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Getting the 50,000 or three times the actual damages after Foreclosure

16 Oct

Getting the 50,000 or three times the actual damages

sanctions-604x270 (b) After a trustee’s deed upon sale has been recorded, a mortgage
servicer, mortgagee, trustee, beneficiary, or authorized agent shall
be liable to a borrower for actual economic damages pursuant to
Section 3281, resulting from a material violation of Section 2923.55,
2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17 by that
mortgage servicer, mortgagee, trustee, beneficiary, or authorized
agent where the violation was not corrected and remedied prior to the
recordation of the trustee’s deed upon sale. If the court finds that
the material violation was intentional or reckless, or resulted from
willful misconduct by a mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent, the court may award the borrower
the greater of treble actual damages or statutory damages of fifty
thousand dollars ($50,000).

2923.55. (a) A mortgage servicer, mortgagee, trustee, beneficiary,
or authorized agent may not record a notice of default pursuant to
Section 2924 until all of the following:
(1) The mortgage servicer has satisfied the requirements of
paragraph (1) of subdivision (b).
(2) Either 30 days after initial contact is made as required by
paragraph (2) of subdivision (b) or 30 days after satisfying the due
diligence requirements as described in subdivision (f).
(3) The mortgage servicer complies with subdivision (c) of Section
2923.6, if the borrower has provided a complete application as
defined in subdivision (h) of Section 2923.6.
(b) (1) As specified in subdivision (a), a mortgage servicer shall
send the following information in writing to the borrower:
(A) A statement that if the borrower is a servicemember or a
dependent of a servicemember, he or she may be entitled to certain
protections under the federal Servicemembers Civil Relief Act (50
U.S.C. Appen. Sec. 501 et seq.) regarding the servicemember’s
interest rate and the risk of foreclosure, and counseling for covered
servicemembers that is available at agencies such as Military
OneSource and Armed Forces Legal Assistance.
(B) A statement that the borrower may request the following:
(i) A copy of the borrower’s promissory note or other evidence of
indebtedness.
(ii) A copy of the borrower’s deed of trust or mortgage.
(iii) A copy of any assignment, if applicable, of the borrower’s
mortgage or deed of trust required to demonstrate the right of the
mortgage servicer to foreclose.
(iv) A copy of the borrower’s payment history since the borrower
was last less than 60 days past due.
(2) A mortgage servicer shall contact the borrower in person or by
telephone in order to assess the borrower’s financial situation and
explore options for the borrower to avoid foreclosure. During the
initial contact, the mortgage servicer shall advise the borrower that
he or she has the right to request a subsequent meeting and, if
requested, the mortgage servicer shall schedule the meeting to occur
within 14 days. The assessment of the borrower’s financial situation
and discussion of options may occur during the first contact, or at
the subsequent meeting scheduled for that purpose. In either case,
the borrower shall be provided the toll-free telephone number made
available by the United States Department of Housing and Urban
Development (HUD) to find a HUD-certified housing counseling agency.
Any meeting may occur telephonically.
(c) A notice of default recorded pursuant to Section 2924 shall
include a declaration that the mortgage servicer has contacted the
borrower, has tried with due diligence to contact the borrower as
required by this section, or that no contact was required because the
individual did not meet the definition of “borrower” pursuant to
subdivision (c) of Section 2920.5.
(d) A mortgage servicer’s loss mitigation personnel may
participate by telephone during any contact required by this section.
(e) A borrower may designate, with consent given in writing, a
HUD-certified housing counseling agency, attorney, or other adviser
to discuss with the mortgage servicer, on the borrower’s behalf, the
borrower’s financial situation and options for the borrower to avoid
foreclosure. That contact made at the direction of the borrower shall
satisfy the contact requirements of paragraph (2) of subdivision
(b). Any foreclosure prevention alternative offered at the meeting by
the mortgage servicer is subject to approval by the borrower.
(f) A notice of default may be recorded pursuant to Section 2924
when a mortgage servicer has not contacted a borrower as required by
paragraph (2) of subdivision (b), provided that the failure to
contact the borrower occurred despite the due diligence of the
mortgage servicer. For purposes of this section, “due diligence”
shall require and mean all of the following:
(1) A mortgage servicer shall first attempt to contact a borrower
by sending a first-class letter that includes the toll-free telephone
number made available by HUD to find a HUD-certified housing
counseling agency.
(2) (A) After the letter has been sent, the mortgage servicer
shall attempt to contact the borrower by telephone at least three
times at different hours and on different days. Telephone calls shall
be made to the primary telephone number on file.
(B) A mortgage servicer may attempt to contact a borrower using an
automated system to dial borrowers, provided that, if the telephone
call is answered, the call is connected to a live representative of
the mortgage servicer.
(C) A mortgage servicer satisfies the telephone contact
requirements of this paragraph if it determines, after attempting
contact pursuant to this paragraph, that the borrower’s primary
telephone number and secondary telephone number or numbers on file,
if any, have been disconnected.
(3) If the borrower does not respond within two weeks after the
telephone call requirements of paragraph (2) have been satisfied, the
mortgage servicer shall then send a certified letter, with return
receipt requested, that includes the toll-free telephone number made
available by HUD to find a HUD-certified housing counseling agency.
(4) The mortgage servicer shall provide a means for the borrower
to contact it in a timely manner, including a toll-free telephone
number that will provide access to a live representative during
business hours.
(5) The mortgage servicer has posted a prominent link on the
homepage of its Internet Web site, if any, to the following
information:
(A) Options that may be available to borrowers who are unable to
afford their mortgage payments and who wish to avoid foreclosure, and
instructions to borrowers advising them on steps to take to explore
those options.
(B) A list of financial documents borrowers should collect and be
prepared to present to the mortgage servicer when discussing options
for avoiding foreclosure.
(C) A toll-free telephone number for borrowers who wish to discuss
options for avoiding foreclosure with their mortgage servicer.
(D) The toll-free telephone number made available by HUD to find a
HUD-certified housing counseling agency.
(g) This section shall not apply to entities described in
subdivision (b) of Section 2924.18.
(h) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
(i) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

2923.6. (a) The Legislature finds and declares that any duty that
mortgage servicers may have to maximize net present value under their
pooling and servicing agreements is owed to all parties in a loan
pool, or to all investors under a pooling and servicing agreement,
not to any particular party in the loan pool or investor under a
pooling and servicing agreement, and that a mortgage servicer acts in
the best interests of all parties to the loan pool or investors in
the pooling and servicing agreement if it agrees to or implements a
loan modification or workout plan for which both of the following
apply:
(1) The loan is in payment default, or payment default is
reasonably foreseeable.
(2) Anticipated recovery under the loan modification or workout
plan exceeds the anticipated recovery through foreclosure on a net
present value basis.
(b) It is the intent of the Legislature that the mortgage servicer
offer the borrower a loan modification or workout plan if such a
modification or plan is consistent with its contractual or other
authority.
(c) If a borrower submits a complete application for a first lien
loan modification offered by, or through, the borrower’s mortgage
servicer, a mortgage servicer, mortgagee, trustee, beneficiary, or
authorized agent shall not record a notice of default or notice of
sale, or conduct a trustee’s sale, while the complete first lien loan
modification application is pending. A mortgage servicer, mortgagee,
trustee, beneficiary, or authorized agent shall not record a notice
of default or notice of sale or conduct a trustee’s sale until any of
the following occurs:
(1) The mortgage servicer makes a written determination that the
borrower is not eligible for a first lien loan modification, and any
appeal period pursuant to subdivision (d) has expired.
(2) The borrower does not accept an offered first lien loan
modification within 14 days of the offer.
(3) The borrower accepts a written first lien loan modification,
but defaults on, or otherwise breaches the borrower’s obligations
under, the first lien loan modification.
(d) If the borrower’s application for a first lien loan
modification is denied, the borrower shall have at least 30 days from
the date of the written denial to appeal the denial and to provide
evidence that the mortgage servicer’s determination was in error.
(e) If the borrower’s application for a first lien loan
modification is denied, the mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent shall not record a notice of default
or, if a notice of default has already been recorded, record a
notice of sale or conduct a trustee’s sale until the later of:
(1) Thirty-one days after the borrower is notified in writing of
the denial.
(2) If the borrower appeals the denial pursuant to subdivision
(d), the later of 15 days after the denial of the appeal or 14 days
after a first lien loan modification is offered after appeal but
declined by the borrower, or, if a first lien loan modification is
offered and accepted after appeal, the date on which the borrower
fails to timely submit the first payment or otherwise breaches the
terms of the offer.
(f) Following the denial of a first lien loan modification
application, the mortgage servicer shall send a written notice to the
borrower identifying the reasons for denial, including the
following:
(1) The amount of time from the date of the denial letter in which
the borrower may request an appeal of the denial of the first lien
loan modification and instructions regarding how to appeal the
denial.
(2) If the denial was based on investor disallowance, the specific
reasons for the investor disallowance.
(3) If the denial is the result of a net present value
calculation, the monthly gross income and property value used to
calculate the net present value and a statement that the borrower may
obtain all of the inputs used in the net present value calculation
upon written request to the mortgage servicer.
(4) If applicable, a finding that the borrower was previously
offered a first lien loan modification and failed to successfully
make payments under the terms of the modified loan.
(5) If applicable, a description of other foreclosure prevention
alternatives for which the borrower may be eligible, and a list of
the steps the borrower must take in order to be considered for those
options. If the mortgage servicer has already approved the borrower
for another foreclosure prevention alternative, information necessary
to complete the foreclosure prevention alternative.
(g) In order to minimize the risk of borrowers submitting multiple
applications for first lien loan modifications for the purpose of
delay, the mortgage servicer shall not be obligated to evaluate
applications from borrowers who have already been evaluated or
afforded a fair opportunity to be evaluated for a first lien loan
modification prior to January 1, 2013, or who have been evaluated or
afforded a fair opportunity to be evaluated consistent with the
requirements of this section, unless there has been a material change
in the borrower’s financial circumstances since the date of the
borrower’s previous application and that change is documented by the
borrower and submitted to the mortgage servicer.
(h) For purposes of this section, an application shall be deemed
“complete” when a borrower has supplied the mortgage servicer with
all documents required by the mortgage servicer within the reasonable
timeframes specified by the mortgage servicer.
(i) Subdivisions (c) to (h), inclusive, shall not apply to
entities described in subdivision (b) of Section 2924.18.
(j) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
(k) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

2923.7. (a) Upon request from a borrower who requests a foreclosure
prevention alternative, the mortgage servicer shall promptly
establish a single point of contact and provide to the borrower one
or more direct means of communication with the single point of
contact.
(b) The single point of contact shall be responsible for doing all
of the following:
(1) Communicating the process by which a borrower may apply for an
available foreclosure prevention alternative and the deadline for
any required submissions to be considered for these options.
(2) Coordinating receipt of all documents associated with
available foreclosure prevention alternatives and notifying the
borrower of any missing documents necessary to complete the
application.
(3) Having access to current information and personnel sufficient
to timely, accurately, and adequately inform the borrower of the
current status of the foreclosure prevention alternative.
(4) Ensuring that a borrower is considered for all foreclosure
prevention alternatives offered by, or through, the mortgage
servicer, if any.
(5) Having access to individuals with the ability and authority to
stop foreclosure proceedings when necessary.
(c) The single point of contact shall remain assigned to the
borrower’s account until the mortgage servicer determines that all
loss mitigation options offered by, or through, the mortgage servicer
have been exhausted or the borrower’s account becomes current.
(d) The mortgage servicer shall ensure that a single point of
contact refers and transfers a borrower to an appropriate supervisor
upon request of the borrower, if the single point of contact has a
supervisor.
(e) For purposes of this section, “single point of contact” means
an individual or team of personnel each of whom has the ability and
authority to perform the responsibilities described in subdivisions
(b) to (d), inclusive. The mortgage servicer shall ensure that each
member of the team is knowledgeable about the borrower’s situation
and current status in the alternatives to foreclosure process.
(f) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
(g) (1) This section shall not apply to a depository institution
chartered under state or federal law, a person licensed pursuant to
Division 9 (commencing with Section 22000) or Division 20 (commencing
with Section 50000) of the Financial Code, or a person licensed
pursuant to Part 1 (commencing with Section 10000) of Division 4 of
the Business and Professions Code, that, during its immediately
preceding annual reporting period, as established with its primary
regulator, foreclosed on 175 or fewer residential real properties,
containing no more than four dwelling units, that are located in
California.
(2) Within three months after the close of any calendar year or
annual reporting period as established with its primary regulator
during which an entity or person described in paragraph (1) exceeds
the threshold of 175 specified in paragraph (1), that entity shall
notify its primary regulator, in a manner acceptable to its primary
regulator, and any mortgagor or trustor who is delinquent on a
residential mortgage loan serviced by that entity of the date on
which that entity will be subject to this section, which date shall
be the first day of the first month that is six months after the
close of the calendar year or annual reporting period during which
that entity exceeded the threshold.

2924.9. (a) Unless a borrower has previously exhausted the first
lien loan modification process offered by, or through, his or her
mortgage servicer described in Section 2923.6, within five business
days after recording a notice of default pursuant to Section 2924, a
mortgage servicer that offers one or more foreclosure prevention
alternatives shall send a written communication to the borrower that
includes all of the following information:
(1) That the borrower may be evaluated for a foreclosure
prevention alternative or, if applicable, foreclosure prevention
alternatives.
(2) Whether an application is required to be submitted by the
borrower in order to be considered for a foreclosure prevention
alternative.
(3) The means and process by which a borrower may obtain an
application for a foreclosure prevention alternative.
(b) This section shall not apply to entities described in
subdivision (b) of Section 2924.18.
(c) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
(d) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

2924.10. (a) When a borrower submits a complete first lien
modification application or any document in connection with a first
lien modification application, the mortgage servicer shall provide
written acknowledgment of the receipt of the documentation within
five business days of receipt. In its initial acknowledgment of
receipt of the loan modification application, the mortgage servicer
shall include the following information:
(1) A description of the loan modification process, including an
estimate of when a decision on the loan modification will be made
after a complete application has been submitted by the borrower and
the length of time the borrower will have to consider an offer of a
loan modification or other foreclosure prevention alternative.
(2) Any deadlines, including deadlines to submit missing
documentation, that would affect the processing of a first lien loan
modification application.
(3) Any expiration dates for submitted documents.
(4) Any deficiency in the borrower’s first lien loan modification
application.
(b) For purposes of this section, a borrower’s first lien loan
modification application shall be deemed to be “complete” when a
borrower has supplied the mortgage servicer with all documents
required by the mortgage servicer within the reasonable timeframes
specified by the mortgage servicer.
(c) This section shall not apply to entities described in
subdivision (b) of Section 2924.18.
(d) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
(e) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

2924.11. (a) If a foreclosure prevention alternative is approved in
writing prior to the recordation of a notice of default, a mortgage
servicer, mortgagee, trustee, beneficiary, or authorized agent shall
not record a notice of default under either of the following
circumstances:
(1) The borrower is in compliance with the terms of a written
trial or permanent loan modification, forbearance, or repayment plan.
(2) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder, and mortgage insurer, as applicable, and
proof of funds or financing has been provided to the servicer.
(b) If a foreclosure prevention alternative is approved in writing
after the recordation of a notice of default, a mortgage servicer,
mortgagee, trustee, beneficiary, or authorized agent shall not record
a notice of sale or conduct a trustee’s sale under either of the
following circumstances:
(1) The borrower is in compliance with the terms of a written
trial or permanent loan modification, forbearance, or repayment plan.
(2) A foreclosure prevention alternative has been approved in
writing by all parties, including, for example, the first lien
investor, junior lienholder, and mortgage insurer, as applicable, and
proof of funds or financing has been provided to the servicer.
(c) When a borrower accepts an offered first lien loan
modification or other foreclosure prevention alternative, the
mortgage servicer shall provide the borrower with a copy of the fully
executed loan modification agreement or agreement evidencing the
foreclosure prevention alternative following receipt of the executed
copy from the borrower.
(d) A mortgagee, beneficiary, or authorized agent shall record a
rescission of a notice of default or cancel a pending trustee’s sale,
if applicable, upon the borrower executing a permanent foreclosure
prevention alternative. In the case of a short sale, the rescission
or cancellation of the pending trustee’s sale shall occur when the
short sale has been approved by all parties and proof of funds or
financing has been provided to the mortgagee, beneficiary, or
authorized agent.
(e) The mortgage servicer shall not charge any application,
processing, or other fee for a first lien loan modification or other
foreclosure prevention alternative.
(f) The mortgage servicer shall not collect any late fees for
periods during which a complete first lien loan modification
application is under consideration or a denial is being appealed, the
borrower is making timely modification payments, or a foreclosure
prevention alternative is being evaluated or exercised.
(g) If a borrower has been approved in writing for a first lien
loan modification or other foreclosure prevention alternative, and
the servicing of that borrower’s loan is transferred or sold to
another mortgage servicer, the subsequent mortgage servicer shall
continue to honor any previously approved first lien loan
modification or other foreclosure prevention alternative, in
accordance with the provisions of the act that added this section.
(h) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
(i) This section shall not apply to entities described in
subdivision (b) of Section 2924.18.
(j) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

2924.17. (a) A declaration recorded pursuant to Section 2923.5 or,
until January 1, 2018, pursuant to Section 2923.55, a notice of
default, notice of sale, assignment of a deed of trust, or
substitution of trustee recorded by or on behalf of a mortgage
servicer in connection with a foreclosure subject to the requirements
of Section 2924, or a declaration or affidavit filed in any court
relative to a foreclosure proceeding shall be accurate and complete
and supported by competent and reliable evidence.
(b) Before recording or filing any of the documents described in
subdivision (a), a mortgage servicer shall ensure that it has
reviewed competent and reliable evidence to substantiate the borrower’
s default and the right to foreclose, including the borrower’s loan
status and loan information.
(c) Until January 1, 2018, any mortgage servicer that engages in
multiple and repeated uncorrected violations of subdivision (b) in
recording documents or filing documents in any court relative to a
foreclosure proceeding shall be liable for a civil penalty of up to
seven thousand five hundred dollars ($7,500) per mortgage or deed of
trust in an action brought by a government entity identified in
Section 17204 of the Business and Professions Code, or in an
administrative proceeding brought by the Department of Business
Oversight or the Bureau of Real Estate against a respective licensee,
in addition to any other remedies available to these entities. This
subdivision shall be inoperative on January 1, 2018.

Foreclosure Cases 2011 in review California

30 Dec
Trustees Catherine Ripley and Ken Gibson

Image by dave.cournoyer via Flickr

California Cases – 2004 to Present
Including Federal cases interpreting California law
LISTED WITH MOST RECENT CASES FIRST
Go to cases 2000 – 2003

Lona v. Citibank     Docket
Cal.App. 6th Dist (H036140)  12/21/11TRUSTEE‘S SALES: The court reversed a summary judgment in favor of defendants in an action seeking to set aside a trustee’s sale on the basis that the loan was unconscionable. The court held that summary judgment was improper for two reasons:
1. The homeowner presented sufficient evidence of triable issues of material fact regarding unconscionability. Plaintiff asserted that the loan broker ignored his inability to repay the loan (monthly loan payments were four times his monthly income) and, as a person with limited English fluency, little education, and modest income, he did not understand many of the details of the transaction which was conducted entirely in English.
2. Plaintiff did not tender payment of the debt, which is normally a condition precedent to an action by the borrower to set aside the trustee’s sale, but defendants’ motion for summary judgment did not address the exceptions to this rule that defendant relied upon.

The case contains a good discussion of four exceptions to the tender requirement: 1. If the borrower’s action attacks the validity of the underlying debt, a tender is not required since it would constitute an affirmation of the debt. 2. A tender will not be required when the person who seeks to set aside the trustee’s sale has a counter-claim or set-off against the beneficiary. 3. A tender may not be required where it would be inequitable to impose such a condition on the party challenging the sale. 4. No tender will be required when the trustor is not required to rely on equity to attack the deed because the trustee’s deed is void on its face.Pioneer Construction v. Global Investment Corp.     Docket
Cal.App. 2nd Dist. (B225685)  12/21/11MECHANICS LIENS: The court held that:
1. A mechanics lien claimant who provided labor and materials prepetition to a debtor in bankruptcy can record a mechanics lien after the property owner files for bankruptcy without violating the automatic stay. (11 U.S.C. §362(b)(3).)
2. A mechanics lienor must, and defendant did, file a notice of lien in the debtor’s bankruptcy proceedings to inform the debtor and creditors of its intention to enforce the lien. (11 U.S.C. §546(b)(2).)
3. The 90-day period to file an action after recording a mechanics lien is tolled during the pendency of the property owner’s bankruptcy. Accordingly, an action to enforce the lien was timely when filed 79 days after a trustee’s sale by a lender who obtained relief from the automatic stay. (The property ceased to be property of the estate upon completion of the trustee’s sale.)Harbour Vista v. HSBC Mortgage Services     Docket
Cal.App. 4th Dist., Div. 3 (G044357)  12/19/11QUIET TITLE: Code of Civil Procedure Section 764.010 states that “[t]he court shall not enter judgment by default. . .” The court held that, while default may be entered, Section 764.010 requires that before issuing a default judgment the trial court must hold an evidentiary hearing in open court, and that a defendant is entitled to participate in the hearing even when it has not yet answered the complaint and is in default. Normally, a defendant has no right to participate in the case after its default has been entered.Park v. First American Title Insurance Company     Docket
Cal.App. 4th Dist., Div. 3 (G044118)  11/23/11 (Pub. Order 12/16/11)TRUSTEE’S SALES: A trustee’s sale was delayed due to defendant’s error in preparing the deed of trust. However, the court held that plaintiff could not establish damages because she could not prove that a potential buyer was ready, willing and able to purchase the property when the trustee’s sale was originally scheduled. Such proof would require showing that a prospective buyer made an offer, entered into a contract of sale, obtained a cashier’s check, or took any equivalent step that would have demonstrated she was ready, willing, and able to purchase plaintiff’s property. Also, plaintiff would need to show that the prospective buyer was financially able to purchase the property, such as by showing that the prospective buyer had obtained financing for the sale, preapproval for a loan or had sufficient funds to purchase the property with cash.Bardasian v. Superior Court     Docket
Cal.App. 3rd Dist. (C068488)  12/15/11TRUSTEE’S SALES: Civil Code Section 2923.5 requires that before a notice of default can be filed, a lender must attempt to contact the borrower and explore options to prevent foreclosure. Where the trial court ruled on the merits that a lender failed to comply with Section 2923.5, it was proper to enjoin the sale pending compliance with that section, but it was not proper to require plaintiff to post a bond and make rent payments. Also, discussions in connection with a loan modification three years previously did not constitute compliance with the code section.Lang v. Roche     Docket
Cal.App. 2nd Dist. (B222885)  11/29/11SHERIFF’S SALES: Plaintiff sought to set aside a Sheriff’s sale arising from the execution on a judgment rendered in another action. Defendant had obtained that judgment by default after service by publication even though plaintiff was defendant’s next door neighbor and could easily be found. The court set the sale aside, holding that even though C.C.P. 701.780 provides that an execution sale is absolute and cannot be set aside, that statute does not eliminate plaintiff’s right of equitable redemption where the judgment is void due to lack of personal jurisdiction.Promenade at Playa Vista HOA v. Western Pacific Housing     Docket
Cal.App. 2nd Dist. (B225086)  11/8/11CC&R’S: In a construction defect action brought by a condominium homeowners association, the court held that a developer cannot compel binding arbitration of the litigation pursuant to an arbitration provision in the Declaration of Covenants, Conditions, and Restrictions. CC&R’s are not a contract between the developer and the homeowners association. Instead, the provisions in the CC&R’s are equitable servitudes and can be enforced only by the homeowners association or the owner of a condominium, not by a developer who has sold all the units.Alpha and Omega Development v. Whillock Contracting     Docket
Cal.App. 4th Dist., Div. 1 (D058445)  11/2/11LIS PENDENS: This is a slander of title and malicious prosecution action brought after defendant’s unsuccessful action to foreclose a mechanics lien. Plaintiff’s slander of title allegation is based on defendant’s recordation of a lis pendens in the prior mechanics lien action. The appellate court upheld the trial court’s granting of defendant’s anti-SLAPP motion and striking the slander of title cause of action, because recording a lis pendens is privileged under Civil Code Section 47(b)(4).Biancalana v. T.D. Service Company     Docket     Sup.Ct. Docket
Cal.App. 6th Dist. (H035400)  10/31/11     Petition for review by Cal Supreme Ct. filed 12/9/11TRUSTEE’S SALES: Inadequacy of the sale price is not a sufficient ground for setting aside a trustee’s sale of real property in the absence of any procedural errors. The unpaid balance of the loan secured by the subject deed of trust was $219,105. The trustee erroneously told the auctioneer to credit bid the delinquency amount ($21,894.17). Plaintiff was the successful bidder with a bid of $21,896. The court refused to set aside the sale because there were no procedural errors and the mistake was within the discretion and control of the trustee, who was acting as agent for the lender. The court distinguished Millennium Rock Mortgage, Inc. v. T.D. Service Co. because here the mistake was made by defendant in the course and scope of its duty as the beneficiary’s agent, not by the auctioneer as in Millennium Rock.

The case also contains a discussion of the rule that once the trustee’s deed has been delivered, a rebuttable presumption arises that the foreclosure sale has been conducted regularly and properly. But where the deed has not been transferred, the sale may be challenged on the grounds of procedural irregularity.First Bank v. East West Bank     Docket
Cal.App. 2nd Dist. (B226061)  10/17/11     Case complete 12/19/11RECORDING: Where two deeds of trust secured by the same real property were simultaneously time-stamped for recording by the County Recorder’s Office but were indexed at different times, the lenders have equal priority. The recording laws protect subsequent purchasers and neither bank was a subsequent purchaser. The court acknowledged that a subsequent purchaser (or lender) who records his interest before the prior interest is indexed has priority, but this rule does not apply when both deeds of trust were recorded simultaneously.Dollinger DeAnza Assoc. v. Chicago Title Insurance Company     Docket     Sup.Ct. Docket
Cal.App. 6th Dist. (H035576)  9/9/11 (Pub. Order 10/6/11     Request for depublication filed 11/4/11TITLE INSURANCE: Plaintiff’s title insurance policy, which was issued in 2004, insured property that originally consisted of seven parcels, but which had been merged into a single parcel pursuant to a Notice of Merger recorded by the City of Cupertino in 1984. The policy did not except the Notice of Merger from coverage. Plaintiff filed this action after Chicago Title denied its claim for damages alleged to result from the inability to sell one of the parcels separately. The court ruled in favor of Chicago, holding:
1. While the notice of merger may impact Plaintiff’s ability to market the separate parcel, it has no affect on Plaintiff’s title to that parcel, so it does not constitute a defect in title. It does not represent a third person’s claim to an interest in the property.
2. Chicago is not barred by principals of waiver or estoppel from denying plaintiff’s claim, after initially accepting the claim, because 1) waiver only applies to insurers that do not reserve rights when accepting a tender of defense and 2) plaintiff failed to show detrimental reliance, which is one of the elements of estoppel.
3. Plaintiff’s claim for breach of the implied covenant of good faith and fair dealing cannot be maintained where benefits are not due under plaintiff’s insurance policy.
4. Since the court held that the Notice of Merger was not a defect in title, it did not need to consider Chicago’s contention that the Notice of Merger was void because the County Recorder indexed it under the name of the City, rather than the name of the property owner.
[Ed. note: This case must have dealt with an ALTA 1992 policy. The ALTA 2006 policy made changes to the Covered Risks.]Sukut Construction v. Rimrock CA     Docket     Sup.Ct. Docket
Cal.App. 4th Dist., Div. 1 (D057774)  9/30/11     Petition for review by Cal Supreme Ct. DENIED 12/14/11MECHANICS LIENS: Plaintiff could not establish a mining lien under Civil Code Section 3060 for removing rocks from a quarry because a quarry is not a mine and the rocks were not minerals. The court did not address whether plaintiff could establish a regular mechanics lien because it held that plaintiff was judicially estopped from asserting that position after leading defendant to believe that it was asserting only a mining claim. UNPUBLISHED: First American Title Insurance Company v. Ordin     Docket
Cal.App. 2nd Dist. (B226671)  9/14/11     Case complete 11/17/11TITLE INSURANCE: An arbitrator found that defendants did not lose coverage under their title policy when they conveyed title to their wholly owned corporation, then to themselves as trustees of their family trust and finally to a wholly owned limited liability company. This conflicts with the holding in Kwok v. Transnation Title Insurance Company and this could have been an interesting case, except that whether the ruling was right or wrong was not before the court. The court held only that the arbitrator’s award could not be overturned, even if the the law was applied incorrectly, because there was no misconduct by the arbitrator.Calvo v. HSBC Bank     Docket     Sup.Ct. Docket
199 Cal.App.4th 118 – 2nd Dist. (B226494)  9/13/11     Petition for review by Cal Supreme Ct. filed 10/25/11TRUSTEE’S SALES: Notice of the assignment of a deed of trust appeared only in the substitution of trustee, which was recorded on the same date as the notice of trustee’s sale, and which stated that MERS, as nominee for the assignee lender, was the present beneficiary. Plaintiff sought to set aside the trustee’s sale for an alleged violation of Civil Code section 2932.5, which requires the assignee of a mortgagee to record an assignment before exercising a power to sell real property. The court held that the lender did not violate section 2932.5 because that statute does not apply when the power of sale is conferred in a deed of trust rather than a mortgage.Robinson v. Countrywide Home Loans     Docket
199 Cal.App.4th 42 – 4th Dist., Div. 2 (E052011)  9/12/11     Case complete 11/15/11TRUSTEE’S SALES: The trial court properly sustained defendant lender’s demurrer without leave to amend because 1) the statutory scheme does not provide for a preemptive suit challenging MERS authority to initiate a foreclosure and 2) even if such a statutory claim were cognizable, the complaint did not allege facts sufficient to challenge the trustee’s authority to initiate a foreclosure.Hacienda Ranch Homes v. Superior Court (Elissagaray)     Docket
198 Cal.App.4th 1122 – 3rd Dist. (C065978)  8/30/11     Case complete 11/1/11ADVERSE POSSESSION: Plaintiffs (real parties in interest) acquired a 24.5% interest in the subject property at a tax sale. The court rejected plaintiffs’ claim of adverse possession under both 1) “color of title” because the tax deed by which they acquired their interest clearly conveyed only a 24.5% interest instead of a 100% interest, and 2) “claim of right” because plaintiffs’ claims of posting for-sale signs and clearing weeds 2 or 3 times a year did not satisfy the requirement of protecting the property with a substantial enclosure or cultivating or improving the property, as required by Code of Civil Procedure Section 325. The court also pointed out that obtaining adverse possession against cotenants requires evidence much stronger than that which would be required against a stranger, and plaintiffs failed to establish such evidence in this case.Gramercy Investment Trust v. Lakemont Homes Nevada, Inc.     Docket
198 Cal.App.4th 903 – 4th Dist., Div. 2 (E051384)  8/24/11     Case complete 10/27/11ANTIDEFICIENCY: After a judicial foreclosure, the lender obtained a deficiency judgment against a guarantor. The court held that the choice of law provision designating the law of New York was unenforceable because there were insufficient contacts with New York. California is where the contract was executed, the debt was created and guaranteed, the default occurred and the real property is located. Also, Nevada law does not apply, even though the guarantor was a Nevada corporation, because Nevada had no connection with the transaction. The court also held that the guarantor was not entitled to the protection of California’s antideficiency statutes because the guaranty specifically waived rights under those statutes in accordance with Civil Code Section 2856.Hill v. San Jose Family Housing Partners     Docket
198 Cal.App.4th 764 – 6th Dist. (H034931)  8/23/11     Case complete 10/25/11EASEMENTS: Plaintiff, who had entered into an easement agreement with defendant’s predecessor to maintain a billboard on a portion of defendant’s property, filed an action to prevent defendant from constructing a multi-unit building that would allegedly block the view of the billboard. Defendant asserted that the easement was unenforceable because it violated city and county building codes. The court held:
1. The easement was enforceable because the property’s use for advertising purposes is not illegal in and of itself. Although the instrumentality of that use, i.e., the billboard, may be illegal, that is not a bar to the enforcement of the agreement.
2. The easement agreement did not specifically state that it included the right to view the billboard from the street, but the parties necessarily intended the easement to include that right since viewing the billboard by passing traffic is the purpose of the easement.
3. Nevertheless, the trial court improperly denied a motion for a retrial to re-determine damages based on new evidence that the city had instituted administrative proceedings to have the billboard removed. The award of damages was based on plaintiff’s expected revenue from the billboard until 2037, and such damages will be overstated if the city forces plaintiff to remove the billboard.Fontenot v. Wells Fargo Bank     Docket     Sup.Ct. Docket
198 Cal.App.4th 256 – 1st Dist. (A130478)  8/11/11     Depublication request DENIED 11/30/11FORECLOSURE / MERS: Plaintiff alleged a foreclosure was unlawful because MERS made an invalid assignment of an interest in the promissory note and because the lender had breached an agreement to forbear from foreclosure. The appellate court held that the trial court properly sustained a demurrer to the fourth amended complaint without leave to amend. The court held that MERS had a right to assign the note even though it was not the beneficiary of the deed of trust because in assigning the note it was acting on behalf of the beneficiary and not on its own behalf. Additionally, Plaintiff failed to allege that the note was not otherwise assigned by an unrecorded document. The court also held that plaintiff failed to properly allege that the lender breached a forbearance agreement because plaintiff did not attach to the complaint a copy of a letter (which the court held was part of the forbearance agreement) that purportedly modified the agreement. Normally, a copy of an agreement does not have to be attached to a complaint, but here the trial court granted a previous demurrer with leave to amend specifically on condition plaintiff attach a copy of the entire forbearance agreement to the amended pleading.Boschma v. Home Loan Center     Docket
198 Cal.App.4th 230 – 4th Dist., Div. 3 (G043716)  8/10/11     Case complete 10/11/11LOAN DISCLOSURE: Borrowers stated a cause of action that survived a demurrer where they alleged fraud and a violation of California’s Unfair Competition Law (B&PC 17200, et seq.) based on disclosures indicating that borrowers’ Option ARM loan may result in negative amortization when, in fact, making the scheduled payments would definitely result in negative amortization. However, the court also pointed out that at trial in order to prove damages plaintiffs will have to present evidence that, because of the structure of the loans, they suffered actual damages beyond their loss of equity. For every dollar by which the loan balances increased, plaintiffs kept a dollar to save or spend as they pleased, so they will not be able to prove damages if their “only injury is the psychological revelation . . . that they were not receiving a free lunch from defendant”.Thorstrom v. Thorstrom     Docket
196 Cal.App.4th 1406 – 1st Dist. (A127888)  6/29/11     Case complete 8/30/11EASEMENTS: Plaintiffs were not able to preclude defendants’ use of a well on plaintiffs’ property. The historic use of the well by the common owner (the mother of the current owners) indicated an intent for the well to serve both properties, and an implied easement was created in favor of defendants when the mother died and left one parcel to each of her two sons. However, the evidence did not establish that defendants were entitled to exclusive use of the well, so both properties are entitled to reasonable use of the well consistent with the volume of water available at any given time.Herrera v. Deutsche Bank     Docket
196 Cal.App.4th 1366 – 3rd Dist. (C065630)  5/31/11 (Cert. for pub. 6/28/11)     Case complete 8/30/11TRUSTEE’S SALES: Plaintiffs sought to set aside a trustee’s sale, claiming that the Bank had not established that it was the assignee of the note, and that the trustee (“CRC”) had not established that it was properly substituted as trustee. To establish that the Bank was the beneficiary and CRC was the trustee, defendants requested that the trial court take judicial notice of the recorded Assignment of Deed of Trust and Substitution of Trustee, and filed a declaration by an employee of CRC referring to the recordation of the assignment and substitution, and stating that they “indicated” that the Bank was the assignee and CRC was the trustee. The trial court granted defendants’ motion for summary judgment and the appellate court reversed. The Court acknowledged that California law does not require the original promissory note in order to foreclose. But while a court may take judicial notice of a recorded document, that does not mean it may take judicial notice of factual matters stated therein, so the recorded documents do not prove the truth of their contents. Accordingly, the Bank did not present direct evidence that it held the note.

Ed. notes: 1. It seems that the Bank could have avoided this result if it had its own employee make a declaration directly stating that the Bank is the holder of the note and deed of trust, 2. In the unpublished portion of the opinion, the Court held that if the Bank is successful in asserting its claim to the Property, there is no recognizable legal theory that would require the Bank to pay plaintiffs monies they expended on the property for back taxes, insurance and deferred maintenance.Tashakori v. Lakis     Docket     Sup.Ct. Docket
196 Cal.App.4th 1003 – 2nd Dist. (B220875)  6/21/11     Petition for review by Cal Supreme Ct. DENIED 9/21/11EASEMENTS: The court granted plaintiffs an “equitable easement” for driveway purposes. Apparently, plaintiffs did not have grounds to establish a prescriptive easement. But a court can award an equitable easement where the court applies the “relative hardship” test and determines, as the court did here, that 1) the use is innocent, which means it was not willful or negligent, 2) the user will suffer irreparable harm if relief is not granted and 3) there is little harm to the underlying property owner.Conservatorship of Buchenau (Tornel v. Office of the Public Guardian)     Docket
196 Cal.App.4th 1031 – 2nd Dist. (B222941)  5/31/11 (Pub. order 6/21/11)     Case complete 8/24/11CONTRACTS: A purchaser of real property was held liable for damages for refusing to complete the purchase contract, even though the seller deposited the deed into escrow 19 days after the date set for close of escrow. The escrow instructions did not include a “time is of the essence” clause, so a reasonable time is allowed for performance. The purchaser presented no evidence that seller’s delay of 19 days was unreasonable following a two-month escrow. Diamond Heights Village Assn. v. Financial Freedom Senior Funding Corp.     Docket     Sup.Ct. Docket
196 Cal.App.4th 290 – 1st Dist. (A126145)  6/7/11     Petition for review by Cal Supreme Ct. DENIED 9/21/11HOMEOWNERS ASSOCIATION LIENS:
1. A homeowner’s association recorded a notice of assessment lien, judicially foreclosed and obtained a judgment against the homeowners. However, it did not record an abstract of judgment, which would have created a judgment lien, nor did it record a writ of execution, which would have created an execution lien. The court held that a subsequently recorded deed of trust had priority because when an assessment lien is enforced through judicial action, the debt secured by the lien is merged into the judgment. The association’s previous rights were merged into the judgment, substituting in their place only such rights as attach to the judgment.
2. After defendant lender prevailed on summary judgment as to the single cause of action naming the lender, trial proceeded as to the owners of the property, including a cause of action for fraudulent conveyance of a 1/2 interest in the property pertaining to a transfer from the original owner to himself and his mother. The trial court ruled in favor of the Association on the fraudulent conveyance cause of action AND held that defendant lender’s deed of trust was set aside as to that 1/2 interest. The appellate court held that trial of those remaining claims was proper, including trial of the Association’s cause of action against the homeowners for fraudulent conveyance of their condominium unit. It was not proper, however, to void the lender’s security interest in the property (in whole or part) when the lender had not been joined as a party to the fraudulent conveyance cause of action, and final judgment had already been entered in its favor.Hamilton v. Greenwich Investors XXVI      Modification     Docket
195 Cal.App.4th 1602 – 2nd Dist. (B224896)  6/1/11     Case complete 8/17/11TRUSTEE’S SALES:
1. Plaintiff/borrower’s failure to disclose, in earlier bankruptcy proceedings, the existence of his breach of contract and fraud claims against the lender bars the borrower from litigating those claims now. The court distinguished several cases that permitted a debtor in bankruptcy from subsequently pursuing a cause of action that was not disclosed in the bankruptcy pleadings on the basis that in those cases the defendant was not a creditor in the bankruptcy and because the schedules specifically asked the debtor to disclose any offsets against the debts that were listed. This action against the lender amounts to an offset against the loan, so by listing the loan and failing to list this claim, the borrower’s bankruptcy schedules were inaccurate.
2. The borrower’s causes of action for breach of contract and fraud fail in any event because the borrower did not allege the essential fact of payment of sums due from the borrower (i.e. performance by the borrower) or set forth an excuse for performance.
3. The borrower cannot state a cause of action for violations of Civil Code Section 2923.5, which requires lenders to contact borrowers to explore options to avoid foreclosure, because the only remedy for such violations is postponement of the foreclosure sale, and borrower’s house has been sold.***DECERTIFIED***
Ferguson v. Avelo Mortgage     Modification     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B223447)  6/1/11     Petition for review by Cal Supreme Ct. DENIED & DECERTIFIED 9/14/11FORECLOSURE / MERS:
1. A Notice of Default was defective because it was signed by a trustee before recordation of the substitution of trustee substituting it in place of the original trustee. But the Notice of Sale was properly given because it recorded at the same time as the substitution and included the statutorily required affidavit attesting to the mailing of a copy of the substitution to all persons to whom an NOD must be mailed. Since the NOS was valid, the court held that the sale was merely voidable and not void. Therefore, unlike a void sale (such as where a substitution of trustee is not recorded until after the trustee’s sale is completed), where the sale is merely voidable the plaintiff must tender full payment of the debt in order to bring an action setting aside the sale. The plaintiff did not make such a tender, so the trial court properly refused to set aside the sale.
2. Mortgage Electronic Registration Systems (MERS), as nominee of the original lender had the authority to assign the note and deed of trust to defendant, even if MERS does not possess the original note.Creative Ventures, LLC v. Jim Ward & Associates     Docket     Sup.Ct. Docket
195 Cal.App.4th 1430 – 6th Dist. (H034883)  5/31/11     Petition for review by Cal Supreme Ct. DENIED 8/10/11USURY:
1. The real estate broker arranged loan exception to the Usury Law does not apply were a corporation was not licensed as a broker, even though the officer who negotiated the loan was licensed, where the officer was acting on behalf of the corporation and not on his own behalf.
2. The payee of the note assigned the note to multiple investors. In order to take free of the borrower’s defenses against the original payee, the assignees would have had to be holders in due course. They were not holders in due course because a) the original payee did not endorse the note and transfer possession of the note to the assignees, both of which are requirements for holder in due course status, and b) each investor was assigned a partial interest and partial assignees cannot be holders in due course.
3. The individual investors did not receive usurious interest because the interest rate itself was not usurious. But since the overall interest was usurious when the payee’s brokerage fee was included, the investors must refund the illegal interest each received.
4. The fact that the investors did not intend to violate the Usury Law is irrelevant because the only intent required is the intent to receive payment of interest.
5. An award of treble damages is within the discretion of the trial court, and the trial court properly exercised its discretion not to award treble damages because the conduct of defendants was not intentional.Ribeiro v. County of El Dorado     Docket     Sup.Ct. Docket
195 Cal.App.4th 354 – 3rd Dist. (C065505)  5/10/111     Petition for review by Cal Supreme Ct. DENIED 8/24/11TAX SALES: “Caveat emptor” applies to tax sales. Accordingly, plaintiff/tax sale purchaser could not rescind the tax sale and obtain his deposit back where he was unaware of the amount of 1915 Act bond arrearages and where the County did not mislead him.The Main Street Plaza v. Cartwright & Main, LLC     Docket
194 Cal.App.4th 1044 – 4th Dist., Div. 3 (G043569)  4/27/11     Case complete 6/27/11EASEMENTS: Plaintiff sought to establish a prescriptive easement for parking and access. The trial court granted a motion for summary judgment against plaintiff because it had not paid taxes on the easement. The appellate court reversed because, while payment of property taxes is an element of a cause of action for adverse possession, payment of taxes is not necessary for an easement by prescription, unless the easement has been separately assessed. A railway easement over the same area was separately assessed, but that is irrelevant because the railway easement and the prescriptive easement were not coextensive in use.Liberty National Enterprises v. Chicago Title Insurance Company     Docket
194 Cal.App.4th 839 – 2nd Dist. (B222455)  4/6/11 (pub. order 4/26/11)     Case complete 6/28/11NOTE: This case is not summarized because it deals with disqualification of a party’s attorney, and not with issues related to title insurance. It is included here only to point out that fact.Barry v. OC Residential Properties     Docket     Sup.Ct. Docket
194 Cal.App.4th 861 – 4th Dist., Div. 3 (G043073)  4/26/11     Petition for review by Cal Supreme Ct. DENIED 7/13/11TRUSTEE’S SALES: Under C.C.P. 729.035 a trustee’s sale to enforce a homeowners association lien is subject to a right of redemption for 90 days after the sale, and under C.C.P. 729.060 the redemption price includes reasonable amounts paid for maintenance, upkeep and repair. Defendant purchased plaintiff’s interest in a common interest development at a foreclosure sale of a homeowners association lien. Plaintiff sought to redeem the property and defendant included certain repair costs in the redemption amount. Plaintiff asserted that the costs were not for reasonable maintenance, upkeep and repair. The court held that the costs were properly included because the person seeking to redeem has the burden of proof, and plaintiff failed to carry that burden in this case. Plaintiff also asserted that she should not have to pay the repair costs because the work was performed by an unlicensed contractor. The court held that the cost of the repair work was properly included because plaintiff would receive a windfall if she did not have to reimburse those costs and because this is not an action in which a contractor is seeking compensation.McMackin v. Ehrheart     Docket
194 Cal.App.4th 128 – 2nd Dist. (B224723)  4/8/11     Case complete 6/9/11CONTRACTS / PROBATE: This case involves a “Marvin” agreement, which is an express or implied contract between nonmarital partners. Plaintiff sought to enforce an alleged oral agreement with a decedent to leave plaintiff a life estate in real property. The court held that since the agreement was for distribution from an estate, it is governed by C.C.P. Section 366.3, which requires the action to be commenced within one year after the date of death. But the court further concluded that, depending on the circumstances of each case, the doctrine of equitable estoppel may be applied to preclude a party from asserting the statute of limitations set forth in section 366.3 as a defense to an untimely action where the party’s wrongdoing has induced another to forbear filing suit.Ferwerda v. Bordon     Docket
193 Cal. App. 4th 1178 – 3rd Dist. (C062389)  3/25/11     Petition for review by Cal Supreme Ct. DENIED 6/8/11CC&R’s
In the published portion of the opinion, the court held:
1. The following language in the CC&R’s gave the Homeowners Association the authority to adopt new design standards pertaining to development of lots in the subdivision: “in the event of a conflict between the standards required by [the Planning] Committee and those contained herein, the standards of said Committee shall govern”; and
2. The Planning Committee could not adopt a rule that allowed for attorney’s fees to be awarded to the prevailing party in a lawsuit because such a provision was not contained in the CC&R’s. Adopting the rule was an attempt by the committee to insert a new provision that binds homeowners without their approval.

In the unpublished portion of the opinion, the court held that the Planning Committee acted properly in denying the plaintiff’s building plans. (The details are not summarized here because that part of the opinion is not certified for publication.)Capon v. Monopoly Game LLC     Docket
193 Cal. App. 4th 344 – 1st Dist. (A124964)  3/4/11     Case complete 5/5/11HOME EQUITY SALES CONTRACT ACT: In the published portion of the opinion, the court held that plaintiff was entitled to damages under the Home Equity Sales Contract Act because the purchaser was subject to the Act and the purchase contract did not comply with it. There is an exception in the Act for a purchaser who intends to live in the property. The principal member of the LLC purchase asserted that he intended to live in the property, but the court held the exception does not apply because the purchaser was the LLC rather than the member, so his intent was irrelevant.Gomes v. Countrywide Home Loans     Docket     Cal. Sup.Ct. Docket     U.S. Supreme Ct. Docket
192 Cal. App. 4th 1149 – 4th Dist., Div. 1 (D057005)  2/18/11     Petition for review by Cal Supreme Ct. DENIED 5/18/11, Petition for a writ of certiorari DENIED 10/11/11FORECLOSURE / MERS: A borrower brought an action to restrain a foreclosure of a deed of trust held by MERS as nominee for the original lender. A Notice of Default had been recorded by the trustee, which identified itself as an agent for MERS. The court held that 1) There is no legal basis to bring an action in order to determine whether the person electing to sell the property is duly authorized to do so by the lender, unless the plaintiff can specify a specific factual basis for alleging that the foreclosure was not initiated by the correct party; and 2) MERS has a right to foreclose because the deed of trust specifically provided that MERS as nominee has the right to foreclose.Schuman v. Ignatin     Docket
191 Cal. App. 4th 255 – 2nd Dist. (B215059)  12/23/10     Case complete 2/23/11CC&R’s: The applicable CC&R’s would have expired, but an amendment was recorded extending them. Plaintiff filed this action alleging that defendant’s proposed house violated the CC&R’s. The trial court held that the amendment was invalid because it was not signed by all of the lot owners in the subdivision. Since the CC&R’s had expired, it did not determine whether the proposed construction would have violated them. The appellate court reversed and remanded, holding that the defect in the amendment rendered it voidable, not void, and it could no longer be challenged because the four-year statute of limitations contained in C.C.P. 343 had run.Schelb v. Stein     Docket
190 Cal. App. 4th 1440 – 2nd Dist. (B213929)  12/17/10     Case complete 2/16/11MARKETABLE RECORD TITLE ACT: In a previous divorce action, in order to equalize a division of community property, the husband was ordered to give the wife a note secured by a deed of trust on property awarded to the husband. In this case (many years later), the court held that under the Marketable Record Title Act, the deed of trust had expired. (Civil Code Section 882.020.) However, under Family Code Section 291, the underlying family law judgment does not expire until paid, so it is enforceable as an unsecured judgment.Vuki v. Superior Court     Docket
189 Cal. App. 4th 791 – 4th Dist., Div. 3 (G043544)  10/29/10     Case complete 1/3/11TRUSTEE’S SALES: Unlike section 2923.5 as construed by this court in Mabry v. Superior Court (2010) 185 Cal.App.4th 208, neither Section 2923.52 or Section 2923.53 provides any private right of action, even a very limited one as this court found in Mabry. Civil Code section 2923.52 imposes a 90-day delay in the normal foreclosure process. But Civil Code section 2923.53 allows for an exemption to that delay if lenders have loan modification programs that meet certain criteria. The only enforcement mechanism is that a violation is deemed to be a violation of lenders license laws. Section 2923.54 provides that a violation of Sections 2923.52 or 2923.53 does not invalidate a trustee’s sale, and plaintiff also argued that a lender is not entitled to a bona fide purchaser protection. The court rejected that argument because any noncompliance is entirely a regulatory matter, and cannot be remedied in a private action.Abers v. Rounsavell     Mod Opinion     Docket
189 Cal. App. 4th 348 – 4th Dist., Div. 3 (G040486)  10/18/10     Case complete 12/20/10LEASES: Leases of residential condominium units required a re-calculation of rent after 30 years based on a percentage of the appraised value of the “leased land”. The term “leased land” was defined to consist of the condominium unit and an undivided interest in the common area of Parcel 1, and did not include the recreational area (Parcel 2), which was leased to the Homeowners Association. The Court held that the language of the leases was clear. The appraisals were to be based only on the value of the lessees’ interest in Parcel 1 and not on the value of the recreational parcel.UNPUBLISHED: Residential Mortgage Capital v. Chicago Title Ins. Company     Docket
Cal.App. 1st Dist. (A125695)  9/20/10     Case complete 11/23/10ESCROW: An escrow holder released loan documents to a mortgage broker at the broker’s request in order to have the borrowers sign the documents at home. They were improperly backdated and the broker failed to provide duplicate copies of the notice of right to rescind. Due these discrepancies, the lender complied with the borrower’s demand for a rescission of the loan, and filed this action against the escrow holder for amounts reimbursed to the borrower for finance charges and attorney’s fees. The Court held that the escrow holder did not breach a duty to the lender because it properly followed the escrow instructions, and it is common for escrow to release documents to persons associated with the transaction in order for them to be signed elsewhere.Starr v. Starr     Docket
189 Cal. App. 4th 277 – 2nd Dist. (B219539)  9/30/10     Case complete 12/16/10COMMUNITY PROPERTY: In a divorce action the Court ordered the husband to convey title to himself and his former wife. Title had been taken in the husband’s name and the wife executed a quitclaim deed. But Family Code Section 721 creates a presumption that a transaction that benefits one spouse was the result of undue influence. The husband failed to overcome this presumption where the evidence showed that the wife executed the deed in reliance on the husband’s representation that he would subsequently add her to title. The husband was, nevertheless, entitled to reimbursement for his separate property contribution in purchasing the property.Malkoskie v. Option One Mortgage Corp.     Docket
188 Cal. App. 4th 968 – 2nd Dist. (B221470)  9/23/10     Case complete 11/23/10TRUSTEE’S SALES: After plaintiff stipulated to a judgment in an unlawful detainer action, she could not challenge the validity of the trustee’s sale in a subsequent action because the subsequent action is barred by collateral estoppel. Because the action was barred, the court did not reach the question of the validity of the trustee’s sale based on the substitution of trustee being recorded after trustee’s sale proceedings had commenced and based on assignments of the deed of trust into the foreclosing beneficiary being recorded after the trustee’s deed.Lee v. Fidelity National Title Ins. Co.     Docket     Sup.Ct. Docket
188 Cal. App. 4th 583 – 1st Dist. (A124730)  9/16/10     Petition for review and depublication by Cal Supreme Ct. DENIED 12/1/10TITLE INSURANCE:
1. The insureds could have reasonably expected that they were buying a title insurance policy on APN 22, and not just APN 9, where both the preliminary report and policy included a reference to APN 22, listed exclusions from coverage that were specific to APN 22, and attached an assessor’s parcel map with an arrow pointing to both APN 9 and 22.
2. A preliminary report is merely an offer to issue a title policy, but an insured has the right to expect that the policy will be consistent with the terms of the offer.
3. There was a triable issue of fact as to whether a neighbor’s construction of improvements on APN 22 was sufficient to commence the running of the statute of limitations, where the insureds testified that they did not know the precise location of APN 22 and assumed that the neighbors constructed the improvements on their own property.
4. There was a triable issue of fact as to whether Fidelity National Title Insurance Company acted as escrow holder or whether the escrow was conducted by its affiliate, Fidelity National Title Company (only the insurance company was named as a defendant).Chicago Title Insurance Company v. AMZ Insurance Services     Docket     Sup.Ct. Docket
188 Cal. App. 4th 401 – 4th Dist., Div. 3 (G041188)  9/9/10     Petition for review and depublication by Cal Supreme Ct. DENIED 12/15/10ESCROW: A document entitled “Evidence of Property Insurance” (“EOI”) constitutes a binder under Insurance Code Section 382.5(a). In this case an EOI was effective to obligate the insurer to issue a homeowner’s policy even though the escrow failed to send the premium check. In order to cancel the EOI the insured has to be given notice pursuant to Insurance Code Section 481.1, which the insurer did not do. The escrow holder paid the insured’s loss and obtained an assignment of rights. The court held that the escrow holder did not act as a volunteer in paying the amount of the loss, and is entitled to be reimbursed by the insurance company under the doctrine of equitable subrogation.Vanderkous v. Conley     Docket
188 Cal. App. 4th 111 – 1st Dist (A125352)  9/2/10     Case complete 11/3/10QUIET TITLE: 1) In a quiet title action the court has equitable powers to award compensation as necessary to do complete justice, even though neither party’s pleadings specifically requested compensation. 2) Realizing that the court was going to require plaintiff to compensate defendant in exchange for quieting title in plaintiff’s favor, plaintiff dismissed the lawsuit. However, the dismissal was invalid because it was filed following trial after the case had been submitted to the court.Purdum v. Holmes     Docket
187 Cal. App. 4th 916 – 2nd Dist. (B216493)  7/29/10     Case complete 10/22/10NOTARIES: A notary was sued for notarizing a forged deed. He admitted that he knew the grantor had not signed the deed, but the lawsuit was filed more than six years after the deed was signed and notarized. The court held that the action was barred by the six-year limitation period in C.C.P. 338(f)(3) even though plaintiff did not discover the wrongful conduct until well within the six year period.Perlas v. GMAC Mortgage     Docket
187 Cal. App. 4th 429 – 1st Dist. (A125212)  8/11/10     Case complete 10/10/10DEEDS OF TRUST: Borrowers filed an action against a lender to set aside a deed of trust, setting forth numerous causes of action. Borrowers’ loan application (apparently prepared by a loan broker) falsely inflated the borrowers’ income. In the published portion of the opinion. The court held in favor of the lender, explaining that a lender is not in a fiduciary relationship with borrowers and owes them no duty of care in approving their loan. A lender’s determination that the borrowers qualified for the loan is not a representation that they could afford the loan. One interesting issue in the unpublished portion of the opinion was the court’s rejection of the borrowers’ argument that naming MERS as nominee invalidated the deed of trust because, as borrower argued, the deed of trust was a contract with MERS and the note was a separate contract with the lender.Soifer v. Chicago Title Company     Modification     Docket     Sup.Ct. Docket
187 Cal. App. 4th 365 – 2nd Dist. (B217956)  8/10/10     Petition for review by Cal Supreme Ct. DENIED 10/27/10TITLE INSURANCE: A person cannot recover for errors in a title company’s informal communications regarding the condition of title to property in the absence of a policy of title insurance or the purchase of an abstract of title. There are two ways in which an interested party can obtain title information upon which reliance may be placed: an abstract of title or a policy of title insurance. Having purchased neither, plaintiff cannot recover for title company’s incorrect statement that a deed of trust in foreclosure was a first lien.In re: Hastie (Weinkauf v. Florez)     Docket     Sup.Ct. Docket
186 Cal. App. 4th 1285 – 1st Dist. (A127069)  7/22/10     Petition for review by Cal Supreme Ct. filed late and DENIED 9/21/10DEEDS: An administrator of decedent’s estate sought to set aside two deeds on the basis that the grantees were the grandson and granddaughter of decedent’s caregiver. Defendant did not dispute that the transfers violated Probate Code Section 21350, which prohibits conveyances to a fiduciary, including a caregiver, or the fiduciary’s relatives, unless specified conditions are met. Instead, defendant asserted only that the 3-year statute of limitations had expired. The court held that the action was timely because there was no evidence indicating that the heirs had or should have had knowledge of the transfer, which would have commenced the running of the statute of limitations.Bank of America v. Stonehaven Manor, LLC     Docket     Sup.Ct. Docket
186 Cal. App. 4th 719 – 3rd Dist. (C060089)  7/12/10     Petition for review by Cal Supreme Ct. DENIED 10/20/10ATTACHMENT: The property of a guarantor of a debt–a debt which is secured by the real property of the principal debtor and also that of a joint and several co-guarantor–is subject to attachment where the guarantor has contractually waived the benefit of that security (i.e. waived the benefit of Civil Code Section 2849).Jackson v. County of Amador     Docket
186 Cal. App. 4th 514 – 3rd Dist. (C060845)  7/7/10     Depublication request DENIED 9/15/10RECORDING LAW: An owner of two rental houses sued the county recorder for recording a durable power of attorney and two quitclaim deeds that were fraudulently executed by the owner’s brother. The superior court sustained the recorder’s demurrer without leave to amend. The court of appeal affirmed, holding that the legal insufficiency of the power of attorney did not provide a basis for the recorder to refuse to record the power of attorney under Government Code Section 27201(a) and the recorder did not owe the owner a duty to determine whether the instruments were fraudulently executed because the instruments were notarized.Luna v. Brownell     Docket
185 Cal. App. 4th 668 – 2nd Dist. (B212757)  6/11/10     Case complete 8/17/10DEEDS: A deed transferring property to the trustee of a trust is not void as between the grantor and grantee merely because the trust had not been created at the time the deed was executed, if (1) the deed was executed in anticipation of the creation of the trust and (2) the trust is in fact created thereafter. The deed was deemed legally delivered when the Trust was established.Mabry v. Superior Court     Docket     Sup.Ct. Docket
185 Cal. App. 4th 208 – 4th Dist., Div. 3 (G042911)  6/2/10     Petition for review by Cal Supreme Ct. DENIED 8/18/10TRUSTEE’S SALES: The court answered, and provided thorough explanations for, a laundry list of questions regarding Civil Code Section 2923.5, which requires a lender to explore options for modifying a loan with a borrower prior to commencing foreclosure proceedings.
1. May section 2923.5 be enforced by a private right of action?  Yes.
2. Must a borrower tender the full amount of the mortgage indebtedness due as a prerequisite to bringing an action under section 2923.5?  No.
3. Is section 2923.5 preempted by federal law?  No.
4. What is the extent of a private right of action under section 2923.5?  It is limited to obtaining a postponement of a foreclosure to permit the lender to comply with section 2923.5.
5. Must the declaration required of the lender by section 2923.5, subdivision (b) be under penalty of perjury?  No.
6. Does a declaration in a notice of default that tracks the language of section 2923.5(b) comply with the statute, even though such language does not on its face delineate precisely which one of three categories applies to the particular case at hand?  Yes.
7. If a lender forecloses without complying with section 2923.5, does that noncompliance affect the title acquired by a third party purchaser at the foreclosure sale?  No.
8. Did the lender comply with section 2923.5?  Remanded to the trial court to determine which of the two sides is telling the truth.
9. Can section 2923.5 be enforced in a class action in this case?  Not under these facts, which are highly fact-specific.
10. Does section 2923.5 require a lender to rewrite or modify the loan? No.612 South LLC v. Laconic Limited Partnership     Docket
184 Cal. App. 4th 1270 – Cal.App. 4th Dist., Div. 1 (D056646)  5/25/10     Case complete 7/26/10ASSESSMENT BOND FORECLOSURE:
1. Recordation of a Notice of Assessment under the Improvement Act of 1911 imparted constructive notice even though the notice did not name the owner of the subject property and was not indexed under the owner’s name. There is no statutory requirement that the notice of assessment be indexed under the name of the property owner.
2. A Preliminary Report also gave constructive notice where it stated: “The lien of special tax for the following municipal improvement bond, which tax is collected with the county taxes. . .”
3. A property owner is not liable for a deficiency judgment after a bond foreclosure because a property owner does not have personal liability for either delinquent amounts due on the bond or for attorney fees incurred in prosecuting the action.Tarlesson v. Broadway Foreclosure Investments     Docket
184 Cal. App. 4th 931 – 1st Dist. (A125445)  5/17/10     Case complete 7/20/10HOMESTEADS: A judgment debtor is entitled to a homestead exemption where she continuously resided in property, even though at one point she conveyed title to her cousin in order to obtain financing and the cousin subsequently conveyed title back to the debtor. The amount of the exemption was $150,000 (later statutorily changed to $175,000) based on debtor’s declaration that she was over 55 years old and earned less than $15,000 per year, because there was no conflicting evidence in the record.UNPUBLISHED: MBK Celamonte v. Lawyers Title Insurance Corporation     Docket     Sup.Ct. Docket
Cal.App. 4th Dist., Div. 3 (G041605)  4/28/10     Petition for review by Cal Supreme Ct. DENIED 7/21/10TITLE INSURANCE / ENCUMBRANCES: A recorded authorization for a Mello Roos Assessment constitutes an “encumbrance” covered by a title policy, even where actual assessments are conditioned on the future development of the property.Plaza Home Mortgage v. North American Title Company     Docket     Sup.Ct. Docket
184 Cal. App. 4th 130 – 4th Dist., Div. 1 (D054685)  4/27/10     Depublication request DENIED 8/11/10ESCROW / LOAN FRAUD: The buyer obtained 100% financing and managed to walk away with cash ($54,000) at close of escrow. (Actually, the buyer’s attorney-in-fact received the money.) The lender sued the title company that acted as escrow holder, asserting that it should have notified the lender when it received the instruction to send the payment to the buyer’s attorney-in-fact after escrow had closed. The court reversed a grant of a motion for summary judgment in favor of the escrow, pointing out that its decision is narrow, and holding only that the trial court erred when it determined the escrow did not breach the closing instructions contract merely because escrow had closed. The case was remanded in order to determine whether the escrow breached the closing instructions contract and if so, whether that breach proximately caused the lender’s damages.Garcia v. World Savings     Docket     Sup.Ct. Docket
183 Cal. App. 4th 1031 – 2nd (B214822)  4/9/10     Petition for review and depublication by Cal Supreme Ct. DENIED 6/23/10TRUSTEE’S SALES: A lender told plaintiffs/owners that it would postpone a trustee’s sale by a week to give plaintiffs time to obtain another loan secured by other property in order to bring the subject loan current. Plaintiffs obtained a loan the following week, but the lender had conducted the trustee’s sale on the scheduled date and the property was sold to a third party bidder. Plaintiffs dismissed causes of action pertaining to setting aside the sale and pursued causes of action for breach of contract, wrongful foreclosure and promissory estoppel. The court held that there was no consideration that would support the breach of contract claim because plaintiffs promised nothing more than was due under the original agreement. Plaintiffs also could not prove a cause of action for wrongful foreclosure because that cause of action requires that the borrower tender funds to pay off the loan prior to the trustee’s sale. However, plaintiffs could recover based on promissory estoppel because procuring a high cost, high interest loan by using other property as security is sufficient to constitute detrimental reliance.LEG Investments v. Boxler     Docket
183 Cal. App. 4th 484 – 3rd Dist. (C058743)  4/1/10     Certified for Partial Publication     Case complete 6/2/10PARTITION: A right of first refusal in a tenancy in common agreement does not absolutely waive the right of partition. Instead, the right of first refusal merely modifies the right of partition to require the selling cotenant to first offer to sell to the nonselling cotenant before seeking partition. [Ed. note: I expect that the result would have been different if the right of partition had been specifically waived in the tenancy in common agreement.]Steiner v. Thexton     Docket
48 Cal. 4th 411 – Cal. Supreme Court (S164928)  3/18/10OPTIONS: A contract to sell real property where the buyer’s performance was entirely conditioned on the buyer obtaining regulatory approval to subdivide the property is an option. Although plaintiffs’ promise was initially illusory because no consideration was given at the outset, plaintiffs’ part performance of their bargained-for promise to seek a parcel split cured the initially illusory nature of the promise and thereby constituted sufficient consideration to render the option irrevocable.Grotenhuis v. County of Santa Barbara     Docket
182 Cal. App. 4th 1158 – 2nd Dist. (B212264)  3/15/10     Case complete 5/18/10PROPERTY TAXES: Subject to certain conditions, a homeowner over the age of 55 may sell a principle residence, purchase a replacement dwelling of equal or lesser value in the same county, and transfer the property tax basis of the principal residence to the replacement dwelling. The court held that this favorable tax treatment is not available where title to both properties was held by an individual’s wholly owned corporation. The court rejected plaintiffs’ argument that the corporation was their alter ego because that concept is used to pierce the corporate veil of an opponent, and not to enable a person “to weave in and out of corporate status when it suits the business objective of the day.”Clear Lake Riviera Community Assn. v. Cramer     Docket
182 Cal.App. 4th 459 – 1st Dist. (A122205)  2/26/10     Case complete 4/29/10HOMEOWNER’S ASSOCIATIONS: Defendant homeowners were ordered to bring their newly built house into compliance with the homeowners association’s guidelines where the house exceed the guidelines’ height restriction by nine feet. Even though the cost to the defendants will be great, they built the house with knowledge of the restriction and their hardship will not be grossly disproportionate to the loss the neighbors would suffer if the violation were not abated, caused by loss in property values and loss of enjoyment of their properties caused by blocked views. The height restriction was contained in the associations guidelines and not in the CC&R’s, and the association did not have records proving the official adoption of the guidelines. Nevertheless, the court held that proper adoption was inferred from the circumstantial evidence of long enforcement of the guidelines by the association.Forsgren Associates v. Pacific Golf Community Development     Docket     Sup. Ct. Docket
182 Cal.App. 4th 135 – 4th Dist., Div. 2 (E045940)  2/23/10     Petition for review by Cal Supreme Ct. DENIED 6/17/10MECHANIC’S LIENS: 1. Owners of land are subject to mechanic’s liens where they were aware of the work being done by the lien claimant and where they failed to record a notice of non-responsibility.
2. Civil Code Section 3128 provides that a mechanic’s lien attaches to land on which the improvement is situated “together with a convenient space about the same or so much as may be required for the convenient use and occupation thereof”. Accordingly, defendant’s land adjacent to a golf course on which the lien claimant performed work is subject to a mechanic’s lien, but only as to the limited portions where a tee box was located and where an irrigation system was installed.
3. The fact that adjacent property incidentally benefits from being adjacent to a golf course does not support extending a mechanic’s lien to that property.
4. The owners of the adjacent property were liable for interest, but only as to their proportionate share of the amount of the entire mechanic’s lien.Steinhart v. County of Los Angeles      Docket
47 Cal.4th 1298 – Cal. Supreme Court (S158007)  2/4/10PROPERTY TAXES: A “change in ownership”, requiring a property tax reassessment, occurs upon the death of a trust settlor who transferred property to a revocable trust, and which became irrevocable upon the settlor’s death. The fact that one trust beneficiary was entitled to live in the property for her life, and the remaining beneficiaries received the property upon her death, did not alter the fact that a change in ownership of the entire title had occurred.Kuish v. Smith     Docket
181 Cal.App.4th 1419 – 4th Dist., Div. 3 (G040743)  2/3/10     Case complete 4/12/10CONTRACTS: 1. Defendants’ retention of a $600,000 deposit designated as “non-refundable” constituted an invalid forfeiture because a) the contract did not contain a valid liquidated damages clause, and b) plaintiff re-sold the property for a higher price, so there were no out-of-pocket damages. 2. The deposit did not constitute additional consideration for extending the escrow because it was labeled “non-refundable” in the original contract.Kendall v. Walker (Modification attached)     Docket
181 Cal.App.4th 584 – 1st Dist. (A105981)  12/30/09     Case complete 3/29/10WATER RIGHTS: An owner of land adjoining a navigable waterway has rights in the foreshore adjacent to his property separate from that of the general public. The court held that the boundary in the waterway between adjacent parcels of land is not fixed by extending the boundary lines into the water in the direction of the last course ending at the shore line. Instead, it is fixed by a line drawn into the water perpendicular to the shore line. Accordingly, the court enjoined defendants from allowing their houseboat from being moored in a manner that crossed onto plaintiffs’ side of that perpendicular boundary line.Junkin v. Golden West Foreclosure Service     Docket
180 Cal.App.4th 1150 – 1st Dist. (A124374)  1/5/10     Case complete 3/12/10USURY: The joint venture exception to the Usury Law, which has been developed by case law, provides that where the relationship between the parties is a bona fide joint venture or partnership, an advance by a joint venturer is an investment and not a loan, making the Usury Law inapplicable. The court applied the exception to a loan by one partner to the other because instead of looking at the loan in isolation, it looked at the entire transaction which it determined to be a joint venture. The case contains a good discussion of the various factors that should be weighed in determining whether the transaction is a bona fide joint venture. The presence or absence of any one factor is not, alone, determinative. The factors include whether or not: 1) there is an absolute obligation of repayment, 2) the investor may suffer a loss, 3) the investor has a right to participate in management, 4) the subject property was purchased from a third party and 5) the parties considered themselves to be partners.Banc of America Leasing & Capital v. 3 Arch Trustee Services     Docket
180 Cal.App.4th 1090 – 4th Dist., Div. 3 (G041480)  12/11/09     Case complete 3/8/10TRUSTEE’S SALES: A judgment lien creditor is not entitled to receive a notice of default, notice of trustee’s sale or notice of surplus sale proceeds unless the creditor records a statutory request for notice. The trustee is required to disburse surplus proceeds only to persons who have provided the trustee with a proof of claim. The burden rests with the judgment creditor to keep a careful watch over the debtor, make requests for notice of default and sales, and to submit claims in the event of surplus sale proceeds.Park 100 Investment Group v. Ryan     Docket
180 Cal.App.4th 795 – 2nd Dist. (B208189)  12/23/09     Case complete 2/26/10LIS PENDENS: 1. A lis pendens may be filed against a dominant tenement when the litigation involves an easement dispute. Although title to the dominant tenement would not be directly affected if an easement right was shown to exist, the owner’s right to possession clearly is affected

2.A recorded lis pendens is a privileged publication only if it identifies an action previously filed with a court of competent jurisdiction which affects the title or right of possession of real property. If the complaint does not allege a real property claim, or the alleged claim lacks evidentiary merit, the lis pendens, in addition to being subject to expungement, is not privileged.Millennium Rock Mortgage v. T.D. Service Company     Modification     Docket
179 Cal.App.4th 804 – 3rd Dist. (C059875)  11/24/09     Case complete 1/26/10TRUSTEE’S SALES: A trustee’s sale auctioneer erroneously read from a script for a different foreclosure, although the correct street address was used. The auctioneer opened the bidding with the credit bid from the other foreclosure that was substantially less than the correct credit bid. The errors were discovered after the close of bidding but prior to the issuance of a trustee’s deed. The court held that the errors constituted an “irregularity” sufficient to give the trustee the right to rescind the sale.

The court distinguished 6 Angels v. Stuart-Wright Mortgage, in which the court held that a beneficiary’s negligent miscalculation of the amount of its credit bid was not sufficient to rescind the sale. In 6 Angelsthe error was totally extrinsic to the proper conduct of the sale itself. Here there was inherent inconsistency in the auctioneer’s description of the property being offered for sale, creating a fatal ambiguity in determining which property was being auctioned.Fidelity National Title Insurance Company v. Schroeder     Docket
179 Cal.App.4th 834 – 5th Dist. (F056339)  11/24/09     Case complete 1/25/10JUDGMENTS: A judgment debtor transferred his 1/2 interest in real property to the other cotenant prior to the judgment creditor recording an abstract of judgment. The court held that if the trial court on remand finds that the transfer was intended to shield the debtor’s property from creditors, then the transferee holds the debtor’s 1/2 interest as a resulting trust for the benefit of the debtor, and the creditor’s judgment lien will attach to that interest. The court also held that the transfer cannot be set aside under the Uniform Fraudulent Transfer Act because no recoverable value remained in the real property after deducting existing encumbrances and Gordon’s homestead exemption.

The case contains a good explanation of the difference between a resulting (“intention enforcing”) and constructive (“fraud-rectifying”) trust. A resulting trust carries out the inferred intent of the parties; a constructive trust defeats or prevents the wrongful act of one of them.Zhang v. Superior Court     Docket     Sup.Ct. Docket
Cal.App. 4th Dist., Div. 2 (E047207) 10/29/09     Petition for review by Cal Supreme Ct. GRANTED 2/10/10INSURANCE / BAD FAITH: Fraudulent conduct by an insurer does not give rise to a private right of action under the Unfair Insurance Practices Act (Insurance Code section 790.03 et seq.), but it can give rise to a private cause of action under the Unfair Competition Law (Business and Professions Code section 17200 et seq.).Presta v. Tepper     Docket
179 Cal.App.4th 909 – 4th Dist., Div. 3 (G040427)  10/28/09     Case complete 1/25/10TRUSTS: An ordinary express trust is not an entity separate from its trustee, like a corporation is. Instead, a trust is merely a relationship by which one person or entity holds property for the benefit of some other person or entity. Consequently, where two men entered into partnership agreements as trustees of their trusts, the provision of the partnership agreement, which required that upon the death of a partner the partnership shall purchase his interest in the partnership, was triggered by the death of one of the two men.Wells Fargo Bank v. Neilsen      Modification     Docket     Sup.Ct. Docket
178 Cal.App.4th 602 – 1st Dist. (A122626)  10/22/09 (Mod. filed 11/10/09)     Petition for review by Cal Supreme Ct. DENIED 2/10/10CIRCUITY OF PRIORITY: The Court follows the rule in Bratcher v. Buckner, even though Bratcher involved a judgment lien and two deeds of trust and this case involves three deeds of trust. The situation is that A, B & C have liens on the subject property, and A then subordinates his lien to C’s lien. The problem with this is that C appears to be senior to A, which is senior to B, which is senior to C, so that each lien is senior and junior to one of the other liens.

The Court held that the lien holders have the following priority: (1) C is paid up to the amount of A’s lien, (2) if the amount of A’s lien exceeds C’s lien, A is paid the amount of his lien, less the amount paid so far to C, (3) B is then paid in full, (4) C is then paid any balance still owing to C, (5) A is then paid any balance still owing to A.

This is entirely fair because A loses priority as to the amount of C’s lien, which conforms to the intent of the subordination agreement. B remains in the same position he would be in without the subordination agreement since his lien remains junior only to the amount of A’s lien. C steps into A’s shoes only up to the amount of A’s lien.

NOTE: The odd thing about circuity of priority cases is that they result in surplus proceeds after a foreclosure sale being paid to senior lienholders. Normally, only junior lienholders and the foreclosed out owner are entitled to share in surplus proceeds, and the purchaser takes title subject to the senior liens.Schmidli v. Pearce     Docket
178 Cal.App.4th 305 – 3rd Dist. (C058270)  10/13/09      Case complete 12/15/09MARKETABLE RECORD TITLE ACT: This case was decided under the pre-2007 version of Civil Code Section 882.020, which provided that a deed of trust expires after 10 years if the maturity date is “ascertainable from the record”. The court held that this provision was not triggered by a Notice of Default, which set forth the maturity date and which was recorded prior to expiration of the 10-year period. NOTE: In 2007, C.C. Section 882.020 was amended to make it clear that the 10-year period applies only where the maturity date is shown in the deed of trust itself.Nielsen v. Gibson     Docket
178 Cal.App.4th 318 – 3rd Dist. (C059291)  10/13/09     Case complete 12/15/09ADVERSE POSSESSION: 1. The “open and notorious” element of adverse possession was satisfied where plaintiff possessed the subject property by actual possession under such circumstances as to constitute reasonable notice to the owner. Defendant was charged with constructive knowledge of plaintiff’s possession, even though defendant was out of the country the entire time and did not have actual knowledge.

2. The 5-year adverse possession period is tolled under C.C.P. Section 328 for up to 20 years if the defendant is “under the age of majority or insane”. In the unpublishedportion of the opinion the court held that although the defendant had been ruled incompetent by a court in Ireland, there was insufficient evidence that defendant’s condition met the legal definition of “insane”.Ricketts v. McCormack     Docket     Sup.Ct. Docket
177 Cal.App.4th 1324 – 2nd Dist. (B210123)  9/27/09     Petition for review by Cal Supreme Ct. DENIED 12/17/09RECORDING LAW: Civil Code Section 2941(c) provides in part, “Within two business days from the day of receipt, if received in recordable form together with all required fees, the county recorder shall stamp and record the full reconveyance or certificate of discharge.” In this class action lawsuit against the County recorder, the court held that indexing is a distinct function, separate from recording a document, and is not part of section 2941(c)’s stamp-and-record requirement.

The court distinguished indexing, stamping and recording:
Stamping: The “stamping” requirement of Section 2941(c) is satisfied when the Recorder endorses on a reconveyance the order of receipt, the day and time of receipt and the amount of fees paid.
Recording: The reconveyance is “recorded” once the Recorder has confirmed the document meets all recording requirements, created an entry for the document in the “Enterprise Recording Archive” system, calculated the required fees and confirmed payment of the correct amount and, finally, generated a lead sheet containing, among other things, a bar code, a permanent recording number and the words “Recorded/Filed in Official Records.”
Indexing: Government Code Section 27324 requires all instruments “presented for recordation” to “have a title or titles indicating the kind or kinds of documents contained therein,” and the recorder is “required to index only that title or titles captioned on the first page of a document.Starlight Ridge South Homeowner’s Assn. v. Hunter-Bloor     Docket
177 Cal.App.4th 440 – 4th Dist., Div. 2 (E046457)  8/14/09 (Pub. Order 9/3/09)     Case complete 10/19/09CC&R’s: Under Code Civ. Proc. Section 1859, where two provisions appear to cover the same matter, and are inconsistent, the more specific provision controls over the general provision. Here the provision of CC&R’s requiring each homeowner to maintain a drainage ditch where it crossed the homeowners’ properties was a specific provision that controlled over a general provision requiring the homeowner’s association to maintain landscape maintenance areas.First American Title Insurance Co. v. XWarehouse Lending Corp.     Docket
177 Cal.App.4th 106 – 1st Dist. (A119931)  8/28/09      Case complete 10/30/09TITLE INSURANCE: A loan policy provides that “the owner of the indebtedness secured by the insured mortgage” becomes an insured under the loan policy. Normally, this means that an assignee becomes an insured. However, where the insured lender failed to disburse loan proceeds for the benefit of the named borrower, an indebtedness never existed, and the warehouse lender/assignee who disbursed money to the lender did not become an insured. The court pointed out that the policy insures against defects in the mortgage itself, but not against problems related to the underlying debt.

NOTE: In Footnote 8 the court distinguishes cases upholding the right of a named insured or its assignee to recover from a title insurer for a loss due to a forged note or forged mortgage because in those cases, and unlike this case, moneys had been actually disbursed or credited to the named borrower by either the lender or its assignee.Wells Fargo v. D & M Cabinets     Docket
177 Cal.App.4th 59 – 3rd Dist. (C058486)  8/28/09     Case complete 10/28/09JUDGMENTS: A judgment creditor, seeking to sell an occupied dwelling to collect on a money judgment, may not bypass the stringent requirements of C.C.P. Section 704.740 et seq. when the sale is conducted by a receiver appointed under C.C.P Section 708.620. The judgment creditor must comply with Section 704.740, regardless of whether the property is to be sold by a sheriff or a receiver.Sequoia Park Associates v. County of Sonoma     Docket     Sup.Ct. Docket
176 Cal.App.4th 1270 – 1st Dist. (A120049)  8/21/09     Petition for review by Cal Supreme Ct. DENIED 12/2/09PREEMPTION: A County ordinance professing to implement the state mobilehome conversion statutes was preempted for the following reasons: (1) Gov. Code Section 66427.5 expressly preempts the power of local authorities to inject other factors when considering an application to convert an existing mobilehome park from a rental to a resident-owner basis, (2) the ordinance is impliedly preempted because the Legislature has established a dominant role for the state in regulating mobilehomes, and has indicated its intent to forestall local intrusion into the particular terrain of mobilehome conversions and (3) the County’s ordinance duplicates several features of state law, a redundancy that is an established litmus test for preemption.Citizens for Planning Responsibly v. County of San Luis Obispo     Docket     Sup.Ct. Docket
176 Cal.App.4th 357 – 2nd Dist (B206957)  8/4/09     Petition for review by Cal Supreme Ct. DENIED 10/14/09PREEMPTION: The court held that the State Aeronautics Act, which regulates the development and expansion of airports, did not preempt an initiative measure adopted by the voters because none of the following three factors necessary to establish preemption was present: (1) The Legislature may so completely occupy the field in a matter of statewide concern that all, or conflicting, local legislation is precluded, (2) the Legislature may delegate exclusive authority to a city council or board of supervisors to exercise a particular power over matters of statewide concern, or (3) the exercise of the initiative power would impermissibly interfere with an essential governmental function.Delgado v. Interinsurance Exchange of the Auto Club of So. Cal.     Docket
47 Cal.4th 302 – Cal. Supreme Court (S155129)  8/3/09INSURANCE / BAD FAITH: The case is not as relevant to title insurance as the lower court case, which held that an insurance company acted in bad faith as a matter of law where a potential for coverage was apparent from the face of the complaint. The Supreme Court reversed, basing its decision on the meaning of “accident” in a homeowner’s policy, and holding that an insured’s unreasonable belief in the need for self-defense does not turn the resulting intentional act of assault and battery into “an accident” within the policy’s coverage clause. Therefore, the insurance company had no duty to defend its insured in the lawsuit brought against him by the injured party.1538 Cahuenga Partners v. Turmeko Properties     Docket
176 Cal.App.4th 139 – 2nd Dist. (B209548)  7/31/09     Case complete 10/7/09RECONVEYANCE: [This is actually a civil procedure case that it not of much interest to title insurance business, but it is included here because the underlying action sought to cancel a reconveyance.] The court ordered that a reconveyance of a deed of trust be cancelled pursuant to a settlement agreement. The main holding was that a trial court may enforce a settlement agreement against a party to the settlement that has interest in the subject matter of the action even if the party is not named in the action, where the non-party appears in court and consents to the settlement.Lee v. Lee     Docket
175 Cal.App.4th 1553 – 5th Dist. (F056107)  7/29/09     Case complete 9/28/09DEEDS / STATUTE OF FRAUDS:
1. The Statute of Frauds does not apply to an executed contract, and a deed that is executed by the grantor and delivered to the grantee is an executed contract. The court rejected defendants’ argument that the deed did not reflect the terms of sale under a verbal agreement.
2. While the alteration of an undelivered deed renders the conveyance void, the alteration of a deed after it has been delivered to the grantee does not invalidate the instrument as to the grantee. The deed is void only as to the individuals who were added as grantees after delivery.White v. Cridlebaugh     Docket
178 Cal.App.4th 506 – 5th Dist. (F053843)  7/29/09  (Mod. 10/20/09)     Case complete 12/21/09MECHANIC’S LIENS: Under Business and Professions Code Section 7031, a property owner may recover all compensation paid to an unlicensed contractor, in addition to not being liable for unpaid amounts. Furthermore, this recovery may not be offset or reduced by the unlicensed contractor’s claim for materials or other services.Linthicum v. Butterfield     Docket     Sup.Ct. Docket
175 Cal.App.4th 259 – 2nd Dist. (B199645)  6/24/09     Petition for review by Cal Supreme Ct. DENIED 9/9/09NOTE: This is a new opinion following a rehearing. The only significant changes from the original opinion filed 4/2/09 (modified 4/8/09) involve the issue of a C.C.P. 998 offer, which is not a significant title insurance or escrow issue.
EASEMENTS: The court quieted title to an easement for access based on the doctrine of “balancing conveniences ” or “relative hardship”. Prohibiting the continued use of the roadway would cause catastrophic loss to the defendants and insignificant loss to the plaintiffs. However, the court remanded the case for the trial court to determine the width of the easement, which should be the minimal width necessary. The court reversed the judgment insofar as it awarded a utility easement to the defendants because they did not seek to quiet title to an easement for utilities, even though they denied the material allegations of that cause of action.United Rentals Northwest v. United Lumber Products     Docket
174 Cal.App.4th 1479 – 5th Dist. (F055855)  6/18/09     Case complete 8/18/09MECHANIC’S LIENS: Under Civil Code Section 3106, a “work of improvement” includes the demolition and/or removal of buildings. The court held that lumber drying kilns are “buildings” so the contractor who dismantled and removed them was entitled to a mechanic’s lien.People v. Shetty     Docket     Sup.Ct. Docket
174 Cal.App.4th 1488 – 2nd Dist. (B205061)  6/18/09     Petition for review by Cal Supreme Ct. DENIED 9/30/09HOME EQUITY SALES CONTRACT ACT: This case is not significant from a title insurance standpoint, but it is interesting because it is an example of a successful prosecution under the Home Equity Sales Contract Act (Civil Code Section 1695 et seq.).Strauss v. Horton     Modification     Docket
46 Cal.4th 364 – Cal. Supreme Court (S168047)  5/26/09SAME SEX MARRIAGE: The California Supreme Court upheld Proposition 8, which amended the California State Constitution to provide that: “Only marriage between a man and a woman is valid or recognized in California.” Proposition 8 thereby overrode portions of the ruling of In re Marriage Cases, which allowed same-sex marriages. But the Court upheld the marriages that were performed in the brief time same-sex marriage was legal between June 17, 2008 (In re Marriage Cases) through November 5, 2008 (Proposition 8).In re Marriage of Lund     Docket
174 Cal.App.4th 40 – 4th Dist., Div. 3 (G040863)  5/21/09     Case complete 7/27/09COMMUNITY PROPERTY: An agreement accomplished a transmutation of separate property to community property even though it stated that the transfer was “for estate planning purposes”. A transmutation either occurs for all purposes or it doesn’t occur at all.St. Marie v. Riverside County Regional Park, etc.     Docket
46 Cal.4th 282 – Cal. Supreme Court (S159319)  5/14/09OPEN SPACE DEDICATION: Property granted to a Regional Park District is not “actually dedicated” under Public Resources Code Section 5540 for open space purposes until the district’s Board of Directors adopts a resolution dedicating the property for park or open space purposes. Therefore, until the Board of Directors adopts such a resolution, the property may be sold by the District without voter or legislative approval.Manhattan Loft v. Mercury Liquors     Docket     Sup.Ct. Docket
173 Cal.App.4th 1040 – 2nd Dist. (B211070)  5/6/09     Petition for review by Cal Supreme Ct. DENIED 8/12/09LIS PENDENS: An arbitration proceeding is not an “action” that supports the recordation of a notice of pendency of action. The proper procedure is for a party to an arbitration agreement to file an action in court to support the recording of a lis pendens, and simultaneously file an application to stay the litigation pending arbitration.Murphy v. Burch     Docket
46 Cal.4th 157 – Cal. Supreme Court (S159489)  4/27/09EASEMENT BY NECESSITY: This case contains a good discussion of the law of easements by necessity, which the court held did not apply in this case to provide access to plaintiff’s property. This means plaintiff’s property is completely landlocked because the parties had already stipulated that a prescriptive easement could not be established.

An easement by necessity arises by operation of law when 1) there is a strict necessity as when a property is landlocked and 2) the dominant and servient tenements were under the same ownership at the time of the conveyance giving rise to the necessity. The second requirement, while not categorically barred when the federal government is the common grantor, requires a high burden of proof to show 1) the intent of Congress to establish the easement under federal statutes authorizing the patent and 2) the government’s lack of power to condemn the easement. Normally, a reservation of an easement in favor of the government would not be necessary because the government can obtain the easement by condemnation.

The court pointed out that there is a distinction between an implied grant and implied reservation, and favorably quotes a treatise that observes: “an easement of necessity may be created against the government, but the government agency cannot establish an easement by necessity over land it has conveyed because its power of eminent domain removes the strict necessity required for the creation of an easement by necessity.”Abernathy Valley, Inc. v. County of Solano     Docket
173 Cal.App.4th 42 – 1st Dist. (A121817)  4/17/09     Case complete 6/22/09SUBDIVISION MAP ACT: This case contains a very good history of California’s Subdivision Map Act statutes. The court held that parcels shown on a 1909 map recorded pursuant to the 1907 subdivision map law are not entitled to recognition under the Subdivision Map Act’s grandfather clause (Government Code Section 66499.30) because the 1907 act did not regulate the “design and improvement of subdivisions”. The court also held that a local agency may deny an application for a certificate of compliance that seeks a determination that a particular subdivision lot complies with the Act, where the effect of issuing a certificate would be to effectively subdivide the property without complying with the Act.Linthicum v. Butterfield     Modification     Docket     Sup.Ct. Docket
172 Cal.App.4th 1112 – 2nd Dist. (B199645)  4/2/09
SEE NEW OPINION FILED 6/24/09
EASEMENTS: The court quieted title to an easement for access based on the doctrine of “balancing conveniences ” or “relative hardship”. Prohibiting the continued use of the roadway would cause catastrophic loss to the defendants and insignificant loss to the plaintiffs. However, the court remanded the case for the trial court to determine the width of the easement, which should be the minimal width necessary. The court reversed the judgment insofar as it awarded a utility easement to the defendants because they did not seek to quiet title to an easement for utilities, even though they denied the material allegations of that cause of action.McAvoy v. Hilbert     Docket
172 Cal.App.4th 707 – 4th Dist., Div 1 (D052802)  3/24/09     Case complete 5/27/09ARBITRATION: C.C.P. Section 1298 requires that an arbitration provision in a real estate contract be accompanied by a statutory notice and that the parties indicate their assent by placing their initials on an adjacent space or line. The court held that a listing agreement that is part of a larger transaction for the sale of both a business and real estate is still subject to Section 1298, and refused to enforce an arbitration clause that did not comply with that statute.Peak-Las Positas Partners v. Bollag     Modification     Docket
172 Cal.App.4th 101 – 2nd Dist. (B205091)  3/16/09     Case complete 5/27/09ESCROW: Amended escrow instructions provided for extending the escrow upon mutual consent which “shall not be unreasonably withheld or delayed”. The court held that substantial evidence supported the trial court’s determination that the seller’s refusal to extend escrow was unreasonable. The court pointed out the rule that equity abhors a forfeiture and that plaintiff had paid a non-refundable deposit of $465,000 and spent $5 million in project costs to obtain a lot line adjustment that was necessary in order for the property to be sold.Alfaro v. Community Housing Improvement System & Planning Assn     Modification     Docket     Sup.Ct. Docket
171 Cal.App.4th 1356 6th Dist. (H031127)  2/19/09     Petition for review by Cal Supreme Ct. DENIED 5/13/09CC&R’s: The court upheld the validity of recorded CC&R’s containing an affordable housing restriction that required property to remain affordable to buyers with low to moderate income. The court reached several conclusions:
1. Constructive notice of recorded CC&R’s is imparted even if they are not referenced in a subsequent deed,
2. CC&R’s may describe an entire tract, and do not need to describe individual lots in the tract,
3. An affordable housing restriction is a reasonable restraint on alienation even if it is of indefinite duration,
4. Defendants had a duty as sellers to disclose the existence of the CC&R’s. Such disclosure was made if plaintiffs were given, prior to close of escrow, preliminary reports that disclosed the CC&R’s.
5. The fact that a victim had constructive notice of a matter from public records is no defense to fraud. The existence of such public records may be relevant to whether the victim’s reliance was justifiable, but it is not, by itself, conclusive.
6. In the absence of a claim that defendants somehow prevented plaintiffs from reading the preliminary reports or deeds, or misled them about their contents, plaintiffs cannot blame defendants for their own neglect in reading the reports or deeds. Therefore, the date of discovery of alleged fraud for failing to disclose the affordable housing restriction would be the date plaintiffs received their preliminary reports or if they did not receive a preliminary report, the date they received their deeds.Kwok v. Transnation Title Insurance Company     Docket     Sup.Ct. Docket
170 Cal.App.4th 1562 – 2nd Dist. (B207421)  2/10/09     Petition for review by Cal Supreme Ct. DENIED 4/29/09TITLE INSURANCE: Plaintiffs did not succeed as insureds “by operation of law” under the terms of the title insurance policy after transfer of the property from a wholly owned limited liability company, of which appellants were the only members, to appellants as trustees of a revocable family trust. This case highlights the importance of obtaining a 107.9 endorsement, which adds the grantee as an additional insured under the policy.Pro Value Properties v. Quality Loan Service Corp.     Docket
170 Cal.App.4th 579 – 2nd Dist. (B204853)  1/23/09     Case complete 3/27/09TRUSTEE’S SALES: A Trustee’s Deed was void because the trustee failed to record a substitution of trustee. The purchaser at the sale was entitled to a return of the money paid plus interest. The interest rate is the prejudgment interest rate of seven percent set forth in Cal. Const., Art. XV, Section 1. A trustee’s obligations to a purchaser are based on statute and not on a contract. Therefore, Civil Code Section 3289 does not apply, since it only applies to a breach of a contract that does not stipulate an interest rate.Sixells v. Cannery Business Park     Docket     Sup.Ct. Docket
170 Cal.App.4th 648 – 3rd Dist. (C056267)  12/29/08     Petition for review by Cal Supreme Ct. DENIED 3/25/09CONTRACTS: The Subdivision Map Act (Gov. Code, Section 66410 et seq.) prohibits the sale of a parcel of real property until a final subdivision map or parcel map has been filed unless the contract to sell the property is “expressly conditioned” upon the approval and filing of a final map (66499.30(e)). Here, the contract satisfied neither requirement because it allowed the purchaser to complete the purchase if, at its election, the subject property was made into a legal parcel by recording a final map or if the purchaser “waived” the recording of a final map. Therefore the contract was void.Patel v. Liebermensch     Docket
45 Cal.4th 344 – Cal. Supreme Court (S156797)  12/22/08SPECIFIC PERFORMANCE: The material factors required for a  written contract are the seller, the buyer, the price to be paid, the time and manner of payment, and the property to be transferred, describing it so it may be identified. Here, specific performance of an option was granted even though it was not precise as to the time and manner of payment because where a contract for the sale of real property specifies no time of payment, a reasonable time is allowed. The manner of payment is also a term that may be supplied by implication.In re Marriage of Brooks and Robinson     Docket     Sup.Ct. Docket
169 Cal.App.4th 176 – 4th Dist., Div. 2 (E043770)  12/16/08     Request for review and depublication by Cal Supreme Ct. DENIED 3/25/09COMMUNITY PROPERTY: The act of taking title to property in the name of one spouse during marriage with the consent of the other spouse effectively removes that property from the general presumption that the property is community property. Instead, there is a presumption that the parties intended title to be held as stated in the deed. This presumption can only be overcome by clear and convincing evidence of a contrary agreement, and not solely by tracing the funds used to purchase the property or by testimony of an intention not disclosed at the time of the execution of the conveyance. Because the court found that there was no agreement to hold title other than as the separate property of the spouse who acquired title in her own name, it did not reach the issue of whether a purchaser from that spouse was a BFP or would be charged with knowledge of that the seller’s spouse had a community property interest in the property.The Formula, Inc. v. Superior Court     Docket
168 Cal.App.4th 1455 – 3rd Dist. (C058894)  12/10/09     Case complete 2/10/09LIS PENDENS: A notice of litigation filed in another state is not authorized for recording under California’s lis pendens statutes. An improperly filed notice of an action in another state is subject to expungement by a California court, but not under the authority of C.C.P. Section 405.30, and an order of expungement is given effect by being recorded in the chain of title to overcome the effect of the earlier filing.Ekstrom v. Marquesa at Monarch Beach HOA     Docket     Sup.Ct. Docket
168 Cal.App.4th 1111 – 4th Dist., Div. 3 (G038537)  12/1/08     Depublication request DENIED 3/11/09CC&R’s: A provision in CC&R’s requiring all trees on a lot to be trimmed so as to not exceed the roof of the house on the lot, unless the tree does not obstruct views from other lots, applies to palm trees even though topping a palm tree will kill it. All trees means “all trees”, so palm trees are not exempt from the requirement that offending trees be trimmed, topped, or removed.Spencer v. Marshall     Docket
168 Cal.App.4th 783 – 1st Dist. (A119437)  11/24/08     Case complete 1/26/09HOME EQUITY SALES: The Home Equity Sales Contract Act applies even where the seller is in bankruptcy and even where the seller’s Chapter 13 Bankruptcy Plan allows the seller to sell or refinance the subject property without further order of the court.Kachlon v. Markowitz     Docket
168 Cal.App.4th 316 – 2nd Dist. (B182816)  11/17/08     Case complete 1/27/09TRUSTEE’S SALES:
1. The statutorily required mailing, publication, and delivery of notices in nonjudicial foreclosure, and the performance of statutory nonjudicial foreclosure procedures, are privileged communications under the qualified, common-interest privilege, which means that the privilege applies as long as there is no malice. The absolute privilege for communications made in a judicial proceeding (the “litigation privilege”) does not apply.
2. Actions seeking to enjoin nonjudicial foreclosure and clear title based on the provisions of a deed of trust are actions on a contract, so an award of attorney fees under Civil Code Section 1717 and provisions in the deed of trust is proper.
3. An owner is entitled to attorney fees against the trustee who conducted trustee’s sale proceedings where the trustee did not merely act as a neutral stakeholder but rather aligned itself with the lender by denying that the trustor was entitled to relief.Hines v. Lukes     Docket
167 Cal.App.4th 1174 – 2nd Dist. (B199971)  10/27/08     Case complete 12/31/08EASEMENTS: [Not significant from a title insurance standpoint]. The underlying dispute concerns an easement but the case involves only civil procedure issues pertaining to the enforcement of a settlement agreement.Satchmed Plaza Owners Association v. UWMC Hospital Corp.     Docket
167 Cal.App.4th 1034 – 4th Dist., Div. 3 (G038119)  10/23/08     Case complete 12/23/08RIGHT OF FIRST REFUSAL: [Not significant from a title insurance standpoint]. The underlying dispute concerns a right of first refusal but the case involves only civil procedure issues pertaining to a party’s waiver of its right to appeal where it has accepted the benefits of the favorable portion of judgment.Gray v. McCormick     Docket     Sup.Ct. Docket
167 Cal.App.4th 1019 – 4th Dist., Div. 3 (G039738)  10/23/08     Petition for review by Cal Supreme Ct. DENIED 1/14/09EASEMENTS: Exclusive easements are permitted under California law, but the use by the owner of the dominant tenement is limited to the purposes specified in the grant of easement, not all conceivable uses of the property.In re Estate of Felder     Docket
167 Cal.App.4th 518 – 2nd Dist.   (B205027)  10/9/08     Case complete 12/11/08CONTRACTS: [Not significant from a title insurance standpoint]. The case held that an estate had the right to retain the entire deposit upon a purchaser’s breach of a sales contract even though the estate had only a 1/2 interest in the subject property.Secrest v. Security National Mortgage Loan Trust     Order Modifying Opinion     Docket     Sup.Ct. Docket
167 Cal.App.4th 544 – 4th Dist., Div. 3 (G039065)  10/9/08, Modified 11/3/08     Petition for review by Cal Supreme Ct. DENIED 12/17/08LOAN MODIFICATION: Because a note and deed of trust come within the statute of frauds, a Forbearance Agreement also comes within the statute of frauds pursuant to Civil Code section 1698. Making the downpayment required by the Forbearance Agreement was not sufficient part performance to estop Defendants from asserting the statute of frauds because payment of money alone is not enough as a matter of law to take an agreement out of the statute, and the Plaintiffs have legal means to recover the downpayment if they are entitled to its return. In addition to part performance, the party seeking to enforce the contract must have changed position in reliance on the oral contract to such an extent that application of the statute of frauds would result in an unjust or unconscionable loss, amounting in effect to a fraud.FDIC v. Dintino     Docket
167 Cal.App.4th 333 – 4th Dist., Div. 1 (D051447)  9/9/08 (Pub. Order 10/2/08)     Case complete 12/2/08TRUST DEEDS: A lender who mistakenly reconveyed a deed of trust could not sue under the note because it would violate the one action rule. However, the lender prevailed on its unjust enrichment cause of action. The applicable statute of limitations was the 3-year statute for actions based on fraud or mistake, and not the 4-year statute for actions based on contract. Nevertheless, the action was timely because the statute did not begin to run until the lender reasonably discovered its mistake, and not from the date of recordation of the reconveyance. Finally, the court awarded defendant attorney’s fees attributable to defending the contract cause of action because defendant prevailed on that particular cause of action even though he lost the lawsuit.California Coastal Commission v. Allen     Docket     Sup.Ct. Docket
167 Cal.App.4th 322 – 2nd Dist. (B197974)  10/1/08     Petition for review by Cal Supreme Ct. DENIED 1/14/09HOMESTEADS:
1. The assignees of a judgment properly established their rights as assignees by filing with the clerk of the court an acknowledgement of assignment of judgment.
2. The subject property was not subject to a homestead exemption because the debtor transferred the property to a corporation of which he was the sole shareholder. The homestead exemption only applies to the interest of a natural person in a dwelling.
3. The debtor could not claim that he was only temporarily absent from a dwelling in order to establish it as his homestead where he leased it for two years. This is true even though the debtor retained the right to occupy a single car section of the garage and the attic.In re Marriage of Holtemann     Docket     Sup.Ct. Docket
162 Cal.App.4th 1175 – 2nd Dist. (B203089)  9/15/08     Petition for review by Cal Supreme Ct. DENIED 12/10/08COMMUNITY PROPERTY: Transmutation of separate property to community property requires language which expressly states that the characterization or ownership of the property is being changed. Here, an effective transmutation occurred because the transmutation agreement clearly specified that a transmutation was occurring and was not negated by arguably confusing language in a trust regarding the parties’ rights to terminate the trust. The court also stated that it was not aware of any authority for the proposition that a transmutation can be conditional or temporary. However, while questioning whether a transmutation can be conditional or temporary, the court did not specifically make that holding because the language used by the parties was not conditional.Mission Shores Association v. Pheil     Docket
166 Cal.App.4th 789 – 4th Dist., Div. 2 (E043932)  9/5/08     Case complete 11/7/08CC&R’s: Civil Code Section 1356 allows a court to reduce a super-majority voting requirement to amend CC&R’s where the court finds that the amendment is reasonable. Here the court reduced the 2/3 majority requirement to a simple majority for an amendment to limit rentals of homes to 30 days or more.Zanelli v. McGrath     Docket
166 Cal.App.4th 615 – 1st Dist. (A117111)  9/2/08     Case complete 11/4/08EASEMENTS:
1. The doctrine of merger codified in Civil Code Sections 805 and 811 applies when “the right to the servitude,” and “the right to the servient tenement” are not vested in a single individual, but in the same persons;

2. The doctrine of merger applies regardless of whether the owners held title as joint tenants or tenants in common. Also, the fact that one owner held his interest in one of the properties as trustee for his inter vivos revocable trust does not preclude merger because California law recognizes that when property is held in this type of trust the settlor has the equivalent of full ownership of the property. (If he had held title only in a representative capacity as a trustee for other beneficiaries under the terms of an irrevocable trust, then his ownership might not result in extinguishment by merger because he would only hold the legal title for the benefit of others.) The court cites Galdjie v. Darwish (2003) 113 Cal.App.4th 1331, stating that a revocable inter vivos trust is recognized as simply a probate avoidance device, but does not prevent creditors of the settlers from reaching trust property.

(3) After being extinguished by merger, an easement is not revived upon severance of the formerly dominant and servient parcels unless it is validly created once again.Ritter & Ritter v. The Churchill Condominium Assn.     Docket
166 Cal.App.4th 103 – 2nd Dist. (B187840) 7/22/08  (pub. order 8/21/08)     Case complete 10/21/08HOMEOWNERS’ ASSOCIATIONS: A member of a condominium homeowners’ association can recover damages from the association which result from a dangerous condition negligently maintained by the association in the common area. However, the court found in favor of the individual directors because a greater degree of fault is necessary to hold unpaid individual board members liable, and such greater degree of fault was not present here.Kempton v. City of Los Angeles     Docket     Sup.Ct. Docket
165 Cal.App.4th 1344 – 2nd Dist. (B201128) 8/13/08     Request for Depublication by Cal Supreme Ct. DENIED 11/12/08NUISANCE: A private individual may bring an action against a municipality to abate a public nuisance when the individual suffers harm that is specially injurious to himself, or where the nuisance is a public nuisance per se, such as blocking a public sidewalk or road. The court held that plaintiff’s assertions that neighbors’ fences were erected upon city property, prevent access to plaintiff’s sidewalk area, and block the sightlines upon entering and exiting their garage were sufficient to support both a public nuisance per se and specific injury.Claudino v. Pereira     Docket     Sup.Ct. Docket
165 Cal.App.4th 1282 – 3rd Dist. (C054808) 8/12/08     Petition for review by Cal Supreme Ct. DENIED 11/12//08SURVEYS: Determining the location of a boundary line shown on a plat recorded pursuant to the 1867 Townsite Acts requires an examination of both the plat and the surveyor’s field notes. Here, the plat showed the boundary as a straight line, but the court held that the boundary followed the center line of a gulch because the field notes stated that the boundary was “down said gulch”.Zack’s, Inc. v. City of Sausalito     Docket
165 Cal.App.4th 1163 – 1st Dist. (A118244) 8/11/08     Case complete 10/14/08TIDELANDS / PUBLIC STREETS: A statute authorizing the City’s lease of tidelands does not supersede other state laws establishing procedures for the abandonment of public streets. Because the City failed to follow the normal procedure for abandonment of the portion of the street upon which it granted a lease, the leasehold was not authorized and can therefore be deemed a nuisance.Gehr v. Baker Hughes Oil Field Operations     Docket     Sup.Ct. Docket
165 Cal.App.4th 660 – 2nd Dist. (B201195) 7/30/08     Petition for review by Cal Supreme Ct. DENIED 10/16/08NUISANCE: Plaintiff purchased from Defendant real property that was contaminated, and Defendant had begun the remediation process. The 3-year statute of limitations for suing under a permanent nuisance theory had expired. So Plaintiff sued for nuisance damages under a continuing nuisance theory, seeking interest rate differential damages based on the difference in the interest rate between an existing loan and a loan that plaintiff could have obtained if not for the contamination.

The court held that plaintiff’s claim for interest rate differential damages is actually a claim for diminution in value, which may not be recovered under a continuing nuisance theory. Damages for diminution in value may only be recovered for permanent, not continuing, nuisances. When suing for a continuing nuisance, future or prospective damages are not allowed, such as damages for diminution in the value of the subject property. A nuisance can only be considered “continuing” if it can be abated, and therefore a plaintiff suing under this theory may only recover the costs of abating the nuisance.

If the nuisance has inflicted a permanent injury on the land, the plaintiff generally must bring a single lawsuit for all past, present, and future damages within three years of the creation of the nuisance. But if the nuisance is one which may be discontinued at any time, it is considered continuing in character and persons harmed by it may bring successive actions for damages until the nuisance is abated. Recovery is limited, however, to actual injury suffered prior to commencement of each action.Witt Home Ranch v. County of Sonoma     Docket     Sup.Ct. Docket
165 Cal.App.4th 543 – 1st Dist. (A118911) 7/29/08     Petition for review by Cal Supreme Ct. DENIED 5/28/08SUBDIVISION MAP ACT: This case contains a good history of California’s Subdivision Map Act statutes. The court held that the laws governing subdivision maps in 1915 did not regulate the “design and improvement of subdivisions,” as required by the grandfather clause of Government Code Section 66499.30. The subdivision map in this case was recorded in 1915 and no lots were subsequently conveyed, so the map does not create a valid subdivision.T.O. IX v. Superior Court     Docket     Sup.Ct. Docket
165 Cal.App.4th 140 – 2nd Dist. (B203794) 7/24/08     Petition for review by Cal Supreme Ct. DENIED 9/10/08MECHANIC’S LIENS: A mechanic’s lien claimant recorded a mechanic’s lien against each of the nine parcels in a project, each lien for the full amount due under the contract. The court held that defendant could record a single release bond under Civil Code Section 3143 to release all of the liens.Kassir v. Zahabi     Docket
164 Cal.App.4th 1352 – 4th Dist., Div. 3 (G038449) 3/5/08 (Pub. Order 4/3/08, Received 7/16/08)     Case complete 5/9/08SPECIFIC PERFORMANCE: The trial court ordered Defendant to specifically perform his contract to sell real property to Plaintiff, and further issued a judgment ordering Defendant to pay Plaintiff for rents accruing during the time Defendant was able to perform the agreement but refused to do so. The court held that because the property was overencumbered, Defendant would have received nothing under the agreement and no offset was required.

The court explained that because execution of the judgment in a specific performance action will occur later than the date of performance provided by the contract, financial adjustments must be made to relate their performance back to the contract date, namely: 1) when a buyer is deprived of possession of the property pending resolution of the dispute and the seller receives rents and profits, the buyer is entitled to a credit against the purchase price for the rents and profits from the time the property should have been conveyed to him, 2) a seller also must be treated as if he had performed in a timely fashion and is entitled to receive the value of his lost use of the purchase money during the period performance was delayed, 3) if any part of the purchase price has been set aside by the buyer with notice to the seller, the seller may not receive credit for his lost use of those funds and 4) any award to the seller representing the value of his lost use of the purchase money cannot exceed the rents and profits awarded to the buyer, for otherwise the breaching seller would profit from his wrong.Grant v. Ratliff     Docket     Sup.Ct. Docket
164 Cal.App.4th 1304 – 2nd Dist. (B194368) 7/16/08     Request for depublication by Cal Supreme Ct. DENIED 10/1/08PRESCRIPTIVE EASEMENTS: The plaintiff/owner of Parcel A sought to establish a prescriptive easement to a road over Parcel B. In order to establish the requisite 5-year period of open and notorious possession, the plaintiff needed to include the time that the son of the owner of Parcel B spent living in a mobile home on Parcel A. The court held that the son’s use of Parcel A was not adverse but was instead a matter of “family accommodation” and, therefore, a prescriptive easement was not established. The court also discussed: 1) a party seeking to establish a prescriptive easement has the burden of proof by clear and convincing evidence and 2) once the owner of the dominant tenement shows that use of an easement has been continuous over a long period of time, the burden shifts to the owner of the servient tenement to show that the use was permissive, but the servient tenement owner’s burden is a burden of producing evidence, and not a burden of proof.SBAM Partners v. Wang     Docket
164 Cal.App.4th 903 – 2nd Dist. (B204191) 7/9/08     Case complete 9/10/08HOMESTEADS: Under C.C.P. Section 704.710, a homestead exemption is not allowed on property acquired by the debtor after the judgment has been recorded unless it was purchased with exempt proceeds from the sale, damage or destruction of a homestead within the six-month safe harbor period.Christian v. Flora     Docket
164 Cal.App.4th 539 – 3rd Dist. (C054523) 6/30/08     Case complete 9/2/08EASEMENTS: Where parcels in a subdivision are resubdivided by a subsequent parcel map, the new parcel map amends the provisions of any previously recorded parcel map made in compliance with the Map Act. Here, although the deeds to plaintiffs referred to the original parcel map, since the intent of the parties was that the easement shown on the amended parcel map would be conveyed, the grantees acquired title to the easement shown on the amended map.Lange v. Schilling     Docket
163 Cal.App.4th 1412 – 3rd Dist. (C055471) 5/28/08; pub. order 6/16/08     Case Complete 8/18/08REAL ESTATE AGENTS: The clear language of the standard California real estate purchase agreement precludes an award of attorney’s fees if a party does not attempt mediation before commencing litigation. Because plaintiff filed his lawsuit before offering mediation, there was no basis to award attorney’s fees.Talbott v. Hustwit     Docket     Sup.Ct. Docket
164 Cal.App.4th 148 – 4th Dist., Div. 3 (G037424) 6/20/08     Petition for review and depublication DENIED by Cal Supreme Ct. 9/24/08GUARANTEES:
1. C.C.P. 580a, which requires an appraisal of the real property security before the court may issue a deficiency judgment, does not apply to an action against a guarantor.
2. A lender cannot recover under a guaranty where there the debtor and guarantor already have identical liability, such as with general partners or trustees of a revocable trust in which the debtor is the settlor, trustee and primary beneficiary. Here, however, a  guarantee signed by the trustees of the debtors’ trust is enforceable as a “true guarantee” because, although the debtors were the settlors, they were a) secondary, not primary, beneficiaries and b) were not the trustees.Mayer v. L & B Real Estate     Sup.Ct. Docket
43 Cal.4th 1231 – Cal. Supreme Court (S142211) 6/16/08TAX SALES: The one-year statute of limitations for attacking a tax sale does not begin to run against a property owner who is in “undisturbed possession” of the subject property until that owner has actual notice of the tax sale. Ordinarily, a property owner who has failed to pay property taxes has sufficient knowledge to put him on notice that a tax sale might result. However, in this case the property owners did not have notice because they purchased a single piece of commercial property and received a single yearly tax bill. They had no reason to suspect that due to errors committed by the tax assessor, a small portion of their property was being assessed separately and the tax bills were being sent to a previous owner.

NOTE: This creates a hazard for title companies insuring after a tax sale in reliance on the one-year statute of limitations in Revenue and Taxation Code Section 3725.California Golf v. Cooper     Docket     Sup.Ct. Docket
163 Cal.App.4th 1053 – 2nd Dist. (B195211) 6/9/08     Petition for review by Cal Supreme Ct. DENIED 9/17/08TRUSTEE’S SALES:
1. A bidder at a trustee’s sale may not challenge the sale on the basis that the lender previously obtained a decree of judicial foreclosure because the doctrine of election of remedies benefits only the trustor or debtor.
2. A lender’s remedies against a bidder who causes a bank to stop payment on cashier’s checks based on a false affidavit asserting that the checks were lost is not limited to the remedies set forth in CC Section 2924h, and may pursue a cause of  action for fraud against the bidder.
(The case contains a good discussion (at pp. 25 – 26) of the procedure for stopping payment on a cashier’s check by submitting an affidavit to the issuing bank.)Biagini v. Beckham     Docket
163 Cal.App.4th 1000 – 3rd Dist. (C054915) 6/9/08     Case complete 8/11/08DEDICATION:
1. Acceptance of a dedication may be actual or implied. It is actual when formal acceptance is made by the proper authorities, and implied when a use has been made of the property by the public 1) of an  intensity that is reasonable for the nature of the road and 2) for such a length of time as will evidence an intention to accept the dedication. BUT the use in this case was not sufficient because the use was by neighbors whose use did not exceed what was permitted pursuant to a private easement over the same area.
2. A statutory offer of dedication can be revoked as to the public at large by use of the area that is inconsistent with the dedication, but the offer remains open for formal acceptance by the public entity to which the offer was made. Steiner v. Thexton     Docket     Sup.Ct. Docket
Cal.App. 3rd Dist. (C054605) 5/28/08     REVERSED by Cal. Supreme Ct.OPTIONS: A contract to sell real property where the buyer’s performance was entirely conditioned on the buyer obtaining regulatory approval to subdivide the property is an option. An option must be supported by consideration, but was not here, where the buyer could back out at any time. Buyer’s promise to deliver to seller copies “of all information, reports, tests, studies and other documentation” was not sufficient consideration to support the option.In re Marriage Cases     Docket
43 Cal.4th 757 – Cal. Supreme Court (S147999) 5/15/08MARRIAGE: The language of Family Code Section 300 limiting the designation of marriage to a union “between a man and a woman” is unconstitutional and must be stricken from the statute, and the remaining statutory language must be understood as making the designation of marriage available both to opposite-sex and same-sex couples.Harvey v. The Landing Homeowners Association     Docket
162 Cal.App.4th 809 – 4th Dist., Div. 1 (D050263) 4/4/08 (Cert. for Pub. 4/30/08)     Case complete 6/30/08HOMEOWNERS ASSOCIATIONS: The Board of Directors of an HOA has the authority to allow owners to exclusively use common area accessible only to those owners where the following provision of the CC&R’s applied: “The Board shall have the right to allow an Owner to exclusively use portions of the otherwise nonexclusive Common Area, provided that such portions . . . are nominal in area and adjacent to the Owner’s Exclusive Use Area(s) or Living Unit, and, provided further, that such use does not unreasonably interfere with any other Owner’s use . . .” Also, this is allowed under Civil Code Section 1363.07(a)(3)(E).Salma v. Capon     Docket
161 Cal.App.4th 1275 – 1st Dist. (A115057) 4/9/08     Case complete 6/11/08HOME EQUITY SALES: A seller claimed he sold his house for far less than it was worth “due to the duress of an impending trustee’s sale and the deceit of the purchasers”. The case involves procedural issues that are not relevant to this web site. However, it is included here because it demonstrates the kind of mess that can occur when you are dealing with property that is in foreclosure. Be careful, folks.Aviel v. Ng     Docket
161 Cal.App.4th 809 – 1st Dist. (A114930) 2/28/08; pub. order 4/1/08     Case complete 5/6/08LEASES / SUBORDINATION: A lease provision subordinating the lease to “mortgages” also applied to deeds of trust because the two instruments are functionally and legally the same. Therefore a foreclosure of a deed of trust wiped out the lease.People v. Martinez     Docket
161 Cal.App.4th 754 – 4th Dist., Div. 2 (E042427) 4/1/08     Case complete 6/2/08FORGERY: This criminal case involves a conviction for forgery of a deed of trust. [NOTE: The crime of forgery can occur even if the owner actually signed the deed of trust. The court pointed out that “forgery is committed when a defendant, by fraud or trickery, causes another to execute a document where the signer is unaware, by reason of such trickery, that he is executing a document of that nature.”Pacific Hills Homeowners Association v. Prun     Docket
160 Cal.App.4th 1557 – 4th Dist., Div. 3 (G038244) 3/20/08     Case complete 5/27/08CC&R’s: Defendants built a gate and fence within the setback required by the CC&R’s. 1) The court held that the 5-year statute of limitations of C.C.P. 336(b) applies to unrecorded as well as recorded restrictions, so that the shorter 4-year statute of limitations of C.C.P. 337 is inapplicable. 2) The court upheld the trial court’s equitable remedy of requiring the HOA to pay 2/3 of the cost of relocation defendant’s gate based upon the HOA’s sloppiness in not pursuing its case more promptly.Nicoll v. Rudnick     Docket
160 Cal.App.4th 550 – 5th Dist. (F052948) 2/27/08     Case complete 4/28/08WATER RIGHTS: An appropriative water right established in a 1902 judgment applied to the entire 300 acre parcel so that when part of the parcel was foreclosed and subsequently re-sold, the water rights must be apportioned according to the acreage of each parcel, not according to the prior actual water usage attributable to each parcel. NOTE: This case contains a good explanation of California water rights law.Real Estate Analytics v. Vallas     Docket
160 Cal.App.4th 463 – 4th Dist., Div. 1 (D049161) 2/26/08     Case complete 5/29/08SPECIFIC PERFORMANCE: Specific performance is appropriate even where the buyer’s sole purpose and entire intent in buying the property was to earn money for its investors and turn a profit as quickly as possible. The fact that plaintiff was motivated solely to make a profit from the purchase of the property does not overcome the strong statutory presumption that all land is unique and therefore damages were inadequate to make plaintiff whole for the defendant’s breach.Fourth La Costa Condominium Owners Assn. v. Seith     Docket
159 Cal.App.4th 563 – 4th Dist., Div. 1 (D049276) 1/30/08     Case complete 4/1/08CC&R’s/HOMEOWNER’S ASSOCIATIONS: The court applied CC 1356(c)(2) and Corp. Code 7515, which allow a court to reduce the supermajority vote requirement for amending CC&R’s and bylaw because the amendments were reasonable and the balloting requirements of the statutes were met.02 Development, LLC v. 607 South Park, LLC     Docket
159 Cal.App.4th 609 – 2nd Dist. (B200226) 1/30/08     Case complete 4/3/08SPECIFIC PERFORMANCE: 1) An assignment of a purchaser’s rights under a purchase agreement prior to creation of the assignee as an LLC is valid because an organization can enforce pre-organization contracts if the organization adopts or ratifies them. 2) A purchaser does not need to prove that it already had the necessary funds, or already had binding commitments from third parties to provide the funds, when the other party anticipatorily repudiates the contract. All that plaintiff needed to prove was that it would have been able to obtain the necessary funding (or funding commitments) in order to close the transaction on time.Richeson v. Helal     Docket     Sup.Ct. Docket
158 Cal.App.4th 268 – 2nd Dist. (B187273) 11/29/07; Pub. & mod. order 12/21/07 (see end of opinion)     Petition for review by Cal Supreme Ct. DENIED 2/20/08CC&R’s / MUNICIPALITIES: An Agreement Imposing Restrictions (“AIR”) and CC&R’s did not properly lend themselves to an interpretation that would prohibit the City from changing the permitted use or zoning and, were they so construed, the AIR and CC&R’s would be invalid as an attempt by the City to surrender its future right to exercise its police power respecting the property. Here, the AIR and CC&R’s did not prohibit the City from issuing a new conditional use permit allowing the continued use of the subject property as a neighborhood market.Bill Signs Trucking v. Signs Family Ltd. Partnership     Docket     Sup.Ct. Docket
157 Cal.App.4th 1515 – 4th Dist., Div. 1 (D047861) 12/18/07     Petition for review by Cal Supreme Ct. DENIED 4/9/08LEASES / RIGHT OF FIRST REFUSAL: A tenant’s right of first refusal under a commercial lease is not triggered by the conveyance of an interest in the property between co-partners in a family limited partnership that owns the property and is the landlord.Schweitzer v. Westminster Investments     Docket     Sup.Ct. Docket
157 Cal.App.4th 1195 – 4th Dist., Div. 1 (D049589) 12/13/07     Petition for review by Cal Supreme Ct. DENIED 3/26/08EQUITY PURCHASERS:
1) The bonding requirement of the Home Equity Sales Contracts Act (Civil Code Section 1695.17) is void for vagueness under the due process clause and may not be enforced. Section 1695.17 is vague because it provides no guidance on the amount, the obligee, the beneficiaries, the terms or conditions of the bond, the delivery and acceptance requirements, or the enforcement mechanisms of the required bond.
2) Although the bond requirement may not be enforced, the remainder of the statutory scheme remains valid because the bond provisions are severable from the balance of the enactment.
3) The court refused to set aside the deed in favor of the equity purchaser because, first, the notice requirements of Civil Code Section 1695.5 appear to have been met and, second, the seller’s right to rescind applies before the deed is recorded but the statute “does not specify that a violation of section 1695.5 provides grounds for rescinding a transaction after recordation of the deed”.Crestmar Owners Association v. Stapakis     Docket
157 Cal.App.4th 1223 – 2nd Dist. (B191049) 12/13/07     Case complete 2/15/07CC&R’s: Where a developer failed to convey title to two parking spaces as required by the CC&R’s, the homeowner’s association was able to quiet title even though more than 20 years had passed since the parking spaces should have been conveyed. The statute of limitations does not run against someone, such as the homeowner’s association here, who is in exclusive and undisputed possession of the property.Washington Mutual Bank v. Blechman     Docket     Sup.Ct. Docket
157 Cal.App.4th 662 – 2nd Dist. (B191125) 12/4/07     Petition for review by Cal Supreme Ct. DENIED 3/19/08TRUSTEE’S SALES: The foreclosing lender and trustee are indispensable parties to a lawsuit which seeks to set aside a trustee’s sale. Therefore, a default judgment against only the purchaser at the trustee’s sale is subject to collateral attack.Garretson v. Post     Docket     Sup.Ct. Docket
156 Cal.App.4th 1508 – 4th Dist., Div.2 (E041858) 11/20/07     Petition for review by Cal Supreme Ct. DENIED 2/27/08TRUSTEE’S SALES: A cause of action for wrongful foreclosure does not fall within the protection of Code of Civil Procedure section 425.16, commonly referred to as the anti-SLAPP statute (strategic lawsuit against public participation).Murphy v. Burch     Docket     Sup.Ct. Docket
Cal.App. 1st Dist. (A117051) 11/19/07
AFFIRMED by Cal Supreme Ct. 4/27/09EASEMENT BY NECESSITY: An easement by necessity arises by operation of law when 1) there is a strict necessity as when a property is landlocked and 2) the dominant and servient tenements were under the same ownership at the time of the conveyance giving rise to the necessity. However, the second requirement is not met when the properties were owned by the federal government because the Government has the power of eminent domain, rendering it unnecessary to resort to the easement by necessity doctrine in order to acquire easements.

The court attempts to distinguish Kellogg v. Garcia, 102 Cal.App.4th 796, by pointing out that in that case the issue of eminent domain did not arise because the dominant tenement was owned by a private party and the servient tenements by the federal government. [Ed. Note: the court does not adequately address the fact that the government does not always have the power of eminent domain. It only has that power if a public purpose is involved. Also, I do not think the court adequately distinguishes Kellogg, which seems to hold that common ownership by the federal government satisfies the requirement of common ownership.]Elias Real Estate v. Tseng     Docket     Sup.Ct. Docket
156 Cal.App.4th 425 – 2nd Dist. (B192857) 10/25/07     Petition for review by Cal Supreme Ct. DENIED 2/13/08SPECIFIC PERFORMANCE: Acts of a partner falling within Corp. Code 16301(1) (acts in ordinary course of business) are not subject to the statute of frauds. Acts of a partner falling within Corp. Code 16301(2) (acts not in the ordinary course of business) are subject to the statute of frauds. In this case, a sale of the partnership’s real property was not in the ordinary course of business, so it fell within Corp. Code 16301(2) and plaintiff could not enforce a contract of sale signed by only one partner.Strong v. State Board of Equalization     Docket     Sup.Ct. Docket
155 Cal.App.4th 1182 – 3rd Dist. (C052818) 10/2/07     Petition for review by Cal Supreme Ct. DENIED 1/3/08CHANGE OF OWNERSHIP: The statute that excludes transfers between domestic partners from property tax reassessment is constitutional.County of Solano v. Handlery     Docket     Sup.Ct. Docket
155 Cal.App.4th 566 – 1st Dist. (A114120) 9/21/07     Petition for review by Cal Supreme Ct. DENIED 12/12/07DEEDS: The County brought an action against grantors’ heirs to invalidate restrictions in a deed limiting the subject property to use as a county fair or similar public purposes. The court refused to apply the Marketable Record Title Act to eliminate the power of termination in favor of the grantors because the restrictions are enforceable under the public trust doctrine.Baccouche v. Blankenship     Docket
154 Cal.App.4th 1551 – 2nd Dist (B192291) 9/11/07     Case complete 11/16/07EASEMENTS: An easement that permits a use that is prohibited by a zoning ordinance is not void. It is a valid easement, but cannot be enforced unless the dominant owner obtains a variance. As is true with virtually all land use, whether a grantee can actually use the property for the purposes stated in the easement is subject to compliance with any applicable laws and ordinances, including zoning restrictions.WRI Opportunity Loans II LLC v. Cooper     Docket
154 Cal.App.4th 525 – 2nd Dist. (B191590) 8/23/07     Case complete 10/26/07USURY: The trial court improperly granted a motion for summary judgment on the basis that the loan was exempt from the usury law.

1. The common law exception to the usury law known as the “interest contingency rule” provides that interest that exceeds the legal maximum is not usurious when its payment is subject to a contingency so that the lender’s profit is wholly or partially put in hazard. The hazard in question must be something over and above the risk which exists with all loans – that the borrower will be unable to pay.
2. The court held that the interest contingency rule did not apply to additional interest based on a percentage of the sale price of completed condominium units because the lender was guaranteed additional interest regardless of whether the project generated rents or profits.
3. The loan did not qualify as a shared appreciation loan, permitted under Civil Code Sections 1917-1917.006, because the note guaranteed the additional interest regardless of whether the property appreciated in value or whether the project generated profits.
4. The usury defense may not be waived by guarantor of a loan. (No other published case has addressed this issue.)Archdale v. American International Specialty Lines Ins. Co.     Docket
154 Cal.App.4th 449 – 2nd Dist. (B188432) 8/22/07     Case complete 10/26/07INSURANCE: The case contains good discussions of 1) an insurer’s liability for a judgment in excess of policy limits where it fails to accept a reasonable settlement offer within policy limits and 2) the applicable statutes of limitation.REVERSED by Cal. Supreme Court 12/22/08
Patel v. Liebermensch
     Docket     Sup.Ct. Docket
154 Cal.App.4th 373 – 4th, Div. 1 (D048582) 8/21/07REVERSED: SPECIFIC PERFORMANCE: Specific performance of an option was denied where the parties never reached agreement on the amount of  the deposit, the length of time of the escrow or payment of escrow expenses if there were a delay. One judge dissented on the basis that the option contract was sufficiently clear to be specifically enforced and the court should insert reasonable terms in place of the uncertain terms.In Re Marriage of Ruelas     Docket
154 Cal.App.4th 339 – 2nd Dist. (B191655) 8/20/07     Case complete 10/26/07RESULTING TRUST: A resulting trust was created where a daughter acquired property in her own name and the evidence showed that she was acquiring the property for her parents who had poor credit.Stoneridge Parkway Partners v. MW Housing Partners     Docket     Sup.Ct. Docket
153 Cal.App.4th 1373 – 3rd Dist. (C052082) 8/3/07     Petition for review by Cal Supreme Ct. DENIED 11/14/07USURY: The exemption to the usury law for loans made or arranged by real estate brokers applies to a loan in which the broker who negotiated the loan was an employee of an affiliate of the lender, but nevertheless acted as a third party intermediary in negotiating the loan. Kinney v. Overton     Docket     Sup.Ct. Docket
153 Cal.App.4th 482 – 4th Dist., Div. 3 (G037146) 7/18/07     Petition for review by Cal Supreme Ct. DENIED 10/10/07EASEMENTS: Former Civil Code Section 812 provided that

“[t]he vacation . . . of streets and highways shall extinguish all private easements therein claimed by reason of the purchase of any lot by reference to a map or plat upon which such streets or highways are shown, other than a private easement necessary for the purpose of ingress and egress to any such lot from or to a public street or highway, except as to any person claiming such easement who, within two years from the effective date of such vacation or abandonment . . . shall have recorded in the office of the recorder of the county in which such vacated or abandoned streets or highways are located a verified notice of his claim to such easement . . .” [Emphasis added.]

The court held that cross-complainant could not maintain an action against the person occupying the disputed abandoned parcel because it was not necessary for access and he did not record the notice required by C.C. Section 812. The court specifically did not address the state of title to the disputed parcel or what interest, if any, cross-defendant may have in the parcel.Hartzheim v. Valley Land & Cattle Company     Docket     Sup.Ct. Docket
153 Cal.App.4th 383 – 6th Dist. (H030053) 7/17/07     Petition for review by Cal Supreme Ct. DENIED 10/10/07LEASES / RIGHT OF FIRST REFUSAL: A right of first refusal in a lease was not triggered by a partnership’s conveyance of property to the children and grandchildren of its partners for tax and estate planning purposes because it did not constitute a bona fide offer from any third party. The court considered three factors: 1) the contract terms must be reviewed closely to determine the conditions necessary to invoke the right, 2) where a right of first refusal is conditioned upon receipt of a bona fide third party offer to purchase the property, the right is not triggered by the mere conveyance of that property to a third party and 3) the formalities of the transaction must be reviewed to determine its true nature.Berryman v. Merit Property Mgmt.     Docket     Sup.Ct. Docket
152 Cal.App.4th 1544 – 4th Dist., Div. 3 (G037156) 5/31/07     Petition for review by Cal Supreme DENIED 10/10/07HOMEOWNER’S ASSOCIATIONS: Fees charged by a homeowner’s association upon a transfer of title by a homeowner are limited by Civil Code Section 1368 to the association’s actual costs. The court held that this limitation does not apply to fees charged by a management company hired by the association.Cal-Western Reconveyance Corp. v. Reed     Docket
152 Cal.App.4th 1308 – 2nd Dist. (B193014) 6/29/07     Case complete 8/29/07TRUSTEE’S SALES: After a trustee’s sale, the trustee deposited the surplus proceeds into court under CC 2924j in order to determine who was entitled to the excess proceeds. The court held that:
(1) The distribution of surplus proceeds to satisfy child and spousal support arrearages was proper because the County had properly recorded an abstract of support judgment,
(2) The trial court erred in distributing proceeds to the debtor’s former wife to satisfy her claims for a community property equalization payment and for attorney fees ordered in the dissolution proceeding, because no recorded lien or encumbrance secured those claims, which in any event were discharged in the debtor’s bankruptcy proceeding (because child and spousal support obligations are not dischargeable, but property settlement payments are dischargeable), and
(3) The trial court erred in distributing proceeds to the debtor’s former lawyer, who was retained to assist the debtor in the collection of proceeds from the trustee’s sale, because an attorney’s lien on the prospective recovery of a client must be enforced in a separate action.
(4) The debtor failed to produce sufficient evidence to support his claim that he was entitled to the $150,000 homestead exemption applicable when a debtor is physically disabled and unable to engage in substantial gainful employment (so he was entitled to only the standard $50,000 homestead exemption).Poseidon Development v. Woodland Lane Estates     Order Modifying Opinion     Docket
152 Cal.App.4th 1106 – 3rd Dist. (C052573) 6/28/07     Case complete 8/31/07PROMISSORY NOTES: A penalty that applied to late payments of installments did not apply to a late payment of the final balloon payment of principal. The penalty was 10% of the amount due, which made sense for regular installments, but bore no reasonable relationship to actual damages if applied to the balloon payment.Carr v. Kamins     Docket
151 Cal.App.4th 929 – 2nd Dist. (B191247) 5/31/07     Case complete 8/1/07QUIET TITLE: A quiet title judgment was set aside by defendant’s heir four years after being entered because the heir was not named and served. The plaintiff believed the defendant to be deceased, but made no effort to locate and serve the defendant’s heirs. [Even though this case contains some unique facts, the fact that a default judgment can be set aside four years after being entered demonstrates the danger of relying on default judgments and the need to closely examine the court file and surrounding circumstances before doing so.]Estate of Yool     Docket
151 Cal.App.4th 867 – 1st Dist. (A114787) 5/31/07     Case complete 7/31/07RESULTING TRUST: A decedent held title with her daughter for the purpose of facilitating financing and did not intend to acquire beneficial title. A probate court properly ordered the Special Administrator to convey title to the daughter based on the Resulting Trust Doctrine. It held that the four-year statute of limitations under C.C.P. 343 applied and not C.C.P. 366.2, which limits actions to collect on debts of the decedent to one year after the date of death.Kalway v. City of Berkeley     Docket
151 Cal.App.4th 827 – 1st Dist. (A112569) 5/31/07     Case complete 8/1/07SUBDIVISION MAP ACT: Plaintiff husband transferred title of a parcel to his wife in order to avoid merger under the Subdivision Map Act of a substandard parcel into their adjoining lot. The court held that plaintiffs could not evade the Map Act in this manner. It also held that the City had no authority to obtain an order canceling the deed, but that the wife also had no right to further transfer title to the substandard lot except back to her husband.Delgado v. Interinsurance Exchange of the Auto Club of So. Cal.     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B191272) 6/25/07
REVERSED BY CALIFORNIA SUPREME COURTBAD FAITH: An insurance company acted in bad faith as a matter of law where a potential for coverage was apparent from the face of the complaint. The insured allegedly assaulted plaintiff and there was a potential for coverage because the insured may have acted in self defense. The case contains a thorough analysis of the duties of defense and indemnity.Blackmore v. Powell     Docket     Sup.Ct. Docket
150 Cal.App.4th 1593 – 2nd Dist. (B185326) 5/22/07     Request for depublication DENIED 8/29/07EASEMENTS: An easement “for parking and garage purposes” includes the exclusive right to build and use a garage. Granting an exclusive easement may constitute a violation under the Subdivision Map act, but here there is no violation because the exclusive use of the garage covers only a small portion of the easement and is restricted to the uses described in the easement deed. Amalgamated Bank v. Superior Court     Docket     Sup.Ct. Docket
149 Cal.App.4th 1003 – 3rd Dist. (C052156, C052395) 4/16/07     Petition for review by Cal Supreme Ct. DENIED 8/8/07LIS PENDENS:
1. In deciding a writ petition from an order granting or denying a motion to expunge a lis pendens after judgment and pending appeal, an appellate court must assess whether the underlying real property claim has “probable validity”. This is the same test that is used before judgment. “Probable validity” post-judgment means that it is more likely than not the real property claim will prevail at the end of the appellate process.
2. A judicial foreclosure sale to a third party is absolute, subject only to the right of redemption, and may not be set aside, except that under C.C.P. Section 701.680(c)(1) the judgment debtor may commence an action to set aside the sale within 90 days only if the purchaser at the sale was the judgment creditor. Here, a potential bidder who was stuck in traffic and arrived too late to the sale could not set it aside because only the judgment debtor can do that and because a third party purchased at the sale. L&B Real Estate v. Housing Authority of Los Angeles     Docket
149 Cal.App.4th 950 – 2nd Dist. (B189740) 4/13/07     Case complete 6/13/07TAX DEEDS: Because public property is exempt from taxation, tax deeds purporting to convey such property for nonpayment of taxes are void. Two parcels were inadvertently not included in a deed to the State (subsequently conveyed to the Housing Authority of Los Angeles). Accordingly, the tax collector thought that those parcels were still owned by the seller and sold them at a tax sale after real estate taxes were not paid on them. The court also points out that plaintiff was not a good faith purchaser because it had constructive and actual knowledge of the fact that the Housing Authority’s low income housing was partially located on the two parcels sold at the tax sale.Ulloa v. McMillin Real Estate     Docket
149 Cal.App.4th 333 – 4th Dist., Div. 1 (D048066) 3/7/07 (Cert. for pub. 4/4/07)     Case complete 6/4/07STATUTE OF FRAUDS: The Statute of Frauds requires the authority of an agent who signs a sales agreement to be in writing if the agent signs on behalf of the party to be charged. However, a plaintiff purchaser whose agent signed her name with only verbal authorization is not precluded by the Statute of Frauds from bringing the action because the defendant is the party to be charged.Jordan v. Allstate Insurance Company     Docket     Sup.Ct. Docket
148 Cal.App.4th 1062 – 2nd Dist. (B187706) 3/22/07      Petition for review and depublication DENIED 6/27/07BAD FAITH: Where there is a genuine issue as to the insurer’s liability under the policy, there can be no bad faith liability imposed on the insurer for advancing its side of that dispute. However, there can be bad faith liability where an insurer denies coverage but a reasonable investigation would have disclosed facts showing the claim was covered under other provisions of the policy. The court clarified that an insurer’s failure to investigate can result in bad faith liability only if there is coverage. If there is no coverage, then any failure to properly investigate cannot cause the insured any damage.Shah v. McMcMahon     Docket
148 Cal.App.4th 526 – 2nd Dist. (B188972) 3/12/07     Case complete 5/16/07LIS PENDENS: Plaintiffs could not appeal an order for attorney’s fees awarded in a hearing of a motion to expunge a lis pendens. The only remedy is to challenge the award by way of a petition for writ of mandate.Sterling v. Taylor     Docket
40 Cal.4th 757 – Cal. Supreme Court (S121676) 3/1/07STATUTE OF FRAUDS: If a memorandum signed by the seller includes the essential terms of the parties’ agreement (i.e. the buyer, seller, price, property and the time and manner of payment), but the meaning of those terms is unclear, the memorandum is sufficient under the statute of frauds if extrinsic evidence clarifies the terms with reasonable certainty. Because the memorandum itself must include the essential contractual terms, extrinsic evidence cannot supply those required terms, however, it can be used to explain essential terms that were understood by the parties but would otherwise be unintelligible to others. In this case, the memorandum did not set forth the price with sufficient clarity because it was uncertain whether it was to be determined by a multiplier applied to the actual rent role or whether the price specified was the agreed price even though it was based on the parties’ incorrect estimate of the rent role.Jet Source Charter v. Doherty     Docket
148 Cal.App.4th 1 – 4th Dist., Div. 1 (D044779) 1/30/07     (Pub. order and modification filed 2/28/07 – see end of opinion) Case complete 5/1/07PUNITIVE DAMAGES: Parts I, II, III and IV NOT certified for publication: Where the defendant’s conduct only involves economic damage to a single plaintiff who is not particularly vulnerable, an award which exceeds the compensatory damages awarded is not consistent with due process.Dyer v. Martinez     Docket     Sup.Ct. Docket
147 Cal.App.4th 1240 – 4th Dist., Div. 3 (G037423) 2/23/07     Petition for review by Cal Supreme Ct. DENIED 6/13/07RECORDING: A lis pendens that was recorded but not indexed does not impart constructive notice, so a bona fide purchaser for value takes free of the lis pendens. The party seeking recordation must ensure that all the statutory requirements are met and the recorder is deemed to be an agent of the recording party for this purpose.Behniwal v. Mix     Docket
147 Cal.App.4th 621 – 4th Dist., Div. 3 (G037200) 2/7/07     Case complete 4/13/07SPECIFIC PERFORMANCE: In a specific performance action, a judgment for plaintiff’s attorneys’ fees cannot be offset against the purchase price that the successful plaintiff must pay defendant for the property. A judgment for attorneys’ fees is not an incidental cost that can be included as part of the specific performance judgment, and it is not a lien that relates back to the filing of the lis pendens. Instead, it is an ordinary money judgment that does not relate back to the lis pendens. So, while plaintiff’s title will be superior to defendant’s liens that recorded subsequent to the lis pendens, those liens are nevertheless entitled to be paid to the extent of available proceeds from the full purchase price.Castillo v. Express Escrow     Docket
146 Cal.App.4th 1301 – 2nd Dist. (B186306) 1/18/07     Case complete 3/20/07MOBILEHOME ESCROWS:
1) Health and Safety Code Section 18035(f) requires the escrow agent for a mobile home sale to hold funds in escrow upon receiving written notice of a dispute between the parties, even though the statute specifically states “unless otherwise specified in the escrow instructions” and even though the escrow instructions provided that escrow was to close unless “a written demand shall have been made upon you not to complete it”.
2) Section 18035(f) does not require the written notice of dispute to cite the code section, or to be in any particular form, or that the notice be addressed directly to the escrow holder, or that the notice contain an express request not to close escrow. The subdivision requires nothing more than that the escrow agent receive notice in writing of a dispute between the parties. So receiving a copy of the buyer’s attorney’s letter to the seller was sufficient to notify the escrow agent that a dispute existed.Rappaport-Scott v. Interinsurance Exchange     Docket
146 Cal.App.4th 831 – 2nd Dist (B184917) 1/11/07     Case complete 3/14/07INSURANCE: An insurer’s duty to accept reasonable settlement offers within policy limits applies only to third party actions and not to settlement offers from an insured. An insurer has a duty not to unreasonable withhold payments due under a policy. But withholding benefits under a policy is not unreasonable if there is a genuine dispute between the insurer and the insured as to coverage or the amount of payment due, which is what occurred in this case.In re: Rabin
BAP 9th Circuit 12/8/06BANKRUPTCY/HOMESTEADS: Under California law, the homestead exemption rights of registered domestic partners are identical to those of people who are married. Therefore, domestic partners are limited to a single combined exemption, in the same manner as people who are married. In the absence of a domestic partnership or marriage, each cotenant is entitled to the full homestead exemption.Wachovia Bank v. Lifetime Industries     Docket
145 Cal.App.4th 1039 – 4th Dist., Div. 2 (E037560) 12/15/06     Case complete 2/16/07OPTIONS:
1. When the holder of an option to purchase real property exercises the option and thereby obtains title to the property, the optionee’s title relates back to the date the option was given, as long as the optionee has the right to compel specific performance of the option. But where the optionee acquires title in a transaction unconnected with the option, such as where there has been a breach of the option agreement so that the optionee did not have the right to specific performance, the optionee takes subject to intervening interests just like any other purchaser.
2. Civil Code Section 2906 provides a safe harbor for a lender to avoid the rule against “clogging” the equity of redemption as long as the option is not dependent on the borrower’s default. But even if the lender falls outside the safe harbor because the exercise of the option is dependent upon borrower’s default, it does not automatically follow that the option is void. Instead, the court will analyze the circumstances surrounding the transaction and the intent of the parties to determine whether the option is either void or a disguised mortgage. Also, even if the transaction is a disguised mortgage the optionee (now mortgagee) has a right to judicially foreclose, which will wipe out intervening interests.Wright v. City of Morro Bay     Docket     Sup.Ct. Docket
144 Cal.App.4th 767, 145 Cal.App.4th 309a – 2nd Dist (B176929) 11/7/06     Modification of Opinion 12/6/06     Petition for review by Cal Supreme Ct. DENIED 2/21/07DEDICATION/ABANDONMENT: C.C.P. 771.010, which provides for termination of an offer of dedication if not accepted within 25 years, did not apply because 1) the statute cannot be applied retroactively to the City’s acceptance occurring more than 25 years after the offer of dedication and 2) the area covered by the dedicated road has never been used by anyone, so the requirement that the property be “used as if free of the dedication” was not met.State Farm General Insurance Co. v. Wells Fargo Bank     Docket
143 Cal.App.4th 1098 – 1st Dist. (A111643) 10/10/06     Case complete 12/11/06The “superior equities rule” prevents an insurer, who is subrogated to the rights of the insured after paying a claim, from recovering against a party whose equities are equal or superior to those of the insurer. Thus, an insurer may not recover from an alleged tortfeasor where the tortfeasor’s alleged negligence did not directly cause the insured’s loss. The court questioned the continued vitality of the superior equities rule in California, but felt compelled to follow a 1938 Supreme Court case that applied the rule. The court suggests that the Supreme Court should re-address the issue in light of modern day fault principles.Corona Fruits & Veggies v. Frozsun Foods     Docket     Sup.Ct. Docket
143 Cal.App.4th 319 – 2nd Dist. (B184507) 9/25/06     Petition for review by Cal Supreme Ct. DENIED 12/20/06UCC: A UCC-1 financing statement filed in the name of Armando Munoz is not effective where the debtor’s true name was Armando Munoz Juarez.Warren v. Merrill     Docket
143 Cal.App.4th 96 – 2nd Dist. (B186698) 9/21/06     Case complete 11/21/06QUIET TITLE: The Court quieted title in plaintiff where title was taken in the real estate agent’s daughter’s name as part of a fraudulent scheme perpetrated by the agent. This is not a significant title insurance case, but I posted it for reference since it involves quiet title.McKell v. Washington Mutual     Docket     Sup.Ct. Docket
142 Cal.App.4th 1457 – 2nd Dist. (B176377) 9/18/06     Request for depublication DENIED 1/17/07RESPA: Washington Mutual (i) charged hundreds of dollars in “underwriting fees” when the underwriting fee charged by Fannie Mae and Freddie Mac to WAMU was only $20 and (ii) marked up the charges for real estate tax verifications and wire transfer fees. The court followed Kruse v. Wells Fargo Home Mortgage (2d Cir. 2004) 383 F.3d 49, holding that marking up costs, for which no additional services are performed, is a violation of RESPA. Such a violation of federal law constitutes an unlawful business practice under California’s Unfair Competition Law (“UCL”) and a breach of contract. Plaintiffs also stated a cause of action for an unfair business practice under the UCL based on the allegation that WAMU led them to believe they were being charged the actual cost of third-party services.Reilly v. City and County of San Francisco     Docket     Sup.Ct. Docket
142 Cal.App.4th 480 – 1st Dist. (A109062) 8/29/06     Request for depublication DENIED 12/13/06PROPERTY TAX: A change in ownership of real property held by a testamentary trust occurs when an income beneficiary of the trust dies and is succeeded by another income beneficiary. Also, for purposes of determining change in ownership, a life estate either in income from the property or in the property itself is an interest equivalent in value to the fee interest.Markowitz v. Fidelity     Docket     Sup.Ct. Docket
142 Cal.App.4th 508 – 2nd Dist. (B179923) 5/31/06     Publication ordered by Cal. Supreme Court 8/30/06ESCROW: Civil Code Section 2941, which permits a title insurance company to record a release of a deed of trust if the lender fails to do so, does not impose an obligation on an escrow holder/title company to record the reconveyance on behalf of the trustee. Citing other authority, the Court states that an escrow holder has no general duty to police the affairs of its depositors; rather, an escrow holder’s obligations are limited to faithful compliance with the parties’ instructions, and absent clear evidence of fraud, an escrow holder’s obligations are limited to compliance with the parties’ instructions. The fact that the borrower had an interest in the loan escrow does not mean that he was a party to the escrow, or to the escrow instructions.Cebular v. Cooper Arms Homeowners Association     Docket     Sup.Ct. Docket
142 Cal.App.4th 106 – 2nd Dist. (B182555) 8/21/06     Request for review by Cal Supreme Ct. DENIED 11/15/06; Request to publish Part III, Sec. B filed 10/24/06COVENANTS, CONDITIONS AND RESTRICTIONS: It is not unreasonable for CC&R’s to allocate dues obligations differently for each unit, along with the same allocation of voting rights, even though each unit uses the common areas equally. Although the allocation does not make much sense, courts are disinclined to question the wisdom of agreed-to restrictions.Bernard v. Foley     Docket
39 Cal.4th 794 – Cal. Supreme Court (S136070) (8/21/06)TESTAMENTARY TRANSFERS: Under Probate Code Section 21350, “care custodians” are presumptively disqualified from receiving testamentary transfers from dependent adults to whom they provide personal care, including health services. The Court held that the term “care custodian” includes unrelated persons, even where the service relationship arises out of a preexisting personal friendship rather than a professional or occupational connection. Accordingly, the Court set aside amendments to decedent’s will that were made shortly before decedent’s death, which would have given most of the estate to the care providers.Regency Outdoor Advertising v. City of Los Angeles     Docket
39 Cal.4th 507 – Cal. Supreme Court (S132619) 8/7/06     Modification of Opinion 10/11/06ABUTTER’S RIGHTS: There is no right to be seen from a public way, so the city is not liable for damages resulting from the view of plaintiff’s billboard caused by planting trees along a city street. The court pointed out that a private party who blocks the view of someone’s property by obstructing a public way would be liable to someone in plaintiff’s position.Kleveland v. Chicago Title Insurance Company     Docket     Sup.Ct. Docket
141 Cal.App.4th 761 – 2nd Dist. (B187427) 7/24/06     Case complete 10/5/06     Request for depublication DENIED 10/25/06TITLE INSURANCE: An arbitration clause in a title policy is not enforceable where the preliminary report did not contain an arbitration clause and did not incorporate by reference the arbitration clause in the CLTA policy actually issued. (The preliminary report incorporated by reference the provisions of a Homeowner’s Policy of Title Insurance with a somewhat different arbitration clause, but a CLTA policy was actually issued.)Essex Insurance Company v. Five Star Dye House     Docket
38 Cal.4th 1252 – Cal. Supreme Court (S131992) 7/6/06INSURANCE: When an insured assigns a claim for bad faith against the insurer, the assignee may recover Brandt (attorney) fees. Although purely personal causes of action are not assignable, such as claims for emotional distress or punitive damages, Brandt fees constitute an economic loss and are not personal in nature.Peak Investments v. South Peak Homeowners Association     Docket
140 Cal.App.4th 1363 – 4th Dist., Div. 3 (G035851) 6/28/06     Case complete 8/31/06HOMEOWNER’S ASSOCIATIONS: Where CC&R’s require approval by more than 50 percent of owners in order to amend the Declaration, Civil Code Section 1356(a) allows a court, if certain conditions are met, to reduce the percentage of votes required, if it was approved by “owners having more than 50 percent of the votes in the association”. The Court held that the quoted phrase means a majority of the total votes in the HOA, not merely a majority of those votes that are cast.CTC Real Estate Services v. Lepe     Docket
140 Cal.App.4th 856 – 2nd Dist. (B185320) 6/21/06     Case complete 8/23/06TRUSTEE’S SALES: The victim of an identity theft, whose name was used to obtain a loan secured by a purchase money deed of trust to acquire real property, may, as the only claimant, recover undistributed surplus proceeds that remained after a trustee sale of the property and the satisfaction of creditors. The Court pointed out that a victim of theft is entitled to recover the assets stolen or anything acquired with the stolen assets, even if the value of those assets exceeds the value of that which was stolen.Slintak v. Buckeye Retirement Co.     Docket     Sup.Ct. Docket
139 Cal.App.4th 575 – 2nd Dist. (B182875) 5/16/06     Request for review by Cal Supreme Ct. DENIED 9/13/06MARKETABLE RECORD TITLE ACT
1) Under Civil Code Section 882.020(a)(1), a deed of trust expires after 10 years where “the final maturity date or the last date fixed for payment of the debt or performance of the obligation is ascertainable from the record”. Here, the October 1992 Notice of Default was recorded and contained the due date of the subject note; thus, the due date is “ascertainable from the record” and the 10-year limitations period of section 882.020(a)(1) applies.

2) Under C.C. Section 880.260, if an action is commenced and a lis pendens filed by the owner to quiet or clear title, the running of the 10-year limitations period is reset and a new 10-year limitations period commences on the date of the recording of the lis pendens. After the expiration of the recommenced 10-year period, the power of sale in the trust deed expires. Preciado v. Wilde     Docket     Sup.Ct. Docket
139 Cal.App.4th 321 – 2nd Dist. (B182257) 5/9/06     Request for review by Cal Supreme Ct. DENIED 8/16/06ADVERSE POSSESSION: Plaintiffs failed to establish adverse possession against defendant, with whom they held title as tenants in common. Before title may be acquired by adverse possession as between cotenants, the occupying tenant must impart notice to the tenant out of possession, by acts of ownership of the most open, notorious and unequivocal character, that he intends to oust the latter of his interest in the common property. Such evidence must be stronger than that which would be required to establish title by adverse possession in a stranger. UNPUBLISHED Harbor Pipe v. Stevens
Cal.App. 4th Dist., Div. 3 (G035530) 4/4/06     Case complete 6/6/06JUDGMENTS: A judgment lien against the settlor of a revocable trust attached to trust property where the identity of the settlor is reflected in the chain of title, so a purchaser takes subject to the judgment lien. NOTE: In other words, title companies need to check the names of the settlors in the General Index when title is held in trust.Aaron v. Dunham     Docket     Sup.Ct. Docket
137 Cal.App.4th 1244 – 1st Dist. (A109488) 3/15/06     Request for review by Cal Supreme Ct. DENIED 6/21/06PRESCRIPTIVE EASEMENTS: 1) Permission granted to an owner does not constitute permission to a successor. 2) Under Civil Code Section 1008, signs preventing prescriptive rights must be posted by an owner or his agent, so signs posted by a lessee without the knowledge of the owner, do not qualify.***DECERTIFIED***
Newmyer v. Parklands Ranch     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B180461) 3/23/06     Request for review by Cal Supreme Ct. DENIED; CA opinion DECERTIFIED 6/14/06EASEMENTS: The owner of the dominant tenement possessing over the servient tenement an access easement that includes the right to grant other easements for “like purposes” may convey to an owner of property adjoining the dominant tenement an enforceable easement for access over the servient tenement.Marion Drive LLC v. Saladino     Docket     Sup.Ct. Docket
136 Cal.App.4th 1432 – 2nd Dist. (B182727) 2/27/06     Request for review by Cal Supreme Ct. DENIED 5/24/06ASSESSMENT LIEN: After a tax sale, the holder of a bond secured by a 1911 Act assessment lien has priority as to surplus tax sale proceeds over a subsequently recorded deed of trust. This is true even though the bond holder purchased the property from the tax sale purchaser. The Court rejected defendant’s argument that fee title had merged with the assessment lien.Barnes v. Hussa     Docket
136 Cal.App.4th 1358 – 3rd Dist. (C049163) 2/24/06     Case complete 4/26/06LICENSES / WATER RIGHTS: The Plaintiff did not overburden a license to run water in a pipeline across defendant’s property where he extended the pipeline to other property he owned because there was no increase in the burden on the servient tenement and no harm to defendants. A couple of interesting things pointed out by the Court are: 1) A person entitled to use water may use it elsewhere as long as others are not injured by the change, and 2) “An irrevocable license . . . is for all intents and purposes the equivalent of an easement.”***REVERSED***
Mayer v. L & B Real Estate
     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B180540) 2/14/06     REVERSED by Cal Supreme Ct. 6/16/08TAX SALES: The one-year statute of limitations for attacking a tax sale applies to preclude an action by a property owner who had actual notice of the tax sale, even where the tax collector’s conduct was egregious. The Court did not reach the question of whether the tax collector satisfied its due process obligations, but refers to a Supreme Court case which held that the limitations period is enforceable even if the defect is constitutional in nature. That case recognized a limited exception where an owner is in “undisturbed possession” such that the owner lacked any reasonable means of alerting himself to the tax sale proceedings.Wright Construction Co. v. BBIC Investors     Docket     Sup.Ct. Docket
136 Cal.App.4th 228 – 1st Dist. (A109876) 1/31/06     Request for review by Cal Supreme Ct. DENIED 4/26/06MECHANICS’ LIENS: A mechanic’s lien is premature and invalid under Civil Code Section 3115 if it is recorded before the contractor “completes his contract”. A contract is complete for purposes of commencing the recordation period under section 3115 when all work under the contract has been performed, excused, or otherwise discharged. Here, because of the tenant’s anticipatory breach of the contract, plaintiff had “complete[d] [its] contract” within the meaning of section 3115 the day before the claim of lien was recorded, so the claim of lien was not premature. In a previous writ proceeding, the Court held that the landlord’s notice of nonresponsibility was invalid under the “participating owner doctrine” because the landlord caused the work of improvement to be performed by requiring the lessee to make improvements.Torres v. Torres     Docket     Sup.Ct. Docket
135 Cal.App.4th 870 – 2nd Dist. (B179146) 1/17/06     Request for review by Cal Supreme Ct. DENIED 4/12/06POWER OF ATTORNEY: 1) A statutory form power of attorney is not properly completed where the principal marks the lines specifying the powers with an “X” instead of initials, as required by the form. However, the form is not the exclusive means of creating a power of attorney, so even though it is not valid as a statutory form, it is valid as regular power of attorney. 2) Under Probate Code Section 4264, an attorney in fact may not make a gift of the principal’s property unless specifically authorized to do so in the power of attorney. Here, the principal quitclaimed the property to himself, the other attorney in fact and the principal as joint tenants. However, the court refused to invalidate the conveyance because the plaintiff failed to produce any evidence that the conveyance was not supported by consideration.Ung v. Koehler     Order Modifying Opinion     Docket     Sup.Ct. Docket
135 Cal.App.4th 186 – 1st Dist. (A109532) 12/28/05     Request for review by Cal Supreme Ct. DENIED 4/12/06TRUSTEE’S SALES:
1. Expiration of the underlying obligation does not preclude enforcement of the power of sale under a deed of trust.
2. A power of sale expires after 60 years or, if the last date fixed for payment of the debt is ascertainable from the record, 10 years after that date.
3. In order to avoid a statutory absurdity, a notice of default that is recorded more than 10 years after “the last date fixed for payment of the debt” does not constitute a part of the “record” for purposes of Civil Code Section 882.020(a).Trust One Mortgage v. Invest America Mortgage     Docket
134 Cal.App.4th 1302 – 4th Dist., Div. 3 (G035111) 12/15/05     Case complete 2/21/06TRUSTEE’S SALES/ANTI-DEFICIENCY: An indemnification agreement is enforceable after a non-judicial foreclosure where the indemnitor is not the same person as the obligor. If the indemnitor and obligor were the same, the indemnity would be void as an attempt to circumvent antideficiency protections.UNPUBLISHED OPINION
Citifinancial Mortgage Company v. Missionary Foundation     Docket
Cal.App. 2nd (B178664) 12/14/05     Case complete 2/16/06MARKETABLE RECORD TITLE ACT: (UNPUBLISHED OPINION) Under Civil Code Section 882.020(a)(1), a deed of trust becomes unenforceable 10 years after the final maturity date, or the last date fixed for payment of the debt or performance of the obligation, if that date is ascertainable from the record. Here, the record showed via an Order Confirming Sale of Real Property that the obligation was due five years after close of escrow. The Court held that since “close of escrow” is an event, and not a date certain, Section 882.020(a)(1) did not apply in spite of the fact that escrow must have closed in order for the deed of trust to have been recorded.McElroy v. Chase Manhattan Mortgage Corp.     Docket
134 Cal.App. 4th 388 – 4th Dist., Div. 3 (G034588) 11/1/05     Case complete 2/1/06TRUSTEE’S SALES: The Court refused to set aside a trustee’s sale where the lender foreclosed after the trustors tendered payment in the form of a “Bonded Bill of Exchange Order”. The Court determined that “the Bill is a worthless piece of paper, consisting of nothing more than a string of words that sound as though they belong in a legal document, but which, in reality, are incomprehensible, signifying nothing.”***DECERTIFIED***
The Santa Anita Companies v. Westfield Corporation     Docket     Sup.Ct. Docket
134 Cal.App.4th 77 – 2nd Dist. (B175820) 11/17/05     Request for review by Cal Supreme Ct. DENIED and DECERTIFIED 01/25/06DEEDS: The 3-year statute of limitations under C.C.P. 338(d) to seek relief on the ground of mistake does not begin to run until discovery of the mistake or receiving facts that would put a reasonable person on notice of the mistake. The fact that carefully reading the deed would have revealed the mistake is not sufficient to charge the plaintiff with notice, so the statute of limitations did not begin to run until plaintiff actually became aware of the error, and this action was therefore timely.Big Valley Band of Pomo Indians v. Superior Court     Docket
133 Cal.App.4th 1185 – 1st Dist. (A108615) 11/1/05     Case complete 1/4/06INDIANS: An employment agreement with an Indian tribe contained the following clause: “Any claim or controversy arising out of or relating to any provisions of this Agreement, or breach thereof, shall . . . be resolved by arbitration under the rules of the American Arbitration Association in San Francisco, California, and judgment on any award by the arbitrators may be entered in any court having such jurisdiction”. The court held that the effect of the arbitration clause as limited to a consent to arbitrate and enforce any award in state court. But this clause was insufficient to waive the tribe’s immunity from a breach of contract action brought in state court. So plaintiffs are apparently free to bring the same breach of contract claims in an arbitration proceeding.Behniwal v. Mix     Docket
133 Cal.App.4th 1027 – 4th Dist., Div. 3 (G034074) 9/30/05     Case complete 1/3/06STATUTE OF FRAUDS: A sales contract signed on the sellers’ behalf by their real estate agent did not satisfy the Statute of Frauds because the agent did not have written authority to sign for the sellers. However, a contract which must be in writing can be ratified if the ratification is also in writing. Here the sellers ratified the contract by a sufficient written ratification where they subsequently signed disclosure documents that specifically referred to the contract signed by the real estate agent.Behniwal v. Superior Court     Docket
133 Cal.App.4th 1048 – 4th Dist., Div. 3 (G035299) 9/30/05     Case complete 1/3/06LIS PENDENS: (Related to Mix v. Superior Court, several cases below.) Having determined that the plaintiffs have at least a “probably valid” real property claim, the Court issued a peremptory writ of mandate directing the Superior Court to vacate its order expunging the lis pendens. The lis pendens will therefore protect plaintiff’s claim until the time for appeal to the Supreme Court expires or unless the Supreme Court issues its own writ directing that the lis pendens be expunged.Zipperer v. County of Santa Clara     Docket
133 Cal.App.4th 1013 – 6th Dist. (H028455) 9/30/05 (Mod. 10/28/05)     Case complete 12/28/05EASEMENTS:
PUBLISHED PORTION: The Solar Shade Control Act provides that “. . . no person owning, or in control of a property shall allow a tree or shrub to be placed, or, if placed, to grow on such property, subsequent to the installation of a solar collector on the property of another so as to cast a shadow greater than 10 percent of the collector absorption area”. The County is exempt from the Act because it adopted an ordinance pursuant to a statute allowing cities and counties to exempt themselves from the Act. The Court did not address the issue of whether the act applies where a tree is not “placed” by a property owner.

UNPUBLISHED PORTION: A common law easement for light and air generally may be created only by express written instrument. A statutory “solar easement” under Civil Code Section 801.5 may be created only by an instrument containing specified terms. The Court held that the County did not have an obligation to trim trees to avoid shading plaintiff’s solar panels, rejecting several theories asserted by plaintiff.Fishback v. County of Ventura     Docket
133 Cal.App.4th 896 – 2nd Dist. (B177462) 10/26/05     Case complete 1/9/06SUBDIVISION MAP ACT: Under the 1937 and 1943 Subdivision Map Acts, “subdivision” was defined as “any land or portion thereof shown on the last preceding tax roll as a unit or as contiguous units which is divided for the purpose of sale . . . into five or more parcels within any one year period.” The Court makes numerous points interpreting those statutes, some of the most significant being: 1) Once the fifth parcel is created within a one-year period, all the parcels created within that year constitute a subdivision; 2) Even though a unit of land is defined as a unit as shown on the last tax roll preceding the division, that does not mean the unit shown on the last preceding tax roll is a legal parcel, and legal parcels cannot be created by dividing that illegal parcel; and 3) If land is divided for the purpose of sale, it is irrelevant that the retained parcel is not held for the purpose of sale. Thus, for example, if the owner of a unit of land divides it in half, the unit is divided for the purpose of sale even if the owner intends to sell only one half and keep the other.Attorney General Opinion No. 04-1105
10/3/05ASSESSOR’S RECORDS: County Assessors maintain parcel boundary map data, which is detailed geographic information used to describe and define the precise geographic boundaries of assessor’s parcels. When maintained in electronic format, Assessors must make copies in electronic format available to the public. The fee charged for producing the copy is limited to the direct cost of producing the copy in electronic format, and may not include expenses associated with the county’s initial gathering of the information, with initial conversion of the information into electronic format, or with maintaining the information.Villacreses v. Molinari     Docket     Sup.Ct. Docket
132 Cal.App.4th 1223 – 4th Dist., Div. 3 (G034719) 9/26/05     Request for review by Cal Supreme Ct. DENIED 12/14/05ARBITRATION: Section 1298 requires that an arbitration provision in a real estate contract be accompanied by a statutory notice and that the parties indicate their assent by placing their initials on an adjacent space or line. The arbitration notice, standing alone, does not constitute an arbitration provision. So the Defendants could not compel arbitration where the contract contained only the notice, but did not contain a separate arbitration provision.

The Court has a good sense of humor. The opinion contains the following memorable quotes:

1. “If the first rule of medicine is ‘Do no harm,’ the first rule of contracting should be ‘Read the documents’.”

2. “. . . to paraphrase the immortal words of a former President of the United States, the applicability of this purported arbitration agreement to the instant dispute ‘depends upon what the meaning of the word “it” is.'”Campbell v. Superior Court (La Barrie)     Docket     Sup.Ct. Docket
132 Cal.App.4th 904 – 4th Dist., Div. 1 (D046064) 9/14/05     Request for review by Cal Supreme Ct. DENIED 12/14/05LIS PENDENS: A cause of action for a constructive trust or an equitable lien does not support a lis pendens where it is merely for the purpose of securing a judgment for money damages. [Ed. Note: The Court in this and similar cases make the absolute statement that “an equitable lien does not support a lis pendens”, and explain that the lien is sought merely to secure a money judgment. But it is unclear whether the Court would reach the same conclusion in a pure equitable lien case. For example, where a loan is paid off with the proceeds of a new loan, but the new mortgage accidentally fails to be recorded, an action to impose an equitable lien seeks more than a mere money judgment. It seeks to allow the new lender to step into the shoes of the old lender and, in my opinion, a lis pendens should be allowed.]Fripp v. Walters Docket     Docket     Sup.Ct. Docket
132 Cal.App.4th 656 – 3rd Dist. (C046733) 9/7/05 (ONLY PART I CERTIFIED FOR PUBLICATION)     Request for review by Cal Supreme Ct. DENIED 11/16/05BOUNDARIES / SURVEYS: A conveyance referring to a parcel map cannot convey more property than the creator of the parcel map owned. The Court rejected Defendant’s claim that the recorded parcel map was a “government sanctioned survey” which precludes a showing that the boundaries established by the parcel map are erroneous. The court explained that the rule cited by Defendants applies only to official survey maps that create boundaries. Boundary lines cannot be questioned after the conveyance of public land to a private party, even if they are inaccurate.Title Trust Deed Service Co. v. Pearson     Docket
132 Cal.App.4th 168 – 2nd Dist (B175067) 8/25/05     Case complete 10/28/05HOMESTEADS: A declared homestead exemption applies to surplus proceeds from a trustee’s sale. [Comment: Applying the declared homestead exemption to trustee’s sales is fine. But the Court also seems to want to pay surplus proceeds to the debtor up to the amount of the exemption before paying the holder of a junior trust deed. This should be wrong since the homestead exemption does not apply to voluntary liens. I think the Court does not adequately address what appears to me to be a circuity of priority problem: The homestead exemption is senior to the judgment lien, which in this case happens to be senior to a junior TD, which is senior to the homestead exemption.]In re Marriage of Benson     Docket
36 Cal.4th 1096 – Cal. Supreme Court (S122254) 8/11/05COMMUNITY PROPERTY: The doctrine of partial performance, which is an exception to the Statute of Frauds, is not an exception to the requirement of Family Code Section 852 that an agreement to transmute property be in writing. The concurring opinion points out that the Court does not decide what statutory or equitable remedy would be available to make whole a spouse who has been disadvantaged by an illusory oral promise to transmute property, or what sanction may be employed against a spouse who has used section 852(a) as a means of breaching his or her fiduciary duty and gaining unjust enrichment.First Federal Bank v. Fegen     Docket
131 Cal.App.4th 798 – 2nd Dist. (B174252) 7/29/05     Case complete 9/29/05JUDGMENTS: The Court dismissed an appeal as being moot where the debtor did not post a bond after a sheriff’s sale of real property. C.C.P. Section 917.4 provides that an appeal of an order directing the sale of real property does not stay enforcement of the order. A sheriff’s sale is final, except that the debtor can commence an action within 90 days to set aside the sale if the judgment creditor is the successful bidder. Here, the debtor failed to file an action within 90 days so the sale is final.Bear Creek Master Association v. Edwards     Docket     Sup.Ct. Docket
130 Cal.App.4th 1470 – 4th Dist. Div. 2 (E034859) 7/13/05     Request for review by Cal Supreme Ct. DENIED 10/19/05CONDOMINIUMS: The definition of “condominium” in Civil Code Section 1351(f) does not require that an actual structure has been built; rather it only requires that it be described in a recorded condominium plan. (Note, however, that under CC 1352 the condominium does not come into existence until a condominium unit has been conveyed.) The case also contains an extensive discussion of the procedural requirements for foreclosing on an assessment lien recorded by the homeowner’s association.Woodridge Escondido Property Owners Assn. v. Nielsen     Docket     Sup.Ct. Docket
130 Cal.App.4th 559 – 4th Dist. Div. 1 (D044294) 5/25/05 (pub. order 6/16/05)     Request for review by Cal Supreme Ct. DENIED 8/31/05CC&R’s: A provision in CC&R’s that prohibited construction of a permanent structure in an easement area applied to a deck because it was attached to the house and had supporting posts that were buried in the ground, such that it was designed to continue indefinitely without change and was constructed to last or endure.Beyer v. Tahoe Sands Resort     Docket
129 Cal.App.4th 1458 – 3rd Dist. (C045691) 6/8/05     Case complete 8/8/05EASEMENTS: California Civil Code Section 805 provides that a servitude cannot be held by the owner of the servient tenement. The Court held that the term “owner” under Section 805 means the owner of the full fee title, both legal and equitable, such that a property owner who owns less than full title may validly create easements in his own favor on his land. Here, the Court held that the grantor could reserve an easement over property conveyed to a time-share trustee where the grantor held all beneficial interest in the trust and the grantee held just bare legal title.Bank of America v. La Jolla Group     Docket     Sup.Ct. Docket
129 Cal.App.4th 706 – 5th Dist. (F045318) 5/19/05     Request for review by Cal Supreme Ct. DENIED 9/7/05TRUSTEE’S SALES: A trustee’s sale, which was accidentally held after the owner and lender agreed to reinstate the loan, is invalid. The conclusive presumptions in Civil Code Section 2924 pertain only to notice requirements, not to every defect or inadequacy. The Court points out that the advantages of being a bona fide purchaser are not limited to the presumptions set forth in Section 2924, but does not discuss it further because the defendant did not argue that its bona fide purchaser status supports its position in any way other than the statutory presumptions.Zabrucky v. McAdams     Docket
129 Cal.App.4th 618 – 2nd Dist. (B167590) 5/18/05     Case complete 7/20/05COVENANTS, CONDITIONS & RESTRICTIONS: The Court interpreted a provision in CC&R’s to prohibit an addition to a house which would unreasonably obstruct a neighbor’s view. The Court painstakingly nit-picked through the provisions of the CC&R’s and compared the provisions and the facts to other cases where courts have done the same. The main conclusion I draw is that these cases are each unique and it is very difficult to determine in advance what a court will do. In fact, one judge dissented in this case. This means it can be very dangerous to issue endorsements such as CLTA Endorsement No. 100.6 or 100.28, insuring against this kind of provision in CC&R’s.Anolik v. EMC Mortgage Corp.     Docket     Sup.Ct. Docket
Cal.App. 3rd Dist. (C044201) 4/29/05 (Mod. 5/26/05)     Request for review by Cal Supreme Ct. DENIED and DECERTIFIED 8/10/05***DECERTIFIED***
TRUSTEE’S SALES:
1. To be valid, a notice of default must contain at least one correct statement of a breach, and it must be substantial enough to authorize use of the drastic remedy of nonjudicial foreclosure.
2. An assertion in a notice of default of one or more breaches qualified with the words “if any” does not satisfy the requirements of section 2924 because it indicates that the lender has no clue as to the truth or falsity of the assertion.
3. It is not proper to declare a payment in default when the time for imposing a late fee on that payment has not expired because the default is not sufficiently substantial at that point.
4. Under Civil Code Section 2954, a lender cannot force impound payments for property taxes until the borrower has failed to pay two consecutive tax installments.Kangarlou v. Progressive Title Company     Docket
128 Cal.App.4th 1174 – 2nd Dist. (B177400) 4/28/05     Case complete 6/29/05ESCROW: 1. Under Civil Code Section 1717, plaintiff can recover attorney’s fees after prevailing in an action against the escrow holder, even though the escrow instructions limited attorney’s fees to actions to collect escrow fees.
2. Under Business and Professions Code Section 10138, an escrow holder has a duty to obtain evidence that a real estate broker was regularly licensed before delivering compensation.Paul v. Schoellkopf     Docket     Sup.Ct. Docket
128 Cal.App.4th 147 – 2nd Dist. (B170379) 4/5/05     Request for review by Cal Supreme Ct. DENIED 6/15/05ESCROW: A provision for attorneys’ fees in escrow instructions limited to fees incurred by the escrow company in collecting for escrow services does not apply to other disputes between the buyer and seller.Knight v. Superior Court     Docket     Sup.Ct. Docket
128 Cal.App.4th 14 – 3rd Dist. (C048378) 4/4/05     Request for review by Cal Supreme Ct. DENIED 6/29/05DOMESTIC PARTNERSHIPS: Family Code Section 308.5, enacted by Proposition 22, 3/7/00, states: “Only marriage between a man and a woman is valid or recognized in California.” This statute did not prohibit the legislature from enacting California’s Domestic Partnership Law, Family Code Section 297, et seq., because Section 308.5 pertains only to marriages, not to other relationships.Estate of Seifert     Docket     Sup.Ct. Docket
128 Cal.App.4th 64 – 3rd Dist. (C046456) 4/4/05     Request for review by Cal Supreme Ct. DENIED 6/22/05ADVERSE POSSESSION: A fiduciary, including an executor, may not acquire title by adverse possession against the heirs. Once the executor was appointed, the statutory period for his adverse possession of the subject property ceased to run.Melendrez v. D & I Investment     Docket     Sup.Ct. Docket
127 Cal.App.4th 1238 – 6th Dist. (H027098) 3/29/05     Request for review by Cal Supreme Ct. DENIED 6/22/05 TRUSTEE’S SALES: A trustee’s sale cannot be set aside where the purchaser at the sale is a bona fide purchaser (“BFP”). The elements of being a BFP are that the buyer 1) purchase the property in good faith for value, and 2) have no knowledge or notice of the asserted rights of another. The value paid may be substantially below fair market value. Also, the buyer’s sophistication and experience in purchasing at trustee’s sales does not disqualify him from being a BFP, although in evaluating whether the buyer is a BFP, the buyer’s foreclosure sale experience may be considered in making the factual determination of whether he had knowledge or notice of the conflicting claim.Radian Guaranty v. Garamendi     Docket     Sup.Ct. Docket
127 Cal.App.4th 1280 – 1st Dist. (A105789) 3/29/05     Request for review by Cal Supreme Ct. DENIED 7/20/05TITLE INSURANCE: Radian’s Lien Protection Policy constitutes title insurance pursuant to Insurance Code Section 12340.1. Because Radian does not possess a certificate of authority to transact title insurance, it is not authorized to sell the policy in California or anywhere else in the United States, pursuant to California’s monoline statutes: Ins. Code Section 12360 (title insurance) and Ins. Code Section 12640.10 (mortgage guaranty insurance).Gardenhire v. Superior Court     Docket     Sup.Ct. Docket
128 Cal.App.4th 426a – 6th Dist. (H026601) 3/22/05     Request for review by Cal Supreme Ct. DENIED 6/8/05TRUSTS: A trust can be revoked by a will where the trust provided for revocation by “any writing” and the will expressed a present intent to revoke the trust. The Court pointed out that a will, which is inoperative during the testator’s life, can nevertheless have a present and immediate effect upon delivery, such as notice of intent to revoke.Jones v. Union Bank of California     Docket     Sup.Ct. Docket
127 Cal.App.4th 542 – 2nd Dist. (B173302) 3/11/05     Request for review by Cal Supreme Ct. DENIED 6/8/05When a lender successfully defends an action to set aside or enjoin a foreclosure sale, the antideficiency provisions of C.C.P. Section 580d do not prohibit an award of attorney fees. In addition, Civil Code sections 2924c and 2924d do not limit the amount of fees the court may award.O’Toole Company v. Kingsbury Court HOA     Docket
126 Cal.App.4th 549 – 2nd Dist. (B172607) 2/3/05     Case complete 4/8/05HOMEOWNER’S ASSOCIATIONS: In a suit to enforce a judgment, the trial court properly appointed a receiver and levied a special emergency assessment when defendant-homeowners association failed to pay. The Court pointed out that regular assessments are exempt from execution, but not special assessments.State of California ex rel. Bowen v. Bank of America     Docket     Sup.Ct. Docket
126 Cal.App.4th 225 – 2nd Dist. (B172190) 1/31/05     Request for review by Cal Supreme Ct. DENIED 5/18/05ESCHEAT: This is a qui tam action filed on behalf of the State Controller. The court held that unused reconveyance fees do not need to be escheated because the obligation to return a specific sum of money is neither certain nor liquidated under Civil Code Section 2941 or under the provisions of the deeds of trust. This case was against lenders and I believe it would not apply in the context of escrow and title insurance.Van Klompenburg v. Berghold     Docket     Sup.Ct. Docket
126 Cal.App.4th 345 – 3rd Dist. (C045417) 1/31/05     Request for review by Cal Supreme Ct. DENIED 5/11/05EASEMENTS: Where the grant of easement states that the right of way shall be “kept open” and “wholly unobstructed”, the normal rule does not apply, which would otherwise allow the owner of the servient estate to erect a locked gate as long as the owner of the dominant estate is given a key and the gate does not unreasonably interfere with the use of the easement.State of California v. Old Republic Title Company     Docket     Sup.Ct. Docket
125 Cal.App.4th 1219 – 1st Dist. (A095918) 1/20/05     NOTE: request for order directing republication of court of appeal opinion DENIED 8/16/06.
Overruled in part on issue not significant to title insurance – SEE BELOW.
TITLE INSURANCE: Old Republic was found liable for 1) failing to escheat unclaimed funds in escrow accounts, 2) failing to return fees collected for reconveyances which were not used and 3) failing to pay interest collected on escrow funds to the depositing party.

Of particular interest, the Court stated:
“Insurance Code Section 12413.5 provides that interest on escrow funds must be paid to the depositing party ‘unless the escrow is otherwise instructed by the depositing party . . . .’ Any title company is free to draft escrow instructions that, with full disclosure to and agreement from the depositing party, direct that the arbitrage interest differential be paid to the company. It is a matter of disclosing the pertinent costs and benefits to the customer.”

State of California v. PriceWaterhouseCoopers
39 Cal.4th 1220 – Cal. Supreme Court (S131807) 8/31/06

FALSE CLAIMS ACT: A political subdivision may not bring an action under Government Code section 12652, subdivision (c), to recover funds on behalf of the state or another political subdivision.Frei v. Davey     Docket
124 Cal.App.4th 1506 – 4th Dist., Div. 3 (G033682) 12/17/04     Case complete 2/22/05CONTRACTS: Under the most recent version of the CAR purchase contract, the prevailing party is barred from recovering attorney fees if he refused a request to mediate.Mix v. Superior Court     Docket      Sup.Ct. Docket
124 Cal.App.4th 987 – 4th Dist., Div. 3  12/7/04  (G033875)     Request for review by Cal Supreme Ct. DENIED 2/16/05LIS PENDENS: (Related to Behniwal v. Superior Court, several cases above.) After the claimant loses at trial, the trial court must expunge a lis pendens pending appeal unless claimant can establish by a preponderance of the evidence the probable validity of the real property claim. Claimants will rarely be able to do this because it requires a trial court to determine that its own decision will probably be reversed on appeal. The court points out that this strict result is tempered by claimant’s ability to petition the appellate court for a writ of mandate, so that the appellate court can make its own determination of the probability of the trial court’s decision being reversed on appeal.D’Orsay International Partners v. Superior Court     Docket     Sup.Ct. Docket
123 Cal.App.4th 836 – 2nd Dist. 10/29/04 (B174411)     Request for review by Cal Supreme Ct. DENIED 1/26/05MECHANIC’S LIENS: The court ordered the release of a mechanic’s lien because there was no actual visible work on the land or the delivery of construction materials. The criteria applicable to a design professional’s lien do not apply where the claimant filed a mechanic’s lien. The court specifically did not address the question of whether a contractor performing design services or employing design professionals may assert a design professionals’ lien.Gibbo v. Berger     Docket     Sup.Ct. Docket
123 Cal.App.4th 396 – 4th Dist., Div. 2 10/22/04 (E035201)     Case complete 12/27/04    Req. for Depublication by Cal. Supreme Ct. DENIED 2/16/05USURY: The usury exemption for loans arranged by real estate brokers does not apply where the broker functioned as an escrow whose involvement was limited to preparing loan documents on the terms provided by the parties, ordering title insurance, and dispersing funds, all in accordance with the parties’ instructions. In order to “arrange a loan” the broker must act as a third party intermediary who causes a loan to be obtained or procured. Such conduct includes structuring the loan as the agent for the lender, setting the interest rate and points to be paid, drafting the terms of the loan, reviewing the loan documents, or conducting a title search.Knapp v. Doherty     Docket
123 Cal.App.4th 76 – 6th Dist. 9/20/04 (H026670)     Case complete 12/21/04TRUSTEE’S SALES:
1. Civil Code Section 2924 requires the trustee to give notice of sale only “after the lapse of the three months” following recordation of the notice of default. The Notice of Sale technically violated this requirement because it was served by mail on the property owner several days prior to the end of three months. However, this did not invalidate the sale because the owner did not suffer prejudice from the early notice.
2. Incorrectly stating the date of the default in the Notice of Default did not invalidate the sale because the discrepancy was not material.Royal Thrift and Loan v. County Escrow     Docket
123 Cal.App.4th 24 – 2nd Dist. 10/15/04 (B165006)     Case complete 12/16/04TRUSTEE’S SALES:
1. Postponements of a trustee’s sale during an appeal were reasonable, so they do not count toward the 3-postponement limit of Civil Code Section 2924g(c)(1). The postponements fall under the “stayed by operation of law” exception. However, the Court recognized that the better course would have been to re-notice the trustee’s sale after the appeal.
2. The court indicated that an appeal from an action to quiet title against a deed of trust should stay the trustee’s sale proceedings under Code of Civil Procedure Section 916 pending the appeal. However, the court did not formally make that holding because the owner did not appeal and the issues involving the appellants (escrow holder and bonding company) did not require a holding on that issue.Tesco Controls v. Monterey Mechanical Co.     Docket
124 Cal.App.4th 780 – 3rd Dist. 12/6/04 (C042184) (Opinion on rehearing)     Case complete 2/7/05MECHANIC’S LIENS: A mechanic’s lien release that waives lien rights up to the date stated in the release is effective to waive lien rights up to that date, even if the progress payments did not fully compensate the lien claimant.Gale v. Superior Court     Docket
122 Cal.App.4th 1388 – 4th Dist., Div. 3  10/6/04 (G033968) (Mod. 10/22/04)     Rehearing Denied 10/22/04; Case Complete 12/10/04LIS PENDENS / DIVORCE
1. The automatic stay contained in a divorce summons does not apply to the sale by the husband, as managing member of a family-owned management company, of real property vested in the management company.
2. A petition for dissolution of marriage which does not allege a community interest in specific real property does not support the filing of a lis pendens.Nwosu v. Uba     Docket
122 Cal.App.4th 1229 – 6th Dist. 10/1/04 (H026182)     Case complete 12/01/04The court held that a transaction was a bona fide sale and not an equitable mortgage. The complicated facts provide little of interest to the title insurance business, other than to note the fact that a deed can be held to be a mortgage if the deed was given to secure a debt. The case contains a good discussion of the distinction between legal claims, for which there is a right to a jury trial, and equitable claims, for which there is no right to a jury trial.Moores v. County of Mendocino     Docket
122 Cal.App.4th 883 – 1st Dist. 9/24/04 (A105446)     Case complete 11/24/04SUBDIVISION MAP ACT: The enactment of an ordinance requiring the County to record notices of merger did not result in the unmerger of parcels that had previously merged under the County’s previous automatic merger ordinance. The County properly sent a subsequent notice under Gov. Code Section 66451.302 notifying property owners of the possibility of a merger. Accordingly, plaintiff’s parcels remain merged.Larsson v. Grabach     Docket     Sup.Ct. Docket
121 Cal.App.4th 1147 – 5th Dist. 8/25/04 (F042675)     Request for review by Cal Supreme Ct. DENIED 12/15/04EASEMENTS: An easement by implication can be created when an owner of real property dies intestate and the property is then divided and distributed to the intestate’s heirs by court decree.Felgenhauer v. Soni     Docket
121 Cal.App.4th 445 – 2nd Dist. 8/5/04 (B157490)     Case complete 10/8/04PRESCRIPTIVE EASEMENTS: To establish a claim of right, which is one of the elements necessary to establish a prescriptive easement, the claimant does not need to believe he is entitled to use of the easement. The phrase “claim of right” has caused confusion because it suggests the need for an intent or state of mind. But it does not require a belief that the use is legally justified; it simply means that the property was used without permission of the owner of the land.Jonathan Neil & Assoc. v. Jones     Docket
33 Cal.4th 917 – Cal. Supreme Court (S107855) 8/5/04 (Mod. 10/20/04)INSURANCE: A tort action for breach of the duty of good faith and fair dealing exists only in regard to the issues of bad faith payment of claims and unreasonable failure to settle. It does not pertain to the general administration of an insurance policy or to other contract settings. In this case, a tort cause of action does not lie for the insurer’s bad faith conduct in setting an unfairly high insurance premium.Bello v. ABA Energy Corporation     Docket
121 Cal.App.4th 301 – 1st Dist. 8/2/04 (A102287)     Case complete 10/6/04RIGHTS OF WAY: A grant of a public right of way includes uses made possible by future development or technology, which are not in existence at the time of the grant. Here, the Court held that a right of way included the right to install a pipeline to transport natural gas.California National Bank v. Havis     Docket
120 Cal.App.4th 1122 – 2nd Dist. 7/23/04 (B167152)     Case complete 9/22/04DEEDS OF TRUST: A bank holding a deed of trust holder was paid outside of escrow with a check. The bank sent a letter to escrow stating that it had “received payoff funds . . . it is our policy to issue the Full Reconveyance 10 days after receipt of the payoff check. Therefore, a Full Reconveyance will be sent to the County Recorder on or about August 5, 2002”. The escrow relied on the letter and closed escrow without paying off the lender. The check bounced and the lender began foreclosure.

The Court reversed a summary judgment in favor of defendants, holding that the letter did not constitute a payoff demand statement binding on the bank under CC 2943. The Court determined that there was a triable issue of fact as to whether the parties could reasonably have relied on the letter. [Ed. note: The Court exhibited a scary lack of understanding of real estate transactions, and could not come to grips with the fact that reconveyances from institutional lenders never record at close of escrow.]Kirkeby v. Sup. Ct. (Fascenelli)     Docket
33 Cal.4th 642 – Cal. Supreme Court 7/22/04 (S117640)LIS PENDENS: An action to set aside a fraudulent conveyance supports the recording of a lis pendens. The court stated that “[b]y definition, the voiding of a transfer of real property will affect title to or possession of real property”. (Ed. note: Several appellate court decisions have held that actions to impose equitable liens and constructive trusts do not support a lis pendens. The Supreme Court did not deal with those issues but it seems that, using the court’s language, it could similarly be said that “by definition imposing an equitable lien or constructive trust will affect title to or possession of real property.”)Tom v. City and County of San Francisco     Docket     Sup.Ct. Docket
120 Cal.App.4th 674 – 1st Dist. 6/22/04 (A101950)     Request for review by Cal Supreme Ct. DENIED 10/13/04TENANCY IN COMMON AGREEMENTS: In order to evade burdensome regulations for converting apartments to condominiums, it has become a common practice in San Francisco for a group of people to acquire a multi-unit residential building and enter into a tenancy in common agreement establishing an exclusive right of occupancy for each dwelling unit. Seeking to end this practice, the People’s Republic of San Francisco enacted an ordinance prohibiting exclusive right of occupancy agreements. The Court held that the ordinance is unconstitutional because it violates the right of privacy set forth in Article I, section I of the California Constitution.California Attorney General Opinion No. 03-1108
6/9/04RECORDING: A memorandum of lease is a recordable instrument.Yeung v. Soos     Docket
119 Cal.App.4th 576 – 2nd Dist. 6/16/04 (B165939) (Mod. 7/2/04)     Case complete 9/10/04QUIET TITLE: A default judgment after service by publication is permissible in a quiet title action. However, the judgment may not be entered by the normal default prove-up methods; the court must require evidence of the plaintiff’s title, including live witnesses and complete authentication of the underlying real property records. Nevertheless, the judgment is not rendered void because the default prove-up method was used rather than an evidentiary hearing.Villa de Las Palmas HOA v. Terifaj     Docket
33 Cal.4th 73 – Cal. Supreme Court 6/14/04 (S109123)RESTRICTIONS: Use restrictions in amended declarations are binding on owners who purchased prior to recordation of the amendment. They are also subject to the same presumption of validity as the original declaration.In re Marriage of Gioia     Docket
119 Cal.App.4th 272 – 2nd Dist. 6/9/04 (B166803)     Case complete 8/11/04BANKRUPTCY: A bankruptcy trustee’s notice of abandonment of property was effective even though it was ambiguous because it did not specifically state that the trustee will be deemed to have abandoned the property 15 days from the date of mailing of the notice. The court also states that an abandonment is irrevocable even if the property later becomes more valuable.Dieckmeyer v. Redevelopment Agency of Huntington Beach     Docket     Sup.Ct. Docket
127 Cal.App.4th 248 – 4th Dist., Div. 3  2/28/05 (G031869) (2nd Opinion)     Case complete 5/5/05DEEDS OF TRUST: Where a deed of trust secures both payment of a promissory note and performance of contractual obligations (CC&R’s in this case), the trustor is not entitled to reconveyance of the deed of trust after the note is paid off, but before the contractual obligations are satisfied.Textron Financial v. National Union Fire Insurance Co.     Docket      Sup.Ct. Docket
118 Cal.App.4th 1061 – 4th Dist., Div. 3  5/20/04 (G020323) (Mod. 6/18/04)     Req. for rev. and depub. by Cal Supreme Ct. DENIED 9/15/04INSURANCE / PUNITIVE DAMAGES:
1. The amount of attorney’s fees incurred by an insured in obtaining policy benefits and recoverable under Brandt v. Sup. Ct. are limited to the fees under the contingency fee agreement between the insured and its counsel, and not a higher figure based on the reasonable value of the attorney’s services.
2. Punitive damages must be based on compensatory damages awarded for tortious conduct, including breach of the implied covenant of good faith and fair dealing, excluding the sum recovered on the breach of contract claim.
3. When compensatory damages are neither exceptionally high nor low, and the defendant’s conduct is neither exceptionally extreme nor trivial, the outer constitutional limit on the amount of punitive damages is approximately four times the amount of compensatory damages.
4. The wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award.Blackburn v. Charnley     Docket     Sup.Ct. Docket
117 Cal.App.4th 758 – 2nd Dist. 4/8/04 (B166080)     Request for review by Cal Supreme Ct. DENIED 7/21/04SPECIFIC PERFORMANCE: Specific performance is available even though the contract referred to lots which had not yet been subdivided. This violation of the Subdivision Map Act made the contract voidable at the option of the buyer, who chose to enforce the contract instead. The requirement in the standard CAR contract to mediate in order to collect attorney’s fees does not apply where an action is filed in order to record a lis pendens and where mediation was conducted pursuant to the court’s own practices.Hedges v. Carrigan     Docket
117 Cal.App.4th 578 – 2nd Dist. 4/6/04 (B166248)     Case complete 6/11/04ARBITRATION: The Federal Arbitration Act preempts C.C.P. Section 1298, which requires that an arbitration clause in a real estate contract contain a specified notice and be in a specified type size. Preemption requires that the transaction affect interstate commerce, which the court found existed because the anticipated financing involved an FHA loan, and the purchase agreement was on a copyrighted form that stated it could only be used by members of the National Association of Realtors. [Ed. note: the form does not say that!] However, in the unpublished portion of the opinion, the court held that the arbitration clause could not be enforced because it required that the parties initial it in order to acknowledge their agreement to arbitration, and they did not all do so. [Ed. note: the concurring opinion makes much more sense than the majority opinion!]Kapner v. Meadowlark Ranch Assn.     Docket
116 Cal.App.4th 1182 – 2nd Dist. 3/17/04 (B163525)     Case complete 5/25/04ADVERSE POSSESSION / PRESCRIPTIVE EASEMENTS: A prescriptive easement cannot be established where the encroacher’s use is exclusive. The Court affirmed the trial court’s order requiring the property owner to sign an encroachment agreement or remove the encroachment.Harrison v. Welch     Docket     Sup.Ct. Docket
116 Cal.App.4th 1084 – 3rd Dist. 3/12/04 (C044320)     Request for depublication DENIED 6/23/04ADVERSE POSSESSION / PRESCRIPTIVE EASEMENTS:
1) In the uncertified Part I of the opinion, the court rejected Defendant’s claim of adverse possession because real property taxes were not paid on any area outside of Defendant’s lot. The court rejected defendant’s creative argument that real property taxes were paid on all land within the setback area where defendant’s house was 3-1/2 feet from the property line, and a zoning ordinance required a 5-foot setback.
2) A prescriptive easement cannot be established where the encroacher’s use is exclusive. The opinion contains an excellent discussion of the case law on this issue.
3) The 5-year statute of limitations in C.C.P. Sections 318 and 321, within which a plaintiff must bring an action to recover real property, does not commence until the encroacher’s use of the property has ripened into adverse possession.Brizuela v. CalFarm Insurance Company     Docket     Sup.Ct. Docket
116 Cal.App.4th 578 – 2nd Dist. 3/3/04 (B160875)     Review by Cal Supreme Ct. DENIED 6/9/04INSURANCE: Where an insurance policy requires an insured who has filed a claim to submit to an examination under oath, that obligation is a condition precedent to obtaining benefits under the policy. The insurer is entitled to deny the claim without showing it was prejudiced by the insured’s refusal.Hanshaw v. Long Valley Road Assn.     Docket     Sup.Ct. Docket
116 Cal.App.4th 471 – 3rd Dist. 3/2/04 (C041796)     Review by Cal Supreme Ct. DENIED 5/19/04PUBLIC STREETS: An offer of dedication of a public street that is not formally accepted may, nevertheless, be accepted by subsequent public use. This is known as common law dedication. However, counties have a duty to maintain only those roads that are “county roads”, and a public road does not become a county road unless specifically accepted as such by the appropriate resolution of the Board of Supervisors.Miner v. Tustin Avenue Investors     Docket
116 Cal.App.4th 264 – 4th Dist., Div.3  2/27/04 (G031703)     Case complete 5/4/04LEASES / ESTOPPEL CERTIFICATES: A lease contained an option to renew for 5 years, but the tenant signed an estoppel certificate stating that the lease was in full force and effect, and that the tenant had no options except the following: (blank lines that followed were left blank). The Court held that the tenant was not bound by the estoppel certificate because it was ambiguous as to whether it referred only to options outside of the lease or whether the tenant had somehow given up his option rights.Tremper v. Quinones     Docket
115 Cal.App.4th 944 – 2nd Dist. 2/17/04 (B165218)     Case complete 5/3/04GOOD FAITH IMPROVER: Attorney’s fees and costs may be included in the calculation of damages awarded against a person bringing an action as a good faith improver under C.C.P. Section 871.3, regardless of whether the costs and fees were incurred in prosecuting a complaint or defending against a cross complaint, and even where the good faith improver issues are part of a quiet title action which would not ordinarily support an award of attorney’s fees and costs.Kertesz v. Ostrovsky     Docket
115 Cal.App.4th 369 – 4th Dist., Div.3  1/28/04 (G030640)     Case complete 4/2/04JUDGMENTS / BANKRUPTCY: The time for renewing a judgment was 10 years from entry of the judgment, plus the amount of time between the debtor’s filing of a bankruptcy petition and the date of the Bankruptcy Court’s order of nondischargeability, plus an additional 30 days under Bankruptcy Code Section 108(c). The court reached this conclusion even though the judgment was entered before the bankruptcy petition was filed, and the 10-year period for renewing the judgment expired long after the bankruptcy was closed.

NOTE: I believe the judge misunderstood the automatic stay and Bankruptcy Code Section 108(c). I do not believe the automatic stay applies when a period of time for taking an action commences prior to bankruptcy, and expires after the bankruptcy case is closed.Rancho Santa Fe Association v. Dolan-King     Docket     Sup.Ct. Docket
115 Cal.App.4th 28 – 4th Dist., Div.1  1/7/04 (D040637/D041486)     Pet. for Review by Cal Supreme Ct. DENIED 4/28/04HOMEOWNER’S ASSOCIATIONS: Regulations adopted and interpreted by a Homeowner’s Association must be reasonable from the perspective of the entire development, not by determining on a case-by-case basis the effect on individual homeowners.Gray Cary Ware & Freidenrich v. Vigilant Insurance Co.     Docket
114 Cal.App.4th 1185 – 4th Dist., Div.1  1/12/04 (D041811)     Case complete 3/15/04INSURANCE: Civil Code Section 2860(c) provides for the arbitration of disputes over the amount of legal fees or the hourly billing rate of Cumis counsel, but does not apply to other defense expenses.

Go to cases 2000 – 2003

Challenge Your Lender… Now!

13 Dec

Don’t delay – Opt in to the follow Blog and gain access to over 680 ideas and posts to hold your Lender accountable new post every day!

Do you want to hold your lender responsible for their illegal actions?

Challenge Your Lender… Now!

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My name is Timothy McCandless, and I’m here to tell you what most banks and mortgage loan servicers don’t want you to know: More than 65 million homes in the US may not be subject to foreclosure after all, and your home is very likely one of the “safe” homes. The reason these homes are not technically subject to foreclosure is because the lenders, mortgage companies, mortgage servicers, and title companies broke the law throughout the process of managing your loan, both at the inception of your loan and throughout the life of the loan. Because of their fraudulent actions, they are unable to produce a title for, or show ownership of, your property. This causes what we call a “defect of title”, and legally prohibits your lender or servicer from foreclosing, regardless of whether or not your loan is current.

This situation is all over the news, and now, starting today, you can learn how to protect yourself from unlawful foreclosure.

WE CAN TRAIN YOU HOW TO CHALLENGE YOUR LENDER

Most Mortgage Assignments are Illegal

In a major ruling in the Massachusetts Supreme Court today, US Bank National Association and Wells Fargo lost the “Ibanez case”, meaning that they don’t have standing to foreclose due to improper mortgage assignment. The ruling is likely to send shock waves through the entire judicial system, and seriously raise the stakes on foreclosure fraud. Bank stocks plummeted after this ruling. These assignments are what people need to challenge in their own mortgages.

I am prepared to show you the most amazing information on how you can actually Challenge Your Lender. Once you opt in for our free ebook (just enter your email address above and to the right), you’ll get immediate access to our first, very informative webinar, as well as to our free ebook. You’ll learn more about the Challenge Your Lender program, and more importantly, how the US mortgage system is rigged to take advantage of you and how to can fight back. My program will show you exactly how to get a copy of your loan documents that your lender or loan servicer currently has in their possession, and then how to begin examining these documents to learn more about how your lender, as well as other parties involved, has used your name and credit to make millions of dollars. Analyzing your loan documents is a crucial first step in beginning the Challenge Your Lender process.


Save your home from foreclosure

The information that you will be receiving in my free material and webinar will further your knowledge on what most lenders are doing to homeowners, and how you can save yourself from foreclosure. You will have the opportunity to acquire a free copy of my Challenge Your Lender workbook and learn how to begin building the paper trail that you will need to defend yourself and to prove the wrongdoings of your lender and loan servicer. Once you go through the workbook and listen in on the free webinar, you will be on top of your Challenge and ready to begin the program.

The Challenge Your Lender program will help put you in a position of power and control over your loan, and will allow you to decide what you would like to do with your property. This leverage will be advantageous when you begin negotiating your foreclosure. Most importantly, your lender or loan servicer should not be able to foreclose on you once you notify them that you have identified fraudulent activity. My program is your first step in saving your property from foreclosure.

Don’t wait – opt in today. Every day counts in the battle against your lender.

Best regards,
Tim

Fighting Foreclosure in California

11 Nov

Using the Courts to Fight a California or Other Non-Judicial Foreclosure – 3-Stage Analysis – including a Homeowner Action to “Foreclose” on the Bank’s Mortgage Security Interest – rev.

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California real property foreclosures are totally different from foreclosures in New York and many other states. The reason is that more than 99% of the California foreclosures take place without a court action, in a proceeding called a “non-judicial foreclosure”. Twenty-one states do not have a non-judicial foreclosure. [These states are CT, DE, FL, IL, IN, KS, KY, LA, ME, MD, MA, NE, NJ, NM, NY, ND, OH, PA, SC, UT, VT. – Source: realtytrac.com] In California, the lending institution can go through a non-judicial foreclosure in about 4 months from the date of the filing and recording of a “Notice of Default”, ending in a sale of the property without any court getting involved. The California homeowner can stop the sale by making full payment of all alleged arrears no later than 5 days prior to the scheduled sale. Unlike a judicial foreclosure, the homeowner will have no right to redeem the property after the sale (“equity of redemption”, usually a one-year period after judicial foreclosure and sale). For a visual presentation of the timeline for California and other state non-judicial foreclosures, go to Visual Timeline for California Non-Judicial Foreclosures.

A 50-state analysis of judicial and non-judicial foreclosure procedures is available at 50-State Analysis of Judicial and Non-Judicial Foreclosure Procedures.]

The problem I am going to analyze and discuss is under what circumstances can a homeowner/mortgagor go into court to obtain some type of judicial relief for wrongful or illegal conduct by the lender or others relating to the property and mortgage. My discussion applies as to all states in which non-judicial foreclosures are permitted.

There are three distinct stages that need to be separately discussed. These stages are the borrower’s current situation. The three stages are:

 

  • Homeowner is not in any mortgage arrears [declaratory judgment action]
  • Homeowner is behind in mortgage payments – at least 5 days before auction [injunction action, which could even be called an action by a homeowner to “foreclose” upon or eliminate the lending institution’s mortgage security interest]
  • Property was sold at auction [wrongful foreclosure action]

 

I. Homeowner Is Not in any Mortgage Arrears [Declaratory Judgment Action]

As long as a homeowner keeps making the mortgage payments, and cures any occasional short-term default, the homeowner is in a position to commence an action in federal or state court for various types of relief relating to the mortgage and the obligations thereunder. One typical claim is a declaratory judgment action to declare that the mortgage and note are invalid or that the terms are not properly set forth. There are various other types of claims, as well. The filing of such an action would not precipitate a non-judicial foreclosure. Compare this to a regular foreclosure, in which the homeowner stops paying on the mortgage, gets sued in a foreclosure action, and then is able in the lawsuit to raise the issues (as “defenses”) which the California homeowner would raise as “claims” or “causes of action” in the lawsuit being discussed for this first stage.

II. Homeowner Is Behind in Mortgage Payments – at Least 5 Days before Auction [Injunction Action seeking TRO and Preliminary Injunction, which you might say is a homeowner’s own “foreclosure proceeding against the bank and its mortgage interest”]

This is the most difficult of the three stages for making use of the courts to oppose foreclosure. The reasons are: foreclosure and sale is apt to take place too quickly; the cost of seeking extraordinary (injunctive) relief is higher because of the litigation papers and hearing that have to be done in a very short period of time to obtain fast TRO and preliminary injunctive relief to stop the threatened sale; the cost of this expensive type of injunctive litigation is probably much higher for many homeowners than just keeping up the mortgage payments; and, finally, you would have to show a greater probability of success on the merits of the action than you would need to file a lawsuit as in Stage 1, so that the homeowner’s chances of prevailing (and getting the requested injunction) are low and the costs and risks are high.

Nevertheless, when the facts are in the homeowner’s favor, the homeowner should consider bringing his plight to the attention of the court, to obtain relief from oppressive lending procedures. The problem with most borrower-homeowners is that they do not have any idea what valid bases they may have to seek this kind of relief. What anyone should do in this case is talk with a competent lawyer as soon as possible, to prevent any further delay from causing you to lose an opportunity to fight back. You need to weigh the cost of commencing a court proceeding (which could be $5,000 more or less to commence) against the loss of the home through non-judicial foreclosure.

 

III. Property Was Sold at Auction [Wrongful Foreclosure Action]

If the property has already been sold, you still have the right to pursue your claims, but in the context of a “wrongful foreclosure” lawsuit, which has various legal underpinnings including tort, breach of contract and statute. This type of suit could not precipitate any foreclosure and sale of the property because the foreclosure and sale have already taken place. Your remedy would probably be monetary damages, which you would have to prove. You should commence the action as soon as possible after the wrongful foreclosure and sale, and particularly within a period of less than one year from the sale. The reason is that some of your claims could be barred by a short, 1-year statute of limitations.

If you would like to talk about any possible claims relating to your mortgage transaction, please give me a call. There are various federal and state statutes and court decisions to consider, with some claims being substantially better than others. I am available to draft a complaint in any of the 3 stages for review by your local attorney, and to be counsel on a California or other-state action “pro hac vice” (i.e., for the one case) when associating with a local lawyer.

KISS: KEEP IT SIMPLE STUPID from Garfield

28 Aug

Finality versus good and evil. In the battlefield it isn’t about good and evil. It is about winner and losers. In military battles around the world many battles have been one by the worst tyrants imaginable.

Just because you are right, just because the banks did bad things, just because they have no right to do what they are doing, doesn’t mean you will win. You might if you do it right, but you are up against a superior army with a dubious judge looking on thinking that this deadbeat borrower wants to get out of paying.

The court system is there to mediate disputes and bring them to a conclusion. Once a matter is decided they don’t want it to be easy to reopen a bankruptcy or issues that have already been litigated. The court presumably wants justice to prevail, but it also wants to end the dispute for better or for worse.

Otherwise NOTHING would end. Everyone who lost would come in with some excuse to have another trial. So you need to show fundamental error, gross injustice or an error that causes more problems that it solves.

These are the same issues BEFORE the matter is decided in court. Foreclosures are viewed as a clerical act or ministerial act. The outcome is generally viewed as inevitable.

And where the homeowner already admits the loan exists (a mistake), that the lien is exists and was properly filed and executed (a mistake) and admits that he didn’t make payments — he is admitting something he doesn’t even know is true — that there were payments due and he didn’t make them, which by definition puts him in default.

It’s not true that the homeowner would even know if the payment is due because the banks refuse to provide any accounting on the third party payments from bailout, insurance CDS, and credit enhancement.

That’s why you need reports on title, securitization, forensic reviews for TILA compliance and loan level accounting. If the Judges stuck to the law, they would require the proof first from the banks, but they don’t. They put the burden on the borrowers —who are the only ones who have the least information and the least access to information — to essentially make the case for the banks and then disprove it. The borrowers are litigating against themselves.

In the battlefield it isn’t about good and evil, it is about winners and losers. Name calling and vague accusations won’t cut it.

Sure you want to use the words surrogate signing, robo-signing, forgery, fabrication and misrepresentation. You also want to show that the court’s action would or did cloud title in a way that cannot be repaired without a decision on the question of whether the lien was perfected and whether the banks should be able to say they transferred bad loans to investors who don’t want them — just so they can foreclose.

But you need some proffers of real evidence — reports, exhibits and opinions from experts that will show that there is a real problem here and that this case has not been heard on the merits because of an unfair presumption: the presumption is that just because a bank’s lawyer says it in court, it must be true.

Check with the notary licensing boards, and see if the notaries on their documents have been disciplined and if not, file a grievance if you have grounds. Once you have that, maybe you have a grievance against the lawyers. After that maybe you have a lawsuit against the banks and their lawyers.

But the primary way to control the narrative or at least trip up the narrative of the banks is to object on the basis that counsel for the bank is referring to things not in the record. That is simple and the judge can understand that.

Don’t rely on name-calling, rely on the simplest legal requirements that you can find that have been violated. Was the lien perfected?

If the record shows that others were involved in the original transaction with the borrowers at the inception of the deal, then you might be able to show that there were only nominees instead of real parties in interest named on the note and mortgage.

Without disclosure of the principal, the lien is not perfected because the world doesn’t know who to go to for a satisfaction of that lien. If you know the other parties involved were part of a securitization scheme, you should say that — these parties can only be claiming an interest by virtue of a pooling and servicing agreement. And then make the point that they are only now trying to transfer what they are calling a bad loan into the pool that the investors bought — which is expressly prohibited for multiple reasons in the PSA.

This is impersonation of the investor because the investors don’t want to come forward and get countersued for the bad and illegal lending practices that were used in getting the borrower’s signature.

Point out that the auction of the property was improperly conducted where you can show that to be the case. Nearly all of the 5 million foreclosures were allowed to be conducted with a single bid from a non-creditor.

If you are not a creditor you must bid cash, put up a portion before you bid, and then pay the balance usually within 24-72 hours.

But instead they pretended to be the creditor when their own documents show they were supposed to be representing the investors who were not part of the lawsuit nor the judgment.

SO they didn’t pay cash and they didn’t tender the note. THEY PAID NOTHING. In Florida the original note must actually be filed with the court to make sure that the matter is actually concluded.

There is a whole ripe area of inquiry of inspecting the so-called original notes and bringing to the attention the fraud upon the court in submitting a false original. It invalidates the sale, by operation of law.

THE GREAT SECURITIZATION SCAM AND THE GREAT RECESSION

4 May

By Neil Garfield

 

            Both the class action lawyers and the AG offices are looking for settlements that will cure the “foreclosure” problem. This is based upon the perceived benefit of getting the foreclosures either litigated or settled, SO THE “MARKET” CAN RESUME “FORWARD” MOTION. But what if the basic transaction was so defective as to be incapable of understanding, much less enforcement?  We ignore the fact that the basic transaction was a lie, that lies are not enforceable and while they could be modified by agreement into enforceable written instruments (completely absent from the current landscape) the inescapable fact is that in order to do so, you will need the signature of borrowers on loans that are based upon fair market values, reality and set-off for the damages inflicted on the homeowners by the Great Securitization Scam.

 

            So we start with the myth that there was a valid legal contract at origination, an assumption that upon examination by a paralegal, much less a first-year law student, is patently untrue.  Thus we proceed with the following ten (10) lies that form the foundation of our impotent financial and economic policies in the Great Recession triggered by the housing crisis:

  1. 1.       VALID MORTGAGE TRANSACTION: There was a loan of money, but not by either the payee, the mortgagee, the trustee or anyone else that is mentioned in the closing papers or the foreclosure papers filed anywhere. That is why the pretenders would rather play with the word “holder” than “creditor.”
  1. 2.       LEGAL MORTGAGE TRANSACTION: Even if the right parties were at the table, the transaction was illegal because of appraisal fraud, underwriting fraud, Securities Fraud and Servicing Fraud.
  1. 3.       LEGAL LOAN: Even if the right parties were at two different tables, the transaction was illegal because of ratings fraud, securities fraud, common law fraud, predatory loan practices and servicing fraud.
  1. 4.       KNOWN CREDITOR: Neither the investor who was the source of funds, nor the investment banker who only committed SOME of those funds to loan transactions, nor the borrower (homeowner) even knew of the existence of each other. After the “reconstituted” bogus mortgage pools that never existed in the first place, payments by insurance, credit de fault swaps, and federal  bailouts, it is at the very least a question of fact to determine the identity of the creditor at any given point in time — i.e., to whom is an obligation owed and how many parties have liability to pay on that transaction either as borrower, guarantors, insurers, or anything else? The dart board approach currently used in foreclosures and mortgage modifications, prepayments and refinancing has generally been frowned upon by the Courts.
  1. 5.       KNOWN OBLIGATION AMOUNT: The amount advanced by the Lender (investor in bogus mortgage bonds) was far in excess of that amount used by intermediaries to fund mortgages — the rest was used to create synthetic derivative trading devices and charge fees every step of the way. Part of the difference between the funding of the residential loans and the amount advanced by the lender (investor) is easily computed by applying the same formula used to compute a yield spread premium that was paid to mortgage brokers under the table. By obscuring the real nature of the loans in the mix that offered (sold forward without ownership by the investment bank with the intent of acquiring he mortgages later) a 6% return promised to an investor could result in a yield spread premium of perhaps 12% if the loan was toxic waste and the nominal rate was 18%. Thus a $900,000 investment was converted into a $300,000 loan with no hope of repayment based upon a wildly inflated appraisal. Payments by servicers, counterparties, guarantors, insurers and bailout agencies were neither credited to the investor nor to the obligation owed to that investor. Since there was no obligor other than the homeowner according to the documents creating the securitization scam infrastructure, the borrower was part of a transaction where he “borrowed” $900,000 but only received $300,000. Third party payments made under expressly and carefully written waivers of subrogation were not applied to the amount owed to the investor and therefore not applied to the amount owed by the borrower. The absence of this information makes the servicer “accounting” a farce.
  1. VALID ACCOUNTING BY ALL PARTIES: Continuing with the facts illuminated in the preceding paragraph, both mortgage closing documents and foreclosure documents are devoid of any reference to the dozens of transactions carried out in the name of, or under agency of, or as constructive trustee of the investor who as lender is obliged to account for the balance due after third party payments.

Foreclosure Trustee duties and obligations

26 Apr

Because of the significant increase in defaults and foreclosures, mortgage servicers need to understand the duties and liabilities the law imposes upon foreclosure trustees.

Litigation based upon trustee error can slow, stop or invalidate foreclosures and impair the servicer’s ability to dispose of properties following foreclosure. When borrowers refinance or pay off during foreclosure, trustees are often responsible for the payoffs and reconveyances. After foreclosure, the trustee is responsible for distribution of surplus funds – the funds in excess of the debt due under the foreclosed deed of trust. All these responsibilities are sources of claims against trustees.

Foreclosure litigation plaintiffs often name and seek to hold lenders and servicers responsible for trustee errors on the theory that the trustee is the agent of the lender and servicer. According to Miller & Starr’s “California Real Estate,” this claim is particularly easy to make when the lender or servicer uses an in-house trustee and especially when the trustee acquires the property by credit bid for the lender or servicer at its own foreclosure sale. This article examines a trustee’s liability for damages under California law for conduct of the foreclosure sale, payoffs, reconveyances and distribution of surplus funds. The scope of a trustee’s duties differs for each of these services, and a breach of one of these duties can subject the trustee, lender and servicer to substantial compensatory damages, punitive damages and even criminal sanctions. Foreclosure sales In the I.E. Associates v. Safeco case, the California Supreme Court limited the scope of the trustee’s duties in conducting foreclosure sales. The issue in that case was whether a trustee breached its duty to a trustor by failing to ascertain the current address of the trustor where the current address was different from the address of record. The trustee did not have actual knowledge of the current address, but through reasonable diligence could have discovered it. The Supreme Court held that the trustee did not have a duty to find the current address. The court found that a foreclosure trustee is not a true trustee, such as a trustee of a person or a trustee under a trust agreement. Instead, a foreclosure trustee is merely “a middleman” between the beneficiary and the trustor who only carries out the specific duties that the deed of trust and foreclosure law specifically impose upon it.

The deed of trust and the statute are the exclusive source of the rights, duties and liabilities governing notice of nonjudicial foreclosure sales. Because neither the deed of trust nor the statute required the trustee to search for an address it did not have, the court held that the trustee had no duty to do so. The Stephens v. Hollis case reiterated the rule that a foreclosure trustee is not a true trustee: “Just as a panda is not an ordinary bear, a trustee of a deed of trust is not an ordinary trustee. ‘A trustee under a deed of trust has neither the powers nor the obligations of a strict trustee. He serves as a kind of common agent for the parties.’”

It is critical to recognize, however, that these rules of limited duty only apply to the trustee’s duty to provide proper notice of the sale. The trustee also has a broad common law duty to conduct a sale that is fair in all respects. In Hatch v. Collins, the court noted that “A trustee has a general duty to conduct the sale ‘fairly, openly, reasonably and with due diligence,’ exercising sound discretion to protect the rights of the mortgagor and others…A breach of the trustee’s duty to conduct an open, fair and honest sale may give rise to a cause of action for professional negligence, breach of an obligation created by statute, or fraud.” Examples of such a breach could be conspiring to “chill the bidding” by overstating the debt, thereby dissuading others from appearing and bidding at the sale. California Civil Code Section 2924h(g) states that it is “unlawful for any person, acting alone or in concert with others, (1) to offer to accept or accept from another any consideration of any type not to bid, or (2) to fix or restrain bidding in any manner at a sale of property conducted pursuant to a power of sale in a deed of trust or mortgage.” The code continues: “In addition to any other remedies, any person committing any act declared unlawful by this subdivision or any act which would operate as a fraud or deceit upon any beneficiary, trustor or junior [lien holder] shall, upon conviction, be fined not more than $10,000 or imprisoned in the county jail for not more than one year, or be punished by both that fine and imprisonment.” In addition to imposing criminal penalties, this section also imposes civil liability upon the trustee.

The courts will review foreclosure sale proceedings to make sure they have been fair in all respects. A trustee who violates its contractual duties under the deed of trust or its statutory or common law duties is liable to the trustor or to an affected junior lien holder for such person’s lost equity in the property. This is measured by the difference between the fair market value of the property and the liens senior to the affected person’s interest at the time of the sale. In addition, pursuant to Civil Code Section 3333, the trustee has liability for all other damages proximately caused by its wrongful conduct, whether those damages were foreseeable or not. A willful violation of these duties can subject the trustee to punitive damages under Civil Code Section 3294. Payoffs and reconveyances Civil Code Section 2943(c) requires a beneficiary or its representative, which is frequently the trustee, to provide a payoff statement to an “entitled person” within 21 days after a written request for a payoff demand. An “entitled person” means the trustor, a junior lien holder, their successors or assigns, or an escrow. Failure to provide a timely payoff demand makes the beneficiary or its representative liable to the entitled person for all actual damages such a person may sustain due to a failure to provide a timely payoff demand, plus $300 in statutory damages. Failure to provide an accurate payoff demand can have dire consequences. If the entitled person closes a sale or refinance in reliance upon a payoff demand that understates the payoff, the beneficiary must reconvey its lien. The beneficiary is then left with only an unsecured claim against the entitled person. A trustee who is responsible for such an error could have substantial liability to its beneficiary. After the note and deed of trust are paid off, Civil Code Section 2941 requires the beneficiary to deliver the original note, the deed of trust and a request for reconveyance to the trustee. Within 21 days thereafter, the trustee must record the reconveyance and deliver the original note to the trustor. If the reconveyance has not been recorded within 60 days after the payoff, upon the trustee’s written request, the beneficiary must substitute himself as trustee and record the reconveyance. If the reconveyance is not recorded within 75 days after payoff, any title company may prepare and record a release of the obligation. A person who violates any of these provisions is liable for $500 in statutory damages and all actual damages caused by the violation. These can include damages for emotional distress. A willful violation of these requirements is a misdemeanor which can subject the violator to a $400 fine, plus six months’ imprisonment in the county jail. Surplus funds Civil Code Sections 2924j and 2924k impose upon the trustee a duty to distribute surplus funds that the trustee receives at a sale to lien holders and trustors whose interests are junior to the foreclosed deed of trust. Surplus funds are defined as funds in excess of the debt due to the holder of the foreclosed lien and the costs of the foreclosure sale. As previously referenced in the I. E. Associates and Stephens cases, those courts held that with respect to the conduct of the foreclosure sale, a foreclosure trustee is not a true trustee – only a middleman. Further, in Hatch v. Collins, the court held that a breach of the trustee’s duties in the conduct of the sale does not constitute a breach of a fiduciary duty. While no case holds that a trustee is a fiduciary with respect to surplus funds, a trustee’s surplus funds duties closely resemble those of a fiduciary – a fiduciary is one who holds and manages property for the benefit of another. Fiduciaries are held to a higher standard of care than others in discharging their duties. If a trustee has a fiduciary duty in handling surplus funds, a trustee may have a duty to do more than simply follow the statute with respect to giving notice of and distributing the surplus funds. For instance, a trustee may have a duty to take reasonable steps to find an interested party whose address is unknown to the trustee if the trustee has reason to believe such an address can be found. This is particularly so because the trustee can pay for the expense of the investigation from the surplus funds. Also, a trustee as a fiduciary may face greater exposure to punitive damages, which can be awarded for breach of fiduciary duty when coupled with fraud, malice or oppression. Servicers Using In-House Foreclosure Trustees Must Beware in Mortgage Servicing > Foreclosure by John Clark Brown Jr. on Tuesday 19 June 2007 email the content item print the content item comments: 0 Servicing Management, June 2007. Because of the significant increase in defaults and foreclosures, mortgage servicers need to understand the duties and liabilities the law imposes upon foreclosure trustees. Litigation based upon trustee error can slow, stop or invalidate foreclosures and impair the servicer’s ability to dispose of properties following foreclosure. When borrowers refinance or pay off during foreclosure, trustees are often responsible for the payoffs and reconveyances. After foreclosure, the trustee is responsible for distribution of surplus funds – the funds in excess of the debt due under the foreclosed deed of trust. All these responsibilities are sources of claims against trustees. Foreclosure litigation plaintiffs often name and seek to hold lenders and servicers responsible for trustee errors on the theory that the trustee is the agent of the lender and servicer. According to Miller & Starr’s “California Real Estate,” this claim is particularly easy to make when the lender or servicer uses an in-house trustee and especially when the trustee acquires the property by credit bid for the lender or servicer at its own foreclosure sale. This article examines a trustee’s liability for damages under California law for conduct of the foreclosure sale, payoffs, reconveyances and distribution of surplus funds. The scope of a trustee’s duties differs for each of these services, and a breach of one of these duties can subject the trustee, lender and servicer to substantial compensatory damages, punitive damages and even criminal sanctions. Foreclosure sales In the I.E. Associates v. Safeco case, the California Supreme Court limited the scope of the trustee’s duties in conducting foreclosure sales. The issue in that case was whether a trustee breached its duty to a trustor by failing to ascertain the current address of the trustor where the current address was different from the address of record. The trustee did not have actual knowledge of the current address, but through reasonable diligence could have discovered it. The Supreme Court held that the trustee did not have a duty to find the current address. The court found that a foreclosure trustee is not a true trustee, such as a trustee of a person or a trustee under a trust agreement. Instead, a foreclosure trustee is merely “a middleman” between the beneficiary and the trustor who only carries out the specific duties that the deed of trust and foreclosure law specifically impose upon it. The deed of trust and the statute are the exclusive source of the rights, duties and liabilities governing notice of nonjudicial foreclosure sales. Because neither the deed of trust nor the statute required the trustee to search for an address it did not have, the court held that the trustee had no duty to do so. The Stephens v. Hollis case reiterated the rule that a foreclosure trustee is not a true trustee: “Just as a panda is not an ordinary bear, a trustee of a deed of trust is not an ordinary trustee. ‘A trustee under a deed of trust has neither the powers nor the obligations of a strict trustee. He serves as a kind of common agent for the parties.’” It is critical to recognize, however, that these rules of limited duty only apply to the trustee’s duty to provide proper notice of the sale. The trustee also has a broad common law duty to conduct a sale that is fair in all respects. In Hatch v. Collins, the court noted that “A trustee has a general duty to conduct the sale ‘fairly, openly, reasonably and with due diligence,’ exercising sound discretion to protect the rights of the mortgagor and others…A breach of the trustee’s duty to conduct an open, fair and honest sale may give rise to a cause of action for professional negligence, breach of an obligation created by statute, or fraud.” Examples of such a breach could be conspiring to “chill the bidding” by overstating the debt, thereby dissuading others from appearing and bidding at the sale. California Civil Code Section 2924h(g) states that it is “unlawful for any person, acting alone or in concert with others, (1) to offer to accept or accept from another any consideration of any type not to bid, or (2) to fix or restrain bidding in any manner at a sale of property conducted pursuant to a power of sale in a deed of trust or mortgage.” The code continues: “In addition to any other remedies, any person committing any act declared unlawful by this subdivision or any act which would operate as a fraud or deceit upon any beneficiary, trustor or junior [lien holder] shall, upon conviction, be fined not more than $10,000 or imprisoned in the county jail for not more than one year, or be punished by both that fine and imprisonment.” In addition to imposing criminal penalties, this section also imposes civil liability upon the trustee. The courts will review foreclosure sale proceedings to make sure they have been fair in all respects. A trustee who violates its contractual duties under the deed of trust or its statutory or common law duties is liable to the trustor or to an affected junior lien holder for such person’s lost equity in the property. This is measured by the difference between the fair market value of the property and the liens senior to the affected person’s interest at the time of the sale. In addition, pursuant to Civil Code Section 3333, the trustee has liability for all other damages proximately caused by its wrongful conduct, whether those damages were foreseeable or not. A willful violation of these duties can subject the trustee to punitive damages under Civil Code Section 3294. Payoffs and reconveyances Civil Code Section 2943(c) requires a beneficiary or its representative, which is frequently the trustee, to provide a payoff statement to an “entitled person” within 21 days after a written request for a payoff demand. An “entitled person” means the trustor, a junior lien holder, their successors or assigns, or an escrow. Failure to provide a timely payoff demand makes the beneficiary or its representative liable to the entitled person for all actual damages such a person may sustain due to a failure to provide a timely payoff demand, plus $300 in statutory damages. Failure to provide an accurate payoff demand can have dire consequences. If the entitled person closes a sale or refinance in reliance upon a payoff demand that understates the payoff, the beneficiary must reconvey its lien. The beneficiary is then left with only an unsecured claim against the entitled person. A trustee who is responsible for such an error could have substantial liability to its beneficiary. After the note and deed of trust are paid off, Civil Code Section 2941 requires the beneficiary to deliver the original note, the deed of trust and a request for reconveyance to the trustee. Within 21 days thereafter, the trustee must record the reconveyance and deliver the original note to the trustor. If the reconveyance has not been recorded within 60 days after the payoff, upon the trustee’s written request, the beneficiary must substitute himself as trustee and record the reconveyance. If the reconveyance is not recorded within 75 days after payoff, any title company may prepare and record a release of the obligation. A person who violates any of these provisions is liable for $500 in statutory damages and all actual damages caused by the violation. These can include damages for emotional distress. A willful violation of these requirements is a misdemeanor which can subject the violator to a $400 fine, plus six months’ imprisonment in the county jail. Surplus funds Civil Code Sections 2924j and 2924k impose upon the trustee a duty to distribute surplus funds that the trustee receives at a sale to lien holders and trustors whose interests are junior to the foreclosed deed of trust. Surplus funds are defined as funds in excess of the debt due to the holder of the foreclosed lien and the costs of the foreclosure sale. As previously referenced in the I. E. Associates and Stephens cases, those courts held that with respect to the conduct of the foreclosure sale, a foreclosure trustee is not a true trustee – only a middleman. Further, in Hatch v. Collins, the court held that a breach of the trustee’s duties in the conduct of the sale does not constitute a breach of a fiduciary duty. While no case holds that a trustee is a fiduciary with respect to surplus funds, a trustee’s surplus funds duties closely resemble those of a fiduciary – a fiduciary is one who holds and manages property for the benefit of another. Fiduciaries are held to a higher standard of care than others in discharging their duties. If a trustee has a fiduciary duty in handling surplus funds, a trustee may have a duty to do more than simply follow the statute with respect to giving notice of and distributing the surplus funds. For instance, a trustee may have a duty to take reasonable steps to find an interested party whose address is unknown to the trustee if the trustee has reason to believe such an address can be found. This is particularly so because the trustee can pay for the expense of the investigation from the surplus funds. Also, a trustee as a fiduciary may face greater exposure to punitive damages, which can be awarded for breach of fiduciary duty when coupled with fraud, malice or oppression.

MERS CEO R.K. Arnold Leaving Company go figure!

22 Jan

Who knows, maybe his resignation has something to do with this article where he admits that they have bifuricated the note from the mortgage and have been doing so for many years with the servicers,

As investors bought more and more loans in the secondary market, many of them began to contract with servicing
companies to handle loan servicing obligations. A servicer is a company that a mortgage loan investor hires to handle
payment processing, tax and insurance escrows, foreclosure and other matters related to the loan or the property. Often, the servicer is the same lender that originated the loan, sold the beneficial ownership in the secondary market and agreed to continue servicing the loan for the new beneficial owner.

For these servicing companies to perform their duties satisfactorily, the note and mortgage were bifurcated. The
investor or its designee held the note and named the servicing company as mortgagee, a structure that became standard. Some servicing companies have grown quite large, and a very active secondary market in servicing contracts has developed as well. Now more than $ 400 billion in servicing contracts trade annually.

A servicing contract is not an interest in real estate. Unlike a mortgage, it has nothing to do with legal title to the
property and is personal property under UCC § 9-106. Even before MERS, servicers had no reason to appear in the
public land records, except to receive the legal process they need to service loans properly.

The bifurcated structure worked fine for a long time, but the sheer volume of transfers between servicing
companies and the resulting need to record assignments caused a heavy drag on the secondary market. The burden
affected lenders, title companies, consumers and even local recorders. Assignment processing for the sale of a relatively modest loan portfolio can take up to six months to complete. Error rates as high as 33% are common. With the active secondary market in servicing contracts, more than four million loans are affected annually. Loan servicing can trade several times before even the first assignment in a chain is recorded, leaving the public land records clogged with unnecessary assignments. Sometimes these assignments are recorded in the wrong sequence, clouding title to the property.

see full article “There is Life on MERS”
MERS CEO R.K. Arnold Leaving Company

Submitted by Tyler Durden on 01/21/2011 14:23 -0500
Is the biggest fraud in the history of the US housing market about to come unglued? If so, take our prediction of a $100 billion total in future BofA rep and warranty reserves and triple it.
From the WSJ:
The chief executive of the privately-held Mortgage Electronic Registration Systems, or MERS, is planning to leave the company and an announcement could come within days, according to people familiar with the matter.

The company has been under fire by Congress and state officials for its role in the mortgage-document crisis. The firm’s board of directors has met in recent days to address the fate of the company and its chief executive, R.K. Arnold, the people said.

Arnold and other MERS executives didn’t respond to requests for comment. A MERS spokeswoman Friday declined comment. Arnold, a former U.S. Army Ranger, has served as the CEO and president of Merscorp Inc., the parent company of MERS, since 1998 and has been with the company since its inception 15 years ago, according to a corporate biography.

MERS was built by Fannie Mae (FNMA), Freddie Mac (FMCC), and several large U.S. banks in 1996 as an electronic registry of land records. That created a parallel database to facilitate the packaging of loans into securities that could be sold and re-sold without being recorded in local county courthouses, reducing costs for banks. The company’s name is listed as the agent for mortgage lenders on more than 65 million home loans.

But the company’s practices have begun to receive heavy scrutiny from state prosecutors and federal regulators, particularly in light of foreclosure-document problems that surfaced last fall. State and federal lawmakers have begun to consider bills that would make it harder for banks to use or foreclose on properties through MERS.

MERS’s legal standing also has been challenged by legal experts because it doesn’t own the underlying debt. Previously, the mortgage and the promissory note weren’t split between different parties.

Critics of the company have raised concerns over whether notes were properly assigned or tracked within the electronic system. Judges have also begun to question the company’s practices of “deputizing” hundreds of bank executives to handle foreclosures by naming them “vice presidents” of MERS.

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Why modify

11 Dec

California Loan Modification Lawyer

(Effective October 11, 2009  The McCandless Firm complies with SB 94)

By now, you may have made your own attempts at loan modification. You now know what we have known: Despite all the government and media hype, the voluntary loan modifications are not the silver bullet to the foreclosure crisis. Even after President Obama introduced the HAMP program, only about 8% of the anticipated 9 million loan modification applications have been considered. Never forget that lenders and loan servicers are in the business of making money for their shareholders, not solving people’s financial problems. Despite the incentives created by the government, loan servicers remain inconsistent, negligent, understaffed, arrogant and just plain indifferent to the financial plight of most folks. If you’ve ever wondered why the bank doesn’t seem to care? Consider that it is the investor, not loan servicer, takes the financial hit when a property is foreclosed. Loan servicers make more money when a borrower falls into foreclosure. Servicers have an incentive to drag out the foreclosure and loan modification process. Despite what the government and the lenders may say, the loan modification or short sale process is not as quick and easy as has been portrayed.

VIOLATIONS CAN GIVE YOU LEVERAGE to secure a “SETTLEMENT”, not a LOAN MODIFICATION.

Whether hiring a lawyer will increase your chances for success a little or a lot depends on whether the lender has done something wrong. This is why Attorney Roberts encourages every client to commission an audit of the original loan documents, review the appraisal and take measure of any agency relationships between the broker, the lender, the appraiser, the escrow and the title companies. Anecdotally, Attorney Roberts believes that your chances of success increase fourfold if there is litigation or bankruptcy. Hiring a lawyer to review your options and handle the process makes sense. Your chances of obtaining a substantial loan modification will be greatly improved if the lender has violated the law…but how will you ever know? A lawyer can help you gain negotiating leverage on your behalf by finding violations of the law or capitalizing on provisions of the bankruptcy code.

FRONT DOOR LOAN MODIFICATIONS

A loan modification can still be secured even where violations do not exist or the borrower chooses to ignore them. In California, SB94 was recently signed into law effectively banning advance fee loan modification services by even lawyers. Attorney Roberts operates in full compliance of the new law. If you hire a lawyer to provide loan modification services rather than to pursue a violation of your rights, special rules now apply and specific disclosures must be made letting you know that you can do the loan modification yourself and avoid fees.

It’s true; you can pursue a loan modification yourself, just as you have the right to represent yourself in court. And to be honest, even with a lawyer, unless a violation has occurred, you are at the mercy of the loan servicer’s interpretation and analysis of your situation. If the servicer loses your paperwork, berates you, keeps you on hold for hours, ignores you, or simply denies the loan modification without explanation…you have NO RECOURSE. You are not entitled to a loan modification and you have no right to sue if denied. Even if the lender ignores the guidelines of the government’s HAMP program, you can’t sue. When you apply for a front door loan modification, you are asking for a break. It is you and not the lender, who seeks to break the mortgage contract. You have no leverage. You cannot force the lender to give you any consideration, whatsoever. Even if you clearly qualify for a loan modification under the printed guidelines of the government HAMP program, if the lender believes that it would make more money in the long run by foreclosing, you can legitimately be denied.

Why pay a lawyer to work on your loan modification? A lawyer adds attention to detail and diligence to the process, as well as a better idea of the location of each loan servicers’ “sweet spot”. Experience and daily contact with the loan servicers provides some advantage as well. The law firm may act as a force to counter act the incompetence built into the lender’s process. Attorney Roberts and his staff simply assume that the loan mod process will be screwed up by the lender, repeatedly. The firm expects that the lenders will lose paperwork, fail to respond and provide conflicting information. The firm is not shocked when a home is improperly sold despite an approval of a loan modification as it happens all the time. The Law Office of The McCandless Firm is there to respond to these constant lender screw ups and bear the brunt of your frustration.

The The McCandless Firm is always prepared to react to the latest bank screw-up or client crisis. One of the favorite tricks of the lenders is to wait to the very last minute before the sale to approve or deny a postponement or a loan modification. This game of chicken may happen every month as the loan modification process drones on. The firm is always ready with a PLAN B if the lender, in its sole discretion, denies the modification. Having the ability to plan and execute a contingency plan, whether it be Chapter 7, 11, 13, a short sale or a federal lawsuit, is truly the firm’s core strength.

A foreclosure relief company or real estate agent is unqualified to provide you with any of this legal insight – but a California loan modification lawyer at the The McCandless Firm has the knowledge and experience to help. California attorney Joseph Arthur “Joe” Roberts can act as your legal counselor and help you get out of the financial situation that you find yourself in. With offices located in Newport Beach, attorney Roberts helps clients throughout California, including Los Angeles, Orange, Riverside County and the surrounding areas.

Loan Modification Attorney in Los Angeles, Orange and Riverside County, California

In California, voluntary loan modification programs of different companies vary. Most loans are owned in pools by “trusts” and not by the servicing agent with whom you deal. The contract between the trust and the servicing agent, called a PSA, limits the number of loans that can be modified in a given pool. Typically, the PSA limits the number of loans that can be modified in a given pool at 5%. However, that restriction is lifted in the event of a bankruptcy or litigation.

Most servicing agents are understaffed, overwhelmed and for the most part…simply don’t care about you. The servicing companies typically make more money off of late fees, costs and penalties when you remain in default. If the property gets foreclosed on, it becomes the trust’s problem, not necessarily the service agent’s. The application process can take months and usually involves rejection or a token change in the loan terms. Amid the flood of modification requests, mistakes frequently get made and the ball gets dropped. In the meantime, the countdown to foreclosure sale continues. Homeowners already under distress get left with little time to act if a modification is not granted. You need to have a backup plan in place in case the lender’s process fails.

Loan modification is driven by income and complicated when there is a second mortgage company involved. If you lack the income to fund whatever plan the lender is willing to give you, you will be denied. Even if the first mortgage company is willing to modify your loan, it doesn’t mean that the second mortgage company will play ball. In the absence of litigation or bankruptcy, the loan modifications have economic limits. A reduction in principal balance is rare. A mortgage holder will not reduce the principal balance below the value of the property. Interest rate adjustments and recapitalization of back payments are more common. However, don’t expect to get an interest only or negative amortization loan. The very best you can hope for is a fixed rate amortized over 30 years at a decent rate based on the current value of the house. Finally, if the lender “cancels” some of your debt, it may still be considered taxable income by the IRS, despite the passage of the limited Mortgage Forgiveness Debt Relief Act of 2007. Only debt from buying or improving the property is covered by the new law.

How a California Loan Modification Lawyer Can Help

loan modification process can be complex, and it is easy for a lender or servicing agent to take advantage of you. Using an experienced lawyer to assert your rights gets you to the front of the line in this process. The possibility of litigation or bankruptcy may increase your negotiating leverage with your lender. Lenders are forced to get their own lawyers involved in your case, not just an administrative person from the loss mitigation department. We welcome you to contact our firm to discuss your loan, your budget and the benefits of attorney negotiated loan modification.

Contact  loan modification attorney The McCandless Firm today! Northern California 925-957-9797and in Southern California 909-890-9192

No Default The Servicer is making the payments !!!

30 Apr

In the sercuritization game there are many co-obligors and you may not be in default after all. In the pooling agreement the servicer must agree to advance payment in the event of a missed payment by debtor.

Who is the obligor? Is there a default? Remember – this is financial engineering at its best. This is the American way to be creative and inventful. These guys are so good that homeowners can stop paying their loan and the creditors get paid anyway. They just forgot to tell the homeowners – and the courts. Some people call this forgetfulness fraud upon the court.

When they added the loans into the pool they attached numerous conditions to them. What might some of those conditions be? One of them is a condition for the servicer (making them an obligor). If the servicer doesn’t receive the homeowners payment, they MUST advance the payment (principal and interest) to keep the flow of revenue to the creditors (read this in the SEC filings). Don’t believe me? Think it can’t be proven? Read on …

The following is in regards to the IndyMac INDX 2005-AR7 trust …

Let’s look at the April 2010 loan level files. Look at the these specific fields (for loan #120600243):

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
523275.38 939.51 0 0 522335.87 939.51 2956.3 0.04625 2016.79 0.00375 163.52 0.0425 1853.27 0.000055 2.4 0 0 165.92 0.0424451 1850.87

Now look at the March 2010 loan level files. Look at these same specific fields (again for loan #120600243).

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
524211.28 935.9 0 0 523275.38 935.9 2956.3 0.04625 2020.4 0.00375 163.82 0.0425 1856.58 0.000055 2.4 0 0 166.22 0.042445 1854.18

(Note the ending balance for March 2010 is 523275.38 – how come the balance is going DOWN?). On the March 2010 loan level files the servicer is also reporting the account is 90+ days delinquent. The homeowner is not and has not been making payments.

Beginning balance is 523,275.38 and ending balance is 522,335.87!!!

Scheduled Principal is 939.51 and the total principal is 939.51

523,275.38 – 939.51 = 522,335.87 (they show the principle has been reduced!)

Scheduled payment is 2956.30

Scheduled Interest is 2016.79 and net interest is 1853.27

939.51 + 2016.79 = 2956.30 (the scheduled payment)

Servicing fee = 163.52

2016.79 – 163.52 = 1853.27 (net interest)

Total PTR Interest is 1850.87 (Trustee fee is 2.40 so 1850.87 + 2.40 = 1853.27 which is the net interest)

The reason they have to ADVANCE the fees is because the fees are still paid and (apparently) come out of the interest portion of the payment.

This homeowner “might” owe the money to somebody, but not the creditor as the creditor has received the payment in full. Remember – this is a STATEMENT to the investors describing what they were PAID. The party foreclosing is not entitled to power of sale as they are not the creditor. The creditor has received all payments and the homeowner has not defaulted.

The method used seems to be inconsistent between deals. I checked for another homeowner in another IndyMac Trust (IndyMac RAST 2007-A5) and the homeowner had interest only payments (so the principal didn’t go down) however, the interest looks like it is being paid. For other homeowners in this deal they are using the “curtailment” field and the ending principal balance is RISING.

This is just the statement to the certifiateholders. You can BET the sub-servicer and the master servicer are keeping full accounting records that they are NOT reporting to the homeowner, the investors or the courts.

The lawyer is not competend to testify

5 Oct

If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

So you sent a QWR and you know the loan is securitized. The orignating lender says talk to the servicer and the servicer declines to answer all the questions because they didn’t originate the loan. Or you are in court and the lawyer is trying to finesse his way past basic rules of evidence and due process by making representations to the Judge as an officer of the court.

He’s lying of course and if you let it go unchallenged, you will lose the case. Basically opposing counsel is saying “trust me Judge I wouldn’t say it if it wasn’t so.” And your answer is that the lawyer is not a witness, that you don’t trust the lawyer or what he has to say, that if he is a witness he should be sworn in and subject to cross examaintion and if he is not a witness you are entitled to be confronted with a real witness with real testimony based upon real knowledge.

First Questions: When did you first learn of this case? What personal knowledge do you have concerning the payments received from the homeowner or third parties? What personal knowledge do you have as to who providing the actual cash from which the subject loan was funded?

Only when pressed relentlessly by the homeowner, the servicer comes up with a more and more restrictive answer as to what role they play. But they always start with don’t worry about a thing we control everything. Not true. Then later after you thought you worked out a modification they tell the deal is off because the investor declined. The investor is and always was the lender. That is the bottom line and any representation to the contrary is a lie and a fraud upon the court.

So whoever you sent the QWR to, always disclaims your right to ask, or tells you the name of the investor (i.e., your lender) is confidential, or that they have authority (but they won’t show it to you). That doesn’t seem to be a lender, does it? In fact they disclaim even knowing enough to answer your questions.

So AFTER THEY SERVE YOU with something file a motion to compel an immediate full answer to your QWR since under TILA service on the servicer is the same as service on the lender. You argue that everyone seems to be claiming rights to be paid under the original obligation, everyone seems to be claiming the right to enforce the note and mortgage, but nobody is willing to state unequivocally that they are the lender.

You are stuck in the position of being unable to seek modification under federal and State rules, unable to sell the property because you don’t know who can sign a satisfaction of mortgage or a release and reconveyance, unable to do a short-sale, and unable to refinance — all because they won’t give a simple answer to a simple question: who is the lender and what is the balance claimed by the real lender on the obligation? At this point you don’t even know that any of the real lenders wish to make a claim.

This is probably because they received TARP funds and insurance proceeds on defaults of pools that they had purchased multiple insurance policies (credit default swaps). But whether they are paid by someone who acquired rights of subrogation or they were not paid, you have a right to a FULL accounting and to know who they are and whether they received any third party money. If they were paid in part or otherwise sold their interest, then you have multiple additional unknown parties.

The reason is simple. They are not the lender and they know it. The lender is a group of investors who funded the transaction with Petitioner/Homeowner and others who purchased similar financial products from the same group of participants in the securitization chain relating to the subject loan.

The people currently in court do not include all the real parties in interest for you to make claims against the lender. Cite to the Massachusetts case where Wells Fargo and its lawyer were subject to an $850,000 sanction for misrepresenting its status to the court.

It is not enough for them to bluff their way by saying that they have already answered the interrogatories. When they lost and it came time to allocate damages and attorneys fees, Wells suddenly said they were NOT the lender, beneficiary or current holder and that therefore the damages and attorneys fees should be assessed against the real lender — who was not a party to the pending litigation and whom they refused to disclose along with their misrepresentation that they were the true lender.

It is not enough that the lawyer makes a representation to the court as an officer of the court. That is not how evidence works. If the lawyer wants to represent facts, then he/she should be sworn in and be subject to (1) voir dire to establish that he/she is opposing counsel that it came from some company.

The witness must be a competent witness who takes an oath, has personal knowledge regarding the content of the document, states that personal knowledge and whose testimony conforms to what is on the document.

There is no such thing as foundation without a witness. There is no such thing as foundation without a competent witness. So if the lawyer tries to finesse the subject by making blanket representations to the court(e.g. the property is “underwater” by $xxx,xxx and we need a lift of stay…yet, there is no certified appraisal entered into evidence with a certified appraiser that can be cross examined…just a statement from opposing counsel) point to Wells, or even point to other inconsistencies between what counsel has represented and what now appears to be the truth, and demand an evidentiary hearing. If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

File a motion to extend time to file adversary proceeding(in BK situation), answer, affirmative defenses and counterclaim UNTIL YOU GET A FULL AND COMPLETE ANSWER TO YOUR QWR so you can determine the real parties in interest and serve them with process. Otherwise, we will have a partial result wherein the real owner of the loan can and will claim damages and injunctive relief probably against all the current parties to this action including the Homeowner.

In short, the opposing counsel cannot just make statements of “fact” and have them accepted by the court as “fact” if they don’t pass the sniff test of real evidence corroborated by a competent witness. …and with every pleading ask for an evidentiary hearing and attorneys fees. Follow rule 11 procedure in Federal Court or the state law counterpart so you can get them later.

SB 94 and its interferance with the practice

5 Sep

CA SB 94 on Lawyers & Loan Modifications Passes Assembly… 62-10

The California Assembly has passed Senate Bill 94, a bill that seeks to protect homeowners from loan modification scammers, but could end up having the unintended consequence of eliminating a homeowner’s ability to retain an attorney to help them save their home from foreclosure.

The bill, which has an “urgency clause” attached to it, now must pass the State Senate, and if passed, could be signed by the Governor on October 11th, and go into effect immediately thereafter.

SB 94’s author is California State Senator Ron Calderon, the Chair of the Senate Banking Committee, which shouldn’t come as much of a surprise to anyone familiar with the bigger picture. Sen. Calderon, while acknowledging that fee-for-service providers can provide valuable services to homeowners at risk of foreclosure, authored SB 94 to ensure that providers of these services are not compensated until the contracted services have been performed.

SB 94 prevents companies, individuals… and even attorneys… from receiving fees or any other form of compensation until after the contracted services have been rendered. The bill will now go to the Democratic controlled Senate where it is expected to pass.

Supporters of the bill say that the state is literally teeming with con artists who take advantage of homeowners desperate to save their homes from foreclosure by charging hefty fees up front and then failing to deliver anything of value in return. They say that by making it illegal to charge up front fees, they will be protecting consumers from being scammed.

While there’s no question that there have been some unscrupulous people that have taken advantage of homeowners in distress, the number of these scammers is unclear. Now that we’ve learned that lenders and servicers have only modified an average of 9% of qualified mortgages under the Obama plan, it’s hard to tell which companies were scamming and which were made to look like scams by the servicers and lenders who failed to live up to their agreement with the federal government.

In fact, ever since it’s come to light that mortgage servicers have been sued hundreds of times, that they continue to violate the HAMP provisions, that they foreclose when they’re not supposed to, charge up front fees for modifications, require homeowners to sign waivers, and so much more, who can be sure who the scammers really are. Bank of America, for example, got the worst grade of any bank on the President’s report card listing, modifying only 4% of the eligible mortgages since the plan began. We’ve given B of A something like $200 billion and they still claim that they’re having a hard time answering the phones over there, so who’s scamming who?

To make matters worse, and in the spirit of Y2K, the media has fanned the flames of irrationality with stories of people losing their homes as a result of someone failing to get their loan modified. The stories go something like this:

We gave them 1,000. They told us to stop making our mortgage payment. They promised us a principal reduction. We didn’t hear from them for months. And then we lost our house.

I am so sure. Can that even happen? I own a house or two. Walk me through how that happened again, because I absolutely guarantee you… no way could those things happen to me and I end up losing my house over it. Not a chance in the world. I’m not saying I couldn’t lose a house, but it sure as heck would take a damn sight more than that to make it happen.

Depending on how you read the language in the bill, it may prevent licensed California attorneys from requiring a retainer in advance of services being rendered, and this could essentially eliminate a homeowner’s ability to hire a lawyer to help save their home.

Supporters, on the other hand, respond that homeowners will still be able to hire attorneys, but that the attorneys will now have to wait until after services have been rendered before being paid for their services. They say that attorneys, just like real estate agents and mortgage brokers, will now only be able to receive compensation after services have been rendered.

But, assuming they’re talking about at the end of the transaction, there are key differences. Real estate agents and mortgage brokers are paid OUT OF ESCROW at the end of a transaction. They don’t send clients a bill for their services after the property is sold.

Homeowners at risk of foreclosure are having trouble paying their bills and for the most part, their credit ratings have suffered as a result. If an attorney were to represent a homeowner seeking a loan modification, and then bill for his or her services after the loan was modified, the attorney would be nothing more than an unsecured creditor of a homeowner who’s only marginally credit worthy at best. If the homeowner didn’t pay the bill, the attorney would have no recourse other than to sue the homeowner in Small Claims Court where they would likely receive small payments over time if lucky.

Extending unsecured credit to homeowners that are already struggling to pay their bills, and then having to sue them in order to collect simply isn’t a business model that attorneys, or anyone else for that matter, are likely to embrace. In fact, the more than 50 California attorneys involved in loan modifications that I contacted to ask about this issue all confirmed that they would not represent homeowners on that basis.

One attorney, who asked not to be identified, said: “Getting a lender or servicer to agree to a loan modification takes months, sometimes six or nine months. If I worked on behalf of homeowners for six or nine months and then didn’t get paid by a number of them, it wouldn’t be very long before I’d have to close my doors. No lawyer is going to do that kind of work without any security and anyone who thinks they will, simply isn’t familiar with what’s involved.”

“I don’t think there’s any question that SB 94 will make it almost impossible for a homeowner to obtain legal representation related to loan modifications,” explained another attorney who also asked not to be identified. ”The banks have fought lawyers helping clients through the loan modification process every step of the way, so I’m not surprised they’ve pushed for this legislation to pass.”

Proponents of the legislation recite the all too familiar mantra about there being so many scammers out there that the state has no choice but to move to shut down any one offering to help homeowners secure loan modifications that charges a fee for the services. They point out that consumers can just call their banks directly, or that there are nonprofit organizations throughout the state that can help homeowners with loan modifications.

While the latter is certainly true, it’s only further evidence that there exists a group of people in positions of influence that are unfamiliar , or at the very least not adequately familiar with obtaining a loan modification through a nonprofit organization, and they’ve certainly never tried calling a bank directly.

The fact that there are nonprofit housing counselors available, and the degree to which they may or may not be able to assist a given homeowner, is irrelevant. Homeowners are well aware of the nonprofit options available. They are also aware that they can call their banks directly. From the President of the United States and and U.S. Attorney General to the community newspapers found in every small town in America, homeowners have heard the fairy tales about about these options, and they’ve tried them… over and over again, often times for many months. When they didn’t get the desired results, they hired a firm to help them.

Yet, even the State Bar of California is supporting SB 94, and even AB 764, a California Assembly variation on the theme, and one even more draconian because of its requirement that attorneys only be allowed to bill a client after a successful loan modification has been obtained. That means that an attorney would have to guarantee a homeowner that he or she would obtain a modification agreement from a lender or servicer or not get paid for trying. Absurd on so many levels. Frankly, if AB 764 passes, would the last one out of California please turn off the lights and bring the flag.

As of late July, the California State Bar said it was investigating 391 complaints against 141 attorneys, as opposed to nine investigations related to loan modifications in 2008. The Bar hasn’t read anywhere all of the complaints its received, but you don’t have to be a statistician to figure out that there’s more to the complaints that meets the eye. So far the State Bar has taken action against three attorneys and the Attorney General another four… so, let’s see… carry the 3… that’s 7 lawyers. Two or three more and they could have a softball team.

At the federal level they’re still reporting the same numbers they were last spring. Closed 11… sent 71 letters… blah, blah, blah… we’ve got a country of 300 million and at least 5 million are in trouble on their mortgage. The simple fact is, they’re going to have to come up with some serious numbers before I’m going to be scared of bumping into a scammer on every corner.

Looking Ahead…

California’s ALT-A and Option ARM mortgages are just beginning to re-set, causing payments to rise, and with almost half of the mortgages in California already underwater, these homeowners will be unable to refinance and foreclosures will increase as a result. Prime jumbo foreclosure rates are already up a mind blowing 634% as compared with January 2008 levels, according to LPS Applied Analytics.

Clearly, if SB 94 ends up reducing the number of legitimate firms available for homeowners to turn to, everyone involved in its passage is going to be retiring. While many sub-prime borrowers have suffered silently through this horror show of a housing crisis, the ALT-A and Option ARM borrowers are highly unlikely to slip quietly into the night.

There are a couple of things about the latest version of SB 94 that I found interesting:

1. It says that a lawyer can’t collect a fee or any other compensation before serivces have been delivered, but it doesn’t make clear whether attorneys can ask the client to deposit funds in the law firm’s trust account and then bill against thsoe funds as amounts are earned. Funds deposited in a law firm trust account remain the client’s funds, so they’re not a lawyer’s “fees or other compensation”. Those funds are there so that when the fees have been earned, the lawyer doesn’t have to hope his or her bill gets paid. Of course, it also says that an attorney can’t hold any security interest, but money in a trust account a client’s money, the attorney has no lien against it. All of this is a matter of interpretation, of course, so who knows.

2. While there used to be language in both the real estate and lawyer sections that prohibited breaking up services related to a loan modification, in the latest version all of the language related to breaking up services as applied to attorneys has been eliminated. It still applies to real estate licensed firms, but not to attorneys. This may be a good thing, as at least a lawyer could complete sections of the work involved as opposed to having to wait until the very end, which the way the banks have been handling things, could be nine months away.

3. The bill says nothing about the amounts that may be charged for services in connection with a loan modification. So, in the case of an attorney, that would seem to mean that… well, you can put one, two and three together from there.

4. Lawyers are not included in definition of foreclosure consultant. And there is a requirement that new language be inserted in contracts, along the lines of “You don’t have to pay anyone to get a loan modification… blah, blah, blah.” Like that will be news to any homeowner in America. I’ve spoken with hundreds and never ran across one who didn’t try it themselves before calling a lawyer. I realize the Attorney General doesn’t seem to know that, but look… he’s been busy.

Conclusion…

Will SB 94 actually stop con artists from taking advantage of homeowners in distress? Or will it end up only stopping reputable lawyers from helping homeowners, while foreclosures increase and our economy continues its deflationary free fall? Will the California State Bar ever finishing reading the complaints being received, and if they ever do, will they understand what they’ve read. Or is our destiny that the masses won’t understand what’s happening around them until it sucks them under as well.

I surely hope not. But for now, I’m just hoping people can still a hire an attorney next week to help save their homes, because if they can’t… the Bar is going to get a lot more letters from unhappy homeowners.

Don’t get HAMP ED out of your home!

5 Sep

By Walter Hackett, Esq.
The federal government has trumpeted its Home Affordable Modification Program or “HAMP” solution as THE solution to runaway foreclosures – few things could be further from the truth. Under HAMP a homeowner will be offered a “workout” that can result in the homeowner being “worked out” of his or her home. Here’s how it works. A participating lender or servicer will send a distressed homeowner a HAMP workout agreement. The agreement consists of an “offer” pursuant to which the homeowner is permitted to remit partial or half of their regular monthly payments for 3 or more months. The required payments are NOT reduced, instead the partial payments are placed into a suspense account. In many cases once enough is gathered to pay the oldest payment due the funds are removed from the suspense account and applied to the mortgage loan. At the end of the trial period the homeowner will be further behind than when they started the “workout” plan.
In California, the agreements clearly specify the acceptance of partial payments by the lender or servicer does NOT cure any default. Further, the fact a homeowner is in the workout program does NOT require the lender or servicer to suspend or postpone any non-judicial foreclosure activity with the possible exception of an actual trustee’s sale. A homeowner could complete the workout plan and be faced with an imminent trustee’s sale. Worse, if a homeowner performs EXACTLY as required by the workout agreement, they are NOT assured a loan modification. Instead the agreement will include vague statements that the homeowner MAY receive an offer to modify his or her loan however there is NO duty on the part of the servicer or lender to modify a loan regardless of the homeowner’s compliance with the agreement.

A homeowner who fully performs under a HAMP workout is all but guaranteed to have given away thousands of dollars with NO assurance of keeping his or her home or ever seeing anything resembling an offer to modify a mortgage loan.
While it may well be the case the government was making an honest effort to help, the reality is the HAMP program is only guaranteed to help those who need help least – lenders and servicers. If you receive ANY written offer to modify your loan meet with a REAL licensed attorney and ask them to review the agreement to determine what you are REALLY agreeing to, the home you save might be your own.

Brown Sues 21 Individuals and 14 Companies Who Ripped Off Homeowners Desperate for Mortgage Relief

17 Jul

News Release
July 15, 2009
For Immediate Release
Contact: (916) 324-5500
Print Version
Attachments

Los Angeles – As part of a massive federal-state crackdown on loan modification scams, Attorney General Edmund G. Brown Jr. at a press conference today announced the filing of legal action against 21 individuals and 14 companies who ripped off thousands of homeowners desperately seeking mortgage relief.

Brown is demanding millions in civil penalties, restitution for victims and permanent injunctions to keep the companies and defendants from offering mortgage-relief services.

“The loan modification industry is teeming with confidence men and charlatans, who rip off desperate homeowners facing foreclosure,” Brown said. “Despite firm promises and money-back guarantees, these scam artists pocketed thousands of dollars from each victim and didn’t provide an ounce of relief.”

Brown filed five lawsuits as part of “Operation Loan Lies,” a nationwide sweep of sham loan modification consultants, which he conducted with the Federal Trade Commission, the U.S. Attorney’s office and 22 other federal and state agencies. In total, 189 suits and orders to stop doing business were filed across the country.

Following the housing collapse, hundreds of loan modification and foreclosure-prevention companies have cropped up, charging thousands of dollars in upfront fees and claiming that they can reduce mortgage payments. Yet, loan modifications are rarely, if ever, obtained. Less than 1 percent of homeowners nationwide have received principal reductions of any kind.

Brown has been leading the fight against fraudulent loan modification companies. He has sought court orders to shut down several companies including First Gov and Foreclosure Freedom and has brought criminal charges and obtained lengthy prison sentences for deceptive loan modification consultants.

Brown’s office filed the following lawsuits in Orange County and U.S. District Court for the Central District (Los Angeles):

– U.S. Homeowners Assistance, based in Irvine;
– U.S. Foreclosure Relief Corp and its legal affiliate Adrian Pomery, based in the City of Orange;
– Home Relief Services, LLC, with offices in Irvine, Newport Beach and Anaheim, and its legal affiliate, the Diener Law Firm;
– RMR Group Loss Mitigation, LLC and its legal affiliates Shippey & Associates and Arthur Aldridge. RMR Group has offices in Newport Beach, City of Orange, Huntington Beach, Corona, and Fresno;
– and
– United First, Inc, and its lawyer affiliate Mitchell Roth, based in Los Angeles.

U.S. Homeowners Assistance
Brown on Monday sued U.S. Homeowners Assistance, and its executives — Hakimullah “Sean” Sarpas and Zulmai Nazarzai — for bilking dozens of homeowners out of thousands of dollars each.

U.S. Homeowners Assistance claimed to be a government agency with a 98 percent success rate in aiding homeowners. In reality, the company was not a government agency and was never certified as an approved housing counselor by the U.S. Department of Housing and Urban Development. None of U.S. Homeowners Assistance’s known victims received loan modifications despite paying upfront fees ranging from $1,200 to $3,500.

For example, in January 2008, one victim received a letter from her lender indicating that her monthly mortgage payment would increase from $2,300 to $3,500. Days later, she received an unsolicited phone call from U.S. Homeowners Assistance promising a 40 percent reduction in principal and a $2,000 reduction in her monthly payment. She paid $3500 upfront for U.S. Homeowners Assistance’s services.

At the end of April 2008, her lender informed her that her loan modification request had been denied and sent her the documents that U.S. Homeowners Assistance had filed on her behalf. After reviewing those documents, she discovered that U.S. Homeowners Assistance had forged her signature and falsified her financial information – including fabricating a lease agreement with a fictitious tenant.

When she confronted U.S. Homeowners Assistance, she was immediately disconnected and has not been able to reach the company.

Brown’s suit contends that U.S. Homeowners Assistance violated:
– California Business and Professions Code section 17500 by falsely stating they were a government agency and misleading homeowners by claiming a 98 percent success rate in obtaining loan modifications;

– California Business and Professions Code section 17200 by failing to perform services made in exchange for upfront fees;

– California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

– California Civil Code section 2945.45 for failing to register with the California Attorney General’s Office as foreclosure consultants; and

– California Penal Code section 487 for grand theft.

Brown is seeking $7.5 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

US Homeowners Assistance also did business as Statewide Financial Group, Inc., We Beat All Rates, and US Homeowners Preservation Center.

US Foreclosure Relief Corporation
Brown last week sued US Foreclosure Relief Corporation, H.E. Service Company, their executives — George Escalante and Cesar Lopez — as well as their legal affiliate Adrian Pomery for running a scam promising homeowners reductions in their principal and interest rates as low as 4 percent. Brown was joined in this suit by the Federal Trade Commission and the State of Missouri.

Using aggressive telemarketing tactics, the defendants solicited desperate homeowners and charged an upfront fee ranging from $1,800 to $2,800 for loan modification services. During one nine-month period alone, consumers paid defendants in excess of $4.4 million. Yet, in most instances, defendants failed to provide the mortgage-relief services. Once consumers paid the fee, the defendants avoided responding to consumers’ inquiries.

In response to a large number of consumer complaints, several government agencies directed the defendants to stop their illegal practices. Instead, they changed their business name and continued their operations – using six different business aliases in the past eight months alone.

Brown’s lawsuit alleges the companies and individuals violated:
– The National Do Not Call Registry, 16 C.F.R. section 310.4 and California Business and Professions Code section 17200 by telemarketing their services to persons on the registry;

– The National Do Not Call Registry, 16 C.F.R. section 310.8 and California Business and Professions Code section 17200 by telemarketing their services without paying the mandatory annual fee for access to telephone numbers within the area codes included in the registry;

– California Civil Code section 2945 et seq. and California Business and Professions Code section 17200 by demanding and collecting up-front fees prior to performing any services, failing to include statutory notices in their contracts, and failing to comply with other requirements imposed on mortgage foreclosure consultants;

– California Business and Professions Code sections 17200 and 17500 by representing that they would obtain home loan modifications for consumers but failing to do so in most instances; by representing that consumers must make further payments even though they had not performed any of the promised services; by representing that they have a high success rate and that they can obtain loan modification within no more than 60 days when in fact these representations were false; and by directing consumers to avoid contact with their lenders and to stop making loan payments causing some lenders to initiate foreclosure proceedings and causing damage to consumers’ credit records.

Victims of this scam include a father of four battling cancer, a small business owner, an elderly disabled couple, a sheriff whose income dropped due to city budget cuts and an Iraq-war veteran. None of these victims received the loan modification promised.

Brown is seeking unspecified civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

The defendants also did business under other names including Lighthouse Services and California Foreclosure Specialists.

Home Relief Services, LLC
Brown Monday sued Home Relief Services, LLC., its executives Terence Green Sr. and Stefano Marrero, the Diener Law Firm and its principal attorney Christopher L. Diener for bilking thousands of homeowners out of thousands of dollars each.

Home Relief Services charged homeowners over $4,000 in upfront fees, promised to lower interest rates to 4 percent, convert adjustable-rate mortgages to low fixed-rate loans and reduce principal up to 50 percent within 30 to 60 days. None of the known victims received a modification with the assistance of the defendants.

In some cases, these companies also sought to be the lenders’ agent in the short-sale of their clients’ homes. In doing so, the defendants attempted to use their customers’ personal financial information for their own benefit.

Home Relief Services and the Diener Law Firm directed homeowners to stop contacting their lender because the defendants would act as their sole agent and negotiator.

Brown’s lawsuit contends that the defendants violated:
– California Business and Professions Code section 17500 by claiming a 95 percent success rate and promising consumers significant reductions in the principal balance of their mortgages;

– California Business and Professions Code section 17200 by failing to perform on promises made in exchange for upfront fees;

– California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

– California Business and Professions Code section 2945.3 by failing to include cancellation notices in their contracts;

– California Civil Code section 2945.45 by not registering with the Attorney General’s office as foreclosure consultants; and

– California Penal Code section 487 for grand theft.

Brown is seeking $10 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

Two other companies with the same management were also involved in the effort to deceive homeowners: Payment Relief Services, Inc. and Golden State Funding, Inc.

RMR Group Loss Mitigation Group
Brown Monday sued RMR Group Loss Mitigation and its executives Michael Scott Armendariz of Huntington Beach, Ruben Curiel of Lancaster, and Ricardo Haag of Corona; Living Water Lending, Inc.; and attorney Arthur Steven Aldridge of Westlake Village as well as the law firm of Shippey & Associates and its principal attorney Karla C. Shippey of Yorba Linda – for bilking over 500 victims out of nearly $1 million.

The company solicited homeowners through telephone calls and in-person home visits. Employees claimed a 98 percent success rate and a money-back guarantee. None of the known victims received any refunds or modifications with the assistance of defendants.

For example, in July 2008, a 71-year old victim learned his monthly mortgage payments would increase from $2,470 to $3,295. He paid $2,995, yet received no loan modification and no refund.

Additionally, RMR insisted that homeowners refrain from contacting their lenders because the defendants would act as their agents.

Brown’s suit contends that the defendants violated:

– California Business and Professions Code section 17500 by claiming a 98 percent success rate and promising consumers significant reductions in the principal balance of their mortgages;

– California Business and Professions Code section 17200 by failing to perform on promises made in exchange for upfront fees;

– California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

– California Business and Professions Code section 2945.3 by failing to include cancellation notices in their contracts;

– California Civil Code section 2945.45 by not registering with the Attorney General’s office as foreclosure consultants; and

– California Penal Code section 487 for grand theft.

Brown is seeking $7.5 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

United First, Inc.
On July 6, 2009, Brown sued a foreclosure consultant and an attorney — Paul Noe Jr. and Mitchell Roth – who conned 2,000 desperate homeowners into paying exorbitant fees for “phony lawsuits” to forestall foreclosure proceedings.

These lawsuits were filed and abandoned, even though homeowners were charged $1,800 in upfront fees, at least $1,200 per month and contingency fees of up to 80 percent of their home’s value.

Noe convinced more than 2,000 homeowners to sign “joint venture” agreements with his company, United First, and hire Roth to file suits claiming that the borrower’s loan was invalid because the mortgages had been sold so many times on Wall Street that the lender could not demonstrate who owned it. Similar suits in other states have never resulted in the elimination of the borrower’s mortgage debt.

After filing the lawsuits, Roth did virtually nothing to advance the cases. He often failed to make required court filings, respond to legal motions, comply with court deadlines, or appear at court hearings. Instead, Roth’s firm simply tried to extend the lawsuits as long as possible in order to collect additional monthly fees.

United First charged homeowners approximately $1,800 in upfront fees, plus at least $1,200 per month. If the case was settled, homeowners were required to pay 50 percent of the cash value of the settlement. For example, if United First won a $100,000 reduction of the mortgage debt, the homeowner would have to pay United First a fee of $50,000. If United First completely eliminated the homeowner’s debt, the homeowner would be required to pay the company 80 percent of the value of the home.

Brown’s lawsuit contends that Noe, Roth and United First:

– Violated California’s credit counseling and foreclosure consultant laws, Civil Code sections 1789 and 2945

– Inserted unconscionable terms in contracts;

– Engaged in improper running and capping, meaning that Roth improperly partnered with United First, Inc. and Noe, who were not lawyers, to generate business for his law firm violating California Business and Professions Code 6150; and

– Violated 17500 of the California Business and Professions Code.

Brown’s office is seeking $2 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

Tips for Homeowners
Brown’s office issued these tips for homeowners to avoid becoming a victim:

DON’T pay money to people who promise to work with your lender to modify your loan. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract, such as negotiating new monthly payments or a new mortgage loan. However, an advance fee may be charged by an attorney, or by a real estate broker who has submitted the advance fee agreement to the Department of Real Estate, for review.

DO call your lender yourself. Your lender wants to hear from you, and will likely be much more willing to work directly with you than with a foreclosure consultant.

DON’T ignore letters from your lender. Consider contacting your lender yourself, many lenders are willing to work with homeowners who are behind on their payments.

DON’T transfer title or sell your house to a “foreclosure rescuer.” Fraudulent foreclosure consultants often promise that if homeowners transfer title, they may stay in the home as renters and buy their home back later. The foreclosure consultants claim that transfer is necessary so that someone with a better credit rating can obtain a new loan to prevent foreclosure. BEWARE! This is a common scheme so-called “rescuers” use to evict homeowners and steal all or most of the home’s equity.

DON’T pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves.

DON’T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the “rescuer.”

DO contact housing counselors approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or http://www.hud.gov.

If you believe you have been the victim of a mortgage-relief scam in California, please contact the Attorney General’s Public Inquiry Unit at http://ag.ca.gov/consumers/general.php.
# # #

Pretender Lenders

2 Jul

— read and weep. Game Over. Over the next 6-12 months the entire foreclosure mess is going to be turned on its head as it becomes apparent to even the most skeptical that the mortgage mess is just that — a mess. From the time the deed was recorded to the time the assignments, powers of attorneys, notarization and other documents were fabricated and executed there is an 18 minute Nixonian gap in the record that cannot be cured. Just because you produce documents, however real they appear, does not mean you can shift the burden of proof onto the borrower. In California our legislator have attempted to slow this train wreck but the pretender lenders just go on with the foreclosure by declaring to the foreclosure trustee the borrower is in default and they have all the documents the trustee then records a false document. A notice of default filed pursuant to Section 2924 shall include a declaration from the mortgagee, beneficiary, or authorized agent that it has contacted the borrower, tried with due diligence to contact the borrower as required by this section, or the borrower has surrendered the property to the mortgagee, trustee, beneficiary, or authorized agent.
Invalid Declaration on Notice of Default and/or Notice of Trustee’s Sale.

The purpose of permitting a declaration under penalty of perjury, in lieu of a sworn statement, is to help ensure that declarations contain a truthful factual representation and are made in good faith. (In re Marriage of Reese & Guy, 73 Cal. App. 4th 1214, 87 Cal. Rptr. 2d 339 (4th Dist. 1999).
In addition to California Civil Code §2923.5, California Code of Civil Procedure §2015.5 states:
Whenever, under any law of this state or under any rule, regulation, order or requirement made pursuant to the law of this state, any matter is required or permitted to be supported, evidenced, established, or proved by the sworn statement, declaration, verification, certificate, oath, or affidavit, in writing of the person making the same, such matter may with like force and effect be supported, evidenced, established or proved by the unsworn statement, declaration, verification, or certificate, in writing of such person which recites that is certified or declared by him or her to be true under penalty of perjury, is subscribed by him or her, and (1), if executed within this state, states the date and place of execution; (2) if executed at any place, within or without this state, states the date of execution and that is so certified or declared under the laws of the State of California. The certification or declaration must be in substantially the following form:
(a) If executed within this state:
“I certify (or declare) under penalty of perjury that the foregoing is true and correct”:
_____________________ _______________________
(Date and Place) (Signature)

For our purposes we need not look any farther than the Notice of Default to find the declaration is not signed under penalty of perjury; as mandated by new Civil Code §2923.5(c). (Blum v. Superior Court (Copley Press Inc.) (2006) 141 Cal App 4th 418, 45 Cal. Reptr. 3d 902 ). The Declaration is merely a form declaration with a check box.

No Personal Knowledge of Declarant
According to Giles v. Friendly Finance Co. of Biloxi, Inc., 199 So. 2nd 265 (Miss. 1967), “an affidavit on behalf of a corporation must show that it was made by an authorized officer or agent, and the officer him or herself must swear to the facts.” Furthermore, in Giles v. County Dep’t of Public Welfare of Marion County (Ind.App. 1 Dist.1991) 579 N.E.2d 653, 654-655 states in pertinent part, “a person who verified a pleading to have personal knowledge or reasonable cause to believe the existence of the facts stated therein.” Here, the Declaration for the Notice of Default by the agent does not state if the agent has personal knowledge and how he obtained this knowledge.
The proper function of an affidavit is to state facts, not conclusions, ¹ and affidavits that merely state conclusions rather than facts are insufficient. ² An affidavit must set forth facts and show affirmatively how the affiant obtained personal knowledge of those facts. ³
Here, The Notice of Default does not have the required agent’s personal knowledge of facts and if the Plaintiff borrower was affirmatively contacted in person or by telephone
to assess the Plaintiff’s financial situation and explore options for the Plaintiff to avoid foreclosure. A simple check box next to the “facts” does not suffice.
Furthermore, “it has been said that personal knowledge of facts asserted in an affidavit is not presumed from the mere positive averment of facts, but rather, a court should be shown how the affiant knew or could have known such facts, and, if there is no evidence from which the inference of personal knowledge can be drawn, then it is
¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬____________________________________________________________________________
¹ Lindley v. Midwest Pulmonary Consultants, P.C., 55 S.W.3d 906 (Mo. Ct. App. W.D. 2001).
² Jaime v. St. Joseph Hosp. Foundation, 853 S.W.2d 604 (Tex. App. Houston 1st Dist. 1993).
³ M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403 (Tex. App. Corpus Chrisit 1999).

presumed that from which the inference of personal knowledge can be drawn, then it is presumed that such does not exist.” ¹ The declaration signed by agent does not state anywhere how he knew or could have known if Plaintiff was contacted in person or by telephone to explore different financial options. It is vague and ambiguous if he himself called plaintiff.
This defendant did not adhere to the mandates laid out by congress before a foreclosure can be considered duly perfected. The Notice of Default states,

“That by reason thereof, the present beneficiary under such deed of trust, has executed and delivered to said agent, a written Declaration of Default and Demand for same, and has deposited with said agent such Deed of Trust and all documents evidencing obligations secured thereby, and has declared and does hereby declare all sums secured thereby immediately due and payable and has elected and does hereby elect to cause the trust property to be sold to satisfy the obligations secured thereby.”

However, Defendants do not have and assignment of the deed of trust nor have they complied with 2923.5 or 2923.6 or 2924 the Deed of Trust, nor do they provide any documents evidencing obligations secured thereby. For the aforementioned reasons, the Notice of Default will be void as a matter of law. The pretender lenders a banking on the “tender defense” to save them ie. yes we did not follow the law so sue us and when you do we will claim “tender” Check Mate but that’s not the law.

Recording a False Document
Furthermore, according to California Penal Code § 115 in pertinent part:
(a) Every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony.

If you say you have a claim, you must prove it. If you say you are the lender, you must prove it. Legislators take notice: Just because bankers give you money doesn’t mean they can change 1000 years of common law, statutory law and constitutional law. It just won’t fly. And if you are a legislator looking to get elected or re-elected, your failure to act on what is now an obvious need to clear title and restore the wealth of your citizens who were cheated and defrauded, will be punished by the votes of your constituents.

Homecomings TILA complaint GMAC

27 Jun

homecomingstila

Lender class action

27 Jun

Mortgageinvestorgroupclass

Option One Complaint Pick a payment lawsuit

27 Jun

optionone

Win the eviction by Summary judgement

27 Jun

When title to the property is still in dispute ie. the foreclosure was bad. They (the lender)did not comply with California civil code 2923.5 or 2923.6 or 2924. Or the didn’t possess the documents to foreclose ie. the original note. Or they did not possess a proper assignment 2932.5. at trial you will be ignored by the learned judge but if you file a Motion for Summary Judgmentevans sum ud
template notice of Motion for SJ
TEMPLATE Points and A for SJ Motion
templateDeclaration for SJ
TEMPLATEProposed Order on Motion for SJ
TEMPLATEStatement of Undisputed Facts
you can force the issue and if there is a case filed in the Unlimited jurisdiction Court the judge may be forced to consider title and or consolidate the case with the Unlimited Jurisdiction Case2nd amended complaint (e) manuel
BAKER original complaint (b)
Countrywide Complaint Form
FRAUDULENT OMISSIONS FORM FINAL
sample-bank-final-complaint1-2.docx

CALIFORNIA CODES
CODE OF CIVIL PROCEDURE
SECTION 437c-438

437c. (a) Any party may move for summary judgment in any action or
proceeding if it is contended that the action has no merit or that
there is no defense to the action or proceeding. The motion may be
made at any time after 60 days have elapsed since the general
appearance in the action or proceeding of each party against whom the
motion is directed or at any earlier time after the general
appearance that the court, with or without notice and upon good cause
shown, may direct. Notice of the motion and supporting papers shall
be served on all other parties to the action at least 75 days before
the time appointed for hearing. However, if the notice is served by
mail, the required 75-day period of notice shall be increased by five
days if the place of address is within the State of California, 10
days if the place of address is outside the State of California but
within the United States, and 20 days if the place of address is
outside the United States, and if the notice is served by facsimile
transmission, Express Mail, or another method of delivery providing
for overnight delivery, the required 75-day period of notice shall be
increased by two court days. The motion shall be heard no later than
30 days before the date of trial, unless the court for good cause
orders otherwise. The filing of the motion shall not extend the time
within which a party must otherwise file a responsive pleading.
(b) (1) The motion shall be supported by affidavits, declarations,
admissions, answers to interrogatories, depositions, and matters of
which judicial notice shall or may be taken. The supporting papers
shall include a separate statement setting forth plainly and
concisely all material facts which the moving party contends are
undisputed. Each of the material facts stated shall be followed by a
reference to the supporting evidence. The failure to comply with this
requirement of a separate statement may in the court’s discretion
constitute a sufficient ground for denial of the motion.
(2) Any opposition to the motion shall be served and filed not
less than 14 days preceding the noticed or continued date of hearing,
unless the court for good cause orders otherwise. The opposition,
where appropriate, shall consist of affidavits, declarations,
admissions, answers to interrogatories, depositions, and matters of
which judicial notice shall or may be taken.
(3) The opposition papers shall include a separate statement that
responds to each of the material facts contended by the moving party
to be undisputed, indicating whether the opposing party agrees or
disagrees that those facts are undisputed. The statement also shall
set forth plainly and concisely any other material facts that the
opposing party contends are disputed. Each material fact contended by
the opposing party to be disputed shall be followed by a reference
to the supporting evidence. Failure to comply with this requirement
of a separate statement may constitute a sufficient ground, in the
court’s discretion, for granting the motion.
(4) Any reply to the opposition shall be served and filed by the
moving party not less than five days preceding the noticed or
continued date of hearing, unless the court for good cause orders
otherwise.
(5) Evidentiary objections not made at the hearing shall be deemed
waived.
(6) Except for subdivision (c) of Section 1005 relating to the
method of service of opposition and reply papers, Sections 1005 and
1013, extending the time within which a right may be exercised or an
act may be done, do not apply to this section.
(7) Any incorporation by reference of matter in the court’s file
shall set forth with specificity the exact matter to which reference
is being made and shall not incorporate the entire file.
(c) The motion for summary judgment shall be granted if all the
papers submitted show that there is no triable issue as to any
material fact and that the moving party is entitled to a judgment as
a matter of law. In determining whether the papers show that there is
no triable issue as to any material fact the court shall consider
all of the evidence set forth in the papers, except that to which
objections have been made and sustained by the court, and all
inferences reasonably deducible from the evidence, except summary
judgment may not be granted by the court based on inferences
reasonably deducible from the evidence, if contradicted by other
inferences or evidence, which raise a triable issue as to any
material fact.
(d) Supporting and opposing affidavits or declarations shall be
made by any person on personal knowledge, shall set forth admissible
evidence, and shall show affirmatively that the affiant is competent
to testify to the matters stated in the affidavits or declarations.
Any objections based on the failure to comply with the requirements
of this subdivision shall be made at the hearing or shall be deemed
waived.
(e) If a party is otherwise entitled to a summary judgment
pursuant to this section, summary judgment may not be denied on
grounds of credibility or for want of cross-examination of witnesses
furnishing affidavits or declarations in support of the summary
judgment, except that summary judgment may be denied in the
discretion of the court, where the only proof of a material fact
offered in support of the summary judgment is an affidavit or
declaration made by an individual who was the sole witness to that
fact; or where a material fact is an individual’s state of mind, or
lack thereof, and that fact is sought to be established solely by the
individual’s affirmation thereof.
(f) (1) A party may move for summary adjudication as to one or
more causes of action within an action, one or more affirmative
defenses, one or more claims for damages, or one or more issues of
duty, if that party contends that the cause of action has no merit or
that there is no affirmative defense thereto, or that there is no
merit to an affirmative defense as to any cause of action, or both,
or that there is no merit to a claim for damages, as specified in
Section 3294 of the Civil Code, or that one or more defendants either
owed or did not owe a duty to the plaintiff or plaintiffs. A motion
for summary adjudication shall be granted only if it completely
disposes of a cause of action, an affirmative defense, a claim for
damages, or an issue of duty.
(2) A motion for summary adjudication may be made by itself or as
an alternative to a motion for summary judgment and shall proceed in
all procedural respects as a motion for summary judgment. However, a
party may not move for summary judgment based on issues asserted in a
prior motion for summary adjudication and denied by the court,
unless that party establishes to the satisfaction of the court, newly
discovered facts or circumstances or a change of law supporting the
issues reasserted in the summary judgment motion.
(g) Upon the denial of a motion for summary judgment, on the
ground that there is a triable issue as to one or more material
facts, the court shall, by written or oral order, specify one or more
material facts raised by the motion as to which the court has
determined there exists a triable controversy. This determination
shall specifically refer to the evidence proffered in support of and
in opposition to the motion which indicates that a triable
controversy exists. Upon the grant of a motion for summary judgment,
on the ground that there is no triable issue of material fact, the
court shall, by written or oral order, specify the reasons for its
determination. The order shall specifically refer to the evidence
proffered in support of, and if applicable in opposition to, the
motion which indicates that no triable issue exists. The court shall
also state its reasons for any other determination. The court shall
record its determination by court reporter or written order.
(h) If it appears from the affidavits submitted in opposition to a
motion for summary judgment or summary adjudication or both that
facts essential to justify opposition may exist but cannot, for
reasons stated, then be presented, the court shall deny the motion,
or order a continuance to permit affidavits to be obtained or
discovery to be had or may make any other order as may be just. The
application to continue the motion to obtain necessary discovery may
also be made by ex parte motion at any time on or before the date the
opposition response to the motion is due.
(i) If, after granting a continuance to allow specified additional
discovery, the court determines that the party seeking summary
judgment has unreasonably failed to allow the discovery to be
conducted, the court shall grant a continuance to permit the
discovery to go forward or deny the motion for summary judgment or
summary adjudication. This section does not affect or limit the
ability of any party to compel discovery under the Civil Discovery
Act (Title 4 (commencing with Section 2016.010) of Part 4).
(j) If the court determines at any time that any of the affidavits
are presented in bad faith or solely for purposes of delay, the
court shall order the party presenting the affidavits to pay the
other party the amount of the reasonable expenses which the filing of
the affidavits caused the other party to incur. Sanctions may not be
imposed pursuant to this subdivision, except on notice contained in
a party’s papers, or on the court’s own noticed motion, and after an
opportunity to be heard.
(k) Except when a separate judgment may properly be awarded in the
action, no final judgment may be entered on a motion for summary
judgment prior to the termination of the action, but the final
judgment shall, in addition to any matters determined in the action,
award judgment as established by the summary proceeding herein
provided for.
(l) In actions which arise out of an injury to the person or to
property, if a motion for summary judgment was granted on the basis
that the defendant was without fault, no other defendant during
trial, over plaintiff’s objection, may attempt to attribute fault to
or comment on the absence or involvement of the defendant who was
granted the motion.
(m) (1) A summary judgment entered under this section is an
appealable judgment as in other cases. Upon entry of any order
pursuant to this section, except the entry of summary judgment, a
party may, within 20 days after service upon him or her of a written
notice of entry of the order, petition an appropriate reviewing court
for a peremptory writ. If the notice is served by mail, the initial
period within which to file the petition shall be increased by five
days if the place of address is within the State of California, 10
days if the place of address is outside the State of California but
within the United States, and 20 days if the place of address is
outside the United States. If the notice is served by facsimile
transmission, Express Mail, or another method of delivery providing
for overnight delivery, the initial period within which to file the
petition shall be increased by two court days. The superior court
may, for good cause, and prior to the expiration of the initial
period, extend the time for one additional period not to exceed 10
days.
(2) Before a reviewing court affirms an order granting summary
judgment or summary adjudication on a ground not relied upon by the
trial court, the reviewing court shall afford the parties an
opportunity to present their views on the issue by submitting
supplemental briefs. The supplemental briefing may include an
argument that additional evidence relating to that ground exists, but
that the party has not had an adequate opportunity to present the
evidence or to conduct discovery on the issue. The court may reverse
or remand based upon the supplemental briefing to allow the parties
to present additional evidence or to conduct discovery on the issue.
If the court fails to allow supplemental briefing, a rehearing shall
be ordered upon timely petition of any party.
(n) (1) If a motion for summary adjudication is granted, at the
trial of the action, the cause or causes of action within the action,
affirmative defense or defenses, claim for damages, or issue or
issues of duty as to the motion which has been granted shall be
deemed to be established and the action shall proceed as to the cause
or causes of action, affirmative defense or defenses, claim for
damages, or issue or issues of duty remaining.
(2) In the trial of the action, the fact that a motion for summary
adjudication is granted as to one or more causes of action,
affirmative defenses, claims for damages, or issues of duty within
the action shall not operate to bar any cause of action, affirmative
defense, claim for damages, or issue of duty as to which summary
adjudication was either not sought or denied.
(3) In the trial of an action, neither a party, nor a witness, nor
the court shall comment upon the grant or denial of a motion for
summary adjudication to a jury.
(o) A cause of action has no merit if either of the following
exists:
(1) One or more of the elements of the cause of action cannot be
separately established, even if that element is separately pleaded.
(2) A defendant establishes an affirmative defense to that cause
of action.
(p) For purposes of motions for summary judgment and summary
adjudication:
(1) A plaintiff or cross-complainant has met his or her burden of
showing that there is no defense to a cause of action if that party
has proved each element of the cause of action entitling the party to
judgment on that cause of action. Once the plaintiff or
cross-complainant has met that burden, the burden shifts to the
defendant or cross-defendant to show that a triable issue of one or
more material facts exists as to that cause of action or a defense
thereto. The defendant or cross-defendant may not rely upon the mere
allegations or denials of its pleadings to show that a triable issue
of material fact exists but, instead, shall set forth the specific
facts showing that a triable issue of material fact exists as to that
cause of action or a defense thereto.
(2) A defendant or cross-defendant has met his or her burden of
showing that a cause of action has no merit if that party has shown
that one or more elements of the cause of action, even if not
separately pleaded, cannot be established, or that there is a
complete defense to that cause of action. Once the defendant or
cross-defendant has met that burden, the burden shifts to the
plaintiff or cross-complainant to show that a triable issue of one or
more material facts exists as to that cause of action or a defense
thereto. The plaintiff or cross-complainant may not rely upon the
mere allegations or denials of its pleadings to show that a triable
issue of material fact exists but, instead, shall set forth the
specific facts showing that a triable issue of material fact exists
as to that cause of action or a defense thereto.
(q) This section does not extend the period for trial provided by
Section 1170.5.
(r) Subdivisions (a) and (b) do not apply to actions brought
pursuant to Chapter 4 (commencing with Section 1159) of Title 3 of
Part 3.
(s) For the purposes of this section, a change in law does not
include a later enacted statute without retroactive application.

438. (a) As used in this section:
(1) “Complaint” includes a cross-complaint.
(2) “Plaintiff” includes a cross-complainant.
(3) “Defendant” includes a cross-defendant.
(b) (1) A party may move for judgment on the pleadings.
(2) The court may upon its own motion grant a motion for judgment
on the pleadings.
(c) (1) The motion provided for in this section may only be made
on one of the following grounds:
(A) If the moving party is a plaintiff, that the complaint states
facts sufficient to constitute a cause or causes of action against
the defendant and the answer does not state facts sufficient to
constitute a defense to the complaint.
(B) If the moving party is a defendant, that either of the
following conditions exist:
(i) The court has no jurisdiction of the subject of the cause of
action alleged in the complaint.
(ii) The complaint does not state facts sufficient to constitute a
cause of action against that defendant.
(2) The motion provided for in this section may be made as to
either of the following:
(A) The entire complaint or cross-complaint or as to any of the
causes of action stated therein.
(B) The entire answer or one or more of the affirmative defenses
set forth in the answer.
(3) If the court on its own motion grants the motion for judgment
on the pleadings, it shall be on one of the following bases:
(A) If the motion is granted in favor of the plaintiff, it shall
be based on the grounds that the complaint states facts sufficient to
constitute a cause or causes of action against the defendant and the
answer does not state facts sufficient to constitute a defense to
the complaint.
(B) If the motion is granted in favor of the defendant, that
either of the following conditions exist:
(i) The court has no jurisdiction of the subject of the cause of
action alleged in the complaint.
(ii) The complaint does not state facts sufficient to constitute a
cause of action against that defendant.
(d) The grounds for motion provided for in this section shall
appear on the face of the challenged pleading or from any matter of
which the court is required to take judicial notice. Where the motion
is based on a matter of which the court may take judicial notice
pursuant to Section 452 or 453 of the Evidence Code, the matter shall
be specified in the notice of motion, or in the supporting points
and authorities, except as the court may otherwise permit.
(e) No motion may be made pursuant to this section if a pretrial
conference order has been entered pursuant to Section 575, or within
30 days of the date the action is initially set for trial, whichever
is later, unless the court otherwise permits.
(f) The motion provided for in this section may be made only after
one of the following conditions has occurred:
(1) If the moving party is a plaintiff, and the defendant has
already filed his or her answer to the complaint and the time for the
plaintiff to demur to the answer has expired.
(2) If the moving party is a defendant, and the defendant has
already filed his or her answer to the complaint and the time for the
defendant to demur to the complaint has expired.
(g) The motion provided for in this section may be made even
though either of the following conditions exist:
(1) The moving party has already demurred to the complaint or
answer, as the case may be, on the same grounds as is the basis for
the motion provided for in this section and the demurrer has been
overruled, provided that there has been a material change in
applicable case law or statute since the ruling on the demurrer.
(2) The moving party did not demur to the complaint or answer, as
the case may be, on the same grounds as is the basis for the motion
provided for in this section.
(h) (1) The motion provided for in this section may be granted
with or without leave to file an amended complaint or answer, as the
case may be.
(2) Where a motion is granted pursuant to this section with leave
to file an amended complaint or answer, as the case may be, then the
court shall grant 30 days to the party against whom the motion was
granted to file an amended complaint or answer, as the case may be.
(3) If the motion is granted with respect to the entire complaint
or answer without leave to file an amended complaint or answer, as
the case may be, then judgment shall be entered forthwith in
accordance with the motion granting judgment to the moving party.
(4) If the motion is granted with leave to file an amended
complaint or answer, as the case may be, then the following
procedures shall be followed:
(A) If an amended complaint is filed after the time to file an
amended complaint has expired, then the court may strike the
complaint pursuant to Section 436 and enter judgment in favor of that
defendant against that plaintiff or a plaintiff.
(B) If an amended answer is filed after the time to file an
amended answer has expired, then the court may strike the answer
pursuant to Section 436 and proceed to enter judgment in favor of
that plaintiff and against that defendant or a defendant.
(C) Except where subparagraphs (A) and (B) apply, if the motion is
granted with respect to the entire complaint or answer with leave to
file an amended complaint or answer, as the case may be, but an
amended complaint or answer is not filed, then after the time to file
an amended complaint or answer, as the case may be, has expired,
judgment shall be entered forthwith in favor of the moving party.
(i) (1) Where a motion for judgment on the pleadings is granted
with leave to amend, the court shall not enter a judgment in favor of
a party until the following proceedings are had:
(A) If an amended pleading is filed and the moving party contends
that pleading is filed after the time to file an amended pleading has
expired or that the pleading is in violation of the court’s prior
ruling on the motion, then that party shall move to strike the
pleading and enter judgment in its favor.
(B) If no amended pleading is filed, then the party shall move for
entry of judgment in its favor.
(2) All motions made pursuant to this subdivision shall be made
pursuant to Section 1010.
(3) At the hearing on the motion provided for in this subdivision,
the court shall determine whether to enter judgment in favor of a
particular party.

Standing argument

7 Jun

judge-youngs-decision-on-nosek

Ameriquest’s final argument, that the sanctions are a
criminal penalty, is bereft of authority. Ameriquest cites F.J.
Hanshaw Enterprises, Inc. v. Emerald River Development, Inc., 244
F.3d 1128 (9th Cir. 2001), a case about inherent powers – not
Rule 11 –

This is an excerpt from the decision just this bloggers note the Hanshaw Case was my case. I argued this case at the 9th circuit court of appeals

http://openjurist.org/244/f3d/1128/fj-v-emeraldfj-v-emerald

If you will grasp the implications of this judge-youngs-decision-on-nosekdecision all or most all the evictions and  foreclosures are being litigated by the wrong parties that is to say parties who have no real stake in the outcome. they are merely servicers not the real investors. They do not have the right to foreclose or evict. No assignment No note No security interest No standing They do not want to be listed anywhere. They (the lenders) have caused the greatest damage to the American Citizen since the great depression and they do not want to be exposed or named in countless lawsuits. Time and time again I get from the judges in demurer hearings ” I see what you are saying counsel but your claim does not appear to be against this defendant” the unnamed investment pool of the Lehman Brothers shared High yield equity Fund trustee does not exist and so far can’t be sued.

Sample complaint template

26 Apr

this is the type of complaint to get the lender to the table sample-bank-final-complaint1-2

Borrowers’ Defenses to Forclosure

19 Apr

A great source of information you can use, and since the Guy is in Washington I can give him all the credit
defensestoforeclosure

United First Class Action

9 Mar

On Saturday March 7,2009 a meeting was held for 200 plus victims of the United First equity save your house scam. At that meeting it was determined that a class action should be filed to recover the funds lost by the victims of the unconscionable contract.

As a first step an involuntary Bankruptcy is being filed today March 9, 2009. To be considered as a creditor of said Bankruptcy please Fax the Joint Venture agreement and retainer agreement to 909-494-4214.
Additionally it is this attorneys opinion that said Bankruptcy will act as a “stay” for all averse actions being taken by lenders as against said victims. This opinion is based upon the fact that United First maintained an interest in the real property as a joint venture to 80% of the properties value(no matter how unconscionable this may be) this is an interest that can be protected by the Bankruptcy Stay 11 USC 362.

Lawyers that get it Niel Garfield list

14 Feb

Lawyers that get it Niel Garfield list
lawyers-that-get-it-02092

The Doan deal

25 Jan

California Civil Code 2923.6 enforces and promotes loan modifications to stop foreclosure in the state. California Civil Code 2923.6 (Servicer’s Duty under Pooling Agreements) went into effect on July 8, 2008. It applies to all loans from January 1, 2003, to December 31, 2007 secured by residential real property for owner-occupied residences.

The new law states that servicing agents for loan pools owe a duty to all parties in the pool so that a workout or modification is in the best interests of the parties if the loan is in default or default is reasonably foreseeable, and the recovery on the workout exceeds the anticipated recovery through a California foreclosure based on the current value of the property.

Almost all residential mortgages have Pooling and Servicing Agreements (“PSA”) since they were transferred to various Mortgage Backed Security Trusts after origination. California Civil Code 2823.6 broadens and extends this PSA duty by requiring servicers to accept loan modifications with borrowers.

How does this law apply?

Attorney Michael Doan provides this example of how the new law applies in his article entitled “California Foreclosures: Lenders Must Accept Loan Modifications” on the Mortgage Law Network blog. We removed the borrower’s name from the example for the sake of privacy.

A California borrower’s loan is presently in danger of foreclosure. The house he bought 2 years ago for $800,000 with a $640,000 first and $140,000 second, has now plummeted in value to $375,000. The borrower can no longer afford the $9,000 per month mortgage payment. But, he is willing, able, and ready to execute a modification of his loan on the following terms:

a) New Loan Amount: $330,000.00

b) New Interest Rate: 6% fixed

c) New Loan Length: 30 years

d) New Payment: $1978.52

While this new loan amount of $330,000 is less than the current fair market value, the costs of foreclosure need to be taken into account. Foreclosures typically cost the lender $50,000 per foreclosure. For example, the Joint Economic Committee of Congress estimated in June, 2007, that the average foreclosure results in $77.935.00 in costs to the homeowner, lender, local government, and neighbors. Of the $77,935.00 in foreclosure costs, the Joint Economic Committee of Congress estimates that the lender will suffer $50,000.00 in costs in conducting a non-judicial foreclosure on the property, maintaining, rehabilitating, insuring, and reselling the property to a third party. Freddie Mac places this loss higher at $58,759.00.

Accordingly, the anticipated recovery through foreclosure on a net present value basis is $325,000.00 or less and the recovery under the proposed loan modification at $330,000.00 exceeds the net present recovery through foreclosure of $325,000.00 by over $5,000.00. Thus, California Civil Code 2823.6 would mandate a modification to the new terms.

This new law remains in effect until January 1, 2013. Restructuring your mortgage will stop foreclosure and lower mortgage payments. Depending on your circumstances, you may also be able to lower your interest rate, as well. Visit the “Get Started” page to find out if you can benefit from this new California law and avoid foreclosure.