Trenk v. Soheili

Facts: A married couple holds title as joint tenants to a property that is their community property. One spouse settles a business dispute by agreeing to pay a creditor a sum of money evidenced by a promissory note in favor of the creditor secured by a trust deed describing the community property. The trust deed is not signed by the other spouse. On a default in payment, the creditor initiates a trustee’s foreclosure to recover on the note.

Claim: The spouse seeks to clear title to the community property claiming the trust deed held by the creditor is unenforceable since one spouse did not sign the trust deed.

Counter claim: The creditor claims the trust deed is enforceable since one spouse can encumber property held by a couple as joint tenants.

Holding: A California appeals court holds the trust deed is unenforceable and thus cancelled as voidable since the property held by a couple vested as joint tenants is community property requiring both spouses to execute the trust deed to encumber the property. [Trenk v. Soheili (December 21, 2020) _CA6th_]

Editor’s note – As found in In re Brace, properties acquired with community funds after 1975 are presumptively community property and this presumption cannot be rebutted simply by the form of title in which a married couple holds property.

Read the case text here.