First, find out through the dmv if that bike has ever been titled in California. If not,then there is a form at the dmv, an affidavit, that you can fill out stating that the owner did not have a title to give to you. You should also have a law enforcment official run a VIN check and give you some kind of form stating it is not a stolen vehicle (even though your friend has had it for years, it's an older bike so a complete history would be best). With those forms and your bill of sale, you should be able to apply for title. Post again as to how your progress is going. If it ends up being titled in another state 20 years ago and the CA dmv doesn't seem to explain what needs to be done, I'll keep an eye out for this thread and see what the next step will be.
goodluck!