A California appeals court has ruled that removing a person’s name from a trust deed before it is recorded is not a material alteration that would void the deed when it originally included the name of a person who had no interest in the property.
In Lin v. Coronado, Helen Lin pooled funds with two other investors to purchase a residential property at a foreclosure auction. Lin contributed $150,000; River Forest Financial LLC contributed $75,000 and Elevation Investments LLC contributed $25,000. After the auction, a trust deed was delivered to River Forest conveying the property to “River Forest Financial LLC 75%, Elevation Investments 25% Helen Lin.”
Without Lin’s consent or knowledge, the trust deed was later altered to remove her name, so that it conveyed the property to “River Forest Financial LLC 75%, Elevation Investments 25%.” Subsequent to the execution and recording of the altered deed, River Forest executed and recorded a quitclaim deed in favor of Elevation, which then sold the property to Mireya Coronado.
Lin sued Coronado, River Forest, Elevation and other entities and individuals. Her only claim against Coronado was to quiet title. Lin argued that the deed was void because it was altered prior to being recorded and thus could not provided good title. A trial court entered judgment in favor of Lin and sustained Coronado’s demurrer without leave to amend.
Upon appeal by Lin, the appellate court affirmed the trial court’s ruling, finding that the removal of the plaintiff’s name from the trust deed was not a material alteration. The original deed showed that Lin had no interest in the property; therefore, the alteration had no legal effect and was not sufficiently material to void the deed.
The court also found that Lin had standing to sue River Forest, Elevation and others for failing to ensure she had a recordable interest in the property and a legal interest in the sale proceeds.
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