Eviction could validate a void Foreclosure sooo……. Watch out !

2 Apr

Lorenzo VelezBecause an unlawful detainer action is a summary proceeding usually limited to the issue of immediate possession of real property, a judgment in such an action usually has  [21] limited res judicata effect “and will not prevent one who is dispossessed from bringing a subsequent action to resolve questions of title.” (Vella v. Hudgins (1977) 20 Cal.3d 251, 255 (Vella).) An exception to this rule is contained in Code of Civil Procedure section 1161a, which extends the summary eviction remedy beyond the conventional unlawful detainer suit brought by a landlord to include actions by certain purchasers of property. (Vella, at p. 255.) In these cases, title to the property may be an issue.

In Malkoskie, the court applied the exception to the rule that title cannot be tried in unlawful detainer in circumstances similar to the present case. There, Wells Fargo Bank, N.A. (Wells Fargo), after purchasing real property at a nonjudicial foreclosure sale, brought an unlawful detainer action against the previous homeowners pursuant to Code of Civil Procedure section 1161a, subdivision (b)(3). This subdivision permits an unlawful detainer action against a person who holds over and continues possession of real property after receiving a three-day written notice to quit the property, “[w]here the property has been sold in accordance with Section 2924 of the Civil Code, under  [22] a power of sale contained in a deed of trust executed by such person, or a person under whom such person claims, and the title under the sale has been duly perfected.” (Code Civ. Proc., § 1161a, subd. (b)(3), italics added.) In a subsequent action by the previous homeowners seeking to set aside the nonjudicial foreclosure sale, the court held that the judgment in the unlawful detainer action “conclusively resolved” the validity of title to the property in Wells Fargo’s favor. (Malkoskie, supra, 188 Cal.App.4th at p. 974.)

Likewise, in the UD action, the complaint alleged that U.S. Bank purchased the property at a foreclosure sale in accordance with Civil Code section 2924, and that it was seeking possession of the property pursuant to Code of Civil Procedure section 1161a, subdivision (b). Subdivision (b) sets forth five circumstances under which an unlawful detainer action may be commenced, all of which require the plaintiff to purchase the property and to duly perfect title. Subdivision (b)(3) appears to be the only circumstance which applies to the facts stated in the complaint. 10 The complaint in the UD action thus raised the issue of title to the property. (Malkoskie, supra, 188 Cal.App.4th at p. 974.)

Although the judgment in the UD action was obtained by default, the issue of title was necessarily and actually decided. By permitting their default in the UD action to be entered, the Sarkisians confessed the truth of all material allegations in the complaint, including U.S. Bank’s allegations that it purchased the property at a foreclosure sale and thereafter perfected its interest in the property. (Fitzgerald v. Herzer (1947) 78 Cal.App.2d 127, 131.) The Sarkisians therefore are collaterally estopped from denying that U.S. Bank holds title to the property. (Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4th 860, 871 [“Even a judgment of default in a civil proceeding is ‘res judicata as to all issues aptly pleaded in the complaint and defendant  [24] is estopped from denying in a subsequent action any allegations contained in the former complaint’ “].)

Each of plaintiffs’ causes of action in this case rest on the premise that U.S. Bank did not acquire title to the property. Because U.S. Bank conclusively established in the UD action that it holds title to the property, the trial court correctly sustained the bank defendants’ demurrer to the FAC.

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One Response to “Eviction could validate a void Foreclosure sooo……. Watch out !”

  1. info@atila4hair.com April 2, 2013 at 10:47 am #

    His is why it is important to bring suit right away after receiving an NOD.

    Cal apoeals, 2d B240785

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