were bona fide purchasers for value without notice of the judgments, and defendant appealed.

On appeal, the Court affirmed, finding that the single handwritten appearance of the name “Wilbert Guillermo Guerrero” in the purchase agreement was not sufficient to put plaintiff on notice.  “The names appearing in the title history are Guillermo Guerrero in 1999; Guilleromo Wilbert Guerrero in 2004; and Guillermo Guerrero in 2015. As discussed, the purchase agreement, counteroffer, statement of information, additional escrow instructions, and preliminary title report all reflect the name Guillermo Guerrero or Guillermo Wilbert Guerrero, except for the single handwritten name Wilbert Guillermo Guerrero on page 10 of the purchase agreement.”   Accordingly, the Court affirmed the decision for the plaintiffs. 

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Anthony Lombardo at alombardo@riker.com.