California Cases - 2009 to Present
LISTED WITH MOST RECENT CASES FIRST
Go to cases 2000 - 2008

Romero v. Shih     Docket
Cal. Supreme Court (S275023)  2/1/24

IMPLIED EASEMENTS: The court held that recognizing an implied easement does not require that the property owners be able to make all or most practical uses of the easement area. The court emphasized that the evidentiary standard for recognizing an implied easement is a high one, and it will naturally be more difficult to meet where the nature of the easement effectively precludes the property owners from making most practical uses of the easement area. However, here there is clear evidence that the parties to the sale that separated the parcels intended for the neighboring parcel's preexisting use of the area to continue after separation of title. The law obligates courts to give effect to that intent. The court reversed and remanded the case back to the Court of Appeal to consider whether substantial evidence supports the trial court's finding that an implied easement existed under the circumstances of this case.

Newman v. Casey     Docket
Cal.App. 1st Dist. (A165210)  1/30/24

ELDER ABUSE / QUIET TITLE: The court affirmed the issuance of restraining orders, finding sufficient evidence of financial abuse, but reversed the order declaring the deed void. The court concluded that the trial court exceeded its statutory authority under Welfare and Institutions Code Section 15657.03 in declaring the deed void. The statute allows for the issuance of restraining orders to protect elders from further abuse, but does not provide the court with the authority to declare a deed void. The court noted that other permanent remedies, such as the return of property, can be pursued through a civil action under other provisions of the Elder Abuse Act.

De Martini v. Superior Court     Docket
Cal.App. 1st Dist. (A168529)  1/22/24

LIS PENDENS: The court held that section 405.36 requires a claimant to seek court permission before recording a lis pendens on the same property in a subsequent proceeding if a lis pendens in a prior, related proceeding has been expunged.

K & S Staffing Solutions v. The Western Surety Co.     Docket
Cal.App. 3rd Dist. (C096705, C097987)  1/19/24

MECHANICS LIENS: The court held that K&S Staffing Solutions, a staffing company, is not a "laborer" under the mechanics' lien law so is not entitled to assert a claim against payment bonds issued for the subject projects.

Vulcan Lands, Inc. v. Currier     Docket
Cal.App. 4th Dist., Div. 1 (D082234)  12/21/23

MINERAL RESERVATION: In the 1950s and 1960s, landowners in southwest San Bernardino County, California, transferred 19 parcels of land to various individuals by grant deed, reserving a partial interest in all minerals beneath the surface. The current owners of the surface estate are mining companies that wish to extract sand and gravel from the combined 196-acre tract through open-pit excavation. Mineral rights holders, descendants of the original grantors, claim a one-half interest in the mining proceeds. The question in this appeal was whether "minerals" in the original reservations include rights to mine sand and gravel. Concluding they do, the trial court granted summary judgment on behalf of the mineral rights holders, and the mining companies appealed.

The Court affirmed the lower court's ruling. The court held that the plain language of the deed was ambiguous as to the term "minerals," and therefore turned to extrinsic evidence to ascertain the parties' intent. The court found that sand and gravel had been mined in the region for decades before the grant deeds, and that these substances possess commercial value. Although open-pit mining will affect the usability of the surface estate, the surface estate retains a 50 percent interest in the extracted minerals. The court concluded that the deeds' ambiguity as to whether sand and gravel were included in the mineral reservation was resolved by California Civil Code section 1069, which requires that deed reservations be construed in favor of the grantor. Thus, the court held that under these deeds, the term "minerals" included sand and gravel.

Green Tree Headlands v. Crawford     Docket
Cal.App. 1st Dist. (A164867)  12/19/23

EASEMENTS: In this case, the Court of Appeal of the State of California First Appellate District reversed the trial court's denial of anti-SLAPP motions filed by Tara Crawford, a trustee, and her lawyer, Benjamin Graves. The case arose from a dispute over an easement connected to a piece of property sold by Alan Patterson to Steven McArthur, who took title in the name of Green Tree Headlands LLC. After Patterson's death, Crawford, as trustee of Patterson's trust, managed the property and argued that the easement had expired based on the terms of the Declaration of Restrictions. McArthur disagreed, asserting that the easement remained in existence. Crawford filed a lawsuit against McArthur, which she later voluntarily dismissed. McArthur then filed a malicious prosecution action against Crawford and Graves. Crawford and Graves filed anti-SLAPP motions, which the trial court denied. On appeal, the appellate court found that Crawford had a reasonable basis to sue McArthur, as the Declaration of Restrictions, by itself, gave Crawford a factual basis to argue that the easement was temporarily limited and had expired. Therefore, the court held that the trial court erred in denying the anti-SLAPP motions and reversed its decision.

Castaic Studios v. Wonderland Studios     Docket
Cal.App. 2nd Dist. (B325853)  11/15/23

LICENSE: The court held that an unlawful detainer action is not available after a default when possession is held pursuant to a license agreement. Instead a much slower trespass or ejectment action is necessary.

Homeward Opportunities Fund I Trust v. Taptelis     Docket
Cal.App. 6th Dist. (H049791)  10/12/23

TRUSTEE'S SALES: Defendant filed an action for wrongful foreclosure and recorded a lis pendens before plaintiff lender's trustee's sale at which plaintiff purchased the property. After recording a trustee's deed, plaintiff filed this action in unlawful detainer in order to evict defendant. The court noted that upon purchasing property in a nonjudicial foreclosure sale under a deed of trust, the new owner must perfect title under the sale before seeking to evict the owner. The court held that, although the recording of a trustee's deed is typically sufficient to raise a conclusive presumption of title under the sale, the failure to expunge the lis pendens before serving the notice to quit constituted a failure to perfect title under Code Civ. Proc. Section 1161a(b)(3). Accordingly, the court reversed the unlawful detainer judgment.

Piedmont Capital Management v. McElfish      Modification #1     Modification #2     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B316372)  8/24/23    Request for review and by Cal Supreme Ct. FILED 10/3/23

EQUITY LINES OF CREDIT: Plaintiff is the lender under a Home Equity Line of Credit (HELOC) agreement secured by a junior deed of trust that was foreclosed by a senior deed of trust. Accordingly, plaintiff was a "sold out junior" and brought this action to recover the debt. The court held that a borrower's duty to make a monthly payment under a HELOC is divisible from the borrower's duty to pay the full amount, so that the statute of limitations to recover the full amount is not necessarily triggered by a missed monthly payment. By setting a fixed maturity date for the full amount and leaving it to the discretion of the lender whether to accelerate that date necessarily contemplates that a breach as to a monthly payment does not constitute a breach as to the full amount.

Ridec v. Ocy Hinkle     Docket
Cal.App. 2nd Dist. (B317420)  6/29/23     Case complete 8/31/23

QUIET TITLE: The court summarized: In Tsasu v. U.S. Bank Trust (2021) 62 Cal.App.5th 704 (Tsasu), this court construed one section of California's Quiet Title Act (Code Civ. Proc., Section 760.010 et seq.). Specifically, Tsasu confirmed that section 764.060 provides that a party acquiring title to property "in reliance" on a quiet title judgment retains its rights in that property - even if that judgment is subsequently invalidated as void - as long as the party is a "purchaser or encumbrancer for value" who lacked "knowledge of any defects or irregularities in the earlier quiet title judgment or the proceedings." The court held that a trial court may not disregard the plain text of a statute or binding precedent in favor of its own view of what the law should be, and section 764.060 does not violate due process or deny equal protection of the law. Because the trial court also erred when, in the alternative, it applied section 764.060 to deprive a lender of its rights to property based on a later-invalidated quiet title judgment, we reverse the trial court’s judgment and order that judgment be entered for the lender.

Visitacion Investment v. 424 Jessie Historic Properties     Docket
Cal.App. 1st Dist. (A163550)  6/27/23     Case complete 8/20/23

EASEMENTS: Abandonment of an easement created by grant requires proof of (1) the cessation of use of the easement by the owner of the dominant tenement and (2) unequivocal and decisive acts on the part of the dominant tenant, clearly showing an intention to abandon. The court held the intention to abandon was too ambiguous and set aside the trial court's granting of summary judgment that had ruled the easement was abandoned.

Diaz v. Zuniga     Docket
Cal.App. 2nd Dist. (B318131)  5/19/23     Case complete 7/20/23

TRUSTS: The court held that where a trust requires that an amendment to the trust must be sent to the trustee by certified mail, the settlor must send the amendment by certified mail to himself where the settlor is also the trustee. Here, the settlor placed the amendment in a closet. The court found that the settlor's intentions were unclear because he may have placed the document in his closet in order to reflect on the proposed changes before finalizing them. That he did not do so by sending the document to himself by certified mail may indicate that he decided against the modifications.

Shetty v. HSBC Bank     Docket
Cal.App. 4th Dist., Div. 3 (G060657)  5/18/23     Case complete 7/20/23

FORECLOSURE: The court held that a successor in interest who acquires title subject to a deed of trust has a right to cure a default under the loan and reinstate it.

Crescent Trust v. City of Oakland     Docket     Sup.Ct. Docket
Cal.App. - 1st Dist. (A162465)  3/23/23 (Cert. for Pub. granted 4/20/23)    Request for review and by Cal Supreme Ct. GRANTED 7/12/23

SUBDIVISION MAP ACT: Plaintiff's lot 18 was shown on a map recorded in 1869 and was one of 4 lots subsequently conveyed in a single deed. Plaintiff acquired Lot 18 along with lot 17 and a portion of lot 16. The court held that lot 18 is a legal lot and plaintiff is entitled to a certificate of compliance, even though Lot 18 was never separately conveyed.

Tariwala v. Mack     Docket     Sup.Ct. Docket
85 Cal.App.5th 197 - 2nd Dist. (B311232)  11/17/22     Request for review by Cal Supreme Ct. DENIED 2/15/23

EASEMENTS: When property is subject to an easement and both the dominant and servient tenements are subsequently acquired by the same person, the easement is normally extinguished because it is merged into the title (Civil Code Sections 805 and 811). Here, however, defendant encumbered the dominant tenancy with a deed of trust that expressly referred to the easement simultaneously with acquiring sole ownership of the two parcels. He again encumbered it with deeds of trust two more times. The deed of trust was subsequently foreclosed and the property sold to plaintiff. The court refused to apply the doctrine of merger to extinguish the easement, holding that defendant never held the two properties in unity of title because of the deeds of trust. The court also stated that even if defendant had established a unity of interest, the equitable component of the trial court's decision would have placed its decision on firm footing due to the profound prejudice to the lender’s successors in interest.

Honchariw v. FJM Private Mortgage Fund     Docket     Sup.Ct. Docket
83 Cal.App.5th 893 - 1st Dist. (A163756)  9/29/22     Request for depublication and review by Cal Supreme Ct. DENIED 12/21/22

NOTES / DEEDS OF TRUST: The court held that liquidated damages in the form of a penalty assessed during the lifetime of a partially matured note against the entire outstanding loan amount are unlawful penalties in contravention of public policy set forth in Civil Code Section 1671, even where the loan is a non-consumer loan.

Garg v. Garg     Docket
82 Cal.App.5th 1036 - 4th Dist., Div. 3 (G061500)  9/7/22     Case complete 11/9/22

APPEALS: A notice of appeal was filed in the superior court late because it was filed more than 60 days after notice of entry of judgment was served upon appellants. (Cal. Rules of Court, rule 8.104(a)(1)(B)). However, the court may permit the appeal to proceed if appellants show by a preponderance of the evidence that an attempt to electronically file the document was made prior to the expiration of the deadline and that diligence was shown in promptly filing the notice of appeal after the failed attempt. Here, appellants did not show such diligence, so the court dismissed the appeal.

Shoker v. Superior Court of Alameda County     Docket     Sup.Ct. Docket
81 Cal.App.5th 271 - 1st Dist. (A163711)  7/15/22     Request for review by Cal Supreme Ct. DENIED 9/28/22

LIS PENDENS: The court held that a constructive trust claim that is akin to a fraudulent conveyance claim is a real property claim supporting a lis pendens where it seeks a constructive trust on real property that was wrongfully taken and, if successful on the merits, plaintiff would regain title to or possession of the same property. The court pointed out that it was not addressing claims that seek a constructive trust or equitable lien on different property, merely as a means to secure collection of a debt.

XPO Logistics Freight v. Hayward Property     Modification     Docket     Sup.Ct. Docket
79 Cal.App.5th 1166 - 1st Dist. (A157687)  6/17/22     Request for review by Cal Supreme Ct. DENIED 8/31/22

DEEDS / LEGAL DESCRIPTIONS: In the published portion of the opinion, the court held that where there is a conflict in a deed between the legal description and the assessor's parcel number, the legal description controls. The court cited R&TC Section 11911.1, which provides in part: "The [assessor's parcel] number will be used only for administrative and procedural purposes and will not be proof of title and in the event of any conflicts, the stated legal description noted upon the document shall govern."

People v. Miller     Docket
78 Cal.App.5th 1051 - 1st Dist. (A161601)  5/18/22     Case complete 7/19/22

FORGERY: The court held that the trial court's decision to rule that a forged deed was void under Penal Code Section 115(e), rather than waiting for the resolution of a pending quiet title action, was well within the court's discretion.

Canyon Vineyard Estates v. DeJoria     Docket
78 Cal.App.5th 995 - 2nd Dist. (B307176)  4/21/22 (Cert. for Partial Publication 5/17/22)     Request for review by Cal Supreme Ct. DENIED 8/10/22

CONSERVATION EASEMENTS: A property owner conveyed fee title, and included in the grant deed a deed restriction requiring the land to remain in its open space condition. The deed provided for a power of termination in the event the restriction was violated. The grantor additionally executed a subordination agreement that assured that a deed of trust would be superior to the deed restriction, specifically identifying the power of termination. The deed of trust was subsequently foreclosed and plaintiff, successor to the foreclosing lender, sought to develop the property.

The court held: 1) although the use restriction in the grant deed was not labeled a conservation easement, it nonetheless met the statutory definition of a conservation easement under Civil Code Section 815.1 as a limitation in a deed that restricted the use of the land, 2) fee title subject to a condition subsequent may be simultaneously granted along with a conservation easement, and the two interests do not merge, 3) the subordination agreement subordinated only the right of termination, not the right to enforce the conservation easement.

Soleimany v. Narimanzadeh     Docket
78 Cal.App.5th 915 - 2nd Dist. (B304644)  5/17/22     Case complete 7/29/22

USURY: The court explained that if a promissory note evidencing a loan stipulates a usurious rate of interest (that is, a rate in violation of the limits set by article XV, section 1 of the California Constitution) the interest provision is void, and the principal sum is deemed due at maturity of the note without interest, meaning that any interest paid is applied against the principal so as to reduce the principal obligation owed. However, if any of the principal amount is unpaid at the date of maturity, the lender is entitled to damages in the form of prejudgment interest on any such unpaid amount from the date of maturity of the loan to the date of judgment.

Here, there were two usurious loans, one secured by a deed of trust and the other was unsecured. The court held that 1) the unsecured loan was entitled to 10% interest after the date of maturity under Civil Code Section 3289(b) and 2) while the 10% rate does not apply to the secured loan because the statute does not apply to loans secured by a deed of trust on real property, the plaintiffs were nonetheless entitled to post-maturity interest on the unpaid principal at the rate of 7%, the default rate of prejudgment interest provided in article XV, section 1 of the California Constitution.

Romero v. Shih     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B310069)  5/5/22     REVERSED and remanded by Cal Supreme Ct. 2/1/24

EQUITABLE EASEMENTS: There was a long standing encroachment including a block wall that encroached onto plaintiffs' property. The court held that defendants were not entitled to an "exclusive implied easement", which is substantially the equivalent to fee title, unless 1) the encroachment is "de minimis" or 2) the easement is necessary to protect the health or safety of the public or for essential utility purposes. Neither of those exceptions applied here. However, court affirmed the trial court's creation of an "equitable easement" because substantial evidence supported the trial court’s finding that 1) the trespass was innocent rather than willful or negligent, 2) the property owner subject to the encroachment was not irreparably injured by the easement, and 3) the hardship to the trespasser from having to cease the trespass is greatly disproportionate to the hardship caused by the continuance of the encroachment. The court pointed out that, instead of prohibiting the encroachment when awarding an equitable easement, damages can be awarded if such damages can be proven.

Morris v. JPMorgan Chase Bank     Docket
78 Cal.App.5th 279 - 1st Dist. (A155027)  5/4/22

TRUSTEE'S SALES: The court reversed the trial court's sustaining of a demurrer without leave to amend as to causes of action for damages for 1) failure to appoint a single point of contact (CC 2923.7), 2) "dual tracking" and denying a loan modification without providing in writing reasons for the denial and notice of the right to appeal (CC 2923.6), and 3) failure to mail upon request a notice of default and notice of trustee’s sale (CC 2924b). However, the court upheld the trial court's sustaining of a subsequent purchaser's demurrer without leave to amend as to causes of action to void the trustee's sale and for quiet title on the basis that 1) plaintiff failed to offer to pay the full amount of the debt and 2) the purchaser was a bona fide purchaser for value.

Sheen v. Wells Fargo Bank     Docket
12 Cal.5th 905 - Cal. Supreme Court (S258019)  3/7/22     Rehearing petition DENIED 6/1/22

LOAN MODIFICATIONS: The court held that when a borrower requests a loan modification, a lender owes no tort duty sounding in general negligence principles to "process, review and respond carefully and completely to" the borrower's application.

CIM Urban REIT 211 Main Street v. City and County of San Francisco     Modification     Docket     Sup.Ct. Docket
76 Cal.App. 5th 824 - 1st Dist. (A161244)  3/3/22     Request for review by Cal Supreme Ct. DENIED 6/1/22

TRANSFER TAX: The court held that a merger changed the control of plaintiff and triggered a transfer tax under a San Francisco ordinance. Revenue and Taxation Code Section 11911 limits the amount of Documentary Transfer Tax that Counties and Cities can charge. Sections 2, 3 and 4 of the Act that implemented Section 11911 were not codified. Section 2 provides in part: "No city or county shall directly or indirectly impose a tax on transfers of real property which is not in conformity with this part. As used in this section, 'city' does not include a chartered city and 'county' does not include a city and county." Since San Francisco is a chartered city, and is also a city and county, Section 11911 does not limit the amount of transfer tax it can charge.

Balistreri v. Balistreri     Docket     Sup.Ct. Docket
Cal.App. 1st Dist. (A162222)  2/24/22     Request for review by Cal Supreme Ct. GRANTED 5/11/22

TRUSTS: The court held that when a trust specifies a method of amendment, an amendment is void if that method is not followed. Here the amendment was void because the trustors' signatures were not notarized as required by the trust.

Meyer v. Sheh     Docket
74 Cal.App.5th 830 - 2nd Dist. (B307734)  2/3/22

JUDGMENTS: Before a creditor with a money judgment may force the sale of a debtor's dwelling to satisfy that judgment, the creditor must, in addition to other procedures, obtain a court order authorizing the sale. (C.C.P. Section 704.750(a).) To obtain that court order, the creditor must file an application that includes, among other things, "[a] statement of the amount of any liens or encumbrances on the dwelling." (Section 704.760(c).) The court held that this requires the creditor to list liens on the property for unpaid real property taxes, even though those liens need not be recorded. Because the creditor's application in this case did not list the delinquent property taxes against the debtor's dwelling and went so far as to represent, under oath, that "there are no actual or purported liens or encumbrances" on the property, the trial court properly denied the creditor's application as deficient.

Greif v. Sanin     Docket
74 Cal.App.5th 412 - 4th Dist., Div. 2  (E070283)  1/26/22

CONTRACTS: The court held that plaintiff did not prove the elements necessary for rescinding a contract for the sale of real property on the basis of unilateral mistake as to the value of the property. Where one party to a contract has no reason to know of and does not cause the unilateral mistake of fact by the party seeking to rescind a contract, the party seeking rescission must establish the following facts to obtain rescission of the contract: (1) he made a mistake regarding a basic assumption upon which he made the contract; (2) the mistake has a material effect upon the agreed exchange of performances that is adverse to him; (3) he does not bear the risk of the mistake; and (4) the effect of the mistake is such that enforcement of the contract would be unconscionable. Merely making a mistake as to the property's value is not a valid basis for rescinding the purchase agreement based on the unilateral mistake defense even though the property was worth 10 times the sales price.

Johnson v. Little Rock Ranch     Docket     Sup.Ct. Docket
73 Cal.App.5th 576 - 5th Dist. (F078173)  1/3/22     Request for review by Cal Supreme Ct. DENIED and Appellate Court opinion is DECERTIFIED 3/23/22

ENCROACHMENTS: The appellate court affirmed the trial court, which found that defendant was trespassing by encroachment on plaintiffs' property. However, applying the defense of laches and the "relative hardship" doctrine, the court denied the injunctive relief sought by plaintiffs. The court fashioned an alternative equitable remedy: defendant was required to pay damages to plaintiffs and undertake corrective action to limit erosion of the now-excavated hillside, while plaintiffs were required to deed the strip of land at issue to Little Rock Ranch. In a parallel analysis, the trial court found the trespass by Little Rock Ranch was permanent, and not continuing, such that the appropriate measure of damages was "diminution in value" damages, rather than other alternative measures.

Villanueva v. Fidelity National Title Company     Docket
UNPUBLISHED
Opinion on remand from Supreme Court
Cal.App. 6th Dist. (H041870)  11/12/21

TITLE INSURANCE: In Villanueva v. Fidelity National Title Company, 11 Cal.5th 104 (2021), the Supreme Court ruled that "[t]he statutory immunity for 'act[s] done . . . pursuant to the authority conferred' ([Ins. Code Section] 12414.26) by the rate-filing statutes does not shield title insurers from suit for charging unauthorized rates, and the Insurance Commissioner does not have exclusive jurisdiction over such claims."  The issue of standing was not addressed.

Here, plaintiffs were not able to show damages as a result of Fidelity charging fees (overnight delivery fee, courier fee, and draw deed fee) that were not filed with the Department of Insurance, where the fees were reasonable and plaintiffs had signed escrow instructions agreeing to pay them. The court held that, consequently, plaintiffs lack standing, either as individuals or in a representative capacity, to bring an action under the Unfair Competition Law seeking the remedies of restitution and injunctive relief. The court also held that plaintiffs did not allege facts sufficient for a cause of action for breach of fiduciary duty against Fidelity, where they could not establish that Fidelity failed to comply with the escrow instructions, or had otherwise committed fraud.

McMillin v. Eare     Modification     Docket
70 Cal.App.5th 893 - 2nd Dist. (B298990)  9/30/21 (Cert. for Pub. 10/25/21)

DEEDS: The court quieted title in the grantees of two deeds, holding that a deed cannot be delivered to the grantee under any condition not expressed in the deed; any delivery to the grantee, or to the grantee's agent, is absolute and the deed therefore takes effect upon delivery, and any purported condition is ignored. (Civil Code Section 1056.) If the grantor executes and delivers a deed to the grantee with the intent of divesting title, but imposes an oral condition on the transfer, the condition is disregarded and the grantee receives title free and clear of the condition. If the condition does not occur, the grantor may be able to recover damages from the grantee, but the title cannot be recovered.

Weeden v. Hoffman     Docket
70 Cal.App.5th 269 - 4th Dist., Div. 1 (D078112)  10/13/21

QUIET TITLE: The trial court granted defendant's anti-SLAPP (Strategic Litigation Against Public Participation) motion with respect to plaintiffs' complaint against defendant, which pleaded causes of action for quiet title, slander of title, and cancellation of an instrument. The appellate court held that the litigation privilege shields a defendant from liability only for tort damages that are based on litigation related communications; plaintiffs' causes of action for quiet title and cancellation of an instrument do not seek to hold defendant liable for tort damages but, rather, seek to ascertain the interests of the parties with respect to a parcel of real property and to determine the validity of an instrument. The litigation privilege does not shield defendant from these claims. The appellate court further held that defendant’s abstract of judgment did not accurately reflect the terms of the judgment. The trial court therefore erred in granting defendant's anti-SLAPP motion with respect to the causes of action for quiet title and cancellation of an instrument.

Humphrey v. Bewley     Docket
69 Cal.App.5th 571 - 4th Dist., Div. 2 (E074339)  9/28/21

QUIET TITLE: In this quiet title action where service of the summons was by publication, the court held that plaintiff did not properly effect service by publication because the notices that he published specified the property only by assessor's parcel number (APN) and not by either legal description or street address.

Nede Mgmt., Inc. v. Aspen American Insurance Company     Modification     Docket
68 Cal.App.5th 1121 - 2nd Dist. (B307470)  9/20/21

INSURANCE: The court held that reservation of rights for punitive damages and damages beyond policy limits did not create a conflict of interest requiring the insurer to provide Cumis counsel pursuant to Civil Code Section 2860. Additionally, the conflicts of interest contemplated by section 2860 do not include an insured's mere dissatisfaction with the performance of insurer-appointed counsel.

Korchemny v. Piterman     Docket
68 Cal.App.5th 1032 - 1st Dist. (A155483, A157716)  8/27/21 (Cert. for Pub. 9/17/21)

USURY: The court upheld a summary judgment in favor of a borrower, holding that after making interest-only payments on two promissory notes for many years, no principal amount was owing. The notes were usurious, and when a loan is usurious the creditor is entitled to repayment of the principal sum only and all interest payments are to be applied to principal. When all of the interest payments were applied to the principal, the notes were fully paid.

Haggerty v. Thornton     Docket     Sup.Ct. Docket
68 Cal.App.5th 1003 - 4th Dist., Div. 1 (D078049)  9/16/21     Request for review by Cal Supreme Ct. GRANTED 12/22/21

TRUSTS: The court held that where a trust agreement provided that an amendment of a trust must be done "by an acknowledged instrument in writing", the amendment did not need to be notarized because the term "acknowledged" is broader than the Civil Code's provisions regarding notarization. Accordingly, the settlor complied with the trust provision by signing the amendment without having her signature notarized and delivering it to herself as trustee.

Pearce v. Briggs     Docket     Sup.Ct. Docket
68 Cal.App.5th 466 - 5th Dist. (F080403)  8/4/21 (Cert. for Pub. 8/31/21)     Request for review by Cal Supreme Ct. DENIED 11/18/21

JOINT TENANCY / COMMUNITY PROPERTY: The court had two main holdings:
1. A provision in the wife's will distributing property held in joint tenancy with her husband did not sever the joint tenancy, so the property passed to the husband as the surviving joint tenant upon the wife's death, and
2. Where one spouse is a partner in a partnership, and community property funds are invested in the partnership, the other spouse has a community property interest in the partner spouse's interest in the partnership, which is personal property. Here, the husband did not distribute the wife's community property interest in partnership property at the time of dissolution of the partnership, but the 3-year statute of limitations for conversion of personal property (C.C.P. Section 338(c)(1)) applied here to bar an action by the wife's successors.

Estate of Wall     Docket
68 Cal.App.5th 168 - 3rd Dist. (C087730)  8/24/21

COMMUNITY PROPERTY: In a probate case the wife claimed that property held in her decedent husband's name was community property. The court held that in a probate case Family Code Section 760's presumption that title acquired during marriage is community property does not prevail over Evidence Code Section 662's presumption that ownership is as set forth in the legal title. (Section 760 does prevail in a dispute between spouses.) However, in the unpublished sections of the opinion, the court held that the property was community property because the undue influence presumption of Probate Code Section 721 does prevail over Section 662, and there was evidence that the husband had led the wife to believe they owned the property together.

Brown v. Montage at Mission Hills     Docket
68 Cal.App.5th 124 - 4th Dist., Div. 2 (E074341, E075762)  8/20/21

HOMEOWNERS ASSOCIATIONS: The court held that a condominium owner was exempt from an amendment to the condominium CC&Rs that prohibited renting properties for less than 30 days where the owner purchased her unit before the amendment was adopted. The court cited Civil Code Section 4740(a), which provides that an owner of a property in a common interest development "shall not be subject to a provision in a governing document or an amendment to a governing document that prohibits the rental or leasing of" the owner’s property unless that document or amendment "was effective prior to the date the owner acquired title" to the property.

Pear v. City and County of San Francisco     Modification     Docket
67 Cal.App.5th 61 - 6th Dist. (H045045)  7/28/21

EASEMENTS: Plaintiff's predecessor granted defendant fee title to property, which defendant needed for an underground pipeline, reserving the right to use the surface of the property for pasturage and the right to construct roads and streets "over and across" the property "but not along in the direction of the pipe line or lines". The court held that grass and ornamental landscaping, three existing roads, and access to automotive service bays are authorized uses under the deed, but the existing parking lot use is not authorized under the deed.

Starcevic v. Pentech Financial Services     Docket
66 Cal.App.5th 365 - 4th Dist., Div. 1 (D076320)  7/7/21

JUDGMENT LIENS: The court held that in a partition action, a judgment creditor who was deemed the priority lien holder loses that status if it does not renew its judgment.

Bailey v. Citibank     Docket
66 Cal.App.5th 335 - 5th Dist. (F079311)  7/6/21

QUIET TITLE: Plaintiffs filed this action to quiet title based on adverse possession against Citibank whose deed of trust was recorded before plaintiffs' possession began. Citibank foreclosed and purchased the property at the trustee's sale when plaintiff had been occupying the property for nearly 5 years. The court ruled in favor of Citibank, holding:
1. Plaintiffs could not establish that their possession of the property was adverse or hostile to Citibank for the required five-year period. Rather, plaintiffs' possession of the property did not become adverse or hostile to Citibank's rights until such time as Citibank actually took title under the trustee's deed. The court noted an exception to this rule, not applicable here: Where a transfer affecting the state of title (e.g., the recording of a deed of trust or a grant deed) is made after the adverse possession has already begun, a successful claim of adverse possession will prevail over the subsequent transferee's title once the five-year period is completed.
2. A default judgment cannot be set aside under C.C.P Section 473 based on the defendant's attorney's neglect where the attorney was not retained until after the default was entered. [This holding did not affect the outcome in Paragraph 1, above.]

Best v. Ocwen Loan Servicing     Docket
64 Cal.App.5th 568 - Cal.App. 4th Dist., Div. 2 (E074386)  5/21/21     Case complete 7/26/21

DEBT COLLECTION: The Rosenthal Fair Debt Collection Practices Act (Civil Code Section 1788 et seq.) is California's counterpart to the Federal Fair Debt Collection Practices Act. The court held that a nonjudicial foreclosure can be "debt collection" by a "debt collector" so as to trigger the protections of the Rosenthal Act. (The case does not have much significance because subsequent to the case being filed the Rosenthal Act was amended to state: "The term 'consumer debt' includes a mortgage debt." (Civil Code Section 1788.2(f))

Billesbach v. Specialized Loan Servicing     Docket
63 Cal.App.5th 830 - 2nd Dist. (B296121)  4/29/21     Case complete 7/1/21

HOMEOWNER BILL OF RIGHTS: In this action against a mortgage servicer under the Homeowner Bill of Rights (Civil Code Section 2923.4 et seq.), the court held that where a mortgage servicer's violations stem from its failure to communicate with the borrower before recording a notice of default, the servicer may cure these violations by doing what respondent did here: postponing the foreclosure sale, communicating with the borrower about potential foreclosure alternatives, and fully considering any application by the borrower for a loan modification. Following these corrective measures, any remaining violation relating to the recording of the notice of default is immaterial, and a new notice of default is therefore not required to avoid liability.

Tsasu LLC v. U.S. Bank     Docket     Sup.Ct. Docket
62 Cal.App.5th 704 - 2nd Dist. (B298589)  4/1/21     Depublication request DENIED by Cal. Supreme Court 6/23/21

QUIET TITLE: The Court of Appeal held that California's Quiet Title Act (C.C.P. 760.010 et seq.), insulates a third party from the effect of a subsequent invalidation of an earlier quiet title judgment only if the third party has no actual or constructive knowledge of any defects or irregularities in that judgment. Here, the chain of title showed that a quiet title judgment setting aside a deed of trust named the original lender as a party, but failed to include U.S. Bank, the assignee who is the current lender pursuant to a recorded assignment of the deed of trust. Plaintiff made a loan secured by a deed of trust and, subsequently, U.S. Bank was successful in setting aside the quiet title judgment. The court upheld a summary judgment setting aside the quiet title judgment and reinstating U.S. Bank’s deed of trust as a lien senior to plaintiff’s deed of trust, on the basis that plaintiff had constructive knowledge that U.S. Bank was not named as a defendant in the quiet title action.

Villanueva v. Fidelity National Title Company     Docket
11 Cal.5th 104 (2021) - Cal. Supreme Court (S252035)  3/18/21

TITLE INSURANCE: The court held that plaintiff was not barred from bringing a class action lawsuit alleging that defendant charged certain escrow fees (overnight delivery fee, courier fee, and draw deed fee) without filing them as part of its rate filing with the Department of Insurance.

Defendant argued that the sole remedy for rate filing violations is to bring them before the Insurance Commissioner. The court disagreed, reasoning that Insurance Code Section 12414.26, which bars suits under noninsurance laws for any "act done, action taken, or agreement made pursuant to the authority conferred" by the rate-filing statutes, applies only to actions authorized by the Insurance Code, not to charging fees that are not authorized. Also, Insurance Code Section 12414.29, which provides that the administration and enforcement of certain Articles of the Insurance Code are governed solely by the provisions relating to title insurance, does not give the Insurance Commissioner exclusive jurisdiction over damages caused by unfiled rates.

Boshernitsan v. Bach     Docket
61 Cal.App.5th 883 - 1st Dist. (A159532)  3/12/21     Request for publication of the unpublished portion of the opinion by Cal Supreme Ct. DENIED 7/1/21

TRUSTS: In this case concerning the City of San Francisco's rent control ordinance, the court held that a trust is not a legal entity. Rather, a trust is a fiduciary relationship with the trustee holding legal title and the beneficiary holding equitable title.

Husain v. California Pacific Bank     Docket
61 Cal.App.5th 717 - 1st Dist. (A159067)  3/9/21     Case complete 5/10/21

PRESCRIPTIVE EASEMENTS: The court held that defendant established a prescriptive easement over plaintiff's property for driveway, parking, storage of garbage bins and garden purposes. The properties were under one ownership until 2011 when the properties were separately foreclosed by different lien holders. The 5-year time for establishing prescriptive rights began at that point. The court rejected an argument that the use of plaintiff's property was permissive. Defendant never requested or received permission to use plaintiff's property, and simply used the property in a manner that was open, notorious, continuous, and hostile for more than five years. The court also rejected an argument that defendant's use of the property was pursuant to a license, and pointed out that a conveyance (by way of foreclosure) of property burdened with a license revokes the license.

Pinto v. Farmers Insurance Exchange     Modification     Docket     Sup.Ct. Docket
61 Cal.App.5th 676 - 2nd Dist. (B295742)  3/8/21     Request for review by Cal Supreme Ct. DENIED

BAD FAITH: The court held that in the context of a third party insurance claim, failing to accept a reasonable settlement offer does not constitute bad faith per se. Rather, bad faith liability requires a finding that the insurer acted unreasonably in some respect.

Gray v. Quicken Loans     Docket
61 Cal.App.5th 524 - 2nd Dist. (B304532)  3/2/21     Case complete 5/10/21

LOAN IMPOUND ACCOUNTS: Civil Code Section 2954.8(a) requires a lender "that receives money in advance for payment of taxes and assessments on the property, for insurance, or for other purposes relating to the property" to pay two percent interest per annum on the amount being held. The court held that this applies to escrows maintained to pay taxes, assessments, and insurance premiums, not to hazard insurance proceeds held by a lender pending property rebuilding. Accordingly, defendant did not have to pay interest on the hazard insurance proceeds it held.

Ashford Hospitality v. City and County of San Francisco     Modification     Docket     Sup.Ct. Docket
61 Cal.App.5th 498 - 1st Dist. (A159181)  3/1/21     Request for review and depublication by Cal Supreme Ct. DENIED 5/26/21

TRANSFER TAX: The court held that San Francisco's transfer tax ordinance that sorts taxpayers into different classifications based on the gross value of the property sold and taxes them at differing rates according to their classification does not violate the Equal Protection Clause.

Keading v. Keading     Docket     Sup.Ct. Docket
60 Cal.App.5th 1115 - 1st Dist. (A151468)  2/18/21     Request for depublication by Cal Supreme Ct. DENIED 6/9/21

ELDER ABUSE: A son executed a deed conveying real property out of a trust to himself and his father as joint tenants, relying on a power of attorney executed by the father. The son recorded the deed after his father died. The court held that the deed was invalid because the power of attorney did not give the son the authority to transfer property out of the trust and because it was the result of elder abuse. (Note: The significance of the case is that it is an example of the danger of relying on uninsured deeds.)

Self v. Cher-Ae Heights Indian Community of the Trinidad Rancheria     Docket     Sup.Ct. Docket
60 Cal.App.5th 209 - 1st Dist. (A158632)  1/26/21     Request for depublication by Cal Supreme Ct. DENIED 4/28/21

INDIANS / SOVEREIGN IMMUNITY: The court held that sovereign immunity bars a quiet title action to establish a public easement for coastal access on property owned by an Indian tribe. The Tribe had purchased coastal property in fee simple absolute. Then it applied to the federal Bureau of Indian Affairs to take the property into trust for the benefit of the Tribe. California worked with the Bureau and the Tribe in that process. The state secured assurances from the Tribe to preserve coastal access, and it has remedies if there are problems in the future: If the Tribe violates the state's coastal access policies, the Coastal Commission may request that the Bureau take appropriate remedial action.

Southern California School of Theology v. Claremont Graduate University     Docket     Sup.Ct. Docket
60 Cal.App.5th 1 - 2nd Dist. (B295488)  1/22/21     Request for depublication by Cal Supreme Ct. DENIED 4/28/21

EQUITABLE SERVITUDES: The case involves a dispute over a 1957 deed that contained two conditions subsequent, one regarding permissible uses of the property and one regarding conditions that would require plaintiff to offer the property for sale to defendant on agreed terms, enforceable by a power of termination and right of reentry. The court held that the power of termination expired under the Marketable Record Title Act (Civil Code Section 880.020 et seq.), but that the conditions could be enforced as equitable servitudes under Civil Code Section 885.060(c).

Nagel v. Westen      Modification     Docket
60 Cal.App.5th 443 - 2nd Dist. (B300552)  1/7/21     Case complete 3/15/21

UNIFORM VOIDABLE TRANSACTIONS ACT: The court held that under the Uniform Voidable Transactions Act (Civil Code Sections 3439 et seq.), selling real property in California and using the sale proceeds to purchase real property out of state, may constitute a direct or indirect mode of parting with assets or one's interest in those assets. As such, plaintiff adequately alleged a "transfer" under the UVTA.

In re the Marriage of Wozniak     Docket
59 Cal.App.5th 120 - 4th Dist., Div. 1 (D074813)  12/29/20     Case complete 3/5/21

INTERSPOUSAL DEED: The court held that where the wife evidenced an intent to reject a deed from the husband quitclaiming his interest in community property real estate to the wife as her separate property, the deed was ineffectual, and did not become effective when the wife recorded the deed 6 years later. Acceptance of the property interest by the transferee spouse is required in order for a valid transmutation to be effectuated. Accordingly, the property remained as community property. The court pointed out that, while there is a presumption of undue influence when the recipient spouse receives an advantage over the donor spouse, there is no need to consider whether undue influence was present here because no effective transaction amounting to a transmutation occurred.

Trenk v. Soheili     Modification     Docket
58 Cal.App.5th 1033 - 2nd Dist. (B295434)  12/21/20     Case complete 2/22/21

DEEDS OF TRUST: The court held:
1. A power of sale in a trust deed is enforceable even if the statute of limitations has run on the underlying obligation.
2. Because the trust deed here did not state the last date for payment under the promissory note, under Civil Code Section 882.020(a)(2) appellants would have 60 years to exercise the power of sale in the trust deed.
3. However, the power of sale is not enforceable because the real property, held by husband and wife as joint tenants, presumptively is community property under Family Code Section 760. Because appellants did not rebut that presumption, and the wife did not execute the trust deed, she has the power to void it.

Russell v. Man     Docket     Sup.Ct. Docket
58 Cal.App.5th 530 - 4th Dist., Div. 2 (E072266)  11/17/20 (Cert. for Pub. 12/11/20)     Request for depublication by Cal Supreme Ct. DENIED 3/17/21

TRESPASS/INJURY TO TREES: The court held that Civil Code Section 3346 (treble damages for injury to a tree when defendant intentionally trespasses on plaintiff's property) does not apply where the tree died because defendant cut the roots of the tree on his own property. Defendant is liable to plaintiff only for the value of the tree, not compounded by treble damages.

Reuter v. Macal     Docket     Sup.Ct. Docket
57 Cal.App.5th 571 - 2nd Dist. (B298265)  11/18/20     Request for review by Cal Supreme Ct. DENIED 2/17/21

QUIET TITLE: The court held that a deed executed by plaintiff in favor of himself and defendant should be rescinded under Civil Code Section 1590 as a gift made in contemplation of marriage. The action was not barred by the statute of limitations because plaintiff had remained in possession. As long as plaintiff enjoyed possession of the property and defendant did not press her adverse claim against him in a manner that threatened or disturbed that possession, no statute of limitations began to run.

Tiburon/Belvedere Residents United to Support the Trails v. Martha Company     Docket     Sup.Ct. Docket
Cal.App. 1st Dist. (A157073)  10/23/20     Request for review by Cal Supreme Ct. DENIED and Appellate Court decision DECERTIFIED 1/27/21

IMPLIED DEDICATION: The court held that plaintiff failed to establish an implied dedication of trails over defendant's land. An implied by law dedication is established when the public has used the land for a period of more than five years with full knowledge of the owner, without asking or receiving permission to do so and without objection being made by anyone. Civil Code Section 1009(b) abrogated this rule prospectively, which is why the dispute before the court centered on the five-year period preceding section 1009's effective date of March 4, 1972. The court found that use of the trails in question were not used by the general public, but rather by neighbors. When the predominant users are neighbors, the landowner may have simply tolerated their use as a neighborly accommodation, and such use is not sufficient to establish an implied dedication. Even assuming, for the sake of argument, that plaintiff showed substantial, diverse, and sufficient public use, there was substantial evidence that defendant made adequate bona fide attempts to prevent public use.

County of Sonoma v. U.S. Bank     Docket     Sup.Ct. Docket
55 Cal.App.5th 696 - 1st Dist (A155837)  10/8/20     Request for review by Cal Supreme Ct. DENIED 12/30/20

RECEIVERSHIPS: The County sought and obtained the appointment of a receiver pursuant to Health and Safety Code Section 17980.7 and C.C.P Section 564 to oversee abatement work for numerous hazardous and substandard conditions on real property. The court affirmed the trial court's orders authorizing a receiver's certificate secured by a super-priority lien, and confirming the sale of the property free and clear of all liens, with such liens attaching to the proceeds of sale. The court reversed the trial court's sale order to the extent it prioritized the County's enforcement fees and costs on an equal footing with the receiver.

Robin v. Crowell     Docket     Sup.Ct. Docket
55 Cal.App.5th 727 - 5th Dist. (F077325)  10/8/20     Request for review by Cal Supreme Ct. DENIED 1/13/21

JUDICIAL FORECLOSURE: The court held that a junior lienholder is not affected by the judicial foreclosure of a senior deed of trust, if the junior lien existed prior to the foreclosure and the junior lienholder was not made a party to the senior lienholder's foreclosure action. To remove a junior lien, the holder of the senior lien or the buyer at the senior sale (standing in the shoes of the senior lienholder) may file a second action to foreclose the omitted party's equity of redemption or a quiet title action having the same effect. However, in this case the second action was barred by the statute of limitations (4 years under Code of Civil Procedure Section 337(a) and Civil Code Section 2911).

Additionally, a non-judicial sale was not available because the senior lienholder cannot conduct a trustee's sale after the property has been sold in the senior lienholder's judicial foreclosure action. The judicial foreclosure sale results in a conveyance of title from the trustee to the buyer at the sale. Once the judicial sale is complete, the trustee no longer holds any title to convey through a subsequent trustee's sale. Also, it would be impossible to comply with the statutory requirements for a non-judicial sale.

Reeder v. Specialized Loan Servicing     Docket
52 Cal.App.5th 795 - 2nd Dist. (B296148)  7/29/20     Case complete 10/14/20

STATUTE OF FRAUDS: Plaintiff lost an investment property to foreclosure after he failed to make the balloon payment due on a 2005 home equity line of credit that matured in 2015. He sued the lender claiming that the lender had made a verbal commitment that, at the end of the 10-year term, plaintiff could refinance the loan with a new 20-year loan. The court held that the oral agreement plaintiff alleged was barred by the statute of frauds, and was in any event too indefinite to be enforced.

In re: Brace (Speier v. Brace)     Docket
9 Cal.5th 903 - Cal. Supreme Court (S252473)  7/23/20

COMMUNITY PROPERTY: On a question referred by the Ninth Circuit, the California Supreme Court answered as follows:
1. Evidence Code section 662 does not apply to property acquired during marriage when it conflicts with Family Code section 760. For joint tenancy property acquired during marriage before 1975, each spouse's interest is presumptively separate in character. For joint tenancy property acquired with community funds on or after January 1, 1975, the property is presumptively community in character.
2. If such property was acquired before 1985, the parties can show a transmutation from community property to separate property by oral or written agreement or a common understanding. Although a joint tenancy deed is insufficient to effect a transmutation, a court may consider the form of title in determining whether the parties had a common agreement or understanding under the pre-1985 rules. For joint tenancy property acquired with community funds on or after January 1, 1985, a valid transmutation from community property to separate property requires a written declaration that expressly states that the character or ownership of the property is being changed. A joint tenancy deed, by itself, does not suffice.
3. Nothing in this decision precludes spouses from holding separate property as joint tenants or from transmuting community property into separate property held in joint tenancy as long as the applicable transmutation requirements are met. Nor does this decision alter the operation of the right of survivorship that is the main incident of joint tenancy title.

Vasquez v. LBS Financial Credit Union     Docket
52 Cal.App.5th 97 - 2nd Dist. (B292390)  6/17/20 (Mod. and Cert. for Pub. 7/14/20)     Case complete 10/6/20

RECORDING / CONSTRUCTIVE NOTICE: The court held that two abstracts of judgment against "Wilbert G. Guerrero" did not impart constructive knowledge as to property held in the name of "Guilleromo Wilbert Guerrero". Documents recorded incorrectly using the seller's middle name as a first name do not impart constructive notice. Accordingly, plaintiffs were bona fide purchasers for value who took free of the judgment liens.

WFG National Title Insurance Company v. Wells Fargo Bank     Docket     Sup.Ct. Docket
51 Cal.App.5th 881 - 2nd Dist. (B294249)  6/12/20 (Cert. for Pub. 7/7/20)     Request for review and depublication by Cal Supreme Ct. DENIED 10/21/20

FORGERY: A trustee's deed purporting to foreclose on Wells Fargo's deed of trust was forged. The purported purchaser sold to a subsequent purchaser who encumbered the property with a loan from Alviso Funding secured by a deed of trust. The court held that Alviso's deed of trust was void because it derived title through the forged trustee's deed. The court rejected Alviso’s argument that Wells Fargo should be equitably estopped from asserting its interest because it failed to monitor the status of its title or to take affirmative steps to rid public records of the forged deed, finding that a lender has no legal duty to do so.

Adams v. Bank of America     Docket
51 Cal.App.5th 666 - 1st Dist. (A156712)  6/30/20     Case complete 8/31/20

HOMEOWNER BILL OF RIGHTS: A borrower who was foreclosed out by a junior deed of trust was entitled to the protections of the Homeowner Bill of Rights (HBOR) as to the first deed of trust if the borrower remains in possession of the property as her principal residence. The definition of "Owner-Occupied" under the HBOR only requires that the person named as the borrower on the loan also occupies the property as the borrower's principal residence, not that the borrower still owns the property.

Zieve, Brodnax & Steele v. Dhindsa     Docket
49 Cal.App.5th 27 - 5th Dist. (F079665)  5/13/20     Case complete 7/13/20

TRUSTEE'S SALES: In this case, a foreclosing creditor held a first deed of trust and was satisfied in full by the foreclosure sale proceeds. The claimants to the surplus funds were (1) the holder of a second deed of trust granted by the owners of an undivided 75 percent interest in the real property and (2) the owner of the undivided 25 percent interest that was not encumbered by the second deed of trust. The court held that the owner of the unencumbered 25 percent interest and the holder of the second deed of trust were each entitled to their proportionate shares of surplus proceeds.

Modesto Irrigation District v. Tanaka     Docket     Sup.Ct. Docket
48 Cal.App.5th 898 - 3rd Dist. (C083430)  5/7/20     Request for review and depublication by Cal Supreme Ct. DENIED 8/19/20

WATER RIGHTS: Defendant's great-grandfather purchased a subdivided parcel that had been part of a larger riparian tract but was no longer contiguous to a river. The deed in this case included the statement "together with all and singular the tenements, hereditaments and appurtenances thereunto belonging, or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof". The question presented for the Court of Appeal's review was whether the parties intended the grantee to receive riparian rights in such a transfer. The court held that this language in the deed indicated that the grantor intended that the farm would retain its riparian rights even when it no longer remained contiguous to the river. (Ed. Note: The case contains a good discussion of corporeal and incorporeal hereditaments.)

Carmel Development Company v. Anderson      Docket
48 Cal.App.5th 492 - 6th Dist. (H041005)  4/30/20     Case complete 8/11/20

MECHANICS LIENS: In this long, complicated case the main holdings are:
1. A mechanics lien that benefited all lots in a subdivision must be allocated to all lots, not only to unsold lots;
2. A mechanics lien foreclosure action is sufficiently like a contract action to be considered a "cause of action in contract" for purposes of awarding prejudgment interest under Civil Code Section 3287(b);
3. The constitutional 7% default rate of interest applies to prejudgment interest on a mechanics lien as to a non-contracting owner, rather than the 10% rate set forth in Civil Code Section 3289(b).

Huang v. Wells Fargo Bank     Docket
48 Cal.App.5th 431 - 1st Dist. (A152074)  4/29/20     Case complete 7/30/20

QUIET TITLE: After receiving a notice of sale under a deed of trust, plaintiffs immediately provided it to their title insurer to resolve any dispute with defendant. The trustee's sale did not take place as scheduled, and plaintiffs heard nothing substantive about the matter for several years thereafter. All the while, plaintiffs continuously lived in and possessed the home. The court held that under these circumstances, the statute of limitations under Civil Code Section 338(d) did not run and the trial court improperly granted summary judgment for defendant.

In re the Marriage of Mohler     Docket
47 Cal.App.5th 788 - 4th Dist., Div. 2 (E071314)  4/13/20     Case complete 7/15/20

COMMUNITY PROPERTY: This case deals with the division of community property interest in real estate that was the separate property of a spouse at the time of marriage, but where community property funds were subsequently used to pay down the principle on a loan secured by a mortgage on the property, pay property taxes or make improvements. The court held that the community is also entitled to be compensated for a spouse's post-separation occupation of the property.

Weimer v. Nationstar Mortgage     Docket     Sup.Ct. Docket
Cal.App. 3rd Dist. (C080550)  4/2/20     7/27/22: Cal Supreme Ct. directed appellate court to vacate its decision and to reconsider the cause in light of  Sheen v. Wells Fargo Bank

LOAN MODIFICATIONS: In the published portion of the opinion, the court reversed the trial court's sustaining of a demurrer, holding that the complaint sufficiently alleged a negligence cause of action, including a duty of care, against loan servicers for their handling of a loan modification application. The fact that the loan servicers did not make default a condition for being considered for a loan modification did not change this result.

Matson v. S.B.S. Trust Deed Network     Docket
46 Cal.App.5th 33 - 4th Dist., Div. 1 (D074442)  3/5/20     Case complete 6/9/20

TRUSTEE'S SALES: Plaintiffs were the purchasers at a trustee's sale. They bid far more than the property was worth due to mistakenly thinking that the deed of trust being foreclosed was in first position when it was, instead, in second position. The court refused to allow plaintiffs to rescind the sale because they were not entitled to relief under the common law principle of a unilateral mistake of fact. The following grounds are necessary in order to establish rescission based upon unilateral mistake: (1) the plaintiff made a mistake regarding a basic assumption upon which the plaintiff made the contract; (2) the mistake has a material effect upon the agreed exchange of performances that is adverse to the plaintiff; (3) the plaintiff does not bear the risk of the mistake; and (4) the effect of the mistake is such that enforcement of the contract would be unconscionable. Here, plaintiffs were not able to establish the third element because their failure to adequately investigate the title to the property was not reasonable and they, therefore, bore the risk of a mistake.

Madani v. Rabinowitz     Docket
45 Cal.App.5th 602 - 2nd Dist. (B292395)  2/24/20     Case complete 6/12/20

TRESPASS: In this trespass and nuisance action, the court affirmed the trial court's conclusion that defendant's fence and parked cars were continuing encroachments and affirmed the trial court's order of their removal. Because the encroachments were continuing, and not permanent, plaintiff's trespass and nuisance claims were not time-barred under the 3-year statute of limitations in C.C.P. Section 338(b). The crucial test of the permanency of a trespass or nuisance is whether it can be abated. The cost of $5,000 to $6,000 to move the fence was not sufficient to regard the fence as a permanent installation.

Barefoot v. Jennings     Docket
8 Cal.5th 822 - Cal. Supreme Court (S251574)  1/23/20

TRUSTS: The court held that if amendments to a revocable trust made before the settlor dies disinherit a beneficiary, that individual has standing to challenge the validity of the disinheriting amendments in probate court on grounds such as incompetence, undue influence, or fraud.

DEPUBLISHED: Williams v. 21st Mortgage Corporation      Modification & Depublication Order     Docket     Sup.Ct. Docket
Cal.App. 1st Dist. (A153307)  1/22/20     Request for review by Cal Supreme Ct. DENIED 6/10/20

TRUSTEE'S SALES: Defendant violated Civil Code Section 2924c(a) by foreclosing on plaintiff's home after demanding not only the approximately $3,000 of post-bankruptcy Chapter 13 arrears, but also the $20,000 subject to the bankruptcy plan, as to which plaintiff was up-to-date on her payments.

Gamerberg v. 3000 E. 11th Street, LLC     Docket     Sup.Ct. Docket
44 Cal.App.5th 424 - 2nd Dist. (B290755)  1/21/20     Request for review by Cal Supreme Ct. DENIED 5/13/20

IRREVOCABLE LICENSE: The court held that an unrecorded irrevocable license does not survive a transfer of the property to a bona fide purchaser without notice. Here, a previous owner of defendant's property entered into an agreement that constituted an irrevocable license to provide eight parking spaces to a previous owner of plaintiff's property. The agreement was filed with the city Building Department but was not recorded and defendant did not know of its existence when it purchased the property. Accordingly, defendant was not bound by the agreement. (The case contains a good discussion of irrevocable licenses and their similarity to easements.)

McDermott Ranch v. Connolly Ranch     Docket
43 Cal.App.5th 549 - 3rd Dist. (C085433)  12/17/19     Case complete 2/24/20

AGREED BOUNDARIES: The court affirmed the judgment quieting title in defendant based on the agreed boundary doctrine. The court held that testimony of the son as to what his father had said about the agreed boundary was properly admitted as an exception to the hearsay rule under Evidence Code Section 1323 because the trial court properly determined that the testimony was trustworthy, the declarant was unavailable as a witness (deceased) and the witness had sufficient knowledge of the subject.

Taniguchi v. Restoration Homes     Docket
43 Cal.App.5th 478 - 1st Dist. (A152827)  12/16/19     Request for review by Cal Supreme Ct. DENIED 3/17/20

TRUSTEE'S SALES: The court held that after a loan modification, in order to cure the default and reinstate the loan under Civil Code Section 2924c, the borrowers do not have to pay the amount of the earlier default on the original loan, which had been deferred under the modification to the end of the loan term. They only need to pay the missed modified monthly payments that caused the default on the modified loan.

City of Santa Maria v. Adam     Docket
43 Cal.App.5th 152 - 6th Dist. (H042712)  12/10/19     Case complete 2/13/20

WATER RIGHTS: This is the third appeal concerning the rights to groundwater contained in the Santa Maria Valley Groundwater Basin. The last appeal was in City of Santa Maria v. Adam (2016) 248 Cal.App.4th 504, where the court determined that quantification of the proportionate prescriptive loss attributable to each of the landowners' respective parcels was unnecessary and upheld the judgment quieting title to landowners' overlying rights to native groundwater . Here, the trial court denied the landowners' motion to clarify that the judgment protects their overlying rights from future prescription. The court of appeal reversed the denial on the merits, finding that the issue was not ripe because prescriptive rights can arise only in times of overdraft of the water supply, and there was no evidence that such an overdraft situation currently exists.

Leiper v. Gallegos     Docket
42 Cal.App.5th 394 - 2nd Dist. (B292905)  11/20/19     Case complete 1/23/20

OIL AND GAS RIGHTS / TAX SALES: The court held that a tax sale of real property does not include oil and gas rights in a previously recorded oil and gas lease. Under Revenue and Taxation Code Section 3712(d) a recorded oil and gas lease is a “restriction of record” and excepted from the tax deed in determining the title conveyed. An oil and gas lease is also an easement because an oil and gas lease is a profits a prendre, which is a non-possessory interest in land. A profit is simply a type of easement, and easements are also excepted under Section 3712(d). The court noted that upon termination of the oil and gas lease, the oil and gas rights will revert to the surface owner.

MTC Financial v. California Department of Tax and Fee Administration     Docket
41 Cal.App.5th 742 - 4th Dist., Div. 3 (G056234)  10/31/19     Case complete 1/2/20

LEGAL DESCRIPTIONS: Plaintiff and defendant claimed priority as to proceeds deposited into court after a foreclosure sale. The court held that defendant was entitled to priority. Plaintiff's deed of trust was void because the legal description was insufficient in that it referred to the wrong lot and page number. While the deed of trust also referred to the assessor's parcel number, there was no evidence that the number was the correct assessor's parcel number. The court rejected plaintiff's argument that defendant was not a bona fide purchaser and that recordation is not essential to the validity of a recorded document.

Myles v. Pennymac Loan Services     Docket     Sup.Ct. Docket
40 Cal.App.5th 1072 - 2nd Dist. (B288905)  10/8/19     Request for review by Cal Supreme Ct. DENIED 1/22/20

FORECLOSURE: The court upheld a demurrer, rejecting plaintiff's strange claim that an assignment of a deed of trust is void where the borrower is in default.

Southern California Edison Company v. Severns     Docket     Sup.Ct. Docket
39 Cal.App.5th 815 - 2nd Dist. (B286354)  9/10/19     Request for review by Cal Supreme Ct. DENIED 12/18/19

EASEMENTS: The court held that grants of easements that also stated that the grantee shall "have free access to the telephone poles and fixtures" created floating easements over the grantor's land, and that the floating easements became fixed easements of reasonable width when the parties agreed to specific access routes. The court also held that damage caused when one of the access routes was relocated by agreement of the parties was a permanent nuisance, so the cause of action was barred by the 3-year statute of limitations in C.C.P Section 338(b).

Pena v. Dey     Docket
39 Cal.App.5th 546 - 3rd Dist. (C083266)  8/30/19     Case complete 10/30/19

TRUSTS: Defendant was allegedly made a beneficiary of a trust by handwritten interlineations by the original settlor and trustee of the trust. Plaintiff, the successor trustee, asserted that the interlineations were not valid. The court concluded that valid amendments must be by written instrument, signed by the settlor, and delivered to the trustee. The interlineations were never signed, so the trust was not effectively amended.

Precision Framing Systems v. Luzuriaga     Docket
39 Cal.App.5th 457 - 4th Dist., Div. 2 (E069158)  8/29/19     Case complete 11/5/19

MECHANICS LIENS: The court held that plaintiff's mechanics lien was invalid because it was recorded before plaintiff finished corrective work. Corrective work performed after the primary work was performed was still part of the primary work, so the mechanics lien was improperly recorded before plaintiff "ceases to provide work" as required by Civil Code Section 8414(a).

Potocki v. Wells Fargo Bank     Docket
38 Cal.App.5th 566 - 3rd Dist. (C081345)  7/11/19; Cert. for Partial Pub. 8/7/19 (order attached)     Case complete 10/8/19

LOAN MODIFICATIONS: In the portion of the opinion that was certified for publication, the court held that plaintiff stated a claim under Civil Code Section 2923.6(f)(2) because the lender failed to specify the reasons the investors in the loan denied a loan modification.

Sheen v. Wells Fargo Bank     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B289003)  8/5/19     Appeal to Cal Supreme Ct. AFFIRMED 3/7/22

LOAN MODIFICATIONS: A lender does not owe the borrower a duty in tort for negligence during negotiations for a mortgage modification.

Ranch at the Falls LLC v. O'Neal     Docket     Sup.Ct. Docket
38 Cal.App.5th 155 - 2nd Dist. (B283986)  7/31/19     Request for review by Cal Supreme Ct. DENIED 11/13/19

EASEMENTS: In this complicated easement dispute filed by the owner of a horse ranch against the owners of an adjacent residential subdivision, the court reversed the trial court's judgment in favor of plaintiff, holding that:
1. The individual homeowners in the gated community were indispensable parties to plaintiff's lawsuit, so were not bound by the judgment;
2. Plaintiff did not have an express easement over all the private streets of the residential subdivision;
3. Plaintiff did not have an express easement or, alternatively, a prescriptive easement; and
4. Plaintiff did not establish an equitable easement.

Eisen v. Tavangarian     Docket     Sup.Ct. Docket
36 Cal.App.5th 626 - 2nd Dist. (B278271)  6/20/19     Request for review & depublication by Cal Supreme Ct. DENIED 9/11/19

CC&R's: The court held that CC&R's affecting a residential subdivision did not restrict renovations or alterations to a previously approved residence. The section of the CC&R's that did apply to alterations of a residence had expired. Note: These are the same CC&R's that were the subject of Zabrucky v. McAdams (2005) 129 Cal.App.4th 618. Here, the court held that the court in Zabrucky misread the CC&R's when it found that they applied to remodeling existing, approved structures. As pointed out in this web site's summary of that case, these cases are each unique and it is very difficult to determine in advance what a court will do. This means it can be very dangerous to issue endorsements such as CLTA Endorsement No. 100.6 or 100.28, insuring against a violation of this kind of provision in CC&R's.

Raney v. Cerkueira     Docket     Sup.Ct. Docket
36 Cal.App.5th 311 - 1st Dist. (A152549)  6/14/19     Request for review by Cal Supreme Ct. DENIED 9/16/19

JOINT TENANCY: Civil Code Section 683.2(c) provides that a written instrument severing a joint tenancy is not effective to eliminate the other tenant's right of survivorship unless it is recorded before the death of the severing tenant (with one exception not relevant to this case). Family Code Section 2040(b)(3) provides that the standard automatic temporary restraining order binding parties in a pending dissolution proceeding does not restrain one party's elimination of a right of survivorship to property, provided that notice of the change is filed and served on the other party before the change takes effect. The court held that a party who is bound by the automatic temporary restraining order must satisfy both Civil Code Section 683.2(c) and Family Code Section 2040(b)(3) before the severance of a joint tenancy is effective. However, these requirements may be satisfied in any order.

Veiseh v. Stapp     Docket
35 Cal.App.5th 1099 - 5th Dist. (F075173)  6/6/19     Case complete 8/6/19

TRESPASS: Plaintiff sued defendant for trespass. The court pointed out that generally, the tort of trespass protects possessory interests and, therefore, a person in actual possession of the land may sue for trespass. Ownership or recorded title to land is not required. Here, following plaintiff's transfer of the property to his daughter pursuant to the California Uniform Transfers to Minors Act, plaintiff continued to occupy the property, which was in violation of the Act's requirement that the property be held for the benefit of the minor. The court ruled in favor of plaintiff, holding that a failure to comply with one or more provisions of the California Uniform Transfers to Minors Act does not render the grantor's continued possession and control of the real property unlawful for purposes of the tort of trespass to realty.

Longview International v. Stirling     Docket
35 Cal.App.5th 985 - 6th Dist. (H044905)  5/31/19     Case complete 8/5/19

ABSTRACT OF JUDGMENT: The court held that a corporate judgment creditor's recording of an abstract of judgment while the corporation was suspended is a procedural matter which was retroactively validated when its corporate powers were restored. Defendant was not a bona fide purchaser because the recorded abstract was not void but, rather, gave notice that plaintiff asserted an interest in the property that could be enforced upon the revival of its corporate powers.

People v. Astorga-Lider (Deo)     Docket     Sup.Ct. Docket
35 Cal.App.5th 646 - 4th Dist., Div. 1 (D073992)  5/2/19 (Cert. for Pub. 5/22/19)     Request for review by Cal Supreme Ct. DENIED 8/28/19

FRAUD/FORGERY: The court upheld a judgment that a deed of trust was void under Penal Code Section 115(e), relying on evidence presented in this criminal proceeding. The owners of the subject property signed the deed of trust, but asserted that they did not realize what it was or that it encumbered their property.

Kahan v. City of Richmond     Docket     Sup.Ct. Docket
35 Cal.App.5th 721 - 1st Dist. (A150866)  5/23/19     Request for review & depublication by Cal Supreme Ct. DENIED 8/21/19

GARBAGE COLLECTION LIENS: The court held that a purchaser at a trustee's sale under a deed of trust took title subject to a garbage collection lien that recorded shortly before the sale. Gov. Code Sections 25831 and 38790.1 expressly authorize the lien to have the super-priority status payable with property taxes, so the lien was not wiped out by the trustee's sale. The purchaser was not a bona fide purchaser because he purchased at the trustee's sale with notice of the recorded lien. He also was not a bona fide encumbrancer because in order to have that status, he would have to allege facts showing the deed of trust that foreclosed was obtained after the garbage lien existed but before it was recorded.

Black Sky Capital v. Cobb     Docket
7 Cal.5th 156 - Cal. Supreme Court (S243294)  5/6/19

DEFICIENCY JUDGMENTS: The court held that where a lender who holds both a senior and junior deed of trust nonjudicially forecloses on the senior lien and wipes out its junior lien, the lender may enforce the junior note. Civil Code Section 580d does not apply to preclude a sold-out junior lienholder from enforcing the junior debt, even where the lienholder foreclosed under its own senior deed of trust. The court pointed out that the junior deed of trust was executed two years after the first, and there was no allegation of gamesmanship by evasively splitting a single loan into two loans or recovery in excess of what any junior lienholder would be able to recover.

Shoen v. Zacarias     Docket
33 Cal.App.5th 1112 - 2nd Dist. (B284374)  4/4/19     Case complete 6/5/19

IRREVOCABLE LICENSE: When a landowner grants someone permission to use her land, she generally retains the right to revoke that license at any time. The landowner may nevertheless be estopped from revoking that license -- and the license will accordingly become irrevocable for so long a time as the nature of it calls for -- if the person using the land has expended money or its equivalent in labor improving the land in the execution of the license. Critically, however, the expenditure of money or labor can make a license irrevocable only if that expenditure is "substantial," "considerable" or "great." Here, the appellate court concluded that the trial court's grant of an irrevocable license was an abuse of discretion because the trial court construed the "substantial expenditure" requirement too permissively, and held that defendant's modest costs of upkeep did not constitute "substantial" expenditures warranting an irrevocable license.

JP Morgan Chase Bank v. Ward     Docket     Sup.Ct. Docket
33 Cal.App.5th 678 - 4th Dist., Div. 1 (D073378)  3/28/19     Request for review by Cal Supreme Ct. DENIED 6/19/19

DEEDS OF TRUST: A deed of trust was executed in 2007 but was never recorded. The trial court sustained a demurrer without leave to amend because plaintiff bank's complaint sought to correct the deed of trust on the basis of mistake, and that claim was barred by the statute of limitations. The appellate court reversed, holding that, while the cause of action asserted by plaintiff was indeed barred by the statute of limitations, plaintiff should be allowed to amend its complaint to assert a cause of action for restoration of a lost deed under Civil Code Section 3415(a). The court also held that a signature by the sole trustee and beneficiary of an inter vivos revocable trust is sufficient to convey good title to trust property, citing Galdjie v. Darwish (2003) 113 Cal.App.4th 1331.

Citrus El Dorado v. Chicago Title Company     Docket
32 Cal.App.5th 943 - 4th Dist., Div. 2 (E067938)  3/5/19     Case complete 5/8/19

TRUSTEE'S SALES: The court upheld the trial court's order sustaining a demurrer in favor of Chicago Title Company, which acted as trustee in conducting a non-judicial foreclosure of a deed of trust. The court held that Chicago Title did not have a duty to verify that the beneficiary received a valid assignment of the loan or to verify the authority of the person who signed the substitution of trustee. Such an inquiry is beyond the scope of the trustee's duties as defined by the deed of trust and the applicable statutes, and there is no appropriate basis for imposing tort liability on Chicago Title for failing to take actions that are beyond the scope of its duties.

City of Sierra Madre v. SunTrust Mortgage     Docket     Sup.Ct. Docket
32 Cal.App.5th 648 - 2nd Dist. (B284550)  2/26/19     Request for review by Cal Supreme Ct. DENIED 5/22/19

RECEIVERS: The court held that the trial court properly authorized a receiver to borrow $250,000 in exchange for a receiver's certificate in the amount of the loan with first priority ahead of all other encumbrances. Courts have substantial discretion to authorize a receiver to borrow money to fund the preservation and management of property in the receivership estate. In that circumstance, the receiver may ask the court to authorize the issuance of a receiver's certificate to the lender as security for money loaned to the estate. Typically, such a receivership certificate will have priority over all other liens, even preexisting liens where it is equitable to do so.

Sturm v. Moyer     Docket
32 Cal.App.5th 299 - 2nd Dist. (B284553)  2/15/19     Case complete 4/18/19

Assuming fraudulent intent, the Uniform Voidable Transactions Act (Civ. Code Section 3439 et seq.) can apply to a premarital agreement in which the prospective spouses agree that upon marriage each spouse’s earnings, income, and other property acquired during marriage will be that spouse’s separate property.

Ditzian v. Unger     Docket
31 Cal.App.5th 738 - 1st Dist. (A152946)  1/24/19     Case complete 3/27/19

PRESCRIPTIVE EASEMENT: The court held that plaintiffs established a prescriptive easement to a foot path over defendant's property by showing that the use had been open, notorious, continuous and adverse for an uninterrupted period of five years. Plaintiff asserted that Civil Code Section 1009 applied, which does not allow public use to ripen into a public right to continue such use in the absence of an express written irrevocable dedication. The court held that Section 1009 does not apply because plaintiffs asserted a private prescriptive easement, not a public right.

In re: Marriage of Begian and Sarajian     Docket
31 Cal.App.5th 506 - 2nd Dist. (B278316)  12/20/18; pub. order 1/18/19     Case complete 3/20/19

TRANSMUTATION: The court held that a "Trust Transfer Deed," signed by a husband, granting real property to his wife, did not meet Family Code section 852(a)'s express declaration requirement in order to transmute property. The document's use of the words "grant" and "gift" were not sufficient alone to satisfy the requirement, because the deed did not unambiguously indicate a change in character or ownership of the property. The court noted that granting the property to the wife "as her sole and separate property" would have satisfied the express declaration requirement.

Prout v. Department of Transportation      Modification     Docket
31 Cal.App.5th 200 - 3rd Dist. (C076812)  1/11/19     Case complete 3/14/19

DEDICATION: The rule is that the government cannot, as a condition for issuance of a development permit, impose a requirement that the landowner dedicate land for public use, unless there is an "essential nexus" between the condition and the projected impact of the proposed development. When a government agency conditions its approval of a real property development project on the grant of an easement or other exaction which would otherwise constitute a taking requiring compensation, the property owner must challenge the condition by petition for writ of mandate filed before, or simultaneously with, a complaint for inverse condemnation. The court held that plaintiff's challenge was time barred by the four-year statute of limitations in C.C.P. Section 343. The court also held that Caltrans impliedly accepted plaintiff's offer of dedication on a map by making road improvements on the dedicated land.

Mikkelsen v. Hansen     Docket     Sup.Ct. Docket
31 Cal.App.5th 170 - 5th Dist. (F072990)  1/10/19     Request for review by Cal Supreme Ct. DENIED 3/27/19

DEDICATION: The court, following Scher v. Burke, 3 Cal.5th 136, held that plaintiffs could not establish an implied dedication of a road on non-coastal property because Civil Code Section 1009(b) bars all use of private real property after March 1972, not just recreational use, from ripening into a public dedication absent an express, written, irrevocable offer of such property to such use, and acceptance by a city or county. Scher dealt with an implied-in-law dedication (the period of adverse public use exceeds the period for prescription) and in this case the court held that Scher also applies to implied-in-fact (the period of adverse public use is less than the period for prescription) dedications.

Smyth v. Berman     Docket     Sup.Ct. Docket
31 Cal.App.5th 183 - 2nd Dist. (B286609)  1/10/19     Request for review by Cal Supreme Ct. DENIED 3/20/19

RIGHT OF FIRST REFUSAL: The court held that a right of first refusal contained in a written lease expires when the leasehold ends and the tenant becomes a "holdover" tenant, and when the lease specifies "the continuing [holdover] tenancy will be from month to month". A right of first refusal is not an essential term that carries forward into a holdover tenancy unless the parties so indicate.

Eith v. Ketelhut     Modification     Docket     Sup.Ct. Docket
30 Cal.App.5th 248 - 2nd Dist. (B272028)  12/17/18     Request for review by Cal Supreme Ct. DENIED 3/13/19

COVENANTS, CONDITIONS & RESTRICTIONS: The CC&R's affecting defendants' residential property prohibited "any business or commercial activity." The court held that the homeowners association board acted within its discretion in allowing the continued operation of the vineyard, and its decision is entitled to judicial deference. The court further concluded that, as a matter of law, it is not a prohibited business or commercial use because it does not affect the community's residential character.

Dr. Leevil, LLC v. Westlake Health Care Center     Docket
6 Cal.5th 474 - Cal. Supreme Court (S241324)  12/17/18

FORECLOSURE / UNLAWFUL DETAINER: Under C.C.P. Section 1161a(b), after a trustee's sale, perfection of title, which includes recording the trustee's deed, is necessary before the new owner serves a three-day written notice to quit on the possessor of the property. Accordingly, an unlawful detainer action cannot proceed where the three-day notice is served before recordation of the trustee's deed, even where the trustee's deed is recorded prior to filing the action.

Durante v. County of Santa Clara     Docket     Sup.Ct. Docket
29 Cal.App.5th 839 - 6th Dist. (H041620)  11/30/18     Request for review by Cal Supreme Ct. DENIED 3/13/19

PROPERTY TAXES / CHANGE IN OWNERSHIP: Plaintiff and her sister each owned a 50% interest in residential property they inherited from their mother. Plaintiff's sister conveyed a life estate in her 50% interest to plaintiff. The court held that the transfer of the life estate was a change in ownership under Revenue and Taxation Code Section 60, and the County properly reassessed the property.

Zissler v. Saville     Docket
29 Cal.App.5th 630 - 2nd Dist. (B286043)  11/29/18     Case complete 1/30/19

EASEMENTS: Defendant attempted to restrict plaintiff's use of an easement for "access, ingress and egress to vehicles and pedestrians" to its historical use of occasional access to maintain landscaping. Plaintiff filed this action alleging that increased use to provide access for a construction project was allowed by the easement. The court reversed the judgment in favor of defendant and remanded to the trial court, holding:
1. Because the easement deed did not contain any limitation on the type of vehicles or frequency of access, the easement may be used to the extent that the use is reasonably necessary for the convenient enjoyment of the easement and is consistent with the purpose for which the easement was granted, provided that the use does not unreasonably interfere with the enjoyment of, unreasonably damage, or materially increase the burden on the servient estate, and
2. As a bona fide purchaser for value, plaintiff was entitled to rely on the plain language of the easement.

Schmidt v. Citibank     Docket
28 Cal.App.5th 1109 - 4th Dist, Div. 1 (D072993)  11/7/18     Case complete 1/10/19

TRUSTEE'S SALES: Former Civil Code Section 2923.55(b)(2) was part of the Homeowners' Bill of Rights, requiring a lender to contact a borrower in default to discuss options to modify a deed of trust before commencing foreclosure. The court held that a lender satisfied the requirements of the statute even though the borrower initiated the telephone calls during which the discussions were had.

Bear Creek Master Association v. Southern California Investors     Docket     Sup.Ct. Docket
28 Cal.App.5th 809 - 4th Dist, Div. 2 (E066588)  10/19/18     Request for review by Cal Supreme Ct. DENIED 2/13/19

HOA LIEN PRIORITY: The court held that a homeowner's association assessment lien is not created or perfected until it records, and does not relate back to the recordation of the CC&R's. However, plaintiff's HOA lien was prior to a subsequently recorded 3rd deed of trust because Section 3 of the CC&R's provides that assessment liens "shall have priority over all liens or claims created subsequent to the recordation of this Declaration ... except for certain trust deeds as provided in Section 4 ..." and Section 4 provides that "The lien for the Assessment provided for herein shall not be subordinate to the lien of any deed of trust or mortgage, except the lien of a first deed of trust or first mortgage". Accordingly, a deed of trust that is not in first position is subordinated to a subsequently recorded assessment lien.

Turner v. Seterus, Inc.     Docket
27 Cal.App.5th 516 - 3rd Dist. (C079613)  9/24/18     Case complete 12/5/18

WRONGFUL FORECLOSURE: The court held that tender of the full amount of the debt was not necessary to state a cause of action for wrongful foreclosure where the lender had wrongfully refused a timely tender of the amount necessary to reinstate the loan, rendering the subsequent sale void. Also, actual payment of the amount to reinstate the loan was not necessary where the borrower offered payment and the lender told the borrower that payment would not be accepted. Accordingly, payment was effectively tendered. The case also discusses the fact that the borrower acquired title before marriage and the loan was in her name alone. The court points out that the husband was an interested party because, while the property was the wife's separate property, loan payments had been made with community property funds, giving the community an interest in the property.

Kushesh v. Kushesh-Kaviani     Docket
27 Cal.App.5th 449 - 4th Dist., Div. 3 (G054936)  9/21/18     Case complete 11/21/18

TRANSMUTATION: The court held that an interspousal transfer grant deed to the wife as her sole and separate property met the requirements for a transmutation of the character of marital property under Family Code Section 852. However, the case was remanded to the trial court to determine whether the transmutation should nevertheless be deemed ineffective under Family Code Section 721 if the wife gained an unfair advantage over the husband.

Pacificare Life and Health Insurance Company v. Jones     Docket     Sup.Ct. Docket
27 Cal.App.5th 391 - 4th Dist., Div. 3 (G053914)  9/20/18     Request for review by Cal Supreme Ct. DENIED 1/2/18

INSURANCE: The court held that:
1. Insurance Code Section 790.03(h) defines an unfair claims settlement practice to be either an insurer's single knowing commission of the described conduct, or its performance of the conduct "with such frequency as to indicate a general business practice."
2. California Code of Regulations Section 2695.2(l) is valid. It defines "knowingly committed" to mean acts performed with actual, implied or constructive knowledge.
3. CCR Section 2695.2(y) is valid. It states that "Willful" or "Willfully" when applied to the intent with which an act is done or omitted means simply a purpose or willingness to commit the act, or make the omission, and does not require any intent to violate law, or to injure another, or to acquire any advantage.

Chacker v. JP Morgan Chase Bank     Modification     Docket     Sup.Ct. Docket
28 Cal.App.5th 25 - 2nd Dist. (B281874)  9/19/18     Request for review by Cal Supreme Ct. DENIED 12/12/18

TRUSTEE'S SALES: The lender prevailed in this wrongful foreclosure action, but was not entitled to an award of attorney's fees. The attorney's fee clause in the deed of trust provided that attorney's fees were an expense that would be added to the amount due under the note like other costs incurred by the lender, and did not provide for a separate award of attorney's fees.

Hart v. Clear Recon Corp.     Docket
27 Cal.App.5th 322 - 2nd Dist. (B283221)  9/18/18     Case complete 11/20/18

TRUSTEE'S SALES: The lender prevailed in this wrongful foreclosure action, but was not entitled to an award of attorney's fees. The attorney's fee clause in the deed of trust provided that attorney's fees were an expense that would be added to the amount due under the note like other costs incurred by the lender, and did not provide for a separate award of attorney's fees.

Villanueva v. Fidelity National Title Company     Docket     Sup.Ct. Docket
Cal.App. 6th Dist. (H041870, H042504)  9/7/18     REVERSED by California Supreme Court

TITLE INSURANCE: Fidelity's escrow rate filing failed to establish classifications of services for document preparation services and for third party delivery services. It also failed to indicate in its rate filings that it intended to charge for those services. By charging for such services, Fidelity violated Insurance Code Sections 12401.1, 12401.2, and 12401.7. However, this conduct is subject to the Section 12414.26 immunity, which precludes plaintiffs' Unfair Competition Law claims. Instead, allegations of rate filing violations must be brought before the Insurance Commissioner pursuant to Section 12414.13.

Hacker v. Homeward Residential, Inc.     Docket     Sup.Ct. Docket
26 Cal.App.5th 270 - 2nd Dist. (B278537)  8/16/18     Case complete 10/18/18

TRUSTEE'S SALES: The court held that plaintiff stated a cause of action for wrongful foreclosure where the lender foreclosed on a note and deed of trust that it obtained by assignment, where the loan had previously been assigned to a different assignee. The court distinguished this situation from the case where an assignment to a securitized trust after the trust's "closing date" is voidable by the lender and assignee, not void, so the trustor does not have standing to challenge the assignment. In contrast, a foreclosure by a party that never possessed legal title to the deed of trust is void.

McLear-Gary v. Scott     Docket
25 Cal.App.5th 145 - 1st Dist. (A146719)  7/11/18     Case complete 9/11/18

PRESCRIPTIVE EASEMENTS: In this appeal from a judgment declaring plaintiff's prescriptive and implied easement extinguished by adverse possession, the court affirmed in part and reversed in part, holding:
1. Where an easement is not separately assessed, the servient tenement owner must pay property taxes on the servient tenement in order to extinguish the easement by adverse possession.
2. C.C.P. Section 325(b) provides that one of the elements of adverse possession is the "timely" payment of property taxes for the statutory period. This requirement was not satisfied where several years of delinquent taxes were paid in a lump sum.
3. The provision in CC&R's for a 60-foot wide easement for ingress and egress "to or from any Parcel" applied only to the original 160 acre parcels and not to subsequent subdivisions of those parcels.

Summers v. Superior Court     Modification     Docket
24 Cal.App.5th 138 - 1st Dist. (A151128)  6/1/18     Case complete 7/20/18

PARTITION: In this partition action the court held that California's partition statutes do not allow a court to order the manner of a property's partition, such as the sale ordered by the trial court in this case, before it determines the ownership interests in the property.

Placer Foreclosure, Inc. v. Aflalo     Docket
23 Cal.App.5th 1109 - 2nd Dist. (B268589)  5/30/18     Case complete 8/3/18

TRUSTEE'S SALES / INTERPLEADER: Placer Foreclosure, acting as trustee, conducted a trustee's sale of property owned by Aflalo. The sale resulted in surplus proceeds. When Aflalo filed an action against Placer and the third-party buyer for wrongful foreclosure and quiet title, Placer filed a complaint in interpleader and deposited the surplus proceeds with the court. The court affirmed a judgment of dismissal after Aflalo's demurrer was sustained and remanded with instructions to release the interpleaded funds to Aflalo. Placer did not face a valid threat of double liability because the purchaser's claim was against Aflalo, not Placer. If the wrongful foreclosure action invalidated the sale, the third party would be entitled to a refund from Aflalo of its purchase proceeds.

Estate of Casserley (Hawkins v. Joya)     Docket
22 Cal.App.5th 824 - 4th Dist. (D072298)  4/27/18     Case complete 6/28/18

JUDGMENT LIENS: C.C.P. Section 686.020 states: "After the death of the judgment debtor, enforcement of a judgment against property in the judgment debtor's estate is governed by the Probate Code, and not by this title." The court held that because the abstract of judgment in this case was recorded after decedent's death, the probate court correctly found the abstract did not create a lien on estate assets.

County Line Holdings v. McClanahan     Docket     Sup.Ct. Docket
22 Cal.App.5th 1067 - 2nd Dist. (B278790)  5/2/18     Request for review by Cal Supreme Ct. DENIED 8/8/18

JUDGMENT LIENS: The court held that Probate Code Section 366.2, requiring an action against a decedent to be commenced within one year of death, does not apply to judgment liens. Rather the lien continues for its statutory duration. Probate Code Section 9300 terminates the right of the creditor to enforce the judgment lien by execution and sale. But the judgment creditor has two options: Either file a timely claim in the estate probate proceeding and seek a deficiency (the priority of the lien will be protected) or, without filing a claim, bring an action to foreclose the lien during its statutory duration, waiving any right to a deficiency.

Hansen v. Sandridge Partners     Docket
22 Cal.App.5th 1020 - 5th Dist. (F073106)  4/6/18 (Pub. Order 5/1/18)     Case complete 7/2/18

EQUITABLE EASEMENTS: Citing Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982, the court explained that three factors must be present to establish an equitable easement: 1) The encroacher must be innocent. That is, the encroachment must not be willful or negligent, 2) Unless the rights of the public would be harmed, the court should stop the encroachment if the burdened landowner will suffer irreparable injury regardless of the injury to the encroacher, and 3) The hardship to the encroacher from ordering removal of the encroachment must be greatly disproportionate to the hardship caused the burdened landowner by the continuance of the encroachment. Here, plaintiffs negligently planted a pistachio orchard on defendant's property, and defendant was not contributorily negligent, so plaintiffs did not establish the first element of an equitable easement. Plaintiffs also could not establish a prescriptive easement because the encroachment would be exclusive. An exclusive easement has the same effect on property rights as adverse possession, so the elements of adverse possession have to be established. Plaintiff was not able to establish the element of adverse possession requiring payment of property taxes.

Integrated Lender Services v. County of Los Angeles     Docket
22 Cal.App.5th 867 - 2nd Dist. (B281135)  4/27/18     Case complete 6/27/18

TRUSTEE'S SALES: There were surplus proceeds after a deed of trust was foreclosed on property once owned by a convicted fraudster. There were two claims to the funds: 1) the County of Los Angeles, which had been awarded criminal restitution against the fraudster, and claimed the right to collect the restitution from the property by means of a lis pendens and temporary restraining order recorded in the criminal prosecution; and 2) several trusts, whose interests in the property were both junior to that of the foreclosing trustee and had post-dated the criminal lis pendens. The court affirmed the trial court's award of the surplus proceeds to the trusts, holding that the lis pendens was inadequate to give the County any interest in the property because the criminal court had ordered restitution but had not ordered the property levied upon to satisfy the restitution award.

Tikosky v. Yehuda     Docket     Sup.Ct. Docket
19 Cal.App.5th 1224 - 2nd Dist. (B278052)  1/30/18     Request for review by Cal Supreme Ct. DENIED 5/9/18

JUDGMENTS: The court held that a title insurance company's payment to a judgment creditor for an assignment of an interest in the judgment did not constitute a payment on the judgment. Accordingly, the debtor was not entitled to a partial satisfaction of judgment.

SMS Financial v. Cornerstone Title Company     Docket
19 Cal.App.5th 1092 - 1st Dist. (A146711)  1/26/18     Case complete 3/28/18

DEEDS OF TRUST: The court overruled the trial court's sustaining of a demurrer, holding that an assignee of a deed of trust has a cause of action for damages under Civil Code Section 2941(b)(6) against a title company that improperly records a release of a deed of trust pursuant to C.C. Section 2941.

Centex Homes v. St. Paul Fire & Marine Ins. Co.     Docket     Sup.Ct. Docket
19 Cal.App.5th 789 - 3rd Dist. (C081266)  1/22/18     Request for review by Cal Supreme Ct. and depublication request DENIED 4/11/18

INSURANCE: The court held that defendant insurance company did not have a duty under Civil Code Section 2860 to provide independent counsel to defend an insured where the defense was accepted with a reservation of rights and the coverage issues did not have anything to do with the issues the insurer was defending in the action. Counsel retained by the insurer had no control over the outcome of the coverage issues, so he did not have a conflict of interest.

MTC Financial v. Nationstar Mortgage     Docket
19 Cal.App.5th 811 - 1st Dist. (A150916)  1/22/18     Case Complete 4/6/18

RECORDING: The court held that although defendant's deed of trust securing a $205,080 loan was recorded one recording number after a simultaneously recorded HELOC deed of trust securing a $15,000 loan, defendant's deed of trust was senior to the HELOC deed of trust because the intent of the parties was clear that the deed of trust securing the large loan would be senior. Where two deeds of trust are submitted at the same time for recording, the order in which they are indexed is not determinative of priority. Rather, the intent of the parties determines priority. Accordingly, the court held that defendant was not entitled to any of the surplus proceeds remaining from a foreclosure of the junior HELOC deed of trust and defendant's senior deed of trust remained as a lien on the property.

Guan v. Hu     Docket     Sup.Ct. Docket
Cal.App. - 2nd Dist. (B276546)  1/12/18     Request for review by Cal Supreme Ct. DENIED and CA opinion DECERTIFIED 3/28/18

CONTRACTS: Plaintiff and defendant entered into a contract under which plaintiff paid the purchase price for a residence to be held by defendant as the "nominal owner" and which required plaintiff to sell the property when requested by plaintiff, with the proceeds to be divided between the parties according to a formula set forth in the contract. The appellate court affirmed the trial court's rejection of plaintiff's fraud claim because plaintiff did not prove that plaintiff did not intend to perform the contract at the time it was entered into, but found that defendant had breached the contract. Accordingly, the court held that there was no basis for rescission, but ordered that the property be sold and the proceeds apportioned between the parties in accordance with the contract.

McBride v. Smith     Docket
18 Cal.App.5th 1160 - 1st Dist. (A147931)  1/4/18     Case complete 3/9/18

PRESCRIPTIVE EASEMENTS: The court overruled the trial court's sustaining of a demurrer, concluding that plaintiff asserted two core allegations which, if proven, were sufficient to raise a triable issue of fact as to whether plaintiff's use of an easement for five years was adverse to defendants property rights: 1) the allegation that plaintiff used the easement in a way that exceeded the usage authorized by the recorded grant and 2) the allegation that plaintiff and her associates used the easement on a "daily basis" because daily use of the easement significantly expanded the use allowed under the terms of the recorded grant.

Yeh v. Tai     Docket
18 Cal.App.5th 953 - 2nd Dist. (B280003)  12/21/17     Case complete 2/20/18

CONTRACTS: Plaintiff claims to have purchased a condominium with her deceased husband, and transferred it to him so that they could obtain a more favorable loan. She claims that he promised to place her back on the title to the property, and that she could sell it or keep it after his death. Instead, he transferred the title to a trust, of which his children from a prior marriage are beneficiaries. The court overturned the probate court's sustaining of a demurrer, and held that the statute of limitations in C.C.P. Sections 366.2 and 366.3, which provide that an action must be filed within one year of death, did not apply. Instead, Family Code Section 1101 applies, which contains its own statute of limitations and specifically addresses marriages ending by death. Under Section 1101, breach of fiduciary duty claims filed after the death of a spouse are governed only by equitable principles of laches, and defendants did not argue that plaintiff’s claim is untimely under laches principles.

City of Grass Valley v. Cohen     Modification     Docket     Sup.Ct. Docket
18 Cal.App.5th 437 - 3rd Dist. (C078981)  11/20/17     Request for review by Cal Supreme Ct. DENIED 3/14/18

REDEVELOPMENT AGENCIES: This case arises out of the "Great Dissolution" of redevelopment agencies ("RDAs"). The bottom line is that the Court directed the trial court to issue a writ commanding the Department of Finance to consider the City's claim regarding a highway project agreement, which was entered into between the City and RDA in an effort to create an "enforceable obligation" before the RDA was dissolved.

BRE DDR BR Whittword CA v. Farmers & Merchants Bank of Long Beach     Docket
14 Cal.App.5th 992 - 2nd Dist. (B272168)  8/29/17     Case complete 11/9/17

LEASES / FORECLOSURE: After a shopping center tenant defaulted on a loan secured by a deed of trust, the lender foreclosed and took possession of the premises, then transferred the leasehold interest to a third party. The third party then surrendered the premises and the landlord filed suit against the lender to enforce the lease obligations. The court reversed a grant of summary adjudication for the landlord, holding that the lender was obligated to pay rent during the time of possession, but was not otherwise bound by the terms of the lease because acquiring the leasehold estate by foreclosure did not constitute an express agreement to assume the obligations of the lease.

Hovannisian v. First American Title Insurance Company     Docket
14 Cal.App.5th 420 - 5th Dist. (F072789)  7/25/17 (Cert. for Pub. 8/11/17)     Case complete 10/11/17

TITLE INSURANCE: Plaintiffs purchased property from Wells Fargo Bank at a nonjudicial foreclosure sale and later discovered there was a prior deed of trust on the property that had not been extinguished by the foreclosure. They sued Wells Fargo for intentional and negligent misrepresentation based on a statement in Wells Fargo's deed of trust that it was a first deed of trust. Wells Fargo tendered defense of the action to its title insurer, First American Title Insurance Company, which refused to indemnify or defend. After Wells Fargo assigned any claim it had against First American to the plaintiffs, they sued First American for breach of contract and breach of the implied covenant of good faith and fair dealing.

The court upheld a motion for summary judgment in favor of First American, holding that there was no coverage under the policy after the property was foreclosed because 1) the trustee's deed stated that it was without warranty and the provisions in the policy allowing for continuation of insurance after a sale only apply to the extent the insured gives a warranty of title to the purchaser, 2) the statement in the deed of trust that it was a first deed of trust did not constitute a warranty, and 3) the insured lender does not suffer damages unless it fails to recoup the debt because of the undisclosed senior lien.

PGA West Residential Association v. Hulven International     Docket     Sup.Ct. Docket
14 Cal.App.5th 156 - 4th Dist., Div. 2 (E064270)  8/9/17     Request for review by Cal Supreme Ct. DENIED 11/15/17

VOIDABLE CONVEYANCE: Plaintiff alleged that defendant Mork tried to fraudulently insulate the equity in his condominium from creditors by naming Hulven, a sham corporation entirely owned and controlled by Mork, as the beneficiary of a deed of trust and note, and by later directing Hulven International, Inc. to foreclose on the condominium. The court held 1) the former Uniform Fraudulent Transfer Act (later renamed the Uniform Voidable Transactions Act) applied to the alleged fraudulent deed of trust, but 2) plaintiff's claims were extinguished by the expiration of the seven-year limitations period set forth in Civil Code Section 3439.09(c) even though defendant did not raise the statute as a defense because that statute is a statute of repose and not a statute of limitations. Although a defendant must plead a statute of limitations defense, it is the plaintiff who must plead facts showing that a substantive right has not been extinguished by a statute of repose. (Ed: The case contains a good explanation of the difference between statutes of limitations and repose.)

Surfrider Foundation v. Martins Beach 1, LLC     Docket     Sup.Ct. Docket
14 Cal.App.5th 238 - 1st Dist. (A144268)  8/9/17     Request for review by Cal Supreme Ct. DENIED 10/30/17

DEDICATION: The court affirmed the trial court's conclusion that appellants' conduct of closing off public access to a beach is "development" requiring a coastal development permit under section 30106 of the Coastal Act. Further, the court concluded that appellants' constitutional challenge to the Coastal Act's permitting requirement under the state and federal takings clauses was not ripe because the Coastal Commission has not yet rendered a decision. Finally, the court rejected appellants' contention that the trial court's temporary injunction is a per se taking and, since appellants did not assert a claim that the injunction was unconstitutional under a different "multifactor" analysis, the court allowed the injunction to stand.

Ayala v. Dawson     Docket     Sup.Ct. Docket
13 Cal.App.5th 1319 - 1st Dist. (A142830)  8/4/17     Request for review by Cal Supreme Ct. DENIED 11/15/17

UNLAWFUL DETAINER / COLLATERAL ESTOPPEL: Plaintiff was evicted from the subject property in a previous unlawful detainer action, and brought the current action claiming that he held equitable title pursuant to an oral installment sale contract. The court explained that because an unlawful detainer action is a summary proceeding ordinarily limited to resolution of the question of possession, any judgment arising therefrom generally is given limited res judicata effect. As a general matter in such cases, collateral estoppel will only apply if the party to be bound agreed expressly or impliedly to submit an issue to prior adjudication and had a full and fair opportunity to litigate under circumstances affording due process protections.

The court held that plaintiff was barred from relitigating the equitable title issue. Plaintiff could have moved to consolidate the unlawful detainer proceeding with this action, thus requiring the court to determine whether the issues presented were so complex and so intertwined with the issue of title that the entire case should be treated as an ordinary civil action, and not as a summary proceeding. But plaintiff did not do so. Instead, he acceded to the summary and expedited procedures of unlawful detainer with respect to his claim to equitable title.

Conroy v. Wells Fargo Bank     Docket
13 Cal.App.5th 1012 - 3rd Dist. (C078914)  7/28/17     Rehearing GRANTED. Decision filed 7/28/17 is VACATED. 8/25/17

TRUSTEE'S SALES: This is another case in which homeowners lived in a house for many years while challenging a lender's right to foreclose. The homeowners finally lost. The court concluded that the complaint did not state valid causes of action for intentional or negligent misrepresentation because plaintiffs did not properly plead actual reliance or damages proximately caused by Wells Fargo. The trial court properly determined that plaintiffs could not assert a tort claim for negligence arising out of a contract with Well Fargo. Plaintiffs did not set forth a viable cause of action for promissory estoppel because of a lack of detrimental reliance on any of Wells Fargo’s alleged promises. The claim under Civil Code Section 2923.6 was not viable because subdivision (g) of that statute excludes loan modification applications undertaken before January 2, 2013. Because Wells Fargo considered and rejected a loan modification before that date, section 2923.6 does not apply to them. Section 2923.7 requires a borrower to expressly request a single point of contact with the loan servicer and the complaint did not allege plaintiffs ever requested a single point of contact. Finally, the trial court properly dismissed the UCL claim because it is merely derivative of other causes of action that were properly dismissed.

Crossroads Investors v. Federal National Mortgage Association (On Remand)     Docket     Sup.Ct. Docket
13 Cal.App.5th 757 - 3rd Dist. (C072585)  7/26/17     Case complete 9/26/17

WRONGFUL FORECLOSURE: The court reversed the trial court's denial of Fannie Mae's anti-SLAPP motion (C.C.P. 425.16) in this wrongful foreclosure action, because the actions on which Crossroads based its complaint arose from the exercise of Fannie Mae's constitutional rights of speech and petition; specifically, statements and omissions made in, or concerning issues under review in, Crossroad's bankruptcy action. However, the court held that allegations relating to Fannie Mae's alleged breach of an oral agreement to provide notice of the foreclosure sale were not constitutionally protected, and it remanded the case for that issue to be decided in the trial court.

Cummings v. Dessel     Docket
13 Cal.App.5th 589 - 1st Dist. (A144212)  7/19/17     Case complete 9/18/17

PARTITION: The court held that the trial court erred when it ordered partition of the property by appraisal because the parties had not agreed to that method, as is required by the statute (C.C.P. 873.910 et seq.) Partition by appraisal is a procedure in which the court sets a minimum bid amount for each owner to bid to buy out the other owner's interest. However, in the unpublished portion of the opinion, the court concluded that defendants did not show that the error was prejudicial because they did not show that a higher price could have been obtained by a sale to a third party.

Deutsche Bank v. Pyle     Docket
13 Cal.App.5th 513 - 4th Dist., Div. 1 (D071079)  7/13/17     Case complete 9/13/17

BONA FIDE PURCHASERS: The court held that a judgment that was obtained without giving notice to Deutsche Bank was void and that a subsequent bona fide purchaser took title subject to the deed of trust that was purportedly cancelled by the void judgment. The court pointed out that the action in which the void judgment was issued was an action to cancel an instrument, and not an action to quiet title. Accordingly, the quiet title statutes do not apply, in particular C.C.P. Section 764.060, which provides: "The relief granted in an action or proceeding directly or collaterally attacking the judgment in the action, whether based on lack of actual notice to a party or otherwise, shall not impair the rights of a purchaser or encumbrancer for value of the property acting in reliance on the judgment without knowledge of any defects or irregularities in the judgment or the proceedings." The court noted that in a quiet title action a court does not simply issue a default judgment. Rather, in default situations in a quiet title action the court must hold an evidentiary hearing where it considers evidence of the plaintiff's title.

926 North Ardmore Ave. v. County of Los Angeles     Docket
3 Cal.5th 319 - Cal. Supreme Court (S222329)  6/29/17

DOCUMENTARY TRANSFER TAX: The court affirmed the appellate court, holding that documentary transfer tax is owed when there is a change in ownership or control of an entity that owns real property. The concept of "realty sold" in the documentary transfer tax statutes (Revenue and Taxation Code Sections 11911 et seq.) has the same meaning as "change in ownership" in the statutes requiring a reassessment of the property for property tax purposes (Revenue and Taxation Code Sections 60 et seq.), and "change in ownership" includes transfer of ownership or control of an entity. The court points out that prior to 2010, County Recorders could not determine when a change in ownership of an entity occurred. Tax forms reflecting the change in ownership were required to be filed with the State Board of Equalization, which would share that information with Tax Assessors. But R&TC Sections 408 and 481 barred that information from being shared with County Recorders. In 2009, the Legislature adopted SB 816, which amended several R&TC Sections by requiring the assessor to provide access to his or her record to the county recorder when conducting an investigation to determine whether a documentary transfer tax should be imposed.

Schep v. Capital One     Modification     Docket     Sup.Ct. Docket
12 Cal.App.5th 1331 - 2nd Dist. (B269724)  6/26/17     Opinion mod. & rhrg denied 7/18/17     Request for review by Cal Supreme Ct. DENIED 10/11/17

TRUSTEE'S SALES: The court held that a trustee's acts in recording a notice of default, a notice of sale, and a trustee's deed upon sale in the course of a nonjudicial foreclosure are privileged under Civil Code section 47. Accordingly, a plaintiff does not state a cause of action for slander of title based on the recording of those documents.

Black Sky Capital v. Cobb     Docket     Sup.Ct. Docket
12 Cal.App.5th 887 - 4th Dist., Div. 2 (E064482)  6/13/17     AFFIRMED by Cal. Supreme Ct. 5/6/19

DEFICIENCY JUDGMENTS: Where a lender who holds both a senior and junior deed of trust nonjudicially forecloses on the senior lien and wipes out its junior lien, the lender may enforce the junior note. Civil Code Section 580d does not apply to preclude a sold-out junior lienholder from enforcing the junior debt, even where the lienholder foreclosed under its own senior deed of trust.

Scher v. Burke     Docket
3 Cal.5th 136 - Cal. Supreme Court (S230104)  6/15/17     Modification

STREET DEDICATION: The court upheld the appellate court opinion. The supreme court held that plaintiffs could not establish an implied dedication of a road on non-coastal property because Civil Code Section 1009(b) bars all use of private real property after March 1972, not just recreational use, from ripening into a public dedication absent an express, written, irrevocable offer of such property to such use, and acceptance by a city or county.

Hardwick v. Wilcox     Docket
11 Cal.App.5th 975 - 1st Dist. (A147944)  5/22/17     Case complete 7/27/17

USURY: The court upheld a judgment in favor of plaintiff, finding, among other things, that usurious interest payments made over the course of several loans offset the principal debt, and that plaintiff could recover $227,235.83 in interest payments he made during the two years prior to the filing of this lawsuit. Specifically, the court held:
1. Plaintiff did not waive his usury claim by signing a forbearance agreement because the agreement did not clearly apply to the usury claim and, even if it did, a waiver of usury would violate public policy.
2. Even though the two year statute of limitations (C.C.P. 339) applies to plaintiff's cause of action to recover usurious interest, payments on a usurious note are deemed to apply first to principal, and the statute of limitations does not begin to run until the debtor has paid the entire principal amount of the debt.

Berman v. HSBC Bank     Docket
11 Cal.App.5th 465 - 3rd Dist. (C081487)  4/11/17 (Cert. for pub. 5/3/17)     Case complete 7/5/17

TRUSTEE'S SALES: The court held that plaintiff stated a cause of action under Civil Code Section 2924.12 to enjoin a trustee's sale. Under that section, one of the grounds for an injunction is to enjoin a violation of Section 2924.6, which provides for a 30-day appeal period after a borrower's application for a loan modification is denied. Here the lender violated Section 2924.6 by sending a denial letter to plaintiff incorrectly informing him that he had only 15 days to appeal.

Hinrichs v. Melton     Docket
11 Cal.App.5th 516 - 2nd Dist. (B267505)  5/3/17     Case complete 7/27/17

EQUITABLE EASEMENTS: The court affirmed the trial court's judgment providing access to plaintiff's landlocked parcel of property, holding that a court may grant an equitable easement without there being a preexisting use by the landowner seeking the easement and that an easement by necessity cannot be extinguished by adverse possession as long as the necessity exists.

Marina Pacifica Homeowners Association v. Southern California Financial Corp.     Docket     Sup.Ct. Docket
11 Cal.App.5th 54 - 2nd Dist. (B270580)  4/24/17     Request for review by Cal Supreme Ct. DENIED 7/12/17

TRANSFER FEE COVENANTS: An "Assignment Fee" set forth in unrecorded condominium leases and certain other recorded documents, requiring payment of a monthly fee to the original developers, fell within the general definition of a "Transfer Fee" within the meaning of Civil Code Section 1098. However, Subsection 1098(i) excepts from that definition any fee recorded against the property on or before December 31, 2007, that is separate from any covenants, conditions, and restrictions, and that substantially complies with subdivision (a) of Section 1098.5. In a previous appeal this court held that provisions in the leases that notify lessees of the existence of the fee satisfied the notice requirements of Subsection 1098(i). Therefore, the court held that the persons entitled to collect the fee did not have to record the notice of transfer fee required by CC Section 1098.5. Subsequent to the decision, and in direct response to the decision, the legislature amended CC Sections 1098 and 1098.5, effective January 1, 2016 to provide that a transfer fee covenant cannot be contained in an unrecorded document that is incorporated by reference. The legislation also provided that such a transfer fee would remain in place, so long as a document reflecting the assignment fee was recorded, "in a single document that complies with subdivision (b) [of Section 1098] and with Section 1098.5," before December 31, 2016. Accordingly, the court affirmed the trial court's judgment determining that the transfer fee was valid. [Ed. note: But the court never specifically says that the defendant actually recorded such a document during 2016!]

Nautilus, Inc. v. Yang     Docket     Sup.Ct. Docket
11 Cal.App.5th 33 - 4th Dist., Div. 3 (G051956)  4/21/17     Request for review by Cal Supreme Ct. DENIED 8/9/17

VOIDABLE CONVEYANCES / EQUITABLE SUBROGATION: Nautilus, Inc. obtained a judgment against Stanley Kuo Hua Yang, and recorded an abstract of judgment against real property on which Stanley and his brother, Peter Chun Hua Yang, held title. Stanley and Peter transferred title to the property to their father, Chao Chen Yang, who obtained a reverse mortgage loan on the property. In its title search, the title insurance company missed Nautilus's abstract of judgment when the reverse mortgage loan funded. The court upheld the judgment awarding an equitable lien in favor of the lender in the amount of liens that were paid off that were senior to the judgment lien, holding:
1. The trial court properly ruled that the transfer of Stanley's 1/2 interest was a fraudulent conveyance, but not as to the lender because the lender acted in good faith. Lack of good faith would require a showing, not present in this case, that the transferee had actual knowledge of facts showing the transferor had fraudulent intent.
2. The title company's error in failing to find the abstract of judgment does not defeat the lender's right to equitable subrogation because the title company's knowledge or negligence is not imputed to the insured lender, and the ability of the lender to recover from the title company does not defeat the lender's claim for equitable subrogation.
3. The trial court's imposition of a lien on the property to support a judgment in favor of plaintiff rendered in the current action was within the court's equitable authority.

Dr. Leevil, LLC v. Westlake Health Care Center     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B266931)  3/7/17     REVERSED by Cal Supreme Ct. 12/17/18

FORECLOSURE / UNLAWFUL DETAINER: 1. Where a lease that had recorded before a deed of trust contained both an automatic subordination clause and permissible subordination clause with a nondisturbance provision, the court held that the ambiguity is to be interpreted against the drafter of the lease, which in this case was the tenant under the lease. Accordingly, the foreclosure of the deed of trust wiped out the lease where the foreclosing lender never invoked the permissible subordination clause.
2. The court also held that a Notice to Quit by the purchaser at the trustee's sale could be served before the trustee's deed was recorded because C.C.P. Section 1161a(b)(3) only requires that title be perfected before a tenant "may be removed" from the property, and a tenant is not "removed" by the service of a Notice to Quit. In this case the trustee's deed was recorded before the unlawful detainer action was filed.

Vieira Enterprises v. McCoy     Docket     Sup.Ct. Docket
8 Cal.App.5th 1057 - 6th Dist. (H039293)  1/23/17 (Mod. and cert. for partial pub. 2/22/17 - order attached)     Request for review by Cal Supreme Ct. DENIED 5/10/17

ADVERSE POSSESSION: The court held that plaintiff was not able to establish termination of an road easement by adverse possession, finding that:
1. Adverse possession of an easement can originate with a mistake.
2. Under the circumstances of this case, the acts of maintaining an apparent boundary fence and a mostly locked gate across a 140-foot section of the easement, planting palm trees along the apparent boundary, maintaining waste bins and parking spaces on part of the easement, and paving the private road, individually or collectively as a matter of law were not hostile to or destructive of defendant's recorded right of way in the private road.
3. Encroachment by mobile homes onto the easement by plaintiff's tenants in its mobile home park was not sufficient to establish adverse possession as to the entire easement area because the encroachments did not interfere with defendant's use of the easement.
4. Plaintiff's alleged adverse possession could not be tacked onto its predecessor's alleged adverse possession where there was not evidence as to whether the predecessor's use was permitted or hostile.
5. Defendant was not required to remove a retaining wall that encroached onto the easement area where the encroachment did not interfere with plaintiff's use of the easement.

Bank of New York Mellon v. Citibank     Docket
8 Cal.App.5th 935 - 2nd Dist. (B262899)  2/16/17     Case complete 4/19/17

EQUITABLE SUBROGATION: Defendant refinanced its own home equity line of credit (HELOC) loan and, almost simultaneously, plaintiff refinanced defendant's second loan. The HELOC account was paid down to zero, but not closed, and additional funds were subsequently loaned under the terms of the HELOC. The court held that plaintiff stated a cause of action for equitable subrogation, and that the 3-year statute of limitations under C.C.P. Section 338 did not apply because the action was not in the nature of relief from a statutory violation, fraud or mistake. The court also held that the doctrine of equitable subordination did not apply because this was not a case of "replacement and modification" of a senior mortgage by the same lender.

Cuenca v. Cohen     Docket     Sup.Ct. Docket
8 Cal.App.5th 200 - 3rd Dist. (C076814)  2/6/17     Request for review by Cal Supreme Ct. DENIED 5/10/17

REDEVELOPMENT AGENCIES: The court held that, while stipulated judgments that required the City to set aside various percentages of the tax increment for low and moderate income housing projects were enforceable obligations, money that had been set aside pursuant to the judgments but not spent at the time redevelopment agencies were dissolved were "unencumbered moneys" if they were not subject to a contract to build housing. Accordingly, such funds that had been set aside and were not  subject to a contract to build housing had to be turned over to the county auditor-controller to be released to taxing entities.

Kalnoki v. First American Trustee Servicing Solutions     Docket     Sup.Ct. Docket
8 Cal.App.5th 23 - 3rd Dist. (C073207)  2/1/17     Request for review by Cal Supreme Ct. DENIED 5/10/17

TRUSTEE'S SALES: In this action to set aside a trustee's sale on numerous grounds, the court ruled in favor of defendant, holding in the published portion of the opinion:
1. The substitution of trustee was valid even though a) the word "Inc." was omitted after the words "Wells Fargo Home Mortgage", b) it was signed by the company into which the original beneficiary merged because the legal effect of that merger was supplied by other documents of which the court properly took judicial notice, c) it was signed by the lender's attorney in fact, d) the power of attorney was not attached and e) the substituted trustee had previously been the agent of the lender, but this did not create a conflict of interest, as alleged by plaintiffs, because a trustee under a deed of trust is a trustee for very limited purposes and does not have any fiduciary duties to the owner during the foreclosure process.
2. The assignment of the deed of trust was valid because a) even though the lender allegedly did not have physical possession of the note, California's nonjudicial foreclosure do not require it and b) an assignment to a securitized trust after the trust's "closing date" is voidable by the lender and assignee, not void, so the trustor does not have standing to challenge the assignment.
3. The trustee's deed upon sale was valid where the lender credit bid at the sale,
4. The Notice of Default was valid in spite of plaintiffs' allegations that it was "robo-signed" because plaintiffs did not dispute the accuracy of any of the salient facts, such as the amount owed or that their loan was in default.
5. Plaintiffs were required to tender the amount owing on the debt because none of the exceptions to the tender rule applied, and plaintiffs did not do so.

OC Interior Services v. Nationstar Mortgage     Docket     Sup.Ct. Docket
7 Cal.App.5th 1318 - 4th Dist., Div. 1 (D070680)  1/31/17     Request for review by Cal Supreme Ct. DENIED 5/10/17

BONA FIDE PURCHASERS: Plaintiff purchased real property knowing about a recorded default judgment in the chain of title that vacated the lien interest of defendant's deed of trust. The default judgment was later adjudicated as void due to lack of service of process. The trial court's judgment, that plaintiff was a bona fide purchaser for value that took title to the property free of defendant's lien, was reversed because the void default judgment was a nullity for all purposes, including as against a purported bona fide purchaser for value.

Gillies v. JPMorgan Chase Bank     Docket
7 Cal.App.5th 907 - 2nd Dist. (B272427)  1/24/17     Case complete 3/28/17

TRUSTEE'S SALES: Plaintiff homeowner filed this action, following several other similar actions, to prevent a trustee's sale based on alleged violations of the Homeowner's Bill of Rights, lack of the lender's standing to foreclose and various other theories. The court ruled in favor of the bank, applying the principal of res judicata. Interestingly, the court stated: "Nonpayment of the mortgage for approximately eight years while the borrower remains in possession is an egregious abuse. [The bank] argued, and the trial court agreed, that appellant is 'gaming the system'. The game is over."

Mendoza v. JPMorgan Chase Bank    Docket     Sup.Ct. Docket     Sup.Ct. Docket (After Remand)
6 Cal.App.5th 802 - 3rd Dist. (C071882)  12/13/16 (On remand)     Request for review by Cal Supreme Ct. DENIED 3/22/17

TRUSTEE'S SALES: In this action to set aside a trustee's deed, a borrower challenged a securitized trust's ownership of a deed of trust by alleging that the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust's "closing date". Under New York law, transfers that violate the terms of the trust instrument are voidable by the parties to the trust agreement, not void, and the borrower is a third party without standing to challenge the validity of an assignment that is merely voidable by the parties to the assignment.

Alereza v. Chicago Title Company     Docket
6 Cal.App.5th 551 - 3rd Dist. (C075547)  11/16/16 (Pub. order 12/9/16)     Case complete 2/8/17

ESCROW: Chicago Title admitted its employee negligently listed the wrong name of the insured (the purchaser of a gas station business) when securing a new certificate of insurance for the business. This was the first of a series of missteps by several persons that eventually led to plaintiff giving a personal guarantee to save the gas station business, and allegedly resulted in damages to plaintiff. The court held in favor of Chicago Title on the basis that it did not owe a duty of care to plaintiff because he was not a party to the escrow, not mentioned in the escrow instructions as a third party beneficiary, and did not sustain his losses as a direct result of the escrow officer's negligence.

Lee v. Rich     Docket     Sup.Ct. Docket
6 Cal.App.5th 270 - 4th Dist., Div. 3 (G051838)  11/30/16     Request for review by Cal Supreme Ct. DENIED 2/15/17

EXECUTION SALE: The court reversed the trial court's order granting plaintiff-debtor's motion for restitution and cancellation of a sheriff's deed of sale. C.C.P Section 701.680(a) unequivocally states that an execution sale is "absolute and shall not be set aside for any reason." Because defendant was a third party purchaser at the sheriff's sale, and was not the judgment creditor, the remedies available for the judgment debtor are recovery of the proceeds of the sale under C.C.P Section 701.680(b), or to seek equitable redemption. Plaintiff is not, however, entitled to equitable redemption in this case because defendant was not guilty of unfairness, and did not manipulate the system or take undue advantage, and the record shows the property was not sold for a grossly inadequate price. The dissent argued that a judgment that is void due to lack of service on a debtor is void ab initio, and all subsequent actions, including a writ of execution and execution sale, have no legal force or effect.

Nellie Gail Ranch Owners Association v. McMullin     Docket     Sup.Ct. Docket
4 Cal.App.5th 982 - 4th Dist., Div. 3 (G051244)  10/3/16 (Mod. & Pub. Order 10/27/16)     Request for review by Cal Supreme Ct. DENIED 1/18/17

ENCROACHMENTS / EQUITABLE EASEMENTS:  The court upheld an injunction requiring the removal of improvements that an owner of a residence in a planned development constructed onto common area of the owners association. The court held that property owners 1) could not establish  adverse possession because they had not paid property taxes on the disputed area, and 2) could not establish an equitable easement because of their knowledge that the improvements extended beyond their property line and that they did not have the owners association's approval to construct the improvements.

Covarrubias v. Cohen     Docket     Sup.Ct. Docket
3 Cal.App.5th 1229 - 3rd Dist. (C078237)  10/7/16     Request for review by Cal Supreme Ct. DENIED 1/11/17

REDEVELOPMENT AGENCIES: In a suit against the Director of the Department of Finance to compel the Department to approve the City's continued payments of set-asides from "tax increment" -- the increase above the tax base level attributed to redevelopment -- to the fund for subsidized housing in the City's redevelopment project area that was previously mandated under redevelopment law, the trial court's judgment in favor of defendants is affirmed where: 1) the strictly statutory obligation to make set-asides accrued on an annual basis and accordingly expired when redevelopment agencies were disbanded; and 2) the set-asides therefore were no longer enforceable obligations of the redevelopment agency.

LSREF 2 Clover Property LLC v. Festival Retail Fund 1     Docket     Sup.Ct. Docket
3 Cal.App.5th 1067 - 2nd Dist. (B259937)  10/4/16     Request for review by Cal Supreme Ct. DENIED 1/18/17

GUARANTIES: After a trustee's sale plaintiff lender filed an action against defendant guarantor to recover under a guaranty. The court reversed the trial court's ruling that defendant was protected by antideficiency laws because defendant owned the debtor so that defendant was effectively the primary obligor on the loan, making the loan guaranty a sham. The court held that in order for the sham guaranty defense to apply, the lender must have structured the loan transaction to circumvent the antideficiency law by casting defendant as the guarantor instead of the borrower. Here, by the time plaintiff was requested to make the loan, defendant had already created the structure under which a special purpose entity owned by defendant would hold title, and the lender merely complied with an already-determined structure.

Lucioni v. Bank of America     Docket     Sup.Ct. Docket
3 Cal.App.5th 150 - 2nd Dist. (B265722)  9/7/16     Request for review by Cal Supreme Ct. DENIED 11/30/16

TRUSTEE'S SALES: The court upheld the trials court's order sustaining defendant lenders' demurrers in borrower's action seeking an injunction to prevent a foreclosure based on alleged violations of the Homeowner's Bill of Rights (HBOR). The court held that the availability of injunctive relief under the HBOR is governed exclusively by two of its provisions - Civil Code Sections 2924.12(a)(1) and 2924.19(a)(1) - in which the Legislature authorized the courts to interpose such relief into the nonjudicial foreclosure scheme. Neither provision authorizes a court to enjoin a violation of section 2924(a)(6), which provides that no one other than the holder of the beneficial interest under a mortgage or deed of trust, the original or substituted trustee, or the agent of the holder of the beneficial interest can initiate the foreclosure process. Thus, no injunctive relief is available for a violation of that section.

The court also affirmed the trial court's order sustaining a demurrer to a separate cause of action for breach of an alleged oral contract to modify the loan because the 2-year statute of limitations for breach of an oral contract had run. The court held that an oral contract is not treated as a written contract for statute of limitations purposes simply because a party offers some written evidence of performance.

Walters v. Boosinger     Docket
2 Cal.App.5th 421 - 4th Dist., Div. 1 (D069255)  8/12/16     Case complete 10/13/16

JOINT TENANCY: Plaintiff alleged that a deed was void because the grantor was incapacitated (too drunk to know what he was doing) at the time he signed it. The trial court ruled that an action to set aside an allegedly void agreement is not subject to a statute of limitations and may be brought at any time. The appellate court reversed, holding that the statute of limitations applies to void, as well as voidable deeds and that this action was barred by C.C.P. Section 338(d), which provides a three-year statute of limitation for an action for relief on the ground of fraud or mistake. The court also held that an action by one joint tenant against the other challenging the validity of the deed does not sever the joint tenancy. (Ed.: It seems to me that this court is actually saying that there is no such thing as a void deed. If the right to set aside a "void" deed can be lost, it must have been merely voidable all along. Note also that even if a deed is void, the grantee may be able to establish title under theories of adverse possession or ratification.)

Findleton v. Coyote Valley Band of Pomo Indians     Docket
1 Cal.App.5th 1194 - 1st Dist. (A142560)  7/29/16     Case complete 10/3/16

INDIANS: The court of appeal reversed the trial court's dismissal of this action to enforce arbitration provisions in contract between plaintiff and the Tribe, finding that the Tribe's General Council authorized the Tribal Council to waive the Tribe's sovereign immunity. Interpreting the Tribe's Constitution, the court held that the General Council's authorization was properly given by means of a resolution adopted by majority vote at a meeting of the General Council, and did not need to be accomplished through the initiative or referendum process.

Yhudai v. Impac Funding Corporation     Docket     Sup.Ct. Docket
1 Cal.App.5th 1252 - 2nd Dist. (B262509)  7/29/16     Request for review by Cal Supreme Ct. DENIED 10/26/16

TRUSTEE'S SALES: A borrower challenged a securitized trust's ownership of a deed of trust by alleging that the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust's "closing date". Under New York law, transfers that violate the terms of the trust instrument are voidable by the parties to the trust agreement, and the borrower is a third party without standing to challenge the validity of an assignment. (A previous New York decision held that an assignment after the closing date is void, but was reversed on appeal.) The court pointed out in Footnote 6 that if the note was timely assigned to the Trust, as plaintiff alleged, so was the deed of trust. Although the conveyance of the note may have been separated in time from the execution, recording, and physical transfer of the instrument reflecting the assignment of the deed of trust, that gap does not alter the legal fact that the deed of trust and the right to foreclose was, as a matter of law, transferred along with the note. (Ed. note: "The mortgage follows the note".)

Friends of the Hastain Trail v. Coldwater Development     Docket     Sup.Ct. Docket
1 Cal.App.5th 1013 - 2nd Dist. (B249841)  7/27/16     Request for review by Cal Supreme Ct. DENIED 10/12/16

IMPLIED DEDICATION: In this action to establish a public right of way over a fire road, the court ruled in favor of defendant landowner, holding that 1) the doctrine of implied dedication set forth in Gion v. City of Santa Cruz (1970) 2 Cal.3d 29 applies to inland wilderness property or recreational hiking trails, as well as to beachfront or shoreline property and roads, but that 2) a wilderness fire road is a conditional, temporary public easement, existing only for so long as and to the extent needed to help protect against fire so, accordingly, the landowner could not reasonably contemplate that hikers' use of the road would become permanent.

Torjesen v. Mansdorf     Docket     Sup.Ct. Docket
1 Cal.App.5th 111 - 2nd Dist. (B263377)  7/5/16     Request for review by Cal Supreme Ct. DENIED (untimely filing) 9/6/16

JUDGMENTS: A judgment creditor obtained a judgment against a judgment debtor (individually and as trustee of the debtor's trust), but did not levy on the debtor's property until after the debtor died. A third party claimant to the property filed a third party claim, and the judgment creditor filed a petition under the Enforcement of Judgments Law ("EJL") to invalidate the third party claim. The trial court granted the judgment creditor's petition. The third party claimant did not appeal from that ruling. Two years later, the third party claimant filed a motion to vacate the order granting the petition, on the ground that it is void because the trial court did not have jurisdiction to proceed under the EJL. (C.C.P. Section 686.020 provides that after the death of the judgment debtor, enforcement of a judgment against property in the judgment debtor's estate is governed by the Probate Code, and not by the EJL.) The trial court denied the motion, and the third party claimant appealed. The appellate court held that the underlying order invalidating the third party claim was voidable, not void, and became final once the time to appeal that order ran. Therefore, the trial court properly denied the third party claimant's belated motion to vacate that order.

City of Santa Maria v. Adam     Docket     Sup.Ct. Docket
248 Cal.App.4th 504 - 6th Dist (H041133)  6/24/16     Request for review by Cal Supreme Ct. DENIED 9/14/16

WATER RIGHTS: In the previous appeal in this action, the court remanded the matter with instructions, directing the trial court to quiet title to appellant landowners' overlying rights to native groundwater by declaring that these rights have priority over all appropriators, less the amount that the respondents are entitled to pursuant to their prescriptive rights. In this appeal, the court held that quantification of the specific prescriptive loss attributable to each overlying user is not necessary to quiet title. When the groundwater basin has a surplus of water, the quiet title judgment is not meant to specify the exact amount of water each user is entitled to, which would include the amount of the prescriptive rights that can be enforced against each overlying user. Rather, the quiet title judgment is meant to clarify and confirm the priority of appellants' overlying rights, specifying that these rights are superior to all appropriators' rights less the prescriptive rights established by respondents. There is no need for a quiet title judgment clarifying the priority of water users to specifically quantify the users' rights until there is a period of overdraft.

Sciarratta v. U.S. Bank     Docket
247 Cal.App.4th 552 - 4th Dist., Div. 1 (D069439)  5/18/16     Case complete 7/26/16

TRUSTEE'S SALES: Plaintiff brought this wrongful foreclosure and quiet title action alleging that JPMorgan Chase Bank recorded an assignment of the deed of trust to Deutsche Bank, and subsequently JPMorgan Chase assigned the deed of trust to Bank of America. Therefore, plaintiff alleged, Bank of America's foreclosure was void because it was not the holder of the note and deed of trust. The court reversed the trial court's sustaining of defendant's demurrer, holding that a homeowner who has been foreclosed on by one with no right to do so -- by those facts alone -- sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure. Losing a home to an entity with no legal right to take it is all that is required to be alleged to satisfy the element of prejudice or harm in a wrongful foreclosure cause of action. The court also held that because plaintiff properly alleged the foreclosure was void and not merely voidable, tender was not required to state a cause of action for quiet title or for cancellation of instruments.

Brown v. Deutsche Bank National Trust Co.     Docket
247 Cal.App.4th 275 - 1st Dist. (A144339)  5/9/16     Case complete 7/12/16

TRUSTEE'S SALES: Plaintiff sought to enjoin a trustee's sale by alleging that it was initiated on behalf of an entity to which the deed of trust was never validly assigned. The court noted that some courts have held that borrowers cannot bring a preemptive action to challenge an entity's authority to foreclose, reasoning that these actions would fundamentally undermine the nonjudicial nature of the process and introduce the possibility of lawsuits filed solely for the purpose of delaying valid foreclosures. But the court did not address this issue because the court took judicial notice of the asset purchase agreement by which defendant acquired the deed of trust. The court held in favor of defendant because the agreement constituted a valid assignment of the deed of trust, giving defendant the right to foreclose.

Friends of Martin's Beach v. Martin's Beach I LLC     Docket     Sup.Ct. Docket
246 Cal.App.4th 1312 - 1st Dist. (A142035)  4/27/16     OPINION DECERTIFIED and request for review by Cal Supreme Ct. DENIED 7/20/16

DEDICATION: At issue in this case is a dispute between the public and property owners over the use of a road, parking area and the inland dry sand of a popular beach. There is no disagreement about defendants' ownership of these areas or the property of which they are a part. The court held 1) Article X, section 4 of the California Constitution, providing a public right of way to tidal lands and navigable water, does not allow plaintiffs access because it is superseded by the federal Act of 1851 and the Treaty of Guadalupe Hidalgo, which that Act implemented, and 2) the trial court's grant of summary adjudication in favor of defendants on the claims alleging dedication are reversed because the record is insufficient to establish there was no intent to dedicate access as a matter of law.

Daniels v. Select Portfolio Servicing     Docket     Sup.Ct. Docket
246 Cal.App.4th 1150 - 6th Dist. (H040487)  4/26/16     Request for depublication by Cal Supreme Ct. DENIED 7/27/16

TRUSTEE'S SALES: The court reversed the trial court's sustaining of a demurrer in this action to enjoin a trustee's sale and collect money damages. The court held that when a lender acquires by assignment a loan being administered by a loan servicer, the lender may be liable to the borrower for misrepresentations made by the loan servicer as the lender's agent, and a loan servicer may owe a duty of care to a borrower if certain criteria are met, even though its involvement in the loan does not exceed its conventional role.

Crossroads Investors v. Federal National Mortgage Association     Docket     Sup.Ct. Docket
Cal.App. 3rd Dist. (C072585)  4/14/16     Request for review by Cal Supreme Ct. DENIED, transferred back to 3rd District Court for reconsideration in light of the decision in Baral v. Scnitt (2016) 1 Cal. 5th 376, and appellate opinion ordered UNPUBLISHED

WRONGFUL FORECLOSURE: The court affirmed the trial court's denial of Fannie Mae's anti-SLAPP motion (C.C.P. 425.16) in this wrongful foreclosure action, because 1) the principal thrust of plaintiff's action was to recover for violations of state nonjudicial foreclosure law, not for any exercise of speech or petition rights by Fannie Mae and 2) even if protected activity was not merely incidental to the unprotected activity, plaintiff established a prima facie case showing Fannie Mae violated Civil Code Section 2924c by not providing it with an accounting of the amount needed to reinstate or pay off the loan. Fannie Mae contended that Section 2924c required plaintiff to make its request for an accounting in writing, and all of its requests were made orally except for an interrogatory served in plaintiff's bankruptcy action. But Section 2924c requires requests to be in writing only when the debtor wants a written accounting. Otherwise, the statute encourages the debtor to contact the beneficiary, even by telephone, to obtain the information.

Carne v. Worthington     Docket
246 Cal.App.4th 548 - 4th Dist., Div. 1 (D067756)  4/13/16     Case complete 6/14/16

TRUSTS: Mr. Liebler conveyed title to the subject property to himself as trustee of his 1985 revocable trust. He subsequently executed a 2009 irrevocable trust, which by its terms conveyed title to the trust, but a separate deed was not executed. The court held that 1) the language in the 2009 trust was sufficient to convey the subject property to the 2009 trust and that Liebler was not required to execute a separate deed in order to effectuate such conveyance and 2) because at the time the 2009 trust was created, the 1985 trust was a revocable inter vivos trust, and Liebler was the sole trustee who owned no interest in the subject property as an individual, Liebler's signature on the 2009 trust was sufficient to convey good title to the subject property from the 1985 trust to the 2009 trust. The court pointed out that nothing in this opinion will "sanction creditor fraud", as asserted by defendant, since the court did not conclude that the transfer in this case was effective as to Liebler's creditors or to third parties.

Hawkins v. SunTrust Bank     Modification     Docket     Sup.Ct. Docket
246 Cal.App.4th 1387 - 2nd Dist. (B264541)  4/6/16     Request for review by Cal Supreme Ct. DENIED 7/20/16

FOREIGN JUDGMENTS: The court held that the trial court properly granted a judgment on the pleadings against plaintiff in this wrongful foreclosure action involving property in South Carolina. Giving full faith and credit to a South Carolina foreclosure judgment against plaintiff, which included a judgment for a deficiency, the court held that the doctrine of res judicata barred plaintiff's action.

Diocese of San Joaquin v. Gunner      Modification     Docket     Sup.Ct. Docket
246 Cal.App.4th 1357 - 5th Dist. (F070264)  4/5/16     Request for review by Cal Supreme Ct. DENIED 7/13/16

CHURCH PROPERTY: The court held that the bishop of an Episcopalian Diocese, who held title as a Corporation Sole, in trust for the diocese, did not have the authority to execute deeds to the diocese's real property to The Anglican Bishop of San Joaquin, a Corporation Sole, and then to the Anglican Diocese Holding Corporation (Holding Corporation), because the bishop had been previously stripped of his powers by the Episcopalian Church. The court stated that the trial court must apply neutral principles of law to resolve property disputes, and that in resolving these disputes, the trial court must rely on applicable documents and civil law, not religious doctrine. Accordingly, the court could not rule on the Church's decision to strip the bishop of his powers.

Saterbak v. JPMorgan Chase Bank     Docket     Sup.Ct. Docket
245 Cal.App.4th 808 - 4th Dist., Div. 1 (D066636)  3/16/16     Request for review and depublication by Cal Supreme Ct. DENIED 7/13/16

TRUSTEE'S SALES: In this pre-foreclosure action challenging the validity of a lender's untimely assignment of a deed of trust to a securitized trust, the court sustained the lender's demurrer without leave to amend, holding:
1. Plaintiff lacked standing to challenge the assignment of the deed of trust because this is a pre-foreclosure action, rather than a post-foreclosure action. The court acknowledged that the California Supreme Court recently held in Yvanova v. New Century Mortgage Corporation that a borrower has standing to sue for wrongful foreclosure where an alleged defect in the assignment renders the assignment void. However, Yvanova's ruling was expressly limited to the post-foreclosure context and this is a pre-foreclosure action. The court also pointed out that the Supreme Court has granted review in Keshtgar v. U.S. Bank, a case involving a preforeclosure challenge based on alleged deficiencies in the assignment of the deed of trust.
2. The invalid assignment is merely voidable against the parties to the assignment, so plaintiff lacked standing to challenge it. The court pointed out that Yvanova recognizes borrower standing only where the defect in the assignment renders the assignment void, rather than voidable, and the Supreme Court expressly offered no opinion as to whether, under New York law, an untimely assignment to a securitized trust made after the trust's closing date is void or merely voidable.
3. Plaintiff did not state a cause of action under Civil Code Section 3412, which provides for cancellation of an instrument that may cause serious injury to a person against whom it is void or voidable. As previously discussed, the assignment was not voidable as to plaintiff. Also, plaintiff could not show "serious injury" where the injury was caused only by her failure to pay the debt.
4. Certain other positions taken by plaintiff were also rejected.

Salazar v. Matejcek     Docket     Sup.Ct. Docket
245 Cal.App.4th 634 - 1st Dist. (A144106)  3/10/16     Publication Request DENIED by California Supreme Court 6/8/16

ENCROACHMENTS/TRESPASS: Defendant built a road on plaintiffs' property, with a gated fence and water tanks. Areas had been cleared and culverts constructed, with pipes extending up the hill, and a marijuana garden on plaintiff's property. The court affirmed an award of damages and an order that defendant remove fencing, irrigation lines, culverts, restore the road to its original condition, and implement erosion control measures.

Bae v. T.D. Service Company     Docket
245 Cal.App.4th 89 - 2nd Dist. (B262921)  2/25/16     Case complete 4/27/16

TRUSTEE'S SALES: Defendant filed an unchallenged declaration of nonmonetary status under Civil Code section 2941l, asserting that it had been named as a defendant solely in its capacity as trustee under the pertinent deed of trust, and not due to any wrongful conduct in its performance as trustee. After respondent filed no answer in the action, the clerk entered respondent’s default, and the trial court issued a default judgment against respondent awarding appellant $3,000,000 in damages. The appellate court upheld the trial court's setting aside of the default judgment because defendant was fully entitled to believe that no default could be entered against it, and respondent's counsel lacked knowledge of the default proceedings.

Picerne Construction Corp. v. Castellino Villas     Docket     Sup.Ct. Docket
244 Cal.App.4th 1201 - 3rd Dist. (C071197)  2/18/16     Request for review by Cal Supreme Ct. DENIED 5/11/16

MECHANICS LIENS: In the published portions of the opinion, the court held:
1. Even though the City had issued certificates of occupancy for the 11 apartment buildings within the project on July 25, 2006, roof and stairway work required under the general contract continued between July 25, 2006 and September 19, 2006. Accordingly, while corrective or repair work would not delay "completion" of the project, the project was not complete until work required by the construction contract was finished, so the mechanics lien filed on November 28, 2006 was properly filed within 90 days of completion.
2. Former Civil Code Section 3131 (now see Section 8448) provided that separate residential units in a project are each deemed to be a separate work of improvement. This does not apply to the 11 separate apartment buildings in this case, which are considered to be a single work of improvement. Accordingly, the project was not complete, and the 90-day period to file mechanics liens did not begin to run, until the completion of the last building.

Yvanova v. New Century Mortgage Corporation     Docket
62 Cal.4th 919 - Cal. Supreme Court (S218973)  2/18/16

TRUSTEE'S SALES: Plaintiff alleged that the deed of trust on her residence was improperly securitized and assigned from the original lender to several successive mortgagees and trustees, and ultimately improperly sold at foreclosure. The Supreme Court held that, because in a nonjudicial foreclosure only the original beneficiary of a deed of trust or its assignee or agent may direct the trustee to sell the property, an allegation that the assignment was void will support an action for wrongful foreclosure; whereas an allegation that the assignment was merely voidable at the behest of the parties to the assignment would not support such an action.

The court pointed out that its holding is a narrow one, and that it is holding only that a borrower who has suffered a nonjudicial foreclosure does not lack standing to sue for wrongful foreclosure based on an allegedly void assignment merely because he or she was in default on the loan and was not a party to the challenged assignment. The court did not hold or suggest that a borrower may preemptively enjoin a nonjudicial foreclosure by a suit questioning the foreclosing party's right to proceed. (This is a suit for damages for wrongful foreclosure, and does not seek to stop a foreclosure.) Nor did the court hold or suggest that plaintiff alleged facts showing the assignment was void or that, to the extent she did, she will be able to prove those facts.

Orcilla v. Big Sur, Inc.     Modification     Docket
244 Cal.App.4th 982 - 6th Dist. (H040021)  2/11/16  (Mod. filed 3/11/16)     Case complete 4/12/16

TRUSTEE'S SALES: The court reversed in part and affirmed in part the sustaining of a demurrer in this action to set aside a trustee's sale, holding:
1. Plaintiffs stated a cause of action to set aside the trustee's sale based on the unconscionability of the loan. Additionally, the requirement of a tender of the loan amount was excused primarily because of allegations that the trustee's sale was wrongful due to fraud. Finally, even assuming defendant was a bona fide purchaser, its status as such does not bar the first cause of action because Civil Code Section 2924's conclusive presumption language for bona fide purchasers applies only to challenges to statutory compliance with respect to default and sales notices. It does not apply to bar the first cause of action based on the unconscionability of the loan agreement.
2. Plaintiffs stated a cause of action for violation of the Unfair Competition Law because of the allegations of fraud,
3. Plaintiffs could not state a cause of action for quiet title because the purchaser at the trustee's sale had evicted plaintiffs, and title is at issue in an unlawful detainer action that is brought pursuant to Code of Civil Procedure Section 1161a(b)(3). Accordingly, the quiet title action founded upon allegations of irregularity in the trustee's sale is barred by the prior unlawful detainer judgment.
4. Plaintiffs could not state a cause of action for violations of several Civil Code sections because plaintiffs did not show that they were prejudiced by the alleged violations.
5. Plaintiffs could not state a cause of action under several other theories.

HUB Construction Services v. Esperanza Charities     Docket     Sup.Ct. Docket
244 Cal.App.4th 855 - 2nd Dist. (B263398)  2/8/16     Request for review by Cal Supreme Ct. DENIED 5/18/16

MECHANICS LIENS: The court held that while strict compliance with the preliminary notice provisions of the mechanics lien law is required, the applicable precedents do not require or justify applying that rule to the statutory provisions governing proof that the required notice was properly given. Here it was stipulated that notice was given in the statutorily prescribed manner, and to require further proof would elevate form over substance. This case involved former Civil Code Section 3097.1(a), which required a mechanics lien claimant to prove that a preliminary notice was served by "affidavit . . . accompanied either by the return receipt of certified or registered mail, or by a photocopy of the record of delivery and receipt maintained by the post office, showing the date of delivery and to whom delivered". The court pointed out that the case would not be before it under current law because Section 3097.1(a) has been replaced by Section 8118(b)(1), which expands the methods of proving notice including, "[d]ocumentation provided by the United States Postal Service showing that payment was made to mail the notice using registered or certified mail, or express mail."

Rey Sanchez Investments v. Superior Court     Docket
244 Cal.App.4th 259 - 4th Dist, Div. 2 (E063757)  1/6/16 (Pub. Order 1/26/16)     Case complete 3/30/16

LIS PENDENS: The court held that the lis pendens recorded by real party in interest was "void and invalid" as to petitioner, who had intervened in the action. First, no proof of service was recorded with the lis pendens. Second, noncompliance with Code of Civil Procedure Section 405.22 occurred because, once petitioner became a party to the action, service "in the same manner" as section 405.22 prescribes when a lis pendens is first recorded was not "made immediately" on petitioner.

Coker v. JPMorgan Chase Bank     Docket
62 Cal.4th 667 - California Supreme Court (S213137)  1/21/16

ANTI-DEFICIENCY: A lender under a purchase money loan on a residence sought to recover the balance due on the loan after the lender and borrower agreed to a short sale, with the borrower agreeing to be personal liable for the unpaid balance. The court held that C.C.P. Section 580b precludes a deficiency judgment even where the lender does not foreclose, and public policy prohibits a waiver of a borrower's rights under Section 580b.

Majd v. Bank of America     Docket
243 Cal.App.4th 1293 - 4th Dist., Div. 3 (G050250)  12/21/15 (Pub. and Mod. order 1/14/16 (See end of opinion))     Case complete 3/17/16

TRUSTEE'S SALES: The court reversed the trial court's sustaining of a demurrer, holding that:
1. An impropriety in the transfer of a promissory note affects only the parties to the transaction, not the borrower, so a borrower lacks standing to challenge an allegedly deficient assignment and securitization.
2. Under the federal Home Affordable Modification Program, a lender must approve a modification if a borrower qualifies for the program, and a trustee's sale cannot occur until at least 30 days after the modification review is completed. Here, the trustee's sale was improper because the lender improperly failed to approve the modification and proceeded with a trustee's sale within 30 days after completing the modification review.
3. Plaintiff stated a cause of action under California's Unfair Competition Law where the loan servicer "dual-tracked" the modification and foreclosure processes because dual-tracking is unfair, even though this occurred before Civil Code Section 2923.6 was enacted prohibiting the practice.
4. A borrower is not required to tender the amount owed on the debt where a lender allegedly fails to comply with requirements for considering a modification of the loan.

County of San Bernardino v. Cohen     Docket     Sup.Ct. Docket
242 Cal.App.4th 803 - 3rd Dist. (C074413)  11/30/15     Request for depublication by Cal Supreme Ct. DENIED 3/9/16

REDEVELOPMENT AGENCIES: When the Legislature dissolved redevelopment agencies, it provided that any agreement between the redevelopment agency and the municipal government that created the redevelopment agency is not an enforceable obligation. (Health & Safety Code, former Section 34171(d)(2) (Stats. 2011-2012, 1st Ex. Sess., ch. 5, Sec. 7; Stats. 2012, ch. 26, Sec. 6) (hereafter, Section 34171(d)(2)).) In 2005 plaintiff County of San Bernardino loaned the San Bernardino County Redevelopment Agency $10 million. When the redevelopment agency was dissolved, $9 million of those funds remained in the former redevelopment agency's coffers. The court upheld the Department of Finance's determination that the loan agreement is unenforceable.

Guess v. Bernhardson     Docket     Sup.Ct. Docket
242 Cal.App.4th 820 - 4th Dist., Div. 1 (D065557)  8/21/15     Request for review by Cal Supreme Ct. DENIED & CA opinion ordered published 11/10/15

JUDGMENT LIENS: The court held that under C.C.P. Section 697.390, the amount of a support judgment lien is fixed at the amount of unpaid support installments due at the time a deed of trust records. In this case that amount was zero. The purchaser at a subsequent trustee's sale under the deed of trust takes free of any support payments that subsequently became due. The court also held that the obligation of the husband under the judgment to maintain life insurance for plaintiff's benefit was neither a money judgment nor a spousal support judgment on which a judgment lien could be created.

Carloss v. County of Alameda     Docket
242 Cal.App.4th 116 - 1st Dist. (A143531)  11/12/15     Case complete 1/13/15

TAX SALES: The trial court held that there is no right to excess proceeds from a tax-default sale in the absence of a recorded grant deed. The appellate court reversed, holding that a recorded grant deed is not the exclusive means of proving a person's title of record. While such a deed is the normal means of establishing title, and proving title may be difficult in the absence of such a deed, in unusual circumstances such as plaintiff has alleged here (plaintiff inherited the property but did not establish title of record), title of record may be established by recorded instruments of various types, the assessor's records, and testimony that, as a whole, proves that the claimant or the claimant's predecessor in interest held title of record.

In re Marriage of Bonvino     Docket
241 Cal.App.4th 1411 - 2nd Dist. (B258376)  11/10/15     Case complete 1/14/15

COMMUNITY PROPERTY: In the published portion of the opinion, the court held that if property is acquired during marriage with both separate and community funds, the transmutation requirements of section 852 must be satisfied before the reimbursement provisions of section 2640 apply. The documents in this case did not contain an express transmutation of husband's separate property, and therefore, husband's separate property contributions remained husband's separate property. He held a separate property interest in the property proportionate to the separate property funds that he contributed.

Save Mount Diablo v. Contra Costa County     Docket     Sup.Ct. Docket
240 Cal.App.4th 1368 - 1st Dist. (A142357)  10/7/15     Request for review by Cal Supreme Ct. DENIED 1/20/16

SUBDIVISION MAP ACT: The court held that a "division" of property within the meaning of the Subdivision Map Act does not occur simply because an eminent domain proceeding results in a physical separation of a property's non-condemned portions. The owner of such a property is therefore not entitled to a certificate of compliance for each of the resulting separate parts.

Scher v. Burke     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B235892)  9/11/15     AFFIRMED by Cal Supreme Ct. 6/15/17

STREET DEDICATION: In the published portion of the opinion, the court held that plaintiffs could not establish an implied dedication of a road because Civil Code Section 1009(b) bars all use of private non-coastal real property after March 1972, not just recreational use, from ripening into a public dedication absent an express, written, irrevocable offer of such property to such use, and acceptance by a city or county. In the unpublished portions of the opinion, the court held that 1) there was insufficient evidence of the government's intent to establish an implied easement in the patent to defendants' properties, and pointed out that in determining whether the doctrine of implied easements applies to a federal land grant, extreme caution must be exercised in determining whether the circumstances surrounding a government land grant are sufficient to overcome the omission of an express reference to a reserved right of access and 2) there was insufficient evidence to establish an express, prescriptive or equitable easement.

Tribeca Companies v. First American Title Insurance Company     Docket
239 Cal.App.4th 1088 - 1st Dist. (A142430)  8/26/15     Case complete 10/27/15

ESCROW: The court held that an escrow holder is not liable to a party to an escrow where the escrow holder returned funds to a 3rd party who deposited the funds into the escrow. The funds are the property of the 3rd party depositor until the escrow closes.

Coppinger v. Rawlins     Docket
239 Cal.App.4th 608 - 4th Dist., Div. 2 (E060664)  8/14/15     Request for review by Cal Supreme Ct. DENIED 10/28/15

DEDICATION: A County's acceptance of a dedication of a road on a Parcel Map is valid even where it is qualified by a statement that the road shall not become part of the county-maintained road system until accepted by resolution of the Board of Supervisors. The fact that a County refuses to accept a road as a county road, imposing responsibilities for maintenance on the County, is not inconsistent with its status as a "public road."

First American Title Insurance Company v. Spanish Inn     Docket
239 Cal.App.4th 598 - 4th Dist., Div. 1 (D067137)  7/16/15 (Pub. order 8/14/15)     Case complete 11/16/15

INDEMNITY: The court upheld the trial court's grant of summary adjudication in favor of First American, which sought recovery under a mechanics lien indemnity executed by defendants. Defendants asserted that the mechanics lien actions defended by First American were not covered by the title policy because Exclusion 3(a) excludes "liens . . . created, suffered, assumed or agreed to by the insured claimant", and the insured construction lender created the liens by failing to disburse the full loan amount. The court pointed out that it only needed to interpret the indemnity agreement and did not interpret Exclusion 3(a). The court held that the following provision in the agreement was determinative because it gave First American the right to conclusively determine coverage: "Any determination of coverage by First American shall be conclusive evidence that the matter is within the Title Policy coverage as to the Mechanic Liens for purposes of this Agreement." The court also held that defendants' challenge to the reasonableness of the amounts of attorney's fees and damages sought by First American failed because defendants failed to produce any actual evidence that such amounts were unreasonable.

In re Marriage of Davis     Docket
61 Cal.4th 846 - Cal. Supreme Court (S215050)  7/20/15

COMMUNITY PROPERTY: Family Code Section 760 provides that all property acquired by the spouses during the marriage is community property except as otherwise provided by statute. One such statute is Family Code Section 771(a), which provides that the earnings and accumulations of a spouse while "living separate and apart" from the other spouse, are the separate property of the spouse. The court held that living in separate residences is an indispensable threshold requirement for a finding that spouses are living separate and apart for purposes of Section 771(a). However, the court expressly reserved the question of whether there could be circumstances that would support a finding that the spouses were "living separate and apart", i.e. they had established separate residences with the requisite objectively evidenced intent, even though they continued to literally share one roof.

Carr v. Rosien     Docket
238 Cal.App. 4th 845 - 4th Dist., Div. 2 (E060166)  7/14/15     Case complete 9/14/15

LIS PENDENS: The court held that a lis pendens has to be mailed to defendant's address as shown on the assessor's roll, regardless of whether that address is actually valid. Because this was not done, the lis pendens was void, not only as against defendant, but also as against defendant's successors.

Wells Fargo Bank v. 6354 Figarden General Partnership     Docket
238 Cal.App.4th 370 - 5th Dist. (F067568)  7/1/15     Case complete 8/31/15

FORECLOSURE: 1. When the property subject to redemption contains multiple parcels, some vacant and unimproved, and some improved and occupied by rent paying tenants, the measure of the offset in determining the redemption price under C.C.P. Section 729.060 for "the value of the use and occupation of the property to the purchaser" is calculated by adding (1) the amount of rents paid for the improved portion of the property with tenants and (2) the value to the purchaser of the use and occupation of the unimproved and unleased portion of the property, if any such value was realized. In this case, the purchaser's use and occupation of the unleased portion had no value, so the redemption price is reduced only by the rents paid.
2. Section 729.060(c) refers to net rents, so the trial court properly subtracted the management fees and operating expenses related to the business of the renting units of the property from the redemption price.

Valbuena v. Ocwen Loan Servicing     Docket     Sup.Ct. Docket
237 Cal.App.4th 1267 - 2nd Dist. (B256378)  5/21/15 (Mod. & Pub. order 6/19/15)     Request for depublication DENIED 9/30/15

FORECLOSURE: It is not necessary for a borrower to tender the loan balance in an action to set aside a trustee's sale based on alleged violations of the Homeowner's Bill of Rights (CC 2923.6 etc.)

In re Marriage of Lafkas     Docket     Sup.Ct. Docket
237 Cal.App.4th 921 - 2nd Dist. (B243635)  6/16/15     Request for review by Cal Supreme Ct. DENIED 9/9/15

COMMUNITY PROPERTY: When a spouse places separate property in joint title form, the transmutation requirements of Family Code Section 852 must be satisfied before the joint title presumption of Section 2581 applies. The modification of a partnership agreement in this case added the husband's wife as a joint tenant as to husband's partnership interest, but did not contain an express transmutation of husband's separate property interest in the partnership, so therefore, it remained husband's separate property.

Monterossa v. Superior Court     Docket     Sup.Ct. Docket
Cal.App. 3rd Dist. (C077683)  6/12/15     Request for depublication DENIED 10/14/15

FORECLOSURE: A borrower who obtains a preliminary injunction enjoining, pursuant to Civil Code Section 2924.12, a trustee's sale of his or her home is a "prevailing borrower" within the meaning of the statute and is entitled to attorney's fees, even if a permanent injunction is never obtained.

Mira Overseas Consulting v. Muse Family Enterprises     Modification     Docket     Sup.Ct. Docket
237 Cal.App.4th 378 - 2nd Dist. (B254298)  6/2/15     Request for review by Cal Supreme Ct. DENIED 9/16/15

LIS PENDENS: A fraudulent conveyance action, if successful, may result in the voiding of a transfer of title of specific real property. By definition, the voiding of a transfer of real property will affect title to or possession of real property. Therefore, a fraudulent conveyance action is a real property claim for the purposes of the lis pendens statutes, and the priority of a subsequent judgment dates back to the recordation of the lis pendens.

Shoen v. Zacarias     Modification     Docket     Sup.Ct. Docket
237 Cal.App.4th 16 - 2nd Dist. (B254487)  5/22/15     Request for review by Cal Supreme Ct. DENIED 8/12/15

EQUITABLE EASEMENTS: A court may grant an equitable easement in favor of a trespasser, and instead force the landowner to accept damages as compensation for the judicial creation of an easement over the trespassed-upon property, provided that the trespasser shows that (1) the trespass was innocent rather than willful or negligent, (2) the public or the property owner will not be irreparably injured by the easement, and (3) the hardship to the trespasser from having to cease the trespass is greatly disproportionate to the hardship caused to the owner by the continuance of the encroachment. Here the court refused to grant an equitable easement because the nominal cost of removing patio furniture did not amount to greatly disproportionate hardship.

Peterson v. Wells Fargo Bank     Docket
236 Cal.App.4th 844 - 2nd Dist. (B250925)  5/8/15     Case complete 7/9/15

LIFE ESTATES: The court held that 1) a life estate can be created without using the term "life estate" where decedent was given the right to live in the property rent-free during her life, with the property passing to other people upon her death, and that 2) even though decedent also had the right to sell the property and split the proceeds with the remaindermen, that right did not convert the life estate into a fee simple estate. Accordingly, a deed of trust executed by the life tenant terminated upon her death.

Salazar v. Thomas     Modification     Docket     Sup.Ct. Docket
236 Cal.App.4th 467 - 5th Dist. (F067831)  5/1/15     Request for review by Cal Supreme Ct. DENIED 8/12/15

QUIET TITLE: In the published part of the opinion, the court held that notices of default under a void deed of trust provided notice of a cloud on the plaintiffs' title, but did not dispute or disturb the plaintiffs' possession of the property. Consequently, the 3-year statute of limitations under C.C.P. Section 338(d) does not bar their quiet title action. Also, plaintiffs remained in possession through occupation by their tenants, as well as their own occupation.

Miles v. Deutsche Bank     Docket
236 Cal.App.4th 394 - 4th Dist., Div. 3 (G050294)  4/29/15     Case complete 6/29/15

WRONGFUL FORECLOSURE: The trial court granted summary judgment for the lender in a wrongful foreclosure action on the sole basis that plaintiff could not prove damages because he did not have any equity in the home when it was sold at a non-judicial foreclosure sale. The appellate court reversed, holding that since wrongful foreclosure is a tort, plaintiff may recover any damages proximately caused by defendants' wrongdoing, and plaintiff offered evidence that he lost rental income and suffered emotional distress as a result of the foreclosure.

Granadino v. Wells Fargo Bank     Docket     Sup.Ct. Docket
236 Cal.App.4th 411 - 2nd Dist. (B256511)  4/14/15 (Mod. and Cert. for pub. 4/29/15)     Request for depublication DENIED 8/26/15

TRUSTEE'S SALES: In an action by homeowners against a bank for promissory estoppel following the collapse of negotiations to modify the loan and foreclosure of their home, a grant of summary judgment to the bank was affirmed. The court held that the claim based on defendant's alleged oral promise that no foreclosure sale was scheduled was barred by the statute of frauds because an agreement that modifies a contract subject to the statute of frauds (the deed of trust) is likewise subject to the statute of frauds. The court also held that summary judgment was properly granted as to the promissory estoppel allegations because an alleged oral statement by defendant's employee that the proposed modification was under review and a trustee's sale was no longer scheduled was not a "promise" required by the cause of action, and because plaintiffs could not establish detrimental reliance where they could not show they would have been able to bring the loan current and stop the trustee's sale if they had been provided accurate information that the sale had not been postponed.

Rideau v. Stewart Title of California     Docket     Sup.Ct. Docket
235 Cal.App.4th 1286 - 4th Dist., Div. 1 (D065751)  4/1/15 (Pub. Order 4/15/15)     Request for review by Cal Supreme Ct. DENIED 7/15/15

ESCROW INSTRUCTIONS: An indemnity provision in escrow instructions requiring a party to the escrow to indemnify the escrow holder for all costs, including attorney's fees, incurred in defending against third party claims does not invoke the reciprocal attorney's fee provisions of Civil Code Section 1717. Instead, the indemnity clause was a one-way protection for Stewart Title, due to the nature of an escrow holder's duties if they are properly performed, but such indemnity rights never come into play where a party to the escrow sues the escrow holder.

Ram's Gate Winery v. Roche     Docket
235 Cal.App.4th 1071 - 1st Dist. (A139189)  4/9/15     Case complete 6/11/15

CONTRACTS / DEEDS: After purchasing real property from defendants, plaintiff brought this action alleging that defendants breached the purchase agreement by failing to disclose the existence of geotechnical reports discussing potentially hazardous seismic conditions on the property. The court held that the trial court improperly granted summary adjudication on the breach of contract cause of action, based on the trial court's determination that the obligations under the purchase agreement and grant deed had merged, because: 1) merger only occurs if the parties so intended, and there was a triable issue of fact as to the parties' intent, 2) the cause of action accrued at the time of the breach, so defendants' liability for that breach was fixed before escrow closed, even though plaintiff was unaware of its right to sue and damages had not yet been incurred, and 3) even if the doctrine of merger applied in this case, the "collateral obligations exception" prevented the merger doctrine from extinguishing the disclosure duty.

CADC/RAD Venture 2011-1 LLC v. Bradley     Docket     Sup.Ct. Docket
235 Cal.App.4th 775 - 1st Dist. (A140420)  4/2/15     Request for review by Cal Supreme Ct. DENIED 7/8/15

GUARANTY: A guaranty is a sham where the guarantor is the principal obligor on the debt, either because he or she personally executed the note or deed of trust, or because the guarantor is liable for the debts of the borrower by operation of some legal principle (e.g. partners of a general partnership). Where there is legal separation between the borrower and guarantor, however, the guaranty is enforceable unless the loan transaction has been structured to subvert the antideficiency laws. Here, the entity in title, whose loan was guaranteed by defendants, was a shell corporation owned by No Boundaries, Ltd., which was wholly owned by defendant guarantors. The evidence showed that No Boundaries observed the necessary formalities, including passing corporate resolutions, holding corporate meetings, and maintaining separate bank accounts and assets, and there was no indication that plaintiff/lender forced defendants to borrow through a shell entity or that it dictated the form that shell entity should take. Accordingly, the court held that the guaranties were enforceable.

Boyce v. T.D. Service Company     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B255958)  3/23/15     Review by Cal Supreme Ct. DISMISSED 4/27/16

TRUSTEE'S SALES: An impropriety in the transfer of a promissory note affects only the parties to the transaction, not the borrower, so a borrower lacks standing to challenge the allegedly deficient assignments and securitization.

Ukkestad v. RBS Asset Finance     Docket
235 Cal.App.4th 156 - 4th Dist., Div. 1 (D065630)  3/16/15     Case complete 5/18/15

PROBATE / TRUSTS: The court granted the trustee's petition under Probate Code Section 850(a)(3) (a "Heggstad petition") for an order confirming that two parcels of land are part of the trust's assets, holding that where the trust instrument stated that all of the settlor's "right, title and interest" to "all of his real . . . property" was included in the trust's assets, and it is possible by resorting to extrinsic evidence to determine that the settlor held title to the two parcels of land, the statute of frauds creates no bar to the petition.

Alborzian v. JPMorgan Chase Bank     Docket
235 Cal.App.4th 29 - 2nd Dist. (B251625)  3/12/15     Case complete 5/15/15

PURCHASE MONEY DEED OF TRUST: The parties did not dispute that under C.C.P. Section 580b, an institutional lender, whose loan is secured by the borrower's residence, cannot obtain a deficiency judgment. (Ed.: The court cited the wrong subsection of Section 580b, but got to the right result.) Nevertheless, defendant, who was a sold-out junior purchase money lender, sent letters to the borrower offering to accept less than the amount of the loan and implying that the debt was still owed. The court held that the plaintiff/borrower stated causes of action sufficient to overcome a demurrer under the Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the Rosenthal Fair Debt Collection Practices Act (Civ. Code 1788 et seq.) and the Unfair Competition Law (Bus. & Prof. Code 17200 et seq.). However, the borrower may not sue for violations of the Consumer Legal Remedies Act (Civ. Code 1750 et seq.). (Ed.: Section 580b was subsequently amended to specifically prohibit efforts to collect a debt where a deficiency is not owed.)

Pulido v. Pereira     Docket
234 Cal.App.4th 1246 - 3rd Dist. (C072284)  3/5/15     Case complete 5/5/15

PRESCRIPTIVE EASEMENTS: In the published portion of the opinion, the court held that Civil Code Section 1009, which prevents the use of private property for recreational purposes by members of the public from ripening into a permanent right, is inapplicable to the facts of this case because the Pulidos claim a private prescriptive easement for the purpose of accessing their own property, even though their use of their property was recreation.

Dyanlyn Two v. County of Orange     Docket
234 Cal.App.4th 800 - 4th Dist., Div. 3 (G049269)  1/30/15 (Cert. for Pub. 2/23/15)     Case complete 4/27/15

PROPERTY TAXES: The court held that there was no change of ownership of a shopping center, so the property was not subject to reassessment for property tax purposes, when it was purchased by the long-term lessee and a third party investor where: 1) the extension of the lease term did not constitute a change of ownership because the original lease was for a term exceeding 35 years; 2) the sale of the owner's fee interest to plaintiff did not constitute a change of ownership because the property was encumbered by a long-term lease; and 3) the two transactions, viewed together, were not a sham to avoid reassessment.

Linda Vista Village San Diego Homeowners Association v. Tecolote Investors     Docket
234 Cal.App.4th 166 - 4th Dist., Div. 1 (D064741)  1/27/15     Case complete 4/14/15

MISCELLANEOUS: Plaintiff sought to invalidate a master lease and its subleases that the City and Landlord Defendants entered into, alleging that the park site was “Pueblo Lands” within the meaning of San Diego City Charter section 219. The court affirmed the trial court’s dismissal of the action because plaintiff did not establish any entitlement to relief based on its claim that reacquired City Pueblo lands, following periods of severed City ownership rights, remained subject to section 219 requirements for voter approval of property transactions.

Ram v. OneWest Bank     Docket
234 Cal.App.4th 1 - 1st Dist. (A139055)  2/6/15     Case complete 4/8/15

TRUSTEE'S SALES: The court upheld the trial court's sustaining of a demurrer and dismissal of the action, holding:
1. A notice of default ("NOD") was valid where it was executed and recorded by the trustee before the substitution of the trustee was executed and recorded because a) Civil Code Section 2934a(c) allows a substitution of trustee to be effected after an NOD is recorded and the affidavit required by 2934a(c) was not required here because the terms of the deed of trust gave OneWest the option of substituting a successor trustee without the need for an affidavit, b) Section 2934a(d) provides that once recorded, the substitution shall constitute conclusive evidence of the authority of the substituted trustee or its agents to act pursuant to that section, c) even if the trustee lacked authority to sign the notice of default at the time it took that action, it had the authority to execute the notice of default as OneWest's agent and d) even if the trustee lacked authority to sign the notice of default as trustee at the time it took that action, its authority was subsequently ratified by OneWest when it formally substituted the trustee several weeks later.
2. Because the court concluded that any alleged defect or omission in the representation of OneWest at the time the notice of default was filed was not substantial, making the subsequent sale at most voidable, and not void, the borrowers were required to allege tender of the amount owed, which they did not do.

Richardson v. Franc     Docket     Sup.Ct. Docket
233 Cal.App.4th 744 - 1st Dist. (A137815)  1/27/15     Request for depublication and review by Cal Supreme Ct. DENIED 4/22/15

EASEMENTS/LICENSES: The court granted plaintiffs an irrevocable license to maintain vegetation and an irrigation system within the area of an easement for access and utilities. An otherwise revocable license becomes irrevocable when the licensee, acting in reasonable reliance either on the licensor's representations or on the terms of the license, makes substantial expenditures of money or labor in the execution of the license; and the license will continue "for so long a time as the nature of it calls for." The court affirmed the trial court's ruling that the license applied to the entire easement area, rather than only the landscaped areas because the trial court apparently concluded that providing a level of certainty to the parties by defining the scope of the irrevocable license with the precise arithmetic measurements of the easement area, rather than attempting to describe more generally the location of areas previously landscaped, will prevent the parties from returning to court for further clarification as to the scope of the irrevocable license. Finally, the court held that plaintiffs did not satisfy the requirements for an equitable easement because an equitable easement requires that the party claiming the easement must be without knowledge or means of knowledge of the facts, and here plaintiffs knew or should have known at the time of their purchase that the grant deed, on its face, described the easement for "access and utility purposes."

Stockton Mortgage v. Tope     Docket     Sup. Ct. Docket
233 Cal.App.4th 437 - 3rd Dist. (C071210)  12/23/14 (Cert for Pub. 1/20/15)     Request for review by Cal Supreme Ct. DENIED 3/25/15

TITLE INSURANCE:
1. A Notice of Abatement Action is not a defect, lien or encumbrance on title,
2. The mere accrual of assessments – without the recording of a lien to enforce those assessments – does not transform a notice of abatement into a defect, lien, or encumbrance on title. That is true even where, as here, the County actually undertakes "abatement activity."
3. The loan policy did not continue in favor of the insured assignor after an assignment, where the assignor did not provide evidence showing that warranties were given to the assignees.
4. A cause of action for breach of contract based on a Preliminary Report does not exist because a Preliminary Report is an offer to issue a title insurance policy, and not a contract.
5. The negligence cause of action against the title insurer did not have merit because there was no evidence that the title insurer had any duty, other than the duty under the title policy.
(Ed.: Plaintiff's deed of trust recorded in 2005, so the policy must have either been a 1990 CLTA Policy or a 1992 ALTA Loan Policy. The relevant provisions of the CLTA policy have not changed, but ALTA policies were significantly modified in 2006.)

Belle Terre Ranch v. Wilson     Docket
232 Cal.App.4th 1468 - 1st Dist. (A137217)  1/13/15     Case complete 3/17/15

BOUNDARY DISPUTES: In this boundary dispute involved a "battle of the surveyors", the court held that testimony of property owners was admissible as evidence of the historical beliefs of adjoining landowners as to where the boundary lay. The court also held that defendant's claim of a prescriptive easement failed where the evidence showed that the use of the disputed area was permissive.

U.S. Bank v. Yashouafar     Docket
232 Cal.App.4th 639 - 2nd Dist. (B249057)  12/17/14     Case complete 2/20/15

NOTES / PREPAYMENT: In this action to enforce a guaranty, the court held that under the terms of a note and deed of trust, a prepayment penalty was not payable until actual prepayment, which occurred when lender purchased the secured property at its foreclosure sale, and not at the earlier date when the lender notified the buyer that it was exercising its right to accelerate the due date of the note. The court pointed out that it was not holding that a creditor can never recover a prepayment penalty prior to actual prepayment, but only that under the clear and explicit terms of the note and deed of trust at issue in this case, no prepayment fee was due until defendants actually prepaid the note's indebtedness.

Marina Pacifica Homeowners Association v. So. Cal. Financial Corporation     Docket     Sup.Ct. Docket
232 Cal.App.4th 494 - 2nd Dist. (B251379)  12/16/14     Request for review by Cal Supreme Ct. DENIED 3/11/15

TRANSFER FEE COVENANTS: An "Assignment Fee" set forth in unrecorded condominium leases and certain other recorded documents, requiring payment of a monthly fee to the original developers, fell within the general definition of a "Transfer Fee" within the meaning of Civil Code Section 1098. However, Subsection 1098(i) excepts from that definition any fee recorded against the property on or before December 31, 2007, that is separate from any covenants, conditions, and restrictions, and that substantially complies with subdivision (a) of Section 1098.5. The court held that provisions in the leases that notify lessees of the existence of the fee satisfy the notice requirements of Subsection 1098(i). Therefore, the court held that the persons entitled to collect the fee did not have to record the notice of transfer fee required by CC Section 1098.5.

Feresi v. The Livery, LLC     Modification     Docket
232 Cal.App.4th 419 - 2nd Dist. (B248607)  12/15/14     Case complete 2/19/15

UNIFORM COMMERCIAL CODE: The court held that if a perfected security interest is created by breaching a fiduciary duty owed to another person, then equitable principles may be applied to give priority to an earlier unperfected security interest.

California Bank & Trust v. DelPonti     Docket
232 Cal.App.4th 162 - 4th Dist., Div. 2 (E053187)  12/9/14     Case complete 2/18/15

GUARANTIES: Where a bank breached the loan agreement by stopping funding the construction loan, the court held that the bank could not recover a deficiency judgment against the guarantors after foreclosing. The guarantee contained a waiver of rights and defenses that would otherwise be available to a guarantor, as permitted by Civil Code Section 2856, but that section does not allow a pre-default waiver of the bank's own misconduct. Waiver of statutory defenses is not deemed to waive all defenses, especially equitable defenses, such as unclean hands, where to enforce the guaranty would allow a lender to profit by its own fraudulent conduct.

Lyons v. Santa Barbara County Sheriff's Office     Docket     Sup.Ct. Docket
231 Cal.App.4th 1499 - 2nd Dist. (B256041)  12/3/14     Request for review by Cal Supreme Ct. DENIED 2/11/15

TRUSTEE'S SALES: After losing her property to a trustee's sale and eviction, plaintiff sued the sheriff's office and county recorder for wrongful eviction. The court held that such an action is not available because the sheriff is statutorily required to levy on property once a writ of execution is issued by a court, and a county recorder is prohibited from refusing to record documents on the basis of a lack of legal sufficiency.

Van Horn v. Department of Toxic Substances Control     Modification     Docket
231 Cal.App.4th 1287 - 3rd Dist. (C073173)  11/26/14     Case complete 1/27/15

LIENS: The lien hearing procedure, used by the Department of Toxic Substances Control to impose a lien for the cost of hazardous substance cleanup, violates due process by failing to allow the affected landowner to dispute 1) the amount of the lien or the lien increase, 2) the extent of the property burdened by the lien or the lien increase, and 3) the characterization of the landowner as a responsible party rather than an innocent landowner.

Lin v. Coronado (As modified on rehearing)     Docket
232 Cal.App.4th 696 - 2nd Dist. (B248848)  11/17/14 (Mod. 12/18/14)     Case complete 2/20/15

DEEDS: A trustee's deed was not void where it was altered to delete plaintiff's name because, even though plaintiff's name was originally shown as a grantee, the other two grantees where shown as having 75% and 25% interests, respectively. Therefore, the alteration was not material because plaintiff never had a percentage interest in the property, so leaving her name off had no legal effect.

Union Pacific Railroad Company v. Santa Fe Pacific Pipelines, Inc.     Docket     Sup.Ct. Docket
231 Cal.App.4th 134 - 2nd Dist. (B242864)  11/5/14     Request for review by Cal Supreme Ct. DENIED 1/21/15

RAILROADS: Under Congressional Acts prior to 1871, the federal government conveyed a "limited fee" to railroads for the purpose of constructing and maintaining a railroad. Congressional Acts in 1875 and afterward conveyed only an easement. Both the pre-1871 and 1875 Acts alone did not provide railroads with sufficient property rights to rent the subsurface to defendant pipeline company.

RNT Holdings v. United General Title Insurance Company     Docket
230 Cal.App.4th 1289 - 2nd Dist. (B250089)  10/7/14 (Pub. Order 10/28/14)     Case complete 12/29/14

TITLE INSURANCE: Plaintiff claimed that there was a defect in title covered by its title insurance policy because the insured deed of trust was executed by the borrower prior to transferring title into a trust, but was recorded after title had been transferred to the trust. Plaintiff subsequently reconveyed the deed of trust to make clear that the deed of trust was invalid. The court held:
1. The deed of trust was valid as between the parties, and the only potential title defect (if any) was that a third party who obtained the property as a bona fide purchaser for value might take the property free of the deed of trust.
2. Plaintiff's full release of its mortgage lien terminated coverage under title insurance policy.
3. Since plaintiff was aware that the borrower was going to transfer the property to a non-borrower trust after the deed of trust was executed, any claims arising out of the title to the property being held in the trust were excluded as created, suffered, assumed or agreed to by plaintiff.

First California Bank v. McDonald      Modification     Docket     Sup.Ct. Docket
231 Cal.App.4th 550 - 5th Dist. (F067812)  10/24/14     Request for review by Cal Supreme Ct. DISMISSED 3/9/16
(NOTE: California Rule of Court 8.528(b)(3) says: "After an order dismissing review, the Court of Appeal opinion remains unpublished unless the Supreme Court orders otherwise.")

DEFICIENCY JUDGMENTS: In order to obtain a deficiency judgment, all real property collateral must be included in one single action for judicial foreclosure. If any of the real property collateral is previously exhausted through any other means, such as a private sale without the consent of all debtors, a deficiency judgment against non-consenting debtors is barred. Here, prior to bringing this judicial foreclosure action, the lender and one of the debtors agreed to a sale of one of the two secured parcels and a release of that property from the security of the deed of trust. The court held that while the lender was entitled to judicially (or non-judicially) foreclose on the remaining parcel, it was not entitled to a deficiency judgment against the non-consenting debtors.

Jenkins v. Teegarden     Docket     Sup.Ct. Docket
230 Cal.App.4th 1128 - 4th Dist., Div. 2 (E059692)  10/23/14     Request for review by Cal Supreme Ct. DENIED 2/11/15

DEEDS: A deed prepared by a caregiver and executed by a dependent adult in favor of the caregiver, for inadequate consideration, is an invalid "donative transfer" under former Probate Code Section 21350 (as well as current Probate Code Section 21380). The fact that the recipient gave good consideration, sufficient to support a contract, does not prevent the transfer from being an invalid donative transfer.

Blueberry Properties v. Chow     Docket
230 Cal.App.4th 1017 - 2nd Dist. (B254259)  10/22/14     Case complete 12/22/14

JUDGMENTS: When a judgment directs a party to execute documents and the party refuses to do so, the court may issue a post-judgment order appointing the clerk of the court as an elisor to execute the documents.

Jones v. Wachovia Bank     Docket
230 Cal.App.4th 935 - 6th Dist. (H038382)  9/22/14 (Cert. for publication 10/21/14)     Case complete 12/23/14

TRUSTEE'S SALES: The court upheld a summary judgment in an action for damages based on the doctrine of promissory estoppel after plaintiffs lost their home in a foreclosure sale, which they allegedly understood from a phone conversation with the bank would be postponed to June 18, a date 10 days after the actual sale date. The court held that:
1. An informal agreement to borrow money from a friend is not a change of position, much less a substantial change of position needed to establish an estoppel. Had the sale actually been scheduled for June 18 and had the bank refused a further postponement, that refusal may have induced plaintiffs to actually borrow funds from the friend at that time to pay the loan in full. But plaintiffs' decision to do nothing before that time reflected no substantial change in position and failed to establish detrimental reliance; and
2. Plaintiff failed to establish damages because they were unable to overcome defendant's showing that the value of the home was less than the outstanding balance of the loan.

Kan v. Guild Mortgage Company     Docket     Sup.Ct. Docket
230 Cal.App.4th 736 - 2nd Dist. (B254007)  9/25/14 (Mod. and cert. for publication 10/15/14)     Request for review by Cal Supreme Ct. DENIED 1/28/15

TRUSTEE'S SALES: Plaintiff/borrower brought this preforeclosure quiet title action alleging that a deed of trust was improperly securitized and, therefore, void. The court upheld the trial court's sustaining of a demurrer because California's nonjudicial foreclosure statutes do not provide a basis to challenge the authority of an entity initiating the foreclosure process.

Huntington Continental Townhouse Association v. Miner     Docket
230 Cal.App.4th 590 - 4th Dist., Div. 3 (G049624)  10/14/14     Case complete 12/16/14

HOMEOWNERS ASSOCIATIONS: The court held that under Civil Code Section 5655(a), a homeowners association must accept a partial payment made by an owner of a separate interest in a common interest development and must apply that payment in the order prescribed by statute. The obligation to accept partial payments continues after a lien has been recorded against an owner's separate interest for collection of delinquent assessments. The remedies available to an association under Civil Code Section 5720 depend upon the amount and the age of the balance of delinquent assessments following application of the partial payment.

Palomar Grading & Paving v. Wells Fargo Bank     Docket
230 Cal.App.4th 686 - 4th Dist., Div. 3 (G049907)  10/14/14     Case complete 12/16/14

MECHANICS LIENS: The court held in the published part of the opinion that the constitutional 7% default rate of interest applies to prejudgment interest on a mechanics lien as to a non-contracting owner, rather than the 10% rate set forth in Civil Code Section 3289(b). In the unpublished part of the opinion the court held:
(a) The fact Cass (a subcontractor) did not name Kohl's (property owner who purchased the property after construction began) on its preliminary notice was not fatal to the later foreclosure of its mechanics lien, because Kohl's wasn't an owner or a reputed owner at the time Cass recorded its preliminary notice.
(b) The fact Cass did some work after it recorded its mechanics lien was similarly not fatal to the foreclosure of its lien, because the work it did was all pursuant to its subcontract with the general contractor.
(c) Cass's failure to name either Kohl's or Wells Fargo (who acquired two parcels by foreclosure of the construction loan) on its mechanics lien was also not fatal, because Cass had no actual knowledge either Kohl's or Wells Fargo was an owner of land in the tract at the time of the recording of Cass's mechanics lien.
(d) R3's (a subcontractor) listing of an address that was not, strictly speaking, the address of Kohl's store, was not fatal to its lien on the tract (which includes the store), because the address it gave was sufficient for identification of the whole tract.
(e) Cass and R3 filed their suits to foreclose their liens timely even though they later had to add Kohl's and Wells Fargo as Doe defendants, because at the time of filing their suits neither had actual knowledge Kohl's or Wells Fargo was an owner in the tract.
(f) Cass can collect an amount in its foreclosure action in excess of the amount it listed on its lien because the excess amount was pursuant to its contract and incurred prior to the recording of the lien.
(g) The trial court did not err in including within Cass's lien foreclosure amount a sum Cass owed to TNT, even though by the time of trial TNT was a suspended corporation, because TNT, at the time of the judgment, did not qualify as a "claimant" under the statute which requires deduction of amounts owed to "claimants" in figuring lien judgments.
(h) Given the unitary nature of the project, even though it involved three contiguous parcels, the trial court was within its discretion not to allocate Cass's and R3's lien judgments between the one parcel owned by Kohl's and the two parcels owned by Wells Fargo.
(i) In light of the court's decision on the allocation question, lien amounts were susceptible of precise calculation, therefore both Cass and Palomar Grading can collect "prejudgment" interest on their liens.

Najah v. Scottsdale Insurance Company     Docket     Sup.Ct. Docket
230 Cal.App.4th 125 - 2nd Dist. (B241097)  9/30/14     Request for review by Cal Supreme Ct. DENIED 12/17/14

TRUSTEE'S SALES: Because a mortgage debt is extinguished by a full credit bid, a mortgagee who purchases an encumbered property at a foreclosure sale by making a full credit bid is not entitled to insurance proceeds payable for preforeclosure damage to the property. This rule holds true whether the party making the claim for insurance proceeds is the holder of the first trust deed or a more junior creditor. The court distinguished Kolodge v. Boyd (2001) 88 Cal.App.4th 349, which only stands for the proposition that the full credit bid rule is inapplicable where the lender is fraudulently or negligently induced to make the bid.

Moorefield Construction v. Intervest-Mortgage Investment Co.     Docket     Sup.Ct. Docket
230 Cal.App.4th 146 - 4th Dist., Div. 1 (D065464)  9/12/14 (Pub. Order 9/30/14)     Request for review by Cal Supreme Ct. DENIED 1/14/15

MECHANICS LIENS: A direct contractor may prospectively subordinate its mechanics lien to a construction loan. Civil Code Section 3262 (now Section 8122) prohibits a direct contractor from waiving or impairing the claims and liens of other claimants, but does not prohibit a direct contractor from impairing his own lien rights. (Ed. note: C.C. 3262 was repealed and re-cast in C.C. 8120 - 8138. The new code sections are similar to, but not exactly the same as, the previous code section.)

Fleet v. Bank of America     Docket
229 Cal.App.4th 1403 - 4th Dist., Div. 3 (G050049)  8/25/14     Case complete 11/25/14

LOAN MODIFICATIONS: The court held that plaintiffs stated causes of action sufficient to overcome a demurrer for breach of contract, promissory fraud, fraudulent misrepresentation and promissory estoppel where plaintiffs alleged the usual: The lender approves the homeowner's participation in a government-funded program meant to lower mortgage payments and avoid foreclosure; the homeowner tries to comply with the terms of the mortgage modification program; he or she contacts the lender to make sure everything is proceeding according to plan and either receives assurances that it is or is passed from person to person, each of whom professes to know nothing about the loan in question or its modification, sometimes both; then the foreclosure notice is posted on the door, and the house is sold.

926 North Ardmore Ave. v. County of Los Angeles     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B248536)  9/22/14     AFFIRMED by Cal Supreme Ct. 6/30/17

DOCUMENTARY TRANSFER TAX: The court held that documentary transfer tax is owed when there is a change in ownership or control of an entity that owns real property. The concept of "realty sold" in the documentary transfer tax statutes (Revenue and Taxation Code Sections 11911 et seq.) has the same meaning as "change in ownership" in the statutes requiring a reassessment of the property for property tax purposes (Revenue and Taxation Code Sections 60 et seq.), and "change in ownership" includes transfer of ownership or control of an entity. The court points out that prior to 2010, County Recorders could not determine when a change in ownership of an entity occurred. Tax forms reflecting the change in ownership were required to be filed with the State Board of Equalization, which would share that information with Tax Assessors. But R&TC Sections 408 and 481 barred that information from being shared with County Recorders. In 2009, the Legislature adopted SB 816, which amended several R&TC Sections by requiring the assessor to provide access to his or her record to the county recorder when conducting an investigation to determine whether a documentary transfer tax should be imposed.

Fonteno v. Wells Fargo Bank     Docket     Sup.Ct. Docket
Cal.App. 1st Dist. (A135577)  8/18/14         Request for depublication by Cal Supreme Ct. DENIED 12/10/14

TRUSTEE'S SALES: In this action to set aside a trustee's deed, the court overruled the trial court's sustaining of a demurrer, holding:
1. Plaintiff stated a cause of action for equitable cancellation of a trustee's deed where plaintiff alleged that defendant failed to comply with the provisions of the National Housing Act (NHA) requiring the lender to attempt a pre-foreclosure meeting with the borrower in an effort to avoid foreclosure, which requirement was also incorporated by the provisions of the deed of trust.
2. A borrower is not required to tender the amount owed on the debt where a lender does not comply with requirements for a pre-foreclosure meeting that is intended to prevent any need for a foreclosure.
3. A trustee conducting trustee's sale proceedings is not subject to the Federal Debt Collection Practices Act (FDCPA).
4. The court rejected plaintiffs' argument that the signature of an attorney in fact under a power of attorney on the substitution of trustee was defective, and the substitution void, because the name of the principal was not identified. The signature block sufficiently indicated that the signatory was acting for the trustee by identifying the signatory as "its" attorney in fact.

Hoffman v. 162 North Wolfe LLC     Docket     Sup.Ct. Docket
228 Cal.App.4th 1178 - 6th Dist. (H038643)  Filed 7/15/14, Mod. and cert. for partial pub. 8/13/14     Request for review by Cal Supreme Ct. DENIED 11/25/14

EASEMENTS: In a cross-complaint alleging that defendant failed to disclose its claim to a prescriptive easement over plaintiffs' property, summary judgment in favor of defendant is affirmed where: 1) defendant had no duty to disclose that it claimed prescriptive easement rights; and 2) plaintiffs could not justifiably rely on an understanding that defendant had no adverse claims over the property based on defendant's representative's statement that he would "take care of" the prescriptive use. The statement was too vague to be enforced.

Mendoza v. JP Morgan Chase Bank    Docket     Sup.Ct. Docket
228 Cal.App.4th 1020 - 3rd Dist. (C071882)  Filed 7/22/14, Cert. for Pub. 8/11/14     Review by Cal Supreme Ct. DISMISSED and REMANDED 4/27/16
DECISION ON REMAND

TRUSTEE'S SALES: In this action to set aside a trustee's deed, the court sustained the trial court's sustaining of a demurrer, holding:
1. Tender of the amount owed is not necessary in an action to set aside a trustee's sale where the sale is alleged to be void.
2. The court rejected Glaski v. Bank of America, and held that a borrower does not have standing to challenge a securitized trust's chain of ownership of a deed of trust by alleging that the attempts to transfer the deed of trust to the securitized trust occurred after the trust's "closing date".
3. Plaintiff lacked standing to challenge the validity of an assignment of deed of trust that was allegedly "robo-signed" (i.e. signed by an individual who signs numerous documents without proper legal or corporate authority).

Alvarez v. BAC Home Loans Servicing     Docket
228 Cal.App.4th 941 - 1st Dist. (A138443)  8/7/14    Case complete 10/8/14

LOAN MODIFICATION: In this action for fraud and unfair business practices in the origination of a loan and for negligence in reviewing plaintiff's application for a loan modification, the court reversed the trial court's sustaining of a demurrer, holding that:
1. Allegations of fraud were sufficient in alleging that the actual interest rate and monthly payments were hidden in the complexity of the Option ARM contract terms and that the monthly payment amounts listed in the loan documents were based entirely on the low "teaser" interest rate that existed only for a single month.
2. Allegations that Countrywide was liable as an aider and abettor were sufficient even though Countrywide was an assignee of the loan, and not the loan originator, because the complaint alleged that Countrywide dictated the use of deceptive loan documents and deceptively marketed Option ARM loans by aggressively promoting the teaser rate.
3. Bank of America could be liable for the conduct of Countrywide because it is a successor by merger. (Liability would not attach if the transaction were merely an asset purchase.)
4. Violation of the Unfair Competition Law was properly pled based on defendants' alleged fraudulent conduct.
5. A cause of action for negligence in handling plaintiff's request for a loan modification was stated because, while a lender does not have a duty to modify a loan, it does have a duty to timely and carefully consider a request for a loan modification.

Bloxham v. Saldinger     Modification     Docket     Sup.Ct. Docket
228 Cal.App.4th 729 - 6th Dist. (H038040)  8/1/14     Request for review by Cal Supreme Ct. DENIED 10/15/14

SURVEYS: In a dispute over the location of the parties' common property lines, a judgment quieting title in favor of plaintiffs is affirmed, where there is no basis for concluding that plaintiffs' survey was insufficient as a matter of law. (Ed: The case contains a good discussion of surveying principles.)

Decon Group v. Prudential Mortgage Capital Company     Docket     Sup.Ct. Docket
227 Cal.App.4th 665 - 2nd Dist. (B248491)  6/30/14     Request for review by Cal Supreme Ct. DENIED 9/17/14

DEED IN LIEU OF FORECLOSURE: The lien of a senior deed of trust and fee title ordinarily do not merge when a deed in lieu of foreclosure is given where there are junior lienholders of record. In this case, where a property owner conveyed title to the holder of a first deed of trust and there was a junior mechanic's lien, the lien of the deed of trust and fee title did not merge. Accordingly, the deed of trust could subsequently foreclose and wipe out the mechanic's lien.

Rufini v. CitiMortgage     Modification     Docket
227 Cal.App.4th 299 - 1st Dist. (A138480)  5/28/14; pub. order 6/23/14    Case complete 8/25/14

LOAN MODIFICATIONS: Plaintiff alleged that defendant breached an agreement to modify a loan pursuant to the federal Home Affordable Modification Program ("HAMP"). The court overruled an order sustaining a demurrer as to causes of action for breach of contract, wrongful foreclosure and the California Unfair Competition Law ("UCL"), holding that 1) temporarily renting out the home does not violate the requirement under HAMP that the property be the borrower's primary residence, 2) plaintiff was not required to tender payment of the amount due under the loan because he is seeking damages and not seeking to set aside the foreclosure sale, and because the complaint alleges that the borrower was not in default, in which case a tender is not required and 3) The UCL applies to unfair practices even where a statute is not violated. Without deciding whether the statute of frauds bars a negligent misrepresentation claim based on an oral agreement to modify the loan, the court also upheld the demurrer as to the cause of action for negligent representation because plaintiff alleged a written agreement to modify the loan. Finally, the court upheld the demurrer as to causes of action for general negligence and breach of fiduciary duty on the basis that no fiduciary duty exists between a borrower and lender.

Keshtgar v. U.S. Bank     Modification      Opinion on Remand (Unpublished)     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B246193)  6/9/14     Review by Cal Supreme Ct. DISMISSED and REMANDED 4/27/16

TRUSTEE'S SALES: The court followed Gomes v. Countrywide Home Loans (2011) 192 Cal.App.4th 1149 in holding that the California non-judicial foreclosure scheme does not allow a judicial action to determine whether the person initiating the foreclosure process is authorized. The court also held that a borrower does not have standing to challenge an assignment of a deed of trust absent a showing of prejudice, disagreeing with Glaski v. Bank of America (2013) 218 Cal.App.4th 1079 on this point. The court also distinguished Glaski because that case involved an action for damages brought after a foreclosure, whereas this case and Gomes involve attempts to enjoin a trustee's sale.

ON REMAND: The court again affirmed the decision of the trial court. Per the California Supreme Court's instruction, the appellate court reconsidered the matter in light of Yvanova v. New Century Mortgage Corporation (2016) 62 Cal.4th 919, and determined that Yvanova has no bearing on this case because Yvanova applies only to actions alleging wrongful foreclosure, not to actions such as this one to preempt foreclosure.

Graham v. Bank of America     Docket
226 Cal.App.4th 594 - 4th Dist., Div. 1 (D063779)  5/23/14    Case complete 7/23/14

PREDATORY LENDING: The court affirmed the trial court's sustaining of a demurrer without leave to amend. Plaintiff did not state a cause of action for reliance on defendant's appraisal because a lender obtains an appraisal for its own benefit, and the borrower cannot reasonably rely on it. Plaintiff also did not state a cause of action for violation of California's Unfair Competition Law (B&PC 17200 et seq.) because plaintiff did not allege a violation of another law that would support a UCL cause of action and because defendant's alleged conduct was not connected to an underlying constitutional, statutory or regulatory provision. The court pointed out that the foreclosure of plaintiff's house was the result of plaintiff's default in making payments, and not defendant's conduct.

Yvanova v. New Century Mortgage Corporation     Opinion on Remand (Unpublished)     Docket     Sup.Ct. Docket
Cal.App. 2nd Dist. (B247188)  4/25/14 (Pub. Order 5/22/14)     REVERSED and Remanded by Cal Supreme Ct. 2/18/16

TRUSTEE'S SALES: Plaintiff alleged that the deed of trust on her residence was improperly securitized and assigned from the original lender to several successive mortgagees and trustees, and ultimately improperly sold at foreclosure. The court held that a demurrer was properly sustained without leave to amend because 1) plaintiff is not entitled to quiet title because she failed to allege she tendered funds to discharge her debt and 2) an impropriety in the transfer of a promissory note affects only the parties to the transaction, not the borrower, so plaintiff lacks standing to challenge the allegedly deficient assignments and securitization.

In re Marriage of Valli     Docket
58 Cal.4th 1396 - Cal. Supreme Court (S193990)  5/15/14

COMMUNITY PROPERTY: The Family Code's transmutation rules, requiring an express written declaration in order to convert community property to separate property, apply to property acquired during marriage in the name of one spouse, even where both parties agreed to hold title in that manner. The court abrogated In re Marriage of Brooks & Robinson, and held that there is no exemption from the transmutation rules for spousal purchases from third parties.

Bisno v. Kahn     Docket     Sup.Ct. Docket
225 Cal.App.4th 1087 - 1st Dist. (A133537)  4/25/14     Petition for review by Cal Supreme Ct. DENIED 8/13/14

USURY: California's usury law does not apply to a judgment creditor's agreement to forbear collecting on a judgment. However, a forbearance fee does not become part of the judgment and is not an amount that must be paid to satisfy the judgment. Rather, a forbearance agreement is a contract between the judgment creditor and the judgment debtor that is separate from the judgment to which it applies. Consequently, a forbearance agreement must be enforced in a separate contract action and is subject to standard contractual defenses such as duress and unconscionability.

Thoryk v. San Diego Gas & Electric Co.     Docket     Sup.Ct. Docket
225 Cal.App.4th - 4th Dist., Div. 1 (D062680)  4/9/14     Petition for review by Cal Supreme Ct. DENIED 7/23/14

ANTIDEFICIENCY: Highland Valley Investors ("Highland"), a junior lienholder, acquired title at its non-judicial foreclosure, but the debt was not fully extinguished. The senior lienholder then foreclosed. The borrower filed an action against third parties seeking damages to the property as a result of a wildfire, and Highland filed a complaint in intervention seeking to impose a lien for the balance that remained owing under the terms of its note and deed of trust, and/or under the doctrine of equitable conversion, upon any recovery that the borrower might eventually obtain against the third party tortfeasors. The court ruled in favor of the borrower, holding that imposing a lien on the proceeds of a recovery of tort damages would amount to an improper antideficiency judgment because:
1. There was no express language in the deed of trust that assigned tort claims as additional security, and
2. The Doctrine of Equitable Conversion, which provides that proceeds from a condemnation action or tort damages can stand in place of the original real property security, did not apply because Highland will no longer hold a security interest in the property when the entitlement to any money damages is determined in the borrower's action against third parties.

Cansino v. Bank of America     Docket
224 Cal.App.4th 1462 - 6th Dist. (H038713)  3/26/14    Case complete 5/28/14

PREDATORY LENDING: A borrower filed this action for damages and for a loan modification alleging that the lender was guilty of fraud for representing that the property would appreciate in the future and for misrepresenting the value of the property. The court held that a demurrer was properly sustained without leave to amend because a prediction about future appreciation is regarded as an opinion and not a representation of fact, and because any representation of value was correct at the time the loan was made even though the value of the property declined afterward.

Schmidt v. Bank of America     Docket
223 Cal.App.4th 1489 - 2nd Dist. (D062532)  2/21/14    Case complete 4/25/14

EASEMENTS: The court held that a reservation of an easement for "the right of ingress and egress for public road purposes over, along and across the Easterly 40 feet" created only a private easement and did not create a public right of way. Accordingly, the easement did not include all purposes for which a governmental entity might use a public road. The court reversed a summary judgment in favor of defendants because there were triable issues of fact as to whether the easement included grading and pavement of the easement area, installation of a locked gate and various subterranean infrastructure elements, including sewer pipes, storm drains, oil and sand separators, and construction nails designed to hold steep dirt slopes in place. Finally, the court rejected Bank of America's argument that by foreclosing on units in a condominium development it did not acquire easement rights that had previously been conveyed to the homeowner's association because the homeowners association acquired only a portion of the dominant tenement. Where a dominant tenement is partitioned in this manner, the easement rights are apportioned according to the division of the dominant tenement.

Ash v. North American Title Company     Docket
223 Cal.App.4th 1258 2nd Dist. (B237404)  2/18/14    Case complete 4/22/14

ESCROW: A plaintiff-buyer obtained a judgment in an action where plaintiff alleged that defendants seller and escrow company were at fault for an escrow not closing on the agreed day. The judgment included damages for the loss of tax benefits because the transaction was part of a 1031 exchange transaction that failed to qualify for deferred taxation when the exchange intermediary filed for bankruptcy on the following day, and delayed disbursing plaintiff's funds until after the 1031 exchange time limits had expired. The appellate court reversed in part and remanded because: 1) there was insufficient evidence that the bankruptcy of the exchange intermediary was foreseeable; and 2) as to defendant escrow company, the trial court failed to instruct the jury on an intervening and superseding cause, i.e., the bankruptcy of the exchange intermediary.

Brewer Corporation v. Point Center Financial     Docket     Sup.Ct. Docket
223 Cal.App.4th 831 - 4th Dist., Div. 1 (D061665)  1/31/14     Petition for review & depublication request DENIED by Cal Supreme Ct. 4/30/14

MECHANICS LIENS:
1. A construction lender must make available to stop notice claimants those amounts from the construction loan that the lender has already disbursed to itself for interest and other fees because the disbursement of funds constitutes an "assignment" under Civil Code Section 3166 (current Section 8544). A lender cannot avoid this result by segregating the loan fund into separate accounts, one for paying interest and fees and the other for construction costs.
2. A contractor who has a direct contract with the owner, but who is not the general contractor, must serve the lender with a preliminary 20-day notice pursuant to CC 3097 (now see CC 8200) in order to enforce a stop notice.
3. The requirement in CC 3172 (current 8550(e)) of giving the construction lender notice within 5 days of the filing of an action to enforce a stop notice (now called a "stop payment notice") is not mandatory unless some detriment can be shown to have resulted from the failure to give notice.

Branscomb v. JPMorgan Chase Bank     Docket     Sup.Ct. Docket
223 Cal.App.4th 801 - 1st Dist. (A137140)  1/31/14     Petition for review by Cal Supreme Ct. DENIED 4/30/14

EQUITABLE SUBROGATION: The court applied the doctrine of equitable subrogation to give priority to defendants' deeds of trust that had refinanced first and second priority deeds of trust. Equitable subrogation was not precluded by the fact that defendants had knowledge of plaintiff's deed of trust because defendants did not know that plaintiff's deed of trust would remain on the property after their refinance transactions. Also, the escrow holder's alleged negligence did not preclude equitable subrogation because it did not affect the equities between the parties, and the escrow holder did not owe a duty to plaintiff who was not a party to the loan escrows.

Nativi v. Deutsche Bank     Docket     Sup.Ct. Docket
223 Cal.App.4th 261 - 6th Dist. (H037715)  1/23/14     Petition for review & depublication request DENIED by Cal Supreme Ct. 4/30/14

TRUSTEE'S SALES: The federal law known as the Protecting Tenants Against Foreclosure Act of 2009 and Code of Civil Procedure Section 1161b cause a bona fide lease of residential property to survive foreclosure through the end of the lease term, subject to the limited authority of the immediate successor in interest to terminate the lease, upon 90-days notice, upon sale to a purchaser who intends to occupy the unit as a primary residence. This applies even where the leased premises is occupied illegally in violation of the local building code.

California Bank & Trust v. Lawlor     Docket
222 Cal.App.4th 625 - 4th Dist., Div. 3 (G047899)  11/25/13 (As modified 12/20/13)     Case complete 2/21/14

GUARANTIES: A guarantor is protected by anti-deficiency laws where the guaranty is a sham because the legal relationship between the guarantor and the borrower is such that the guarantors are effectively the primary obligors on the loan. Where there is legal separation between the guarantor and borrower through a corporate or other legal structure so that the guarantor is not liable for corporate obligations and where the lender does not require the transaction to be structured in a manner intended to evade the anti-deficiency laws, the guaranty will normally not be deemed to be a sham. Here, the court upheld a deficiency judgment against the guarantors in spite of an apparently legitimate legal separation from the borrower because the guarantor failed to present evidence showing that the borrower was a properly formed corporation and that the necessary corporate formalities had been followed to protect the shareholders from corporate liabilities, or that the lender had required the transaction to be structured in a manner intended to evade the anti-deficiency laws.

Dolnikov v. Ekizian     Docket
222 Cal.App.4th 419 - 2nd Dist. (B226675)  12/19/13     Case complete 2/21/14

EASEMENTS: The court held that conduct can constitute actionable interference with the use and enjoyment of an easement even when the conduct does not physically obstruct the servitude. The easement in question was for ingress and egress to undeveloped lots. Defendants, the servient tenement owners, interfered with the easement during plaintiff's construction of two residences by refusing to sign both a covenant for community driveway and permission for a building permit to construct a retaining wall. When an easement is based on a grant, as in this case, the grant gives the easement holder both those interests expressed in the grant and those necessarily incident thereto. Every easement includes what are termed "secondary easements"; that is, the right to do such things as are necessary for the full enjoyment of the easement itself. Defendants' refusal to sign the documents interfered with plaintiff's rights and rendered plaintiff's easement useless for the purpose for which it was intended.

Rye. v. Tahoe Truckee Sierra Disposal Company     Modification     Docket     Sup.Ct. Docket
222 Cal.App.4th 84 - 3rd Dist. (C067970)  12/16/13     Petition for review by Cal Supreme Ct. DENIED 4/9/14

EASEMENTS: The court rejected defendant's attempt to use an easement beyond the area it had been used for many years, holding that when an instrument of conveyance grants an easement in general terms, without specifying or limiting the extent of its use, the permissible use is determined by the intention of the parties and the purpose of the grant. Once the easement has been used for a reasonable time, the extent of its use is established by its "historical use", and once the extent of an easement's use has been established, the easement owner cannot subsequently enlarge its character so as to materially increase the burden on the servient tenement. The court rejected defendant's alternative theory that the same easement was created by a lease because the lease had been ignored for 22 years, permitting the inference that it had been abandoned.

Lueras v. BAC Home Loans Servicing     Docket
221 Cal.App.4th 49 - 4th Dist., Div. 3 (G046799)  10/31/13     Case complete 1/2/14

TRUSTEE'S SALES: The court overruled the trial court's sustaining of defendant's demurrer, holding that:
1. A residential lender does not owe a common law duty of care to offer, consider, or approve a loan modification, or to explore and offer foreclosure alternatives. Any such duty arises only as set forth in the note and deed of trust, any forbearance agreement entered into by borrower and lender, federal and state statutes and regulations, and governmental directives and announcements. However, a lender does owe a duty to a borrower to not make material misrepresentations about the status of an application for a loan modification or about the date, time, or status of a foreclosure sale.
2. A forbearance agreement entered into pursuant to Fannie Mae's HomeSaver Forbearance Program includes the provisions and directives set forth in Fannie Mae's Announcement 09-05R, which was issued to provide policy clarification and instruction.
3. A cause of action does not lie for violation of Civil Code Section 2923.5, requiring a lender to explore foreclosure alternatives before foreclosing, because the only remedy afforded by that section is to postpone the foreclosure sale before it happens, and in this case the sale had been conducted.
4. Plaintiff's allegations that the lender misrepresented the status and date of the foreclosure sale were sufficient to state a cause of action for violation of California's unfair competition law, Business and Professions Code Section 17200 et seq.
5. Plaintiff could not state a cause of action for quiet title without alleging tender of payment of the outstanding balance of the indebtedness.

Fowler v. M&C Association Management Services     Docket
220 Cal.App.4th 1152 - 1st Dist. (A137462)  10/28/13     Case complete 1/9/14

TRANSFER FEES: Transfer fees charged by a Homeowners Association were not "transfer fees" within the meaning of Civil Code Section 1098, which requires recordation of a document disclosing details of the fee, because CC Section 1098(g) excludes assessments, charges, penalties, or fees authorized by the Davis-Stirling Common Interest Development Act.

Bushell v. JPMorgan Chase Bank     Docket
220 Cal.App.4th - 3rd Dist. (C070643)  10/22/13     Case complete 12/24/13

LOAN MODIFICATIONS: After being denied a loan modification under the federal Home Affordable Modification Program ("HAMP"), plaintiffs properly alleged state law causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel and fraud based on false promise, where they alleged that they complied with all terms of a "Trial Period Plan" including making all required payments, providing all required documentation, and maintaining the integrity of their modification-based representations.

The court rejected the defendant lender's argument that plaintiffs could not allege damages, because all plaintiffs did was to make monthly mortgage payments they were already obligated to make. Plaintiffs properly alleged damages where they alleged that they were damaged by the considerable time they spent repeatedly contacting defendant and repeatedly preparing documents at defendant's request; by discontinuing efforts to pursue a refinance from other financial institutions or to pursue other means of avoiding foreclosure (such as bankruptcy restructuring, or selling or renting their home); by having their credit reports further damaged; and by losing their home and making it unlikely they could purchase another one.

Self v. Sharafi     Docket     Sup.Ct. Docket
220 Cal.App.4th 483 - 4th Dist., Div. 1 (D061181)  9/20/13 (Pub. Order 10/11/13)     Petition for review by Cal Supreme Ct. DENIED 1/29/14

DEED RESTRICTIONS: A 1946 deed contained a restriction against erecting any buildings on specified property retained by the grantor. In this lawsuit between subsequent owners of each parcel concerning whether the restriction runs with the land so as to bind subsequent owners of the servient parcel, the court held:
1. The restriction is not a covenant running with the land under the version of Civil Code Section 1468 in effect at the time of the conveyance because that Code Section only applied to covenants between landowners. The statute was subsequently amended to include covenants between a grantor and grantee, but the amendment only applies to covenants postdating its enactment.
2. The restriction is a covenant running with the land under Civil Code Section 1462, which provides that a covenant contained in a grant of an estate and made for the direct benefit of "the property", runs with the land. The term "the property" refers to the property conveyed, which was benefitted by the restriction, so Section 1462 applies.

Rossberg v. Bank of America     Docket     Sup.Ct. Docket
219 Cal.App.4th 1481 - 4th Dist, Div. 3 (G047028)  8/27/13 (Pub. Order 9/26/13)     Petition for review by Cal Supreme Ct. DENIED 11/26/13

TRUSTEE'S SALES: The court held:
1. Civil Code Section 2923.5 requires a lender to contact a borrower to explore options to avoid foreclosure more than 30 days prior to recording a Notice of Default, but does not require contacting the borrower during the 30 days prior to recording the NOD.
2. A Substitution of Trustee is valid where it is executed prior to recording an NOD even though it is not recorded until after the NOD records.
3. A document can be notarized after, and even long after, it is executed.
4. An NOD can be executed by an agent for the beneficiary or trustee, rather than by the beneficiary or trustee themselves.
5. The requirement in C.C. 2932.5 that an assignment must be recorded prior to recordation of a Notice of Default applies only to mortgages and not to deeds of trust.
6. Plaintiffs did not state a cause of action for promissory fraud because they failed to specifically allege the harm suffered and how their reliance on the allegedly promised loan modification caused them harm.
7. Plaintiffs did not adequately allege a violation of the Unfair Competition Law (B&PC 17200 et seq.) because they did not properly allege a breach of C.C. 2924 et seq.
8. Plaintiff's breach of contract claim fails because an agreement to modify a loan secured by a deed of trust is subject to the Statute of Frauds, and plaintiffs did not allege that there was a written loan modification.

Swanson v. State Farm General Insurance Company     Docket
219 Cal.App.4th 1153 - 2nd Dist. (B240016)  9/23/13     Case complete 11/27/13

INSURANCE: An insurer agreed to provide a defense with a reservation of rights and approved independent counsel selected by the insured to represent the insured in the underlying tort action, pursuant to Civil Code Section 2860 and San Diego Federal Credit Union v. Cumis Ins. Society, Inc. (1984) 162 Cal.App.3d 358 (Cumis). The court held that the insurer did not have to continue to pay the insured's Cumis counsel after it subsequently withdrew all reservations of rights and coverage defenses that gave rise to the insured's right to Cumis counsel.

Chavez v. Indymac Mortgage Services     Docket
219 Cal.App.4th 1052 - 4th Dist., Div. 1 (D061997)  9/19/13     Case complete 11/19/13

TRUSTEE'S SALES:
1. Plaintiff borrower asserted that a trustee's sale was improper because she had complied with a modification agreement that defendant lender had not signed. The court held that defendant was equitably estopped from asserting a statute of frauds defense because defendant had represented to plaintiff that it would sign the modification agreement if plaintiff qualified for the modification, and plaintiff did qualify.
2. Plaintiff was excused from tendering the amount of the indebtedness because plaintiff alleged that the trustee's sale was void, which is one of four exceptions to the tender rule.

Joannou v.City of Rancho Palos Verdes     Docket
219 Cal.App.4th 746 - 2nd Dist. (B241035)  9/12/13     Case complete 11/14/13

LANDSLIDE / QUIET TITLE: The Cullen Earthquake Act, which provides for quiet title actions to reestablish boundaries that have shifted due to "disasters", does not apply to gradual earth movements.

Siliga v. MERS     Docket
219 Cal.App.4th 75 - 2nd Dist. (B240531)  8/27/13     Case complete 10/29/13

TRUSTEE'S SALES:
1. A property owner may not pursue a "preemptive suit" challenging the authority of a foreclosing beneficiary or beneficiary's agent absent a specific factual basis for alleging that the foreclosure was not initiated by the correct party. (A "preemptive suit" does not seek a remedy for specified misconduct in the nonjudicial foreclosure process, which may provide a basis for a valid cause of action. Instead, a preemptive suit seeks to create an additional requirement for the foreclosing party, apart from the comprehensive statutory requirements, by requiring the foreclosing party to demonstrate in court that it is authorized to initiate a foreclosure.)
2. MERS has the authority to assign a note secured by a deed of trust and to initiate trustee's sale proceedings.
3. A trustee may record a Notice of Default before it is substituted as trustee where it executes the NOD not as trustee but as agent for the beneficiary.

King v. Wu     Docket     Sup.Ct. Docket
218 Cal.App.4th 1211 - 2nd Dist. (B239801)  8/14/13     Petition for review by Cal Supreme Ct. DENIED 11/20/13

PRESCRIPTIVE EASEMENTS: Defendants asserted as a defense to a claim of a prescriptive easement that defendant was not in possession of the adversely used land for a continuous period of five years because the property was leased under a series of leases and defendant was therefore not personally in possession for five continuous years. The court rejected this defense holding that if at any point during the adverse use an owner or a landlord has been in possession, including constructively at the expiration of a renewable lease, he or she could and should have taken action to interrupt such use.

Glaski v. Bank of America     Docket     Sup.Ct. Docket
218 Cal.App.4th 1079 - 5th Dist. (F064556)  7/31/13 (Pub. order 8/8/13)     Request for depublication DENIED 2/26/14

TRUSTEE'S SALES: A borrower may challenge a securitized trust's chain of ownership of a deed of trust by alleging that the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust's "closing date". Transfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement. Also, tender of the amount due is not required where the foreclosure sale is void, rather than voidable, such as when a plaintiff proves that the entity lacked the authority to foreclose on the property.

Citizens Business Bank v. Gevorgian     Docket
218 Cal.App.4th 602 - 2nd Dist. (B239747)  8/1/13     Case complete 10/2/13

SUBORDINATION AGREEMENTS: A seller's agreement to subordinate its security interest to that of a bank is unenforceable where the developer and the bank entered into a letter of understanding between themselves, to which the seller did not consent, about which it knew nothing, and which substantially impaired its security. The bank had paid off prior deeds of trust, but the court rejected the bank's claim of equitable subrogation because it is not available where the superior equities of the otherwise senior lien holder would be prejudiced by granting equitable subrogation.

Zhang v. Superior Court     Docket
57 Cal.4th 364 - Cal. Supreme Court (S178542)  8/1/13

INSURANCE / 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 ("UCL") (Business and Professions Code section 17200 et seq.). The court pointed out that the UCL permits only injunctive relief and restitution, not damages.

Sierra Club v. Superior Court of Orange County     Docket
57 Cal.4th 157 - Cal. Supreme Court (S194708)  7/8/13

COUNTY RECORDER: Orange County's geographic information system is a database that must be made available to the public at the actual cost of duplication. The plaintiff must, however, use its own software to access the data.

Trapp v. Naiman     Docket     Sup.Ct. Docket
218 Cal.App.4th 113 - 4th Dist., Div. 2 (E054908)  6/28/13 (Pub. order 7/24/13)     Petition for review by Cal Supreme Ct. DENIED 10/2/13

TRUSTEE'S SALES / ANTI-SLAPP: Plaintiffs brought this action against financial institutions and their lawyers based on a trustee's sale and subsequent unlawful detainer action. The court ordered the lawyers' anti-SLAPP motion to be granted and the action dismissed as to them. The act of noticing a nonjudicial foreclosure sale does not qualify as a protected activity under the anti-SLAPP statute, but the lawyers did not participate in the nonjudicial sale proceedings. The lawyers only involvement was with the unlawful detainer action, which is a protected activity.

Coker v. JP Morgan Chase Bank     Docket     Sup.Ct. Docket
218 Cal.App.4th 1 - 4th Dist., Div. 1 (D061720)  7/23/13     AFFIRMED by Cal Supreme Ct. 1/21/16

ANTI-DEFICIENCY: A lender under a purchase money loan on a residence sought to recover the balance due on the loan after the lender and borrower agreed to a short sale, with the borrower agreeing to be personal liable for the unpaid balance. The court held that C.C.P. Section 580b precludes a deficiency judgment even where the lender does not foreclose, and public policy prohibits a waiver of a borrower's rights under Section 580b.

Bank of America v. Roberts     Docket     Sup.Ct. Docket
217 Cal.App.4th 1386 - 5th Dist. (F064109)  7/17/13     Petition for review by Cal Supreme Ct. DENIED 10/30/13

ANTI-DEFICIENCY: Plaintiff held a loan secured by a second deed of trust on defendant's residence. The parties entered into a short sale agreement, which provided that plaintiff would release its security interest in the property with defendant paying only a portion of the amount due, and that defendant would remain personally liable for the balance. Plaintiff filed this action seeking a money judgment after defendant defaulted. The court upheld the trial court's grant of a summary judgment in favor of plaintiff holding:
1. C.C.P. Section 580e currently provides a borrower with anti-deficiency protection after the parties agree to a short sale and the loan is secured by any deed of trust on 1-4 family residential property. However, defendant is not entitled to that protection because at the time the parties entered into the short sale agreement Section 580e applied only to a first deed of trust, and the statute is not retroactive.
2. C.C.P. Section 726, which permits a deficiency judgment only after a judicial foreclosure, does not prohibit this lawsuit because defendant asked for and consented to the short sale and thereby waived any rights under Section 726.
3. The federal Troubled Asset Relief Program ("TARP"), which may require lenders subject to the program to modify mortgages, does not preclude this lawsuit for several reasons, including the fact that there is no private right of action under that law.

Enloe v. Kelso     Docket     Sup.Ct. Docket
217 Cal.App.4th 877 - 2nd Dist. (B241201)  7/3/13     Petition for review by Cal Supreme Ct. DENIED 9/18/13

ANTI-DEFICIENCY: Plaintiffs/sellers of real property carried back a loan secured by a second deed of trust. They filed this an action seeking a deficiency judgment after the parties entered into a short sale agreement leaving a large balance unpaid. Summary judgment in favor of defendant-purchasers was affirmed because Civil Code Section 580b bars a deficiency judgment for a purchase money loan, even though the trust deed was given to sellers after the close of escrow. Section 580b applies because the timing of the recordation of the trust deed did not change the character of the transaction.

Liberty National Enterprises v. Chicago Title Insurance Company     Docket     Sup.Ct. Docket
217 Cal.App.4th 62 - 2nd Dist. (B234341)  5/22/13  (Pub. Order 6/13/13)     Petition for review by Cal Supreme Ct. DENIED 8/28/13

TITLE INSURANCE: The court followed Safeco Title Ins. Co. v. Moskopoulos (1981) 116 Cal.App.3d 658, holding that the insuring clause of a title insurance policy did not cover an action that did not allege defective title, but rather tortious conduct in the manner in which the insured acquired title. There was no potential for coverage and therefore no duty to defend. The court did not address whether any policy exclusions applied because an occurrence not within the insuring clause does not also have to be excluded by the policy's exclusions.

Fuller v. First Franklin Financial     Docket     Sup.Ct. Docket
216 Cal.App.4th 955 - 3rd Dist. (C070452)  5/1/13 (Cert. for pub. 5/29/13)     Petition for review by Cal Supreme Ct. DENIED 9/25/13

PREDATORY LENDING: The court overruled the trial court's sustaining of a demurrer because the complaint's allegations of an overstatement of the appraisal value, concealment of plaintiffs' eligibility for more favorable loans, and hidden kickbacks stated a claim for deceit, and this alleged conduct, along with the alleged failure to explain the terms of the loans to plaintiffs, stated a claim for breach of fiduciary duty and for unfair business practices. The court also concluded that defendants had failed to establish the expiration of the statute of limitations period on the face of the pleading.

Jenkins v. JP Morgan Chase Bank     Docket
216 Cal.App.4th 497 - 4th Dist., Div. 3 (G046121)  5/17/13     Case complete 7/19/13

TRUSTEE'S SALES: The court upheld the trial court's sustaining of a demurrer without leave to amend, finding:
1. Production of the note is not required for a lender to process a trustee's sale.
2. Plaintiff's claim that defendant violated the terms of a securitized investment trust's pooling and servicing agreement fails because plaintiff was not a third party beneficiary of that agreement.
3. A borrower cannot bring a preemptive judicial action to challenge whether the person initiating the foreclosure is authorized to do so because California's trustee's sale statutes do not allow for an additional requirement that the foreclosing entity must demonstrate in court that it is authorized to initiate a foreclosure.
4. Civil Code Section 2932.5's requirement that an assignment be recorded before the power of sale can be exercised applies to mortgages, but not to deeds of trust.
5. Plaintiff lacked standing under Business and Professions Code Section 17200 et seq. (Unfair Competition Law) because one of the requirements is for a plaintiff to show economic injury resulting from the defendant's unlawful acts. Here, plaintiff's economic injury was a result of her default on her loan, which occurred prior to defendants' allegedly unlawful acts.
6. Plaintiff's claim of a breach of the implied covenant of good faith and fair dealing fails because the covenant must be related to a contract. Here, the only contracts were the note and deed of trust and defendants' alleged conduct was in connection with plaintiff's efforts to have the loan modified and in connection with the conduct of the trustee's sale, not to a violation of any provision of the note and deed of trust.
7. Plaintiff did not state a cause of action for violation of RESPA's Qualified Written Request rules because any harm plaintiff suffered occurred as a result of her own default on the loan.

Corrie v. Soloway     Docket
216 Cal.App.4th 436 - 1st Dist. (A135963)  5/16/13     Case complete 7/17/13

SUBDIVISION MAP ACT: An option agreement was originally illegal because it permitted the sale of a parcel of real property before the filing of a final parcel map and without being expressly conditioned upon the approval and filing of such a map, as required by the Subdivision Map Act (Gov. Code Section 66499.30(e)). However, a subsequent amendment to the option agreement provided that it was conditioned on the filing of a parcel map. The court held that the option was valid and did not violate Section 66499.30(e) because the amendment was in substance a new and different option agreement that stood on its own feet independently of the prior illegality.

Biancalana v. T.D. Service Company     Docket
56 Cal.4th 807 - Cal. Supreme Court (S198562)  5/16/13

TRUSTEE'S SALES: A trustee under a deed of trust may declare a trustee's sale to be void where the trustee made an error in communicating the lender's credit bid to the auctioneer, and the error was coupled with a grossly inadequate bid price. The court pointed out that its holding was premised on the trustee discovering its mistake before it issues the deed, and that after the deed is issued, a bona fide purchaser is entitled to a conclusive presumption that the sale was conducted regularly and properly.

Bock v. California Capital Loans     Docket
216 Cal.App.4th 264 - 3rd Dist. (C069863)  5/14/13     Case complete 7/16/13

USURY: Even when the lender on a loan arranged by a licensed real estate broker is a corporation that is wholly owned by the broker, the broker can still be found to have arranged the loan "for another" for purposes of the usury exemption in Civil Code section 1916.1. Also, in such a situation, the broker may be found to have met the requirement that the broker arranged the loan "in expectation of compensation" even if the only compensation the broker will receive is the profit his wholly owned corporation reaps from the interest on the loan. The court also found that a loan would be arranged "for another" if it was arranged for the borrower instead of the lender.

Multani v. Witkin & Neal     Modification     Docket
215 Cal.App.4th 1428 - 2nd Dist. (B237295)  5/1/13     Case complete 7/2/13

HOA LIEN FORECLOSURE:
1. A non-judicial foreclosure of a homeowner's association lien can be set aside where the HOA fails to provide notice of the homeowner's 90-day right of redemption, as required by C.C.P. 729.050.
2. Plaintiffs were excused from complying with the usual requirement that they tender the amount due in order to maintain an action to set aside a foreclosure because requiring tender of the amount due would undermine a debtor's right under C.C.P. 729.070 to seek a judicial determination of the redemption price.

Chanda v. Federal Home Loans Corporation     Docket     Sup.Ct. Docket
215 Cal.App.4th 746 - 4th Dist., Div. 1 (D059976)  4/19/13     Petition for review & depublication request DENIED by Cal. Supreme Ct. 7/10/13

INSURANCE: Under the Collateral Source Rule, payments under an insurance policy are not deducted from the damages a plaintiff can otherwise collect from a tortfeasor. Therefore, a plaintiff may not normally introduce evidence that the defendant had insurance coverage. Here, however, evidence that a loan broker obtained title insurance for plaintiff's deed of trust was admissible as to the issue of whether the loan broker satisfied industry standards and met its fiduciary duty toward plaintiff. Any prejudicial effect of the existence of insurance could be eliminated by an appropriate jury instruction.

Hamilton Court, LLC v. East Olympic, L.P.     Docket     Sup.Ct. Docket
215 Cal.App.4th 501 - 2nd Dist. (B240052)  4/16/13     Petition for review by Cal Supreme Ct. DENIED 7/10/13

EASEMENTS: The doctrine of merger does not apply to eliminate an easement where a servient and dominant tenement come under common ownership, and the dominant tenement is encumbered by a mortgage which later forecloses.

Hagman v. Meher Mount Corporation     Docket
215 Cal.App.4th 82 - 2nd Dist. (B239014)  4/13/13     Case complete 6/12/13

ADVERSE POSSESSION: A nonprofit religious organization's status as a "public benefit corporation" does not make it a "public entity" immune from adverse possession under Civil Code section 1007. Since the organization did not pay property taxes, the adverse possessor was able to establish adverse possession without the usual requirement that he pay taxes on the disputed land for five years. Also, the adverse possessor was not required to pay a mosquito abatement assessment because the assessment was not a tax.

Intengan v. BAC Home Loans Servicing     Docket
214 Cal.App.4th 1047 - 1st Dist. (A135782)  3/22/13     Case complete 5/24/13

DEEDS OF TRUST / FORECLOSURE:
1. Plaintiff stated a cause of action sufficient to overcome a demurrer where plaintiff alleged that defendant did not contact her to explore options to foreclosure as required by Civil Code Section 2923.5. The trial court improperly took judicial notice of defendant's statements in the declaration attached to the recorded notice of default asserting that defendant attempted with due diligence to contact plaintiff. While judicial notice may be taken of the existence of the declaration, the court may not take judicial notice of the facts asserted in the declaration.
2. Plaintiff did not need to tender payment of the loan in order to maintain this action because while the tender requirement may apply to causes of action to set aside a foreclosure sale, it does not apply to actions seeking to enjoin a foreclosure sale where the lender has allegedly not complied with a condition precedent to foreclosure.

West v. JPMorgan Chase Bank     Docket     Sup.Ct. Docket
214 Cal.App.4th 780 - 4th Dist., Div. 3 (G046516)  3/18/13     Petition for review & depublication request DENIED 7/10/13

DEEDS OF TRUST: When a borrower complies with the terms of a "trial period plan" under the Home Affordable Mortgage Program, and the borrower's representations remain true and correct, the loan servicer must offer the borrower a permanent loan modification. Accordingly, the plaintiff stated causes of action for damages and breach of contract where defendant foreclosed rather than offer a permanent loan modification. However, the court upheld the trial court's sustaining of a demurrer to the cause of action to set aside the trustee's sale because the complaint alleged only procedural irregularities in the sale notice and procedure, and the trustee's deed upon sale recited that the trustee complied with the deed of trust and all applicable statutory requirements. Thus, any notice defects were deemed voidable, not void, and plaintiff was therefore required to allege tender of the indebtedness in order to set aside the trustee's sale, which plaintiff did not do. The court also upheld the sustaining of a demurrer to the cause of action to quiet title because plaintiff did not name as a defendant the person who purchased at the trustee's sale.

Scott v. JPMorgan Chase Bank     Docket     Sup.Ct. Docket
214 Cal.App.4th 743 - 1st Dist. (A132741)  3/18/13     Petition for review by Cal Supreme Ct. DENIED 6/12/13

DEEDS OF TRUST: Plaintiff asserted that he had been fraudulently induced to enter into a subprime loan with the original lender, First Magnus Financial Corporation, and that consequently defendant could not foreclose. First Magnus had assigned the loan to Washington Mutual Bank, which was taken over by the FDIC, and the FDIC sold the loan to defendant pursuant to a Purchase and Assumption Agreement (P&A Agreement). The court upheld the trial court's sustaining of defendant's demurrer without leave to amend on the basis that under the P&A Agreement defendant obtained the beneficial interest under the deed of trust without assuming related liabilities.

Appel v. Superior Court     Docket
214 Cal.App.4th 329 - 2nd Dist. (B244590)  3/11/13     Case complete 4/3/13

MECHANICS LIENS: Where the value of a mechanics lien claimant's work exceeds the contract price, the amount of the lien is limited to the contract price under former Civil Code Section 3123(a) (substantially reenacted as CC 8430), even where the property has been conveyed to a person who was not a party to the contract. That code section provided that the amount of a mechanics lien is the lesser of 1) the reasonable value of the work or 2) the price agreed to by the claimant and the person that contracted for the work.

Jolley v. Chase Home Finance     Docket     Sup.Ct. Docket
213 Cal.App.4th 872 - 1st Dist. (A134019)  2/11/13     Petition for review and depublication DENIED by Cal Supreme Ct. 5/22/13

LOAN AGREEMENTS: In an action to enjoin a trustee's sale and for damages in connection with a construction loan, the court reversed a summary judgment in favor of the defendant lender, finding that there were triable issues of fact as to whether the lender was negligent or engaged in misconduct that allegedly lead plaintiff to believe the loan would be modified. The court held that, while the "Homeowner Bill of Rights" (Assem. Bill 278; Sen. Bill 900 (2011-2012 Reg. Sess.)) did not apply in this case, the legislation sets forth policy considerations that should affect a court's assessment of whether a duty of care was owed to plaintiff, and courts should not rely mechanically on the general rule that lenders owe no duty of care to their borrowers.

Aguayo v. Amaro     Docket
213 Cal.App.4th 1102 - 2nd Dist. (B231194)  1/31/13     Case complete 4/3/13

ADVERSE POSSESSION: The doctrine of unclean hands can serve as a defense to adverse possession by color of title, but normally is not a defense when it is based on claim of right. The court held that unclean hands can be a defense to a claim of adverse possession by claim of right where plaintiff recorded a "wild" deed executed by a non-title holder in order to divert property tax bills from the true owner. The doctrine applied to defeat the adverse possession claim because recordation of the deed constituted deceitful interference with the true owner's ability to defeat the claim.

Hutton v. Fidelity National Title Company     Modification     Docket
213 Cal.App.4th 486 - 5th Dist. (F063318/F063922)  1/31/13     Case complete 4/24/13

NOTARIES: Government Code section 8211.1 limits that amount a notary may charge for taking an acknowledgment to $10 per signature, but does not limit the amount a notary may charge for performing other services, such as traveling to the location of signing, presenting multiple documents for signature, showing where to sign or initial each document, answering questions, etc. In the unpublished portion of the opinion the court held that the attorney's fee provision in the General Provisions of defendant's escrow instructions was unconscionable because it was buried in the middle of extensive provisions in small font, was one of numerous documents signed by plaintiff and was one-sided because it provided for attorney's fees only for defendant, and not for plaintiff.

Windsor Pacific v. Samwood Co.     Docket
213 Cal.App.4th 263 - 2nd Dist. (B233514)  1/30/13     Case complete 4/3/13

PRESCRIPTIVE EASEMENTS:
1. Plaintiff could not establish a prescriptive easement over access roads where the use was permissive pending the parties' negotiations regarding development of the property.
2. Plaintiff was equitably estopped from asserting a prescriptive easement where defendants were entitled to rely on plaintiff's conduct indicating that use of the roads was permissive.

R.E. Loans v. Investors Warranty of America     Docket     Sup.Ct. Docket
212 Cal.App.4th 1432 - 2nd Dist. (B234384)  1/23/13     Petition for review by Cal Supreme Ct. DENIED 5/1/13

SUBORDINATION AGREEMENTS: The court held that defendant did not violate a subordination agreement pursuant to which plaintiff agreed to subordinate its deed of trust to a deed of trust in favor of defendant securing a loan in the amount of $4,006,600, even though defendant cross-collateralized the loan with two other loans for $11,227,500 and $5,912,750. To the extent defendant's trust deed secured a note in the amount of $4,006,600, it was senior to plaintiff's trust deed. To the extent defendant's trust deed secured other notes it is junior to plaintiff's trust deed. Plaintiff could have protected its interest by tendering the amount necessary to cure the default under the $4,006,600 note alone.

Bank of American v. Superior Court     Docket     Sup.Ct. Docket
212 Cal.App.4th 1076 - 4th Dist., Div. 3 (G046829)  1/15/13     Petition for review by Cal Supreme Ct. DENIED 4/10/13

ATTORNEY-CLIENT PRIVILEGE: A tripartite attorney-client relationship arises when a title insurer retains counsel to prosecute an action on behalf of an insured pursuant to a title policy. The privilege applies even where the insurer asserted a reservation of rights in a non-Cumis situation.

Riverisland Cold Storage v. Fresno-Madera Production Credit Assn.     Sup.Ct. Docket
191 Cal.App.4th 611 - Cal. Supreme Court (S190581)  1/14/13

PAROL EVIDENCE RULE: The California Supreme Court held that evidence of oral promises or agreements at variance with the terms of a written contract may be considered to determine if the contract should be invalidated as having been procured by fraud, even where the contract contains an "integration clause". The court overruled its 1935 decision in Bank of America v. Pendergrass, which held that evidence offered to prove fraud "must tend to establish some independent fact or representation, some fraud in the procurement of the instrument or some breach of confidence concerning its use, and not a promise directly at variance with the promise of the writing." The court pointed out that a showing of justifiable reliance would still be necessary to establish the alleged fraud.

Pfeifer v. Countrywide Home Loans     Docket     Sup.Ct. Docket
211 Cal.App.4th 1250 - 1st Dist. (A133071)  12/13/12     Petition for review by Cal Supreme Ct. & Depublication Request DENIED 2/20/13

FORECLOSURE:
1. A trustee is not subject to, and does not have to comply with the requirements of, the Fair Debt Collection Practices Act because processing a non-judicial foreclosure is not a debt collection activity under the Act.
2. Where a deed of trust incorporates by reference the servicing requirements of HUD, including a face-to-face interview, the lender had to comply with the servicing terms prior to conducting a valid nonjudicial foreclosure.
3. A tender of the amount owed was not required in this case because a) the tender rule applies only in cases seeking to set aside a completed sale, rather than an action seeking to prevent a sale in the first place, and b) the lender allegedly violated laws related to avoiding the necessity for a foreclosure.
4. Plaintiff's default does not bar their claim that the lender cannot proceed with the foreclosure prior to complying with the HUD servicing requirements.
5. Borrowers may seek to enjoin a lender from proceeding with a foreclosure based on the lender's failure to perform a HUD servicing requirement, but a private right of action for damages does not exist.

Wooster v. Dept. of Fish and Game     Docket     Sup.Ct. Docket
211 Cal.App.4th 1020 - 3rd Dist. (C068816)  11/26/12 (Pub. Order 12/11/12)     Petition for review by Cal Supreme Ct. DENIED 2/13/13

CONSERVATION EASEMENTS:
1. The Department of Fish and Game's failure to comply with its obligation to post signs on the subject property did not extinguish a conservation easement or give the plaintiff a basis for rescinding the easement.
2. The grant of hunting rights to the department, so that the department could prohibit all hunting on the property, was legal and consistent with the statutes governing conservation easements.

Shuster v. BAC Home Loans Servicing     Docket
211 Cal.App.4th 505 - 2nd Dist. (B235890)  11/29/12     Case complete 1/29/13

TRUSTEE'S SALES: 1. Omission of the name of the trustee in a deed of trust does not preclude a non-judicial sale. It was sufficient that a trustee was substituted prior to the foreclosure.
2. The foreclosing party does not have to have an interest in or possession of the note. CC 2924(a)(1) permits the "trustee, mortgagee, or beneficiary, or any of their authorized agents" to institute foreclosure.
3. Plaintiff's claims fail because they did not allege tender of the amounts due and owing under the loan. The court pointed out that there are exceptions to the tender rule, such as when the borrower challenges the validity of the underlying debt, asserts a counterclaim or set-off against the beneficiary or demonstrates the deed of trust is void on its face, but none of those exceptions was applicable in this case.

La Jolla Group II v. Bruce     Docket
211 Cal.App.4th 461 - 5th Dist. (F061829)  11/28/12     Case complete 1/28/13

LIS PENDENS / FORGERY: 1. In order to be privileged under CC 47(b)(4), a lis pendens must a) identify a previously filed action and b) the previously filed action must be one that affects title or right of possession of real property. The court declined to add a third requirement that the plaintiff must make a showing of evidentiary merit.
2. The name of the beneficiary in a deed of trust was altered in an attempt by a loan broker to support an unrelated loan. The court held that since the deed of trust was materially altered after it was signed, it was a forgery and was therefore void ab initio.

Twenty-Nine Palms Enterprises Corporation v. Bardos     Docket     Sup.Ct. Docket
210 Cal.App.4th 1435 - 4th Dist., Div. 2 (E051769)  10/11/12 (Pub. order 11/8/12)     Petition for review by Cal Supreme Ct. DENIED 2/20/13

INDIANS / CONTRACTOR LAW: In an Indian tribal corporation's suit to recover money paid for construction work done on tribal land, on the ground that defendant was unlicensed at the time of the contract, a grant of summary judgment in favor of the plaintiff was affirmed where:
1. Defendant argued that sovereign immunity prevented plaintiff from asserting that defendant was not licensed as a contractor under state law because the work was performed on tribal land. This defense was rejected because it is only available to tribal entities and not to non-tribal entities;
2. Defendant was the sole shareholder of a corporation that had a contractor's license, with defendant as Responsible Managing Officer. But the work was performed as a sole proprietorship under a different fictitious business name, and defendant did not obtain a contractor's license in that name until after the work was complete. Even though a sole proprietorship is not a legal entity separate from the individual owner, the corporate license belonged to the corporation, which is a separate entity, so he could not perform work under the name of the sole proprietorship:
3. The court rejected defendant's contention that the corporate identity should be disregarded via the alter ego doctrine because defendant used the sole proprietorship for the purpose of self-dealing, and equity does not require piercing the corporate veil in that circumstance.
4. Defendant could not establish substantial compliance with the licensing requirement because he did not meet the criteria of Business and Professions Code Section 7031(e); and
5. Defendant contended that plaintiff should be estopped from relying on Section 7031 because plaintiff told defendant that a license was not required for work performed on tribal land. But equitable principles may not be used to circumvent Business and Professions Code section 7031.

Cottonwood Duplexes, LLC v. Barlow     Docket
210 Cal.App.4th 1501 - 3rd Dist. (C069564)  11/13/12     Case complete 1/15/13

EASEMENTS: The court held that an easement cannot be reduced in size on the basis that the reasonable use requirements of the easement, both presently and in the future, do not require the full size and scope of the original easement. Even though defendant had no apparent use for more than 15 feet of the 60-foot easement, an easement acquired by deed cannot be lost by mere non-user. The court distinguished Scruby v. Vintage Grapevine, Inc. (1995) 37 Cal.App.4th 697, in which the court permitted the servient tenement to maintain water tanks and grape vines in the easement area because such use did not interfere with the dominant tenements use of the remainder of the easement for ingress and egress. Scruby dealt with the scope of use of an easement, whereas here plaintiff sought to entirely terminate defendant's rights as to a portion of the easement.

JP Morgan Chase Bank v. Banc of America Practice Solutions     Docket
209 Cal.App.4th 855 - 4th Dist., Div. 3 (G045943)  9/27/12     Case complete 11/29/12

EQUITABLE SUBROGATION: The court applied the Doctrine of Equitable Subrogation to subrogate respondent's deed of trust to two deeds of trust that had been paid off with the loan proceeds, thereby making respondent's deed of trust senior to appellant's earlier recorded deed of trust. The evidence showed that respondent intended to be in first position, and that appellant had intended to be in third position junior to the two deeds of trust that were paid off with the proceeds of respondent's loan.

Ragland v. U.S. Bank     Docket
209 Cal.App.4th 182 - 4th Dist., Div. 3 (G045580)  9/11/12     Case complete 11/13/12

FORECLOSURE: The court overruled the trial court's order sustaining the bank's motion for summary judgment, holding that:
1. Plaintiff raised a triable issue of fact as to whether the bank's representative told her not to make a payment. Plaintiff's failure to tender the amount due does not preclude her from raising this issue because the amount claimed by the bank includes late charges and other charges that would not have been incurred if plaintiff had continued to make payments.
2. Civil Code section 2924g(d), prohibiting a trustee's sale from being conducted prior to the seventh day after an injunction is terminated, creates a private right of action and is not preempted by federal law.
NOTE: Plaintiff conceded that her cause of action for rescission of the trustee's deed was no longer viable because the property was resold to a bona fide purchaser for value.

Martin v. Van Bergen     Docket
209 Cal.App.4th 84 - 2nd Dist. (B232570)  9/6/12     Case complete 11/6/12

BOUNDARY DISPUTES: The doctrine of boundary by agreement does not apply where: 1) a boundary was not uncertain where it can be ascertained by an accurate survey; and 2) evidence of an actual agreement to resolve a boundary dispute does not exist.

Burnham v. California Public Employees' Retirement System     Docket
208 Cal.App.4th 1576 - 3rd Dist. (C067715)  8/31/12     Case complete 10/31/12

DOMESTIC PARTNERS: Presenting a declaration of domestic partnership for filing with the Secretary of State is a necessary prerequisite for a valid domestic partnership. Signing a declaration of domestic partnership and having it notarized is not sufficient alone. Here, because plaintiff's purported domestic partner was deceased when plaintiff presented the declaration of domestic partnership for filing with the Secretary of State, they never became domestic partners. Therefore, Plaintiff was not entitled to the decedent's state pension survivor benefits. The court also held that the putative spouse doctrine did not apply because that doctrine protects the expectation of parties who accumulate property over time believing they are part of a valid union. Here, plaintiff and the decedent attempted to establish a domestic partnership shortly before one of them died, so they did not accumulate property over time in expectation of having a valid union.

JCC Development Corp. v. Levy     Docket     Sup.Ct. Docket
208 Cal.App.4th 1522 - 2nd Dist. (B231920)  8/31/12     Petition for review by Cal Supreme Ct. DENIED 11/20/12

PROMISSORY NOTES: A promissory note provided for a higher rate of interest to be charged if the due date of the note was accelerated due to a default. The court held that the higher interest rate did not apply after the note became due and payable by its own terms because at that point the due date was not being accelerated, and the higher interest rate was only contained within the acceleration clause.

Barroso v. Ocwen Loan Servicing     Docket     Sup.Ct. Docket
208 Cal.App.4th 1001 - 2nd Dist. (B229112)  8/21/12     Request for depublication DENIED by Cal Supreme Ct. 11/14/12

LOAN MODIFICATION: In this action to set aside a trustee's sale, the trial court sustained the loan servicer's demurrer, and the appellate court reversed. The court held that the demurrer was properly sustained to the extent the action was based on a Revised Modification Agreement because the borrower's signature was not notarized as required by the agreement and the borrower signed it after the deadline for accepting the offer. However, the demurrer should not have been sustained as to a previous Modification Agreement because that agreement did not contain a requirement that the signature be notarized, and it was timely submitted. Also, the general rule that a borrower must tender payment of the debt in order to set aside a trustee's sale did not apply here because there was no default under the terms of the Modification Agreement.

Vieira Enterprises v. City of East Palo Alto     Docket     Sup.Ct. Docket
208 Cal.App.4th 584 - 1st Dist. (A132754)  8/15/12     Request for depublication DENIED by Cal Supreme Ct. 11/28/12
Modification of Opinion: 209 Cal.App.4th 120

FIXTURES: The court held that Health & Safety Code Section 18551, which sets forth the requirements for approving the installation of a manufactured homes on a foundation, does not preempt the common law of fixtures. The notice and recording requirements of Section 18551 serve the sole purpose of placing the manufactured homes on the property tax rolls to permit taxing them as an improvement of real property. Accordingly, the manufactured home in this case became a fixture at the time it was installed even though that was prior to the City's issuance of a notice of installation. [Ed. note: The case would not normally be of interest because it is an action against a city for inverse condemnation and due process violations, but the discussion pertaining to the law of fixtures is relevant for our purposes.]

Pinnacle Museum Tower Assn. v. Pinnacle Market Development     Docket
55 Cal.4th 223 - Cal. Supreme Court (S186149)  8/16/12

CC&R's: The court held that a provision in CC&R's providing that the homeowners association and each condominium owner agree to waive their right to a jury trial and to have any construction dispute resolved exclusively through binding arbitration is not unconscionable and is properly enforced against the association, as well as the individual owners.

Arabia v. BAC Home Loans Servicing     Docket     Sup.Ct. Docket
208 Cal.App.4th 462 - 4th Dist., Div. 1 (D060923)  8/13/12     Petition for review by Cal Supreme Ct. DENIED 10/31/12

JUDICIAL FORECLOSURE: The court held:
1. A loan servicer may prosecute a judicial foreclosure action in its own name as long as the right to foreclose has been assigned to the loan servicer. Here the lender assigned that right pursuant to a Pooling and Servicing Agreement.
2. Failure to name a junior lienholder does not preclude a judgment against the named parties, although the judgment does not affect the junior lien.
3. Filing a cross-complaint for judicial foreclosure in an action by the borrower for alleged violations concerning earlier attempts to non-judicially foreclose is valid and does not undermine the extensive procedures California has put in place for non-judicial foreclosure. Judicial foreclosures are conducted under the supervision of a court and do not require the same procedural protections as non-judicial foreclosures.

Weinstein v. Rocha     Docket     Sup.Ct. Docket
208 Cal.App.4th 92 - 2nd Dist. (B235931)  8/1/12     Petition for review by Cal Supreme Ct. DENIED 10/31/12

ANTI-DEFICIENCY: The seller (Rocha) carried back a note secured by a second deed of trust on property he sold to defendant (Weinstein). The note was later modified pursuant to a settlement agreement in an action in which Weinstein sued Rocha for failing to disclose housing code violations. Weinstein defaulted on both deeds of trust and the holder of the first deed of trust foreclosed, wiping out Rocha's deed of trust. Rocha sued to recover the amount due on the note. The court held that the settlement agreement was inextricably tied to the promissory note, and was a modification of the terms of the note. Therefore, a deficiency judgment is precluded by C.C.P. Section 580b, which prohibits a seller who carries back a purchase money deed of trust from recovering a deficiency judgment.

Wilson v. Hynek     Docket
207 Cal.App.4th 999 - 4th Dist., Div. 1 (D057620)  6/20/12 (Pub. Order 7/16/12)     Case complete 9/19/12

TRUSTEE'S SALES: A loan was secured by two deeds of trust, one securing a vacant parcel of land and the other securing plaintiffs' residence. The court rejected plaintiffs' claim that defendants were bound by alleged oral representations that defendants would first foreclose on the vacant parcel, because the deeds of trust specifically provided: "Borrower hereby expressly waives any right which it may have to direct the order in which any of the Property shall be sold in the event of any sale or sales pursuant to this Deed of Trust." The court also rejected plaintiffs' claim that the notice of default was invalid because it was executed by an agent for the beneficiary rather than by the trustee, because Civil Code Section 2942(a)(1) provides that a notice of default can be recorded by a trustee, beneficiary or any of their authorized agents.

Skov v. U.S. Bank National Association     Docket
207 Cal.App.4th 690 - 6th Dist. (H036483)  6/8/12 (Partial Pub. Order 7/3/12)     Case complete 9/5/12

TRUSTEE'S SALES: The trial court sustained defendant's demurrer to a complaint asserting that defendant failed to comply with Civil Code Section 2923.5 (which requires that before recording a notice of default, a lender must contact the borrower to "explore" options for avoiding foreclosure). The appellate court reversed, holding that:
1. A court can take judicial notice of the fact that a Notice of Default has been recorded with an attached declaration asserting compliance with CC 2923.5. But whether the lender actually complied with CC 2923.5 is a question of fact that cannot be resolved on demurrer.
2. A private cause of action exists to enjoin a trustee's sale for a violation of CC 2923.5.
3. CC 2923.5 is not preempted by the National Bank Act (12 U.S.C. 21, et seq.).

Fait v. New Faze Development     Docket     Sup.Ct. Docket
207 Cal.App.4th 284 - 3rd Dist. (C067630)  6/27/12     Petition for review by Cal Supreme Ct. DENIED 10/17/12

ANTIDEFICIENCY LAW: Plaintiffs sold a parcel of property and carried back a note secured by a deed of trust to finance the balance of the p urchase price. The purchaser demolished a building on the property to make way for new development, but was unable to complete the development and defaulted on the loan. Plaintiffs foreclosed non-judicially and purchased the property at the foreclosure sale. They then sued for waste and impairment of security based on the demolition of the building and the resulting loss of value. Defendants claimed that the action was barred by California's antideficiency laws. The court held that the antideficiency laws bar recovery for waste only if it is caused by the economic pressures of a depressed market, such as where an owner is compelled as a result of an economic downturn to forego the general maintenance and repair of the property in order to keep up with payments on the mortgage debt. But antideficiency laws do not preclude this action because defendants' demolition of the building was not induced by an economic downturn.

Cadlerock Joint Venture v. Lobel     Docket     Sup.Ct. Docket
206 Cal.App.4th 1531 - 4th Dist., Div. 3 (G045936)  6/20/12     Petition for review by Cal Supreme Ct. DENIED 10/10/12

TRUSTEE'S SALES / DEFICIENCY JUDGMENTS: When a single lender contemporaneously makes two non-purchase money loans secured by two deeds of trust referencing a single parcel of real property and soon thereafter assigns the junior loan to a different entity, the assignee of the junior loan, who is subsequently "sold out" by the senior lienholder's nonjudicial foreclosure sale, may pursue the borrower for a money judgment in the amount of the debt owed. The court pointed out that there was no suggestion in the record that the loan originator and assignees were affiliated in any way or that two loans were created, when one would have sufficed, as an artifice to evade C.C.P. Section 580d. (Section 580d prohibits a lender from obtaining a deficiency judgment after non-judicially foreclosing its deed of trust.)

Nickell v. Matlock     Docket     Sup.Ct. Docket
206 Cal.App.4th 934 - 2nd Dist. (B230321)  6/4/12     Petition for review by Cal Supreme Ct. DENIED 8/15/12

QUIET TITLE: Normally, a defendant has no right to participate in the case after its default has been entered. But Code of Civil Procedure Section 764.010, pertaining to quiet title actions, provides that "[t]he court shall not enter judgment by default but shall in all cases require evidence of plaintiff's title and hear such evidence as may be offered respecting the claims of any of the defendants . . ." 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 defendants were entitled to participate in the hearing even though their answers to the complaint had been stricken as a result of sanctions, and their defaults had been entered.

Cal Sierra Construction v. Comerica Bank     Docket     Sup.Ct. Docket
206 Cal.App.4th 841 - 3rd Dist. (C060707)  5/31/12     Petition for review by Cal Supreme Ct. DENIED 8/29/12

MECHANICS LIENS: The court held that only owners, and not lenders, are entitled to bring a "Lambert" motion. This term refers to Lambert v. Superior Court (1991) 228 Cal.App.3d 383, which held that where a claimant has already filed suit to enforce a mechanics lien or stop notice, the owner may file a motion in the action to have the matter examined by the trial court. On such motion, the claimant bears the burden of establishing the "probable validity" of the claim underlying the lien or stop notice. If the claimant fails to meet that burden, the lien and stop notice may be released in whole or in part.

Cyr v. McGovran     Docket
206 Cal.App.4th 645 - 2nd Dist. (B231155)  5/29/12

OPTIONS: The 3-year statute of limitation under C.C.P. 338(b) for injury to real property does not apply to plaintiff's alleged injury to rights under an option because an option is a contractual right, and not an interest in real property.

American Property Management Corporation v. Superior Court     Docket     Sup.Ct. Docket
206 Cal.App.4th 491 - 4th Dist., Div. 1 (D060868)  5/24/12     Petition for review by Cal Supreme Ct. DENIED 8/22/12

INDIANS - SOVEREIGN IMMUNITY: The court held that a California limited liability company ("the LLC"), which was wholly owned through a series of California limited liability companies by an Indian tribe, was not entitled to sovereign immunity. The LLC owned a hotel and the lawsuit involved a dispute with its property management company. The court stated that the dispositive fact was that the LLC was a California limited liability company. Nevertheless, it went through the weighing process prescribed by the US 10th Circuit Court of Appeals in Breakthrough Mgmt. Group, Inc. v. Chukchansi Gold Casino & Resort 629 F.3d 1173, which concluded that a court needs to determine whether a tribe's entities are an "arm of the tribe" by looking to a variety of factors when examining the relationship between the tribe and its entities, including but not limited to: (1) their method of creation; (2) their purpose; (3) their structure, ownership, and management, including the amount of control the tribe has over the entities; (4) whether the tribe intended for the entities to have tribal sovereign immunity; (5) the financial relationship between the tribe and the entities; and (6) whether the purposes of tribal sovereign immunity are served by granting immunity to the entities. The court concluded that the balance of these factors weighed heavily against sovereign immunity, and reiterated that the most significant fact was the LLC's organization as a California limited liability company.

The concurring opinion would not accord the same dispositive effect of formation under state law as a limited liability company that the majority did, but agreed that the factors set forth by the 10th Circuit weighed against sovereign immunity.

[Ed. note: The "weighing" process is impossible to do with any certainty at the time of contracting with an LLC (or other entity) in which an Indian tribe owns an interest. In spite of the favorable outcome of this state court appellate opinion, it seems that in order to be safe, you need to insist on a specific waiver of sovereign immunity from a tribe that has an interest in any entity you enter into a contract with.]

Shady Tree Farms v. Omni Financial     Docket
206 Cal.App.4th 131 - 5th Dist. (F062924)  5/22/12     Case complete 7/23/12

MECHANICS LIENS: Plaintiff contracted directly with the owner of a development to deliver trees, and recorded a mechanics lien after not being paid. The court held that plaintiff's mechanics lien was invalid because it failed to provide defendant construction lender with a preliminary 20-day notice under Civil Code Section 3097(b). Section 3097(a), requiring a 20-day notice to the owner, original contractor and construction lender, did not apply because plaintiff was under direct contract with the owner, and the subsection contains an exception for such persons. However, Section 3097(b) requires a 20-day notice to the construction lender by anyone under direct contract with the owner, except "the contractor". The court interpreted that term to refer only to the general contractor, so the exception did not apply to plaintiff.

Deutsche Bank v. McGurk     Docket
206 Cal.App.4th 201 - 2nd Dist. (B231591)  5/22/12     Case complete 7/26/12

QUIET TITLE: Defendant McGurk filed a previous quiet title action against a purchaser who had defrauded her, and recorded a lis pendens. She also named as a defendant the lender holding a deed of trust executed by the purchaser. McGurk dismissed the lender after the lender filed bankruptcy intending to pursue the lender in the bankruptcy action. The lender then assigned the note and deed of trust to plaintiff, after which McGurk took the default of the purchaser. Plaintiff brought this declaratory relief action seeking a determination of the validity of the deed of trust. The court held that 1) even though the assignment was recorded subsequent to the lis pendens, plaintiff stands in the shoes of the lender, whose deed of trust recorded prior to the lis pendens, 2) while plaintiff took the assignment subject to the risk that its assignor's interest would be proven to have been invalid, that risk never came to fruition because the assignor was dismissed, 3) the case was remanded to the trial court to determine the validity of the deed of trust.

Herrera v. Federal National Mortgage Association     Docket     Sup.Ct. Docket
205 Cal.App.4th 1495 - 4th Dist., Div. 2 (E052943)  5/17/12     Petition for review DENIED by Cal Supreme Ct. 8/8/12

TRUSTEE'S SALES: MERS, as nominee beneficiary, has the power to assign its interest under a deed of trust. Even assuming plaintiffs can allege specific facts showing that MERS' assignment of the deed of trust was void, a plaintiff in a suit for wrongful foreclosure is required to demonstrate the alleged imperfection in the foreclosure process was prejudicial to the plaintiff's interests. Not only did plaintiffs fail to show prejudice, but if MERS lacked the authority to assign the deed of trust, the true victim would not be the plaintiffs, who were admittedly in default, but the lender whose deed of trust was improperly assigned. Finally, Civil Code Section 2932.5, requiring recordation of an assignment of a mortgage, applies only to mortgages that give a power of sale to the creditor, not to deeds of trust which grant a power of sale to the trustee.

Estates of Collins and Flowers (Flowers v. Dancy)     Docket     Sup.Ct. Docket
205 Cal.App.4th 1238 - 3rd Dist. (C064815)  5/10/12     Petition for review DENIED by Cal Supreme Ct. 7/25/12

FORGERY: The son of one of two property owners forged a deed after they both had died. The court held that the administrator of the estates of the property owners was precluded from attacking the admittedly forged deed due to the "unclean hands" doctrine. The administrator, prior to being appointed as such, wrongfully sought to control the house by filing a defective mechanics lien, filing a baseless quiet title action for his own benefit, and renting the property to tenants for his own benefit, without regard for the other heirs of the two deceased property owners. The court pointed out that a forged deed is a nullity, but a party's conduct may estop him from asserting that the deed is forged, and that the unclean hands doctrine can prevent a party from attacking a forged deed.

The court also addressed the fact that as the other heirs should not suffer as a result of the administrator's wrongful conduct. However, the court found that there was no evidence that any heirs who had not aided, ratified, or acquiesced in the administrator's actions actually exist in this case.

Sumner Hill Homeowners' Association v. Rio Mesa Holdings     Docket
205 Cal.App.4th 999 - 5th Dist. (F058617)  5/2/12     Petition for review DENIED by Cal Supreme Ct. 7/24/12

EASEMENTS: In the published portion of the opinion, the court held that a subdivision map failed to provide public access to a river as required by Government Code Section 66478.4 if the river is navigable, but that the challenge to the map was barred by the 90-day statute of limitations in Government Code Section 66499.37. The court did not reach the question of whether or not the river is navigable. The court also held that implied and equitable easement rights are sufficient "title" to support a slander of title action, and that defendant slandered plaintiffs' title by recording a Notice of Permission to Use Land Under Civil Code Section 813 that purported to restrict plaintiffs use of the easement.

The court also addressed Streets and Highways Code Section 8353, which provides that the vacation of a street or highway extinguishes all private easements claimed by reason of the purchase of a lot by reference to a map on which the street or highway is shown, unless within two years after the vacation, the claimant records a notice describing the private easement. The court held that this section does not apply to private easements that are based on other or additional grounds besides the fact that the purchase was by reference to a map depicting a street.

Haynes v. EMC Mortgage Corporation     Docket     Sup.Ct. Docket
205 Cal.App.4th 329 - 1st Dist. (A131023)  4/9/12 (Pub. Order 4/14/12)     Petition for review DENIED by Cal Supreme Ct. 8/8/12

TRUSTEE'S SALES: Civil Code Section 2932.5, which requires the assignee of a mortgagee to record the assignment before exercising a power to sell the real property, applies only to mortgages and not to deeds of trust. Section 2932.5 requires the assignment of a mortgage to be recorded so that a prospective purchaser knows that the mortgagee has the authority to exercise the power of sale. This is not necessary when a deed of trust is involved, since the trustee conducts the sale and transfers title. (Ed. note: The result was not affected by the fact that the assignee substituted a new trustee.)

Brown v. Wells Fargo Bank     Docket
204 Cal.App.4th 1353 - 2nd Dist (B233679)  4/16/12     Case complete 6/20/12

TRUSTEE'S SALES: Plaintiff filed suit and sought a preliminary injunction to prevent a trustee's sale. The trial court granted the injunction on the condition that plaintiff deposit $1,700 a month into a client trust account. The trial court subsequently dissolved the injunction after plaintiff failed to make any payments. The appellate court affirmed, and further determined that the appeal was frivolous because no viable issue was raised on appeal. It directed the court clerk to send a copy of the opinion to the California State Bar for consideration of discipline of plaintiff's attorney.

Connolly v. Trabue     Docket     Sup.Ct. Docket
204 Cal.App.4th 1154 - 1st Dist. (A131984)  4/10/12     Petition for review and depublication request DENIED by Cal Supreme Ct. 6/27/12

PRESCRIPTIVE EASEMENTS: Plaintiffs brought an action to establish a prescriptive easement to a portion of defendant's property they had fenced in 1998. Plaintiff and defendant's predecessor intended to do a lot line adjustment that would transfer the disputed area to plaintiffs, but it was not accomplished because of an error in a deed. The trial court ruled that, even if such an easement had been acquired by Plaintiffs, their claim was barred by the doctrine of laches because they had delayed in asserting their claim in a timely manner. The appellate court reversed, holding that the doctrine of laches is inapplicable in an action involving a claim for a prescriptive easement because 1) once a prescriptive easement is established for the statutory period, the owner of the easement is under no obligation to take further action, rather, it is the record owner who must bring an action within 5 years after the prescriptive period commences, 2) this was an action at law, not equity, and laches applies only to equitable actions and 3) there was no evidence that plaintiffs were aware of the error in deed until shortly before they filed this action. [Ed. note: Plaintiff's occupation of the disputed area was apparently exclusive, but the court did not discuss cases holding that a prescriptive easement cannot be established where the use is exclusive. For example, see Harrison v. Welch.]

Bank of America v. Mitchell     Docket
204 Cal.App.4th 1199 - 2nd Dist. (B233924)  4/10/12     Case complete 6/11/12

TRUSTEE'S SALES / DEFICIENCY JUDGMENTS: The court acknowledged existing case law holding that a "sold out" junior holder of a deed of trust can obtain a deficiency judgment when the junior lien is wiped out by a trustee's sale under a senior deed of trust. But the court held that a deficiency judgment was not available in this case where the same lender held both deeds of trust and assigned the junior deed of trust to plaintiff after the trustee's sale. The court also held that this applies regardless of whether the lender purchases at its own trustee's sale or where, as here, a 3rd party purchases at the sale.

Montgomery Sansome LP v. Rezai     Docket
204 Cal.App.4th 786 - 1st Dist. (A130272, A130694)  3/28/12     Case complete 5/29/12

MECHANICS LIENS/CONTRACTOR LICENSING: Plaintiff's certificate of limited partnership with the California Secretary of State was in the name of "Montgomery-Sansome, LP". Its contractor's license was in the name of Montgomery Sansome LTD. A fictitious business name statement named Montgomery Sansome LTD, L.P. and incorrectly stated that it was a general partnership. The contract entered into with defendant to perform certain repairs named plaintiff as Montgomery Sansome LTD, LP. The trial court granted a summary judgment in favor of defendant, holding that plaintiff could not recover because the entity that signed the contract was not licensed. The appellate court reversed, holding that there is a triable issue of fact regarding whether there is actually only a single entity. Plaintiff did not violate the licensing law if the entity that entered into the contract is actually the same as the entity that signed the contract. The court distinguished cases holding that the licensing law is violated where a corporation or partnership enters into a contract and the principal is licensed, but not the entity.

Debrunner v. Deutsche Bank     Docket     Sup.Ct. Docket
204 Cal.App.4th 433 - 6th Dist. (H036379)  3/16/12     Petition for review and depublication request DENIED by Cal Supreme Ct. 6/13/12

TRUSTEE'S SALES: The court upheld the trial court's grant of a demurrer in favor of the lender without leave to amend, holding:
1. Since each assignment of deed of trust provided for the assignment "together with the note or notes therein described", it was not necessary to separately endorse the promissory note.
2. Physical possession of the note is not a precondition to nonjudicial foreclosure.
3. A notice of default does not need to be filed by the person holding the note. C.C. 2924(a)(1) permits a notice of default to be filed by the "trustee, mortgagee or beneficiary, or any of their authorized agents".
4. A notice of default (NOD) is valid even though the substitution of the trustee identified in the NOD is not recorded until after the NOD records.

Walker v. Ticor Title Company of California     Docket
204 Cal.App.4th 363 - 1st Dist. (A126710)  3/15/12     Case complete 5/16/12

ESCROW: Plaintiffs filed suit against Ticor and 12 other defendants alleging defendants conspired to fraudulently induce them to refinance real estate loans. The court upheld the judgment in favor of Ticor, holding as follows:
1. Even though Ticor gave the loan documents to the loan broker in order to have plaintiffs sign them at home, this did not violate a provision of the lender's closing instructions prohibiting the release of loan documents without lender's prior approval because the lender was fully aware that this was Ticor's and the loan broker's practice so, therefore, it impliedly consented to it.
2. It was reasonable for the jury to conclude that Ticor did not violate a provision of the lender's closing instructions requiring the closing agent to "coordinate the settlement" because the loan broker's activity of obtaining signatures was only part of the larger coordination of the settlement handled and supervised by Ticor.
3. It was permissible for the loan broker to provide copies of the "Notice of Right to Cancel" because nothing in the language of the instructions precluded Ticor from delegating this task, nor could plaintiffs have been damaged by such a delegation.
4. One of the plaintiffs notified Ticor after the loan closed that his wife had not signed the loan documents. This was insufficient to establish that Ticor aided and abetted the loan broker's fraud because it did not show that Ticor had actual knowledge of the fraud.
5. It was improper for the trial court to reduce the amount of attorney's fees awarded to Ticor based on plaintiff's financial condition.

Kavin v. Frye     Docket
204 Cal.App.4th 35 - 2nd Dist. (B230076)  3/5/12     Case complete 5/7/12

OPTION TO RENEW LEASE:
1. An option to renew a lease was not effective where it was exercised by only one of four tenants, and the other tenants did not authorize the first tenant to do so.
2. A lease provision stating that all lessees are jointly and severally liable for lease obligations is not an authorization for only one lessee to execute an option to extend the lease.
3. The option was executed late per the terms of the lease. Normally, a lessor can waive the time requirement for an option since the provision normally benefits only the lessor. Here, however, the lessor could not waive the provision on behave of two of the tenants who, since they signed the lease basically as guarantors, also stood to benefit by the expiration of the option period.

SCI California Funeral Services v. Five Bridges Foundation     Docket
203 Cal.App.4th 549 - 1st Dist. (A126053)  2/14/12     Case complete 4/17/12

DAMAGES-DIMINUTION IN VALUE: In this non-title insurance case, plaintiff purchased property, including an easement that was determined, in another action, to be invalid. The court held that the buyer's damages for loss of the easement included, in addition to diminution in value caused by loss of the easement, damages attributable to the fact that the easement had additional unique value to a neighbor, which plaintiff could have used as a "bargaining chip" to obtain a higher price when negotiating a sale of the easement to the neighbor.

[Ed. Note: This case may not be applicable to title insurance because standard ALTA policies contain a provision limiting liability for damages to "the difference between the value of the Title as insured and the value of the Title subject to the risk insured against by this policy". CLTA policies contain a similar provision. The ALTA/CLTA Homeowners Policy of Title Insurance contains a provision limiting damages to "your actual loss".]

California Redevelopment Association v. Matosantos     Docket
53 Cal.4th 231 - Cal. Supreme Court (S194861)  12/29/11

REDEVELOPMENT AGENCIES:
1. Assembly Bill 1X 26, which bars redevelopment agencies from engaging in new business and provides for their windup and dissolution, is constitutional.
2. Assembly Bill 1X 27, which offers redevelopment agencies the alternative to continue to operate if the cities and counties that created them agree to make payments into funds benefiting the state's schools and special districts, is unconstitutional.

Stebley v. Litton Loan Servicing     Docket     Sup.Ct. Docket
202 Cal.App.4th 522 - 3rd Dist. (C066130)  11/30/11 (Pub. Order 12/29/11)    Petition for review and depublication request by Cal Supreme Ct. DENIED 3/14/12

TRUSTEE'S SALES: The court upheld the trial court's sustaining of a demurrer without leave to amend in an action alleging that defendant violated Civil Code Section 2923.5, which requires that before a notice of default can be filed, a lender must attempt to contact the borrower and explore options to prevent foreclosure. The court held:
1. Section 2923.5 does not provide for damages or for setting aside a foreclosure sale. The only remedy available is to provide the borrower more time before a foreclosure sale occurs. After the sale, the statute provides no relief.
2. The statute does not require a lender to modify the loan.
3. While a tender of the loan amount is not necessary to delay a foreclosure sale, it is necessary in order to set aside a sale after it occurs.
4. Plaintiff's cause of action for dependant adult abuse fails because plaintiff failed to allege that the property was taken wrongfully where an ordinary foreclosure sale occurred.

Portico Management Group v. Harrison     Docket     Sup.Ct. Docket
202 Cal.App.4th 464 - 3rd Dist. (C062060)  12/28/11     Petition for review by Cal Supreme Ct. DENIED 4/11/12

TRUSTS: In the published portion of the opinion, the court held that an arbitration award and judgment against a trust, and not against the trustees in their capacity as trustees, were not valid because a trust is not an entity or person capable of owning title to property. A trust is, rather, a fiduciary relationship with respect to property. The court pointed out that if the judgment had been against the trustees in their representative capacities, it would have also bound successor trustees. Although the lawsuit properly named the trustees, for some reason plaintiff did not seek to correct or modify the arbitration award or judgment to indicate that it was properly against the trustees.

Gray1 CPB v. Kolokotronis     Docket
202 Cal.App.4th 480 - 3rd Dist (C064954)  12/2/11 (Pub. Order 12/28/11)     Case complete 2/28/12

GUARANTY: The court rejected defendant's contention that the guaranty he signed was actually a demand note, which would have meant that he could compel the lender to foreclose on the security first and that the waiver of his rights under various antideficiency statutes would be invalid. The court held that the following language in the guaranty did not turn the guaranty into a promissory note: "whether due or not due," "on demand," and "not contingent upon and are independent of the obligations of Borrower."

Lona v. Citibank     Docket
202 Cal.App.4th 89 - 6th Dist (H036140)  12/21/11     Case complete 2/22/12

TRUSTEE'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.     Modification Order     Docket     Sup.Ct. Docket
202 Cal.App.4th 161 - 2nd Dist. (B225685)  12/21/11     Request for depublication DENIED 3/28/12

MECHANICS 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
201 Cal.App.4th 1496 - 4th Dist., Div. 3 (G044357)  12/19/11     Case complete 2/21/12

QUIET TITLE: Normally, a defendant has no right to participate in the case after its default has been entered. But Code of Civil Procedure Section 764.010, pertaining to quiet title actions, provides that "[t]he court shall not enter judgment by default but shall in all cases require evidence of plaintiff's title and hear such evidence as may be offered respecting the claims of any of the defendants . . ." 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.

Park v. First American Title Insurance Company     Docket
201 Cal.App.4th 1418 - 4th Dist., Div. 3 (G044118)  11/23/11 (Pub. Order 12/16/11)     Case complete 2/15/12

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
201 Cal.App.4th 1371 - 3rd Dist. (C068488)  12/15/11

TRUSTEE'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
201 Cal.App.4th 254 - 2nd Dist. (B222885)  11/29/11     Case complete 2/3/12

SHERIFF'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     Sup.Ct. Docket
200 Cal.App.4th 849 - 2nd Dist. (B225086)  11/8/11     Petition for review by Cal Supreme Ct. GRANTED 1/25/12

CAL SUPREME COURT 10/10/12: Transferred back to the Court of Appeal with directions to vacate its decision and to reconsider the cause in light of Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223.

2nd DISTRICT COURT OF APPEALS 12/6/12: Prior decision vacated because it is inconsistent with Pinnacle.

CC&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     Sup.Ct. Docket
200 Cal.App.4th 656 - 4th Dist., Div. 1 (D058445)  11/2/11     Petition for review by Cal Supreme Ct. DENIED 2/15/12

LIS 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
200 Cal.App.4th 527 - 6th Dist. (H035400)  10/31/11     REVERSED by Cal Supreme Ct. 5/16/13

TRUSTEE'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 delivered, the sale may be challenged on the grounds of procedural irregularity.

First Bank v. East West Bank     Docket
199 Cal.App.4th 1309 - 2nd Dist. (B226061)  10/17/11     Case complete 12/19/11

RECORDING: 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
199 Cal.App.4th 1132 - 6th Dist. (H035576)  9/9/11 (Pub. Order 10/6/11)     Request for depublication DENIED 1/4/12

TITLE 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.
5. Market value and marketable title are not synonymous. One can have marketable title to land while the land itself is unmarketable.
[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
199 Cal.App.4th 817 - 4th Dist., Div. 1 (D057774)  9/30/11     Petition for review by Cal Supreme Ct. DENIED 12/14/11

MECHANICS 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 11/17/11

TITLE 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. DENIED 1/4/12

TRUSTEE'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 11/15/11

TRUSTEE'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 11/1/11

ADVERSE 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 10/27/11

ANTIDEFICIENCY: 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 10/25/11

EASEMENTS: 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 11/30/11

FORECLOSURE / 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 10/11/11

LOAN 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 8/30/11

EASEMENTS: 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 8/30/11

TRUSTEE'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 9/21/11

EASEMENTS: 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 8/24/11

CONTRACTS: 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 9/21/11

HOMEOWNERS 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 8/17/11

TRUSTEE'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 9/14/11

FORECLOSURE / 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 8/10/11

USURY:
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 8/24/11

TAX 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 6/27/11

EASEMENTS: 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 6/28/11

NOTE: 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 7/13/11

TRUSTEE'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 6/9/11

CONTRACTS / 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 6/8/11

CC&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 5/5/11

HOME 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 10/11/11

FORECLOSURE / 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 2/23/11

CC&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 2/16/11

MARKETABLE 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 1/3/11

TRUSTEE'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 12/20/10

LEASES: 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 11/23/10

ESCROW: 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 12/16/10

COMMUNITY 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 11/23/10

TRUSTEE'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 12/1/10

TITLE 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 12/15/10

ESCROW: 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 11/3/10

QUIET 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 10/22/10

NOTARIES: 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 10/10/10

DEEDS 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 10/27/10

TITLE 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 9/21/10

DEEDS: 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 10/20/10

ATTACHMENT: 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 9/15/10

RECORDING 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 8/17/10

DEEDS: 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 8/18/10

TRUSTEE'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 7/26/10

ASSESSMENT 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 7/20/10

HOMESTEADS: 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 7/21/10

TITLE 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 8/11/10

ESCROW / 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 6/23/10

TRUSTEE'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 6/2/10

PARTITION: 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)  3/18/10

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. 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 5/18/10

PROPERTY 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 4/29/10

HOMEOWNER'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 6/17/10

MECHANIC'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)  2/4/10

PROPERTY 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 4/12/10

CONTRACTS: 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 3/29/10

WATER 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 3/12/10

USURY: 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 3/8/10

TRUSTEE'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 2/26/10

LIS 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 1/26/10

TRUSTEE'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 Angels the 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 1/25/10

JUDGMENTS: 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     Affirmed by Cal Supreme Ct. 8/1/13

INSURANCE / 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 1/25/10

TRUSTS: 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 2/10/10

CIRCUITY 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 12/15/09

MARKETABLE 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 12/15/09

ADVERSE 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 unpublished portion 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 12/17/09

RECORDING 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 10/19/09

CC&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 10/30/09

TITLE 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 10/28/09

JUDGMENTS: 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 12/2/09

PREEMPTION: 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 10/14/09

PREEMPTION: 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)  8/3/09

INSURANCE / 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 10/7/09

RECONVEYANCE: [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 9/28/09

DEEDS / 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 12/21/09

MECHANIC'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 9/9/09

NOTE: 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 "equitable 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 8/18/09

MECHANIC'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 9/30/09

HOME 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)  5/26/09

SAME 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 from 5:00pm on June 16, 2008 (when In re Marriage Cases was final) through November 4, 2008 (the day before Proposition 8 became effective restricting the definition of marriage to a man and a woman).

In re Marriage of Lund     Docket
174 Cal.App.4th 40 - 4th Dist., Div. 3 (G040863)  5/21/09     Case complete 7/27/09

COMMUNITY 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)  5/14/09

OPEN 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 8/12/09

LIS 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)  4/27/09

EASEMENT 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 6/22/09

SUBDIVISION 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 "equitable 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 5/27/09

ARBITRATION: 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 5/27/09

ESCROW: 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 5/13/09

CC&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 4/29/09

TITLE 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 3/27/09

TRUSTEE'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.

Go to cases 2000 - 2008