Hamilton Court, LLC v. East Olympic, L.P.

Filed 4/16/

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

HAMILTON COURT, LLC, et al., B240052

Plaintiffs, Cross-Defendants and (Los Angeles County Respondents, Super. Ct. No. BC437727)

v.

EAST OLYMPIC, L.P., et al.,

Defendants, Cross-Complainants and Appellants.

APPEAL from a judgment of the Superior Court of Los Angeles County. Susan Bryant-Deason, Judge. Reversed and remanded with instructions. TroyGould, Jeffrey W. Kramer, Annmarie Mori for Defendants, Cross- Complainants and Appellants. Vivoli Saccuzzo, Michael W. Vivoli for Plaintiffs, Cross-Defendants and Respondents. _______________ Defendants East Olympic, L.P., a California limited partnership ("East Olympic"), and its general partner, Jack Wilder, appeal the judgment quieting title to an easement on certain commercial real property in favor of plaintiffs Hamilton Court, LLC ("Hamilton Court") and 3650 Olympic, L.P. ("3650 Olympic"). Defendants contend that the trial court erred in applying the doctrine of merger of title to the facts of this case. We agree, and so reverse the…

Defendants East Olympic, L.P., a California limited partnership (East Olympic), and its general partner, Jack Wilder, appeal the *503 judgment quieting title to an easement on certain commercial real property in favor of plaintiffs Hamilton Court, LLC (Hamilton Court) and 3650 Olympic, L.P. (3650 Olympic). Defendants contend that the trial court erred in applying the doctrine of merger of title to the facts of this case. We agree, and so reverse the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Prior to 1983, East Olympic owned an entire city block on East Olympic Boulevard in Los Angeles. The block, consisting of multiple subdivided lots, contained several buildings and parking lots; one of the buildings, referred to at trial as the “Three Story Building,” sat on two of these lots, straddling a lot line.

In January 1983, East Olympic sold the majority of the city block, including the Three Story Building, to Angelus Building Partnership; the parties refer to this as the “Angelus Property.” East Olympic retained the southwest portion of the block, on which stood a one-story building, a two-story building, and an adjacent yard and shed. The parties refer to this as the…

I concur.

Although the deed of trust refers to “priority,” which could be viewed as just referring to a priority over other liens, I agree with the majority’s view.

There is another ground that should support the judgment: That is, there is or should be a so-called mortgage—in this case, deed of trust—exception to the merger doctrine. There is no authority in this state on that point. But as one authority has written, “it has been held that an easement is not terminated by merger when the dominant tenement is encumbered by a deed of trust or a mortgage at the time ownership of the servient and dominant tenement is *507 united in the same party. Preventing merger in such case equitably preserves the mortgagee’s security.” (Ely & Bruce, The Law of Easements and Licenses in Land (2013) § 10:27, fn. omitted; see Pergament v. Loring Properties, Ltd. (Minn. 1999) 599 N.W.2d 146, 149-151 ; Lewitz v. Porath Family Trust (Colo.App. 2001) 36 P.3d 120 ; Heritage Communities of North Carolina, Inc. v. Powers, Inc. (1980) 49 N.C. App. 656 [ 272 S.E.2d 399 ]; Rest.3d Property, Servitudes, § 7.5, com. d, p. 368; Note, Property Law—To Merge or Not to Merge: Determining the Scope of Mortgage;…