What is a Cancellation of Instruments?

An “instrument” is “a written paper signed by a person or persons transferring the title to, or giving a lien on real property, or giving a right to a debt or duty.” (Gov. Code, § 27279.) Recordings not affecting title are not instruments. (Sisemore v. Master Financial, Inc. (2007) 151 Cal.App.4th 1388, 1399-1400; Ward v. Super. Ct. (1997) 55 Cal.App.4th 60, 64-65.)

Section 3412 of the Code of Civil Procedure provides for the cancellation of an instrument. (Code of Civ. Proc., § 3412.) It states that a “written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.” (Code of Civ. Proc., § 3412; Robertson v. Super. Ct. (2001) 90 Cal.App.4th 1319, 1324.)

Cancellation of an instrument is essentially a request for rescission of the instrument. (Bank of America v. Greenbach (1950) 98 Cal.App.2d 220, 228.) The effect of a decree cancelling an instrument is to place the parties where they were before the instrument was made, as if it had never been made. (Id. at 238.) A decree cancelling an instrument is equitable in nature and may be subject to equitable conditions, including reimbursement for the reasonable value of benefits conferred. (Ebbert v. Mercantile Trust Co. (1931) 213 Cal. 496, 501.)

Legal Standard

To plead a right to cancellation of an instrument, a plaintiff must allege the instrument is “void or voidable” and would cause “serious injury” if not canceled. (Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 818-19; U.S. Bank N.A. v. Naifeh (2016) 1 Cal.App.5th 767, 774; Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1193-1194.) “The injury referred to in section 3412 is not limited to pecuniary loss; it may be the alteration of one’s position to his prejudice.” (Turner v. Turner (1959) 167 Cal.App.2d 636, 641.)

The plaintiff must allege specific facts, “not mere conclusions, showing the apparent validity of the instrument designated, and point out the reason for asserting that it is actually invalid.” (Ephraim v. Metropolitan Trust Co. (1946) 28 Cal.2d 824, 833-34; Wolfe v. Lipsy (1985) 163 Cal.App.3d 633, 638.)

Promissory fraud is a basis for demonstrating the invalidity of an instrument in an action to cancel an instrument. (Lawrence v. Gayetty (1889) 78 Cal. 126, 131-132.) Notwithstanding the strict common law pleading requirements for causes of actions for damages for fraud (and somewhat surprisingly), general allegations of fraud are sufficient to allege the invalidity of an instrument in the absence of a special demurrer for uncertainty. (Larkin v. Mullen (1900) 128 Cal. 449, 453-454 [general demurrer properly overruled even though fraud alleged in general terms]; see also Campbell v. Genshlea (1919) 180 Cal. 213, 218.)

Statute of Limitations

The statute of limitations for a cause of action for cancellation of instruments is three years if based on fraud, otherwise, the statute is four years. (Zakaessian v. Zakaessian (1945) 70 Cal.App.2d 721, 725.)

Useful Rulings on Cancellation of Instruments

Recent Rulings on Cancellation of Instruments

NATIONSTAR MORTGAGE LLC VS NEW CENTURY MORTGAGE CORPORATION, A CALIFORNIA COR~ORATION

On October 31, 2019, Plaintiff filed a verified complaint, asserting causes of action against Defendants New Century Mortgage Corporation, Anyone Claiming an Interest in the New Century Deed of Trust (“Anyone”) and Does 1-50 for: Quiet Title Cancellation of Instruments Declaratory Relief On June 18, 2020, New Century’s default was entered. A Case Management Conference, an Order to Show Cause Re: Failure to Proceed with Default Judgment and a Default Prove-Up Hearing are set for December 3, 2020.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Quiet Title

THRESSA D. YOUNG VS BLUE SKY CAPITAL REALTY INC., ET AL.

Unfair Business Practices and Cancellation of Instruments Young’s UCL claim and cancellation of instruments causes of action are derivative of the first cause of action. The demurrer to these causes of action are sustained. Leave to amend “[L]eave to amend is liberally allowed as a matter of fairness, unless the complaint shows on its face that it is incapable of amendment. [Citations.]" (City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 747.)

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

  • Judge

    Maurice A. Leiter or Salvatore Sirna

  • County

    Los Angeles County, CA

CHATELAINE COMMUNITY ASSOCIATION VS TERESA MCCLENDON, ET AL

Plaintiff fails to cite any authority that would permit a prospective cancellation of instruments claim. III.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Quiet Title

  • Judge

    H. Jay Ford

  • County

    Los Angeles County, CA

BARBARA HOUSLEY V. FCI LENDER SERVICES, INC.

First and Seventh Causes of Action, TD Specialists Plaintiff’s opposition states that she will cease to pursue her causes of action under Civil Code section 2924 (first cause of action) and for cancellation of instruments (seventh causes of action). (Opposition, 1:12-13.) Therefore, the Court shall sustain the demurrer without leave to amend as to those causes of action. Plaintiff’s opposition further releases her claims against TD Specialists.

  • Hearing

U.S. BANK TRUST VS. MARIAM SHASHIKYAN, ET AL

Marks, 6552 Woodman LLC, Larisa Kirakosian, Lan Tran, Bassam Mustafa, Ahlam Mustafa, and Nabil Abudayeh alleging: (1) Declaratory Relief; (2) Cancellation of Instruments; (3) To Impress an Equitable Lien; and (4) Quiet Title. On June 6, 2019, PCI Defendants filed a Cross-Complaint against Plaintiff alleging Common Law Implied Indemnity and Declaratory Relief. PCI Defendants filed a Request for Dismissal of the Cross-Complaint without prejudice on August 21, 2019.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

VIRGINA ASSET PARTNERS, LLC VS USM INVESTMENTS, INC.

Discussion Plaintiff moves the court for an order granting leave to file a Second Amended Complaint; more specifically, Plaintiff proposes adding new claims for fraud (against USM/Ulloa), aiding and abetting (against Herman and Rosemary Carrillo), constructive trust and cancellation of instruments (against all Defendants) and amending the prayer to request the relief sought by the proposed additional causes of action. The motion was filed on January 29, 2020 and originally heard on August 31, 2020.

  • Hearing

NICOLE MAYS VS MORTGAGE MANAGEMENT CONSULTANTS, INC., ET AL.

On October 28, 2020, Plaintiff filed the second amended complaint for wrongful foreclosure, fraudulent misrepresentation, negligent misrepresentation, negligence (fourth cause of action), unfair business practices, promissory estoppel, cancellation of instruments, conversion, negligence (ninth cause of action), negligence (tenth cause of action), professional negligence (eleventh cause of action), and breach of fiduciary duty.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

NICOLE MAYS VS MORTGAGE MANAGEMENT CONSULTANTS, INC., ET AL.

On October 28, 2020, Plaintiff filed the second amended complaint for wrongful foreclosure, fraudulent misrepresentation, negligent misrepresentation, negligence (fourth cause of action), unfair business practices, promissory estoppel, cancellation of instruments, conversion, negligence (ninth cause of action), negligence (tenth cause of action), professional negligence (eleventh cause of action), and breach of fiduciary duty. RULING: Moot.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

EDGAR A MEINHARDT VS SUNNY ACRE LLC, ET AL.

Plaintiff also seeks to add ten causes of action for: (1) violation of Civil Code section 2923.5; (2) wrongful foreclosure; (3) set aside a foreclosure sale; (4) violation of Civil Code section 2924.12; (5) violation of the Real Estate Settlement Procedures Act (RESPA); (6) rescission and damages under the Truth in Lending Act (TILA); (7) violation of the Home Ownership and Equity Protection Act (HOEPA); (8) fraud and deceit; (9) negligent misrepresentation; and (10) cancellation of instruments.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

CRUZ VS. RUSHMORE LOAN MANAGEMENT

The Fifth Cause of Action is for cancellation of instruments. The Court sustains defendants’ demurrer to this cause of action on the same grounds stated above in the ruling on the demurrer to the First Cause of Action.

  • Hearing

TERRY HERRERA, ET AL. VS FULL CIRCLE REAL ESTATE SOLUTIONS INC., A CALIFORNIA CORPORATION, ET AL.

Mangabat, and Erik Lederman, alleging: (1) intentional misrepresentation; (2) concealment; (3) negligent misrepresentation; (4) conversion; (5) elder abuse; (6) rescission of contract; (7) cancellation of instruments; (8) quiet title; (9) declaratory relief; (10) unjust enrichment; (11) equitable lien; and (12) preliminary and permanent injunction. Defendant Full Circle Real Estate Solutions, Inc.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Quiet Title

20230- GOODSELL V. HAVEN HOUSE RESIDENTIAL FACILITIES, INC.

Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 527 (trial court properly sustained demurer to dependent adult financial abuse claim where plaintiffs failed to allege facts showing that their foreclosed property was taken wrongfully or for a wrongful use). 4th, 5th COA Defendants contend Plaintiff’s claims for cancellation of instruments and quiet title fail because they are remedies that Plaintiff has not established he can obtain.

  • Hearing

YULIYA GAYEVSKA VS ZINC FINANCIAL, INC.

(Defendant), alleging: (1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) unfair competition; (4) breach of fiduciary duty; (5) fraud in the inducement; (6) promissory estoppel; (7) wrongful foreclosure; (8) setting aside foreclosure; (9) unjust enrichment; (10) cancellation of instruments; (11) quiet title; and (12) slander of title. Defendant now demurs to Plaintiff’s second, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, and twelfth causes of action.

  • Hearing

  • Type

    Personal Injury/ Tort

  • Sub Type

    Fraud

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

GULLIERMO GUTIERREZ VS. SD LENDING LLC

As to the cause of action for cancellation of instruments, Plaintiff has not alleged Defendant JEFFREY MIDDAUGH committed any fraudulent act giving rise to cancellation. The causes of action for Negligent Infliction of Emotional Distress and Intentional Infliction of Emotional Distress fail.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

RASOOL ESKANDARI VS PROPERTY SPECIALISTS GROUP, INC. A NEVADA CORPORATION DOING BUSINESS IN CALIFORNIA, ET AL.

., Sean Cohen, and Mehran Frozenfar asserting causes of action for: 1) Breach of Contract; 2) Constructive Fraud; 3) Actual Fraud; 4) Conversion; 5) Unjust Enrichment; 6) Slander of Title; 7) Cancellation of Instruments; 8) Intentional Infliction of Emotional Distress; 9) Violation of Business & Professions Code §17200; 10) Quiet Title; and 11) Declaratory Relief. On August 26, 2020, Defendant served its Deposition Subpoena for Production of Business Records on the Law Offices of Simon & Resnik.

  • Hearing

  • Type

    Real Property

  • Sub Type

    Quiet Title

  • Judge

    Paul A. Bacigalupo or Virginia Keeny

  • County

    Los Angeles County, CA

NICOLE MAYS VS MORTGAGE MANAGEMENT CONSULTANTS, INC., ET AL.

On February 5, 2020, Plaintiff filed the unverified 12 cause of action first amended complaint for wrongful foreclosure, fraudulent misrepresentation, negligent misrepresentation, negligence (fourth cause of action), unfair business practices, promissory estoppel, cancellation of instruments, conversion, negligence (ninth cause of action), negligence (tenth cause of action), professional negligence (eleventh cause of action), and breach of fiduciary duty.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

ANAT KRICHMAR VS LUDMILLA HAIKIN

The four-year statute of limitations set forth in CCP § 343[1] applies to a cause of action for cancellation of instruments. (Costa Serena Owners Coalition v. Costa Serena Architectural Com. (2009) 175 Cal.App.4th 1175, 1195.) Plaintiff filed the Complaint on September 24, 2019. The allegedly fraudulent Deeds were recorded in April 2007, November 2007, December 2007, November 2012, and February 2013 (2AC, ¶¶ 16 – 32; Exhs. D – I.)

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

NICOLE MAYS VS MORTGAGE MANAGEMENT CONSULTANTS, INC., ET AL.

On February 5, 2020, Plaintiff filed the unverified 12 cause of action first amended complaint for wrongful foreclosure, fraudulent misrepresentation, negligent misrepresentation, negligence (fourth cause of action), unfair business practices, promissory estoppel, cancellation of instruments, conversion, negligence (ninth cause of action), negligence (tenth cause of action), professional negligence (eleventh cause of action), and breach of fiduciary duty.

  • Hearing

  • Type

    Real Property

  • Sub Type

    other

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