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September 2013 Newsletter

The Import & Impact of Glaski v. Bank of America
A month has passed since the California Court of Appeal handed
down their decision in Glaski v. Bank of America, N.A., 218 Cal. App.
4th 1079 (2013). In that month, the opinion has been published and
Bank of Americas petition for rehearing denied. Now binding on all
California trial courts, the opinion has attracted much attention and
praise in the foreclosure defense world. This article summarizes the
courts major findings, places the decision into the current legal
landscape, and analyzes both its potential impact and its limitations.
I. The Courts Conclusions

Ultimately, the courts conclusions are rooted in two basic and
related inquiries that clarify (and in some respects simplify) the
authority to foreclose question in California, at least for the time
being. First, does the borrower allege that the foreclosing party was
not the beneficiary based on specific facts? Second, if borrowers claim
is based on a failed assignment, was the assignment void, or voidable?
If borrowers can allege specific facts showing that the purported
beneficiary derived their authority from a void assignment, their
claims, under Glaski, may now survive the pleading stage in California
courts.
A. Alleging that the Assignment Granting the Beneficiarys Power to
Foreclose is Void, is a Specific, Factual Allegation and the Basis for a
Valid Wrongful Foreclosure Claim

The court divides wrongful foreclosure claims based on an authority
to foreclose theory into two categories: 1) borrowers who allege,
generally, that the foreclosing entity was not the true beneficiary

2

under the deed of trust; and 2) borrowers who allege, with specific
facts, that the foreclosing entity was not the true beneficiary.
1

Borrowers in the first category rarely make it past the pleading stage,
but borrowers in the second group may. In other words, it is not
enough to say X is not the true beneficiary, but it may be enough to
allege X is not the true beneficiary because Y. If Y is a specific,
factual allegation that shows the foreclosing entity did not have the
authority to foreclose, then the claim is viable.
The court then explained that [o]ne basis for claiming that a
foreclosing party did not hold the deed of trust is if the assignment
purportedly giving that party foreclosing power is void.
2
The court did
not say that attacking a beneficiarys assignment is the only way to
bring a wrongful foreclosure claim, only that this particular defect,
when alleged with specific facts, is enough to put the authority to
foreclose at issue. Glaski alleged that the assignment of his deed of
trust and note to the WaMu Securitized Trust was void because it
occurred after the trusts closing date.

B. Standing: Void vs. Voidable Assignment

Many securitization-based wrongful foreclosure claims fail because
the borrowers do not have standing to challenge how their loan was
securitized.
3
The Glaski court framed this issue simply, focusing on the
assignment: When a borrower asserts an assignment was ineffective,
a question often arises about the borrowers standing to challenge the
assignment of the loan (note and deed of trust) an assignment to
which the borrower is not a party.
4
The court cites federal cases from

1
See Glaski v. Bank of Am., N.A., 218 Cal. App. 4th 1079, 160 Cal. Rptr. 3d 449, 460
(2013).
2
Glaski, 160 Cal. Rptr. 3d at 461 (emphasis added).
3
See, e.g., Rodenhurst v. Bank of Am., 773 F. Supp. 2d 886, 898-99 (D. Haw. 2011)
([C]ourts have uniformly rejected the argument that securitization of a mortgage
loan provides the mortgagor a cause of action.); Junger v. Bank of Am., N.A., 2012
WL 603262, at *3 (C.D. Cal. Feb. 24, 2012) ([P]laintiff lacks standing to challenge
the process by which his mortgage was (or was not) securitized because he is not a
party to the PSA.); Bascos v. Fed. Home Loan Mortg. Corp., 2011 WL 3157063, at *6
(C.D. Cal. July 22, 2011) (Plaintiff has no standing to challenge the validity of the
securitization of the loan as he is not an investor in of the loan trust.).
4
Glaski, 160 Cal. Rptr. 3d at 461.

3

other circuits,
5
and a California Jurisprudence treatise to conclude, a
borrower can challenge an assignment of his or her note and deed of
trust if the defect asserted would void the assignment.
6
California
courts have largely adopted a knee-jerk reaction to securitization
theories, throwing those claims out because the borrower is not a party
to, or third-party beneficiary of, the assignment agreement (the PSA in
most cases). The Glaski court broke with California precedent in
framing the issue as one of void versus voidable assignments, allowing
theories based on void assignments to survive pleading.

C. A Post-Closing Date Transfer to Trust Renders the Assignment Void

The court had thus far established: 1) Glaskis attack on the
beneficiarys assignment was specific enough that it went beyond a
general challenge foreclosing partys right to foreclose; and 2)
generally, void assignments give a borrower standing to challenge the
loans securitization, even though the borrower was not a party to, or
third-party beneficiary of, the PSA. The court then analyzed whether
Glaskis specific allegations, taken as true, would void the assignment,
giving him standing.
Like many mortgage loans, Glaskis note and deed of trust were
sold (assigned) to a trust to be bundled with other mortgages, sliced up
and sold again. Through a subsequent FDIC takeover, acquisition, and
more assignments, defendant Bank of America either became the
successor trustee to the WaMu trust, or acquired the Glaski deed of
trust from JP Morgan, who bought all of WaMus assets from the
FDIC.
7
Either way, the possible chains of title are broken because the
transfer from JP Morgan Chase to the WaMu Securitized Trust
occurred long after the closing date of the trust.
8

But does a post-closing assignment to a trust render that
assignment void? To answer this question, the Glaski court analyzed

5
Id. (citing Reinagel v. Deutsche Bank Natl Trust Co., 722 F.3d 700, at *3 (5th Cir.
2013); Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 361 (6th Cir.
2013); Culhane v. Aurora Loan Servs. of Neb., 708 F.3d 282, 291 (1st Cir. 2013)).
6
Glaski, 160 Cal. Rptr. 3d at 461 (emphasis original).
7
Id.
8
Id. The WaMu trust, by its own terms, closed in 2005. Id. at 454. An assignment
recorded in 2008 stated that JP Morgan transferred and assigned all beneficial
interest under the Glaski deed of trust [and note] to LaSalle Bank NA as trustee for
WaMu [Securitized Trust].Id.

4

New York law, which, according to the pleadings, was controlling,
9
to
conclude that an assignment transferred after a trusts closing date is
void, rather than voidable.
10

Glaski pled both threshold questions with the requisite specificity:
1) he alleged that Bank of America was not the beneficiary because the
assignment purporting to give it foreclosing power was invalid; and 2)
the assignment was void, not voidable, because the transfer to the
trust occurred after the trusts closing date. The first point got him
past Gomes, and the second established his standing.

D. Tender

The court addressed the tender issue briefly, but it was still critical
to its ruling and again emphasizes the importance of distinguishing
whether a foreclosure sale is void or voidable. Tender 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.
11
Because tender was not required, and because Glaski
stated a cognizable claim for wrongful foreclosure, the court reversed
the trial courts dismissal of the complaint, and vacated and overruled
the order sustaining the Bank of Americas demurrer.

II. Placing Glaski in the California Foreclosure Landscape

A. Distinguishing Gomes: Specificity
Gomes was probably Glaskis biggest hurdle. The court dedicated an
entire section of its opinion to differentiate its findings from those in
Gomes.
12
The borrower in Gomes also brought a wrongful foreclosure
claim, alleging that the foreclosing entity, MERS, was not the
beneficiarys nominee because the unknown beneficiary did not appoint
MERS as nominee, or give MERS authorization to foreclose.
13
Unlike

9
Id. at 462.
10
Id. at 463 ([T]he [WaMu trust] trustees attempt to accept a loan after the closing
date would be void as an act in contravention of the trust document.). The closing
date is meant to protect the interests of the trusts investors because it ensures
REMIC status, exempting investors from federal income tax (with respect to the
trust). Id. at 460 n.12, 463.
11
Id. at 466.
12
Glaski, 160 Cal. Rptr. 3d at 464.
13
Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 1152 (2011).

5

Glaski, however, Gomes left his argument there. He did not take the
crucial step of explaining why MERS, who was listed as beneficiary
and nominee in the deed of trust,
14
was not the true beneficiary.
15

Rather, Gomes alleged that CC 2924 afforded him the right to test
whether MERS had the beneficial interest before the sale took place.
16

Whether is the key word and the difference between a Gomes claim
and a Glaski claim. Gomes wanted to investigate whether or not MERS
was the beneficiary. By contrast, Glaski alleged that Bank of America
was definitely not the beneficiary because the assignment giving them
beneficiary status was late to the trust, and therefore void. Gomes
asked, who has the authority to foreclose? whereas Glaski stated: X
definitely does not have authority for these reasons . . . . The Gomes
court found that CC 2924 provides no right for borrowers to ask
whether the foreclosing party had the authority to do so.
17

B. Distinguishing Nguyen: Void vs. Voidable
The Glaski court also had to reckon with Nguyen v. Calhoun, 105
Cal. App. 4th 428 (2003), which held that anything outside of the
foreclosure sale process cannot be used to challenge a presumably valid
and complete sale.
18
Specifically, the court had to consider whether an
ineffective transfer to the WaMu Securitized Trust was an aspect of
the foreclosure sale, or if it fell outside of that sale and was therefore
irrelevant.
19
Because the transfer to the trust was fundamental to
Bank of Americas authority to foreclose, and would void the sale itself,
the court decided that the trust transfer was part of the foreclosure
sale and a valid basis for challenging the foreclosure.
20


14
Id. at 1151.
15
Instead, Gomes claimed he d[id] not know the identity of the Notes beneficial
owner, but that whoever authorized MERS to foreclose was not the beneficiary or
the beneficiarys agent. Id. at 1152. He gave no specific reason for believing this,
other than that his loan was sold . . . on the secondary mortgage market. Id.
16
Id.
17
Id. at 1155 ([Section 2924 does not] provide for a judicial action to determine
whether the person . . . foreclos[ing] . . . is indeed authorized.).
18
See Nguyen v. Calhoun, 105 Cal. App. 4th 428, 441-42 (2003).
19
Glaski, 160 Cal. Rptr. 3d at 466.
20
Id.

6

C. Distinguishing Fontenot: Burden Shifting

The Glaski opinion nowhere cites Fontenot v. Wells Fargo Bank,
N.A., 198 Cal. App. 4th 256 (2011), but it is important to recognize why
Glaski came out differently from that case. As in Glaski, the borrower
in Fontenot alleged that an invalid assignment voided the entire
foreclosure transaction.
21
Unlike Glaski, however, Fontenot based her
invalid assignment theory, not on specific facts like a late transfer to a
trust, but on the theory that the assignor (MERS) had the burden to
prove the assignment was valid, and could not do so.
22
The court
determined that MERS did not bear that burden because nothing in
the statutory scheme regulating nonjudicial foreclosures created that
duty: [A] nonjudicial foreclosure sale is presumed to have been
conducted regularly, and the burden of proof rests with the party
attempting to rebut this presumption.
23
If the party challenging the
trustees sale [can] prove such irregularity and . . . overcome the
presumption of the sales regularity, that could shift the burden to
defendant to show a valid assignment.
24
This is precisely what Glaski
accomplished: by pleading specifically that the assignment is void
because of the late transfer to the trust, Glaski rebutted the
presumption of regularity, which is all he needed to do at the pleading
stage.

III. The Promise & Limits of Glaski

Glaski cannot be used to bolster every securitization theory. To
employ Glaski principles effectively, advocates should undertake the
same analysis the court did. First, does the borrower simply allege the
foreclosing party does not hold the beneficial interest in the deed of
trust (Gomes), or does the borrower allege that the foreclosing party
could not possibly be the rightful beneficiary because the assignment
giving them that interest was invalid? (Glaski). Second, do the
borrowers allegations render the assignment void or voidable? If void,
then Glaski could lend support to both the borrowers standing and
their wrongful foreclosure claim. The HBOR Collaborative will monitor

21
See Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 269 (2011).
22
See id. at 269-70.
23
Id. at 270.
24
Id. (quoting Melendrez v. D & I Inv., Inc., 127 Cal. App. 4th 1238, 1258 (2005)).

7

Glaskis implications and influence as other courts interpret this
important decision.


8

Summaries of Recent Cases
25


State Cases
Challenging the Authority to Foreclose Requires Specific
Factual Allegations
Siliga v. Mortg. Elec. Registration Sys., Inc., __ Cal. App. 4th __,
2013 WL 4522474 (Aug. 27, 2013): Nonjudicial foreclosures are
regulated by statute. Borrowers may not bring the foreclosing entities
to court to require them to prove anything outside of what is already
required by statute. These types of actions are preemptive in that
they do not seek redress for specific misconduct (which would create a
valid cause of action), but rather generally allege that the entity
initiating a foreclosure lacks the authority to do so. Such an action is
preemptive if the plaintiff alleges no specific factual [basis] for the
claim that the foreclosure was not initiated by the correct person
(emphasis added).
Here, borrowers alleged MERS lacked the authority to foreclose
because: 1) when the lender went out of business, their agreement with
MERS (making MERS the DOT beneficiary and the lenders nominee)
lapsed, negating any authority to foreclose MERS did possess; 2)
MERS had no authority to assign the note, and any DOT assignment
without a note assignment is void; and 3) MERS required the lenders
authorization to assign the DOT and the note to satisfy the statute of
frauds, authorization it did not have. As to the first allegation, the
borrowers failed to allege in the complaint that the lender had gone out
of business. The lenders chapter 11 bankruptcy indicates
reorganization, but neither the companys death nor an incapacity to
contract. Second, MERS authority to assign the note derives from its
agency agreement with the lender. A general allegation that MERS
lacked authority, without alleging a specific problem with the agency
agreement, is not sufficient to state a claim. Lastly, the claim that
MERS lacked written authorization to assign the note and DOT,
without a more factual allegation, attempts to make MERS prove its
authority to foreclose outside the statutory scheme. Without sufficient

25
Cases without Westlaw citations can found at the end of the newsletter.

9

factual allegations, the court affirmed the dismissal of borrowers
complaint.

Litigation Privilege Does Not Bar a UCL Claim Based on
Rosenthal Act and FDCPA Violations

People v. Persolve, LLC, __ Cal. App. 4th __, 2013 WL 4354386
(Aug. 15, 2013): Californias litigation privilege bars suits based on any
communication made in judicial or quasi-judicial proceedings . . . to
achieve the object of the litigation. CC 47. If the privilege directly
conflicts with a coequal state statute, a court will decide which takes
precedence by evaluating which is more specific, the statute or the
privilege, and whether application of the privilege would render the
statute significantly or wholly inoperable. Usually an UCL claim
would fail the specificity element because Bus. & Prof. Code 17200 is
much broader than the litigation privilege. Because this UCL claim
was based on alleged violations of the FDCPA and Rosenthal Act,
however, the privilege does not bar this UCL claim. Not only are those
two statutes more specific than the litigation privilege (explicitly
forbidding creditors from misleading debtors, providing false
information, etc.), but applying the privilege to prevent FDPCA and
RFDPCA-based claims would render those statutes meaningless. The
whole point of the FDCPA and RFDPCA is to regulate debt collection
conduct, much of which occurs in litigation, or in preparation for
litigation. The Court of Appeal reversed the trial courts dismissal and
allowed the county D.A.s UCL claim to continue.

CCP 1162 Notice Requirements; CCP 1161as Required
Compliance with CC 2924

Bank of New York Mellon v. Preciado, Nos. 1-12-AP-001360 & 1-
12-AP-001361 (Cal. App. Div. Super. Ct. Aug. 19, 2013): To be effective,
UD notices to quit must be properly served: 1) by personal service; 2)
or if personal service failed, by leaving the notice with a person of
suitable age and discretion at the residence or business of the tenant
(or former borrower) and then mailing a copy; 3) or if the first two
methods failed, by posting a notice at the residence and mailing a copy.
CC 1162. Here, the process servers affidavit stated that after due

10

and diligent effort, he executed post and mail service. The trial court
accepted this statement as evidence of compliance with CC 1162, but
the appellate division reversed. The statute indicates that post and
mail is the last available method of service, not the first. Since the
affidavit does not specifically assert that personal service was ever
attempted, the trial court erred in assuming that service complied with
CC 1162. Further, defendants appeal based on defective service was
not barred because they failed to assert it as an affirmative defense.
Proper service is an essential [UD] element and tenants general
denial of each statement in the complaint put service at issue.
Post-foreclosure UD plaintiffs must also demonstrate duly perfected
title and compliance with CC 2924 foreclosure procedures. CCP
1161a. Duly perfected title encompasses all aspects of purchasing the
property, not just recorded title. The trial court relied on plaintiffs
trustees deed upon sale, showing plaintiffs purchased the property at
the foreclosure sale. The court ignored contradicting testimony alleging
that the property was sold to the loans servicer, not plaintiff. Further,
to prove compliance with section 2924, the plaintiff must necessarily
prove the sale was conducted by the trustee. Here, the trustees deed
upon sale identifies one trustee, but the DOT identifies another. The
trial court erred in accepting the recorded trustees deed upon sale as
conclusive evidence of compliance with 2924, and the appellate
division reversed.

TPP Requires Servicer to Re-review Borrower for Permanent
Modification
Lovelace v. Nationstar Mortg. LLC, No. 34-2012-00119643-CU-BC-
GDS (Cal. Super. Ct. Sacramento Co. Aug. 22, 2013): Borrowers must
allege performance, breach, consideration, and damages to plead a
breach of contract claim. Here, borrowers sufficiently alleged each
element and defendants demurrer was overruled. The predecessor
servicer sent borrowers a TPP agreement and letter, requiring
borrowers to sign and return the agreement, make their payments,
and contact the servicer when the TPP ended, so servicer could re-
review them for a permanent modification. Borrowers performed all
aspects of the contract, but Nationstar, the current servicer, breached
by refusing to re-review them for a modification. To show

11

consideration and damages, borrowers successfully alleged the time
and effort required in applying for a modification. Nationstar argued
that the TPP agreement and letter only constituted an agreement to
agree in the future. The TPP language clearly indicated, though, that
the servicer would perform a re-review if the borrower met the other
requirements, so this argument was unavailing.

Preliminary Injunction Granted on SPOC Claim; Dual
Tracking: First Application Requirement

Rogers v. OneWest Bank FSB, No. 34-2013-00144866-CU-WE-GDS
(Cal. Super. Ct. Sacramento Co. Aug. 19, 2013): HBORs single-point-
of-contact provision requires servicers to provide borrowers seeking
foreclosure alternatives with a single person (or team) that handles the
borrowers application, has updated information, and the authority to
stop a foreclosure sale. Here, the court granted borrowers request for a
preliminary injunction to stop the foreclosure of her home because her
servicer gave her at least three points of contact over the course of one
month. One of these contacts informed her she did not qualify for a
HAMP modification. This contact, though, should have remained
borrowers contact until the servicer determined she did not qualify for
any foreclosure alternative, as required by CC 2923.7(c). Because the
borrower was shuffled to different people after this HAMP denial but
before she was denied for other alternatives, the court granted the
injunction and set a $10,000 bond.
HBOR prohibits dual tracking while a servicer reviews a borrowers
first modification application. Even when the first application was
submitted pre-HBOR (1/1/13), if the servicer gave it a full review and
denied the application, the servicer has no duty to halt the foreclosure
process until it considered a second application (absent a change in
financial circumstances). Here, borrower submitted their first
application in 2012, which was denied by defendant in April 2013.
Borrowers second application was submitted, at defendants
invitation, in May 2013, and defendant subsequently recorded an NTS.
Borrower argued that her 2012 application should not bar the dual
tracking claim based on her second application because HBOR does
not apply retroactively to a 2012 loan modification request. The court
pointed to the language in CC 2923.6(g) (specifically including pre-

12

1/1/13 applications in its first lien loan modification definition) and
found the borrower unlikely to prevail on the merits of her dual
tracking claim.

Motion to Quash UD Service: CCP 1161bs 90-day Notice
Requirement

Deutsche Bank Natl Trust Co. vs. Pastor, No. 1417736 (Cal.
Super. Ct., Santa Barbara Co. Aug. 9, 2013): A motion to quash is the
correct procedural challenge to a courts exercise of personal
jurisdiction. In the unlawful detainer context, a defendant should bring
a motion to quash if the notice period is inappropriate. Here, plaintiff
served tenant a 30-day notice instead of the 90-day notice required for
tenants occupying foreclosed property. CCP 1161b. Plaintiff argued
that as the daughter of the former homeowners, who still occupied the
property, the tenant only required a 30-day notice. Tenant provided
credible evidence that her parents no longer occupied the property,
convincing the court to grant the motion to quash. Plaintiff must serve
tenant with a 90-day notice in accordance with CCP 1161b, and can
only move forward with a UD after those 90 days.

Federal Cases

Fair Credit Reporting Act
Ferguson v. Wells Fargo Bank, __ F. Appx __, 2013 WL 4406843
(9th Cir. Aug. 19, 2013): The Fair Credit Reporting Act requires
furnishers of credit information (including servicers of mortgage loans)
to, upon notification of a dispute, investigate and report on their
calculations and conclusions. Here, borrower alleged that though Wells
Fargo may have responded to the dispute notification by completing
and returning a form sent by the credit-reporting agency, they
incorrectly reported that the borrower had gone through bankruptcy.
Upon production of this form, the district court granted summary
judgment to Wells Fargo. A factual dispute exists, however, because
Wells Fargo left a space blank instead of entering a particular code,
which would presumably have indicated that the borrower had not
gone through bankruptcy. The Ninth Circuit reversed and remanded.

13

HOLA Does Not Preempt State Tort Law Claims; Tender;
Specifically Pled Fraud Claim; Modification Does Not Give Rise
to a Duty of Care
Wickman v. Aurora Loan Servs., LLC, 2013 WL 4517247 (S.D. Cal.
Aug. 23, 2013): State laws regulating or affecting the processing,
origination, servicing, sale or purchase of . . . mortgages are
preempted by the Home Owners Loan Act, as applied to federal
savings associations. State tort law claims that only incidentally affect
those areas of banking, however, are not preempted. Here, borrower
claimed fraud, negligent misrepresentation, and promissory estoppel
based on their servicers promise to work with the borrower on a loan
modification in good faith. Laws based in the general duty not to
engage in fraud, do not require anything additional from the servicer,
and do not demand or require a modification. These laws only
incidentally affect defendants business practices, and borrowers
claims are therefore not preempted by HOLA.
Tender is usually required to bring a claim for wrongful foreclosure.
There are at least three exceptions to this general rule: 1) when it
would be inequitable to demand tender; 2) when the borrower seeks to
prevent a sale from happening, rather than undo a completed sale; and
3) when the sale is (or would be) void, rather than voidable. This
borrower brought his wrongful foreclosure claim after a notice of
trustee sale was recorded, but before an actual sale. Accordingly,
tender was not required here.
Fraud claims demand very specific pleading of: 1) a misrepresentation;
2) defendants knowledge that the misrepresentation is false; 3)
defendants intent to induce borrowers reliance; 4) the borrowers
justifiable reliance; and 5) damages. Many claims for fraud in wrongful
foreclosure cases are dismissed for lack of specificity. But here,
borrower was able to describe several conversations with a specific
employee of defendant, when those conversations occurred, and the
misrepresentations made. Not all statements were ultimately held to
constitute a claim for fraud, but the employees statement assuring
borrower he was eligible for a loan modification despite his
unemployed status does serve as the basis for a fraud claim. The
employee told the borrower that being unemployed would actually help
him qualify for a modification because of financial hardship.

14

Borrower alleged defendant knew this statement was false,
maintained a policy of denying modifications based on unemployed
status, and never intended to review him for a modification in good
faith. The fraud claim based on this statement survived the motion to
dismiss.
As outlined in Rosenfeld (above), a claim for negligent
misrepresentation requires the establishment of a duty of care owed
from the lender/servicer to the borrower. The court declined to find a
duty here, where defendant allegedly misrepresented the borrowers
ability to secure a modification while unemployed. The court does not
imply that any and all modification negotiations fail to give rise to a
duty of care, only that this particular negotiation and assurance does
not.

Dual Tracking: Document & Submit Requirements for a
Second Application; Modification Does Not Give Rise to a Duty
of Care

Rosenfeld v. Nationstar Mortg., LLC, 2013 WL 4479008 (C.D. Cal.
Aug. 19, 2013): Dual tracking protections are afforded to borrowers
who submit a second modification application if they can document
and submit to their servicer a material change in financial
circumstances. Here, borrowers submitted their first modification
application in 2012, and while that application was under review,
alerted their servicer that their income was reduced. With this
information, the servicer put them on a TPP plan, and then offered a
permanent modification in 2013. Borrowers objected to the terms of the
modification, asserting that the servicer did not consider the reduction
in income. Defendant scheduled a foreclosure sale, concluding that
borrowers had rejected the loan modification offer. While the sale was
scheduled, borrowers contend their financial circumstances changed a
second time, because they paid off credit card debt, reducing their
expenses. Their CC 2923.6 claim alleges that dual tracking
protections should extend to a second modification application, which
they should be allowed to submit based on their changed
circumstances. The court disagreed, largely because borrowers
complaint did not allege when the credit card debt was extinguished,
or when (and if) borrowers made their servicer aware of this change, as

15

required. Alleging a change in financial circumstances in a complaint
does not fulfill the document and submit requirements in CC
2923.6(c). The court dismissed borrowers UCL claim based on the
alleged dual track.
To state a claim for negligence, a plaintiff must establish that
defendant owed them a duty of care. Generally, there is no duty of care
between a financial institution and a borrower, if their relationship is
confined to a usual lender-borrower relationship. This court
determined that activities related to loan modifications fall squarely
within defendants traditional money-lending role. Without a duty of
care, the borrowers negligence claim was dismissed.

CC 2923.5 Pleading Requirements vs. Preliminary Injunction
Requirements

Weber v. PNC Bank, N.A., 2013 WL 4432040 (E.D. Cal. Aug. 16,
2013): A servicer may not record an NOD until 30 days after they
contact the borrower to discuss foreclosure alternatives. Servicers must
make a diligent effort to contact the borrower under specific statute
requirements. A servicer must record an NOD declaration (with the
NOD) attesting to their statutory compliance. Here, borrowers 2923.5
claim survived a motion to dismiss because they alleged not only that
their servicer never contacted them before recording an NOD, but that
the servicer could not have made a diligent attempt to contact them.
The specificity of this second allegation was crucial to their claim: they
asserted that their home telephone number had not changed since loan
origination, the servicer had successfully contacted borrowers in the
past, they had a working, automated answering machine that recorded
no messages from the servicer, and that they never received a certified
letter from servicer. These factual allegations put the veracity of
defendants NOD declaration at issue and defeated the motion to
dismiss. The court also indicated that, if borrowers allegations were
true, not only would defendant have violated CC 2923.5, but the
NOD itself would be invalid, stopping the foreclosure.
The court allowed the 2923.5 claim to move forward, but denied
borrowers request for a preliminary injunction. To win a PI, a moving
party must demonstrate that they are likely to succeed on the merits of

16

their claim. Here, even though borrowers pled their 2923.5 claim
with sufficient specificity, they failed to provide sufficient evidence to
show that they are likely to prevail on the merits. Defendant offered
evidence of a diligent effort to contact borrowers, and of actual contact.
Defendant produced copies of letters allegedly sent to borrowers
offering to discuss financial options regarding their loan. The letters
also memorialize several telephone conversations with borrowers.
Borrowers argument that these phone conversations were initiated by
them, not by the servicer, as required by statute, was deemed likely
unmeritorious by the court, which denied the PI.

Dual Tracking: PI Granted on 2011 Application
Ware v. Bayview Loan Servicing, LLC, 2013 WL 4446804 (S.D.
Cal. Aug. 16, 2013): In California federal district courts, a party
seeking a preliminary injunction must show they are likely to succeed
on the merits, to suffer irreparable harm without the PI, that the
balance of equities tips in their favor, and that the PI serves the public
interest. Here, borrowers sought a PI to prevent the foreclosure of their
property, alleging three separate violations of HBORs dual tracking
provision. First, they claimed that defendants cursory denial of their
short sale application violated CC 2923.6(f), which requires servicers
to identify reasons for a denial. The measure only applies to loan
modifications however, not short sales, so this claim was deemed
unlikely to prevail on the merits. Second, borrowers claimed they
should be granted dual tracking protections on their second
modification application because they sent a letter to their servicer
asserting an increase in routine expenses. This barebones
description of a change in financial circumstances does not constitute
documentation under CC 2923.6(g). Lastly, borrowers alleged a
dual tracking violation based on 2013 foreclosure actions, which
occurred before defendant made a determination on borrowers 2011
modification application. Defendant pointed to their internal policy of
denying modifications to borrowers in bankruptcy (which borrowers
were in, from 2011-2013) as proof of the evaluation and denial. The
court determined that this policy did not, by itself, constitute an
evaluation for purposes of CC 2923.6. To proceed with a foreclosure
after HBOR became effective, defendant had to expressly deny
borrowers 2011 modification application. Because borrowers are likely

17

to prevail on this third dual tracking claim, foreclosure constitutes
irreparable harm, a mere delay does not unduly burden defendants,
and because it is in the publics interest to enforce a newly enacted
state law, the court granted the PI.

Wrongful Foreclosure Burden of Proof

Barrionuevo v. Chase Bank, 2013 WL 4103606 (N.D. Cal. Aug. 12,
2013): Wrongful foreclosure plaintiffs normally bear the burden of
proving a defendant lacked authority to foreclose. If, however, 1) no
foreclosure has taken place; and 2) the borrower has alleged a specific
factual basis attacking the servicers authority to foreclose, the burden
shifts to defendant to prove authority. (The court implies this burden
shifting is unsettled law and does not seem certain the burden should
shift to defendant, but goes through the analysis anyway.) Here, the
borrower pled an authority to foreclose theory based on WaMus
securitization (selling) of borrowers loan. When Chase subsequently
purchased all of WaMus assets, the loan could not have been included
in the purchase because the loan was no longer WaMus to sell.
Purchasing and owning nothing, Chase lacked authority to foreclose.
This theory was specific enough to survive a motion to dismiss and
shift the burden to defendant. Chase provided evidence to support
their assertion that the loan was not securitized before Chases
purchase: sworn testimony that it possesses the original note and
DOT, electronic records attesting to its authority to foreclose, and the
absence of borrowers loan number in the WaMu trust. Even if the
burden had not shifted to Chase, the court found borrowers evidence
insufficient to survive a summary judgment motion. The court was not
persuaded by their experts research into the WaMu trust, reasoning
that, absent proof that borrowers specific loan was sold to the trust,
the experts findings amounted to speculation and opinion. A jury could
reasonably conclude from Chases evidence that Chase had authority to
foreclose on borrowers property.


18

First & Second TPP Agreements as Distinct Bases for Fraud &
Promissory Estoppel Claims; Pre-HBOR Authority to Foreclose
Theory

Alimena v. Vericrest Fin., Inc., 2013 WL 4049663 (E.D. Cal. Aug. 9
2013): Deceit (a type of common law fraud) requires: 1)
misrepresentation; 2) knowledge of falsity; 3) intent to defraud; 4)
justifiable reliance; and 5) causal damages. In this case, borrower
successfully pled several counts of intentional misrepresentation based
on separate misrepresentations by their servicer, Citimortgage.
Borrowers first TPP agreement misrepresented Citis intentions
because it required borrowers to make timely TPP payments and
maintain documentation, and bound Citi to consider them for a
permanent modification if those conditions were met something Citi
never did. Citis alleged conduct during the modification process (oral
and written promises, assurances, etc.), coupled with their ultimate
refusal to consider borrowers for a permanent modification, shows
knowledge and intent to defraud. Absent Citis TPP agreement and
assurances, borrowers would not have made their TPP payments,
demonstrating reasonable reliance. Finally, borrowers adequately pled
damages even though their delinquency predated their modification
applicationby pointing to the dozens of fruitless hours spent
trying to meet Citis requests (fruitless because Citi never intended to
modify), a delayed bankruptcy filing, and the TPP payments
themselves. Alleging similar facts, borrowers successfully pled another
two counts of intentional misrepresentation against Citi for 1) their
promise, and then failure, to honestly review borrowers second HAMP
application, and 2) Citis notice (in letter form) of a second TPP and
subsequent failure to review them for a modification in good faith. To
show damages stemming from the second TPP, borrowers added the
sale of their car, which Citi assured borrowers would qualify them for a
modification.
From the same set of facts, borrowers successfully stated two claims
for promissory estoppel, based on each TPP agreement. Central to the
courts reasoning was its basic view of the first TPPs language, which
constitutes an enforceable agreement to permanently modify a
mortgage if the requirements are met by the borrower. Those
requirements were: 1) making timely TPP payments; 2) continuing to

19

submit requested documentation; and 3) continuing to qualify for the
modification under HAMP. To plead a PE claim, borrowers must
amend their complaint to allege the third element: that they continued
to qualify for HAMP throughout the TPP process. Their PE claim is
still viable based on a different allegation, however: that Citi was
obligated to evaluate them for a permanent modification in good faith,
and failed, evidenced by Citis false accusation that borrowers failed to
supply all required documents, resulting in denial. Borrowers also
have a viable PE claim based on the second TPP. After all trial period
payments are timely made and you have submitted all the required
documents, your mortgage will be permanently modified, is a clear
and unambiguous promise, and their TPP payment evidenced
justifiable reliance, and constitutes an injury.
Pre-HBOR, CC 2924 required foreclosing entities to record an NOD,
let three months pass, and then record an NTS. HBOR clarified that
the foreclosing entity must also possess the authority to foreclose. CC
2924(a)(6). Even without this additional protection, though, these
borrowers successfully pled a wrongful foreclosure claim based on an
authority to foreclose theory. They alleged that defendant Lone Star
was the beneficiary and note holder when MERS, not Lone Star,
assigned the DOT to Citi. Because Lone Star held the note, was the
loans beneficiary, and apparently did not appoint MERS as its agent,
MERS did not have the authority to assign anything, voiding the
foreclosure. (Borrowers must present evidence, showing that MERS
was not Lone Stars agent, at a later stage.)

HOLA Preemption; CC 2923.5 Requirements; Wrongful
Foreclosure Claim Based on Loan Securitization

Cerezo v. Wells Fargo Bank, N.A., 2013 WL 4029274 (N.D. Cal.
Aug. 6, 2013): California federal district courts have adopted several
different analyses to determine whether national banks can invoke
HOLA preemption, despite HOLAs application to federal savings
associations. This court objected to the popular bright line method[ ]
of applying HOLA wholesale to any successor in interest to a federal
savings association . . . . Logically, it makes more sense to examine
the conduct being litigated. If the conduct arises from the savings
associations activities, apply HOLA. If the conduct arises from the

20

banks activities, then discern whether the action stems from the
successors obligations on instruments originating from the [savings
association] or whether the successor is acting independently of any
requirements from the instruments. The court though, declined to
decide the HOLA issue without sufficient briefing.
CC 2923.5 only applies to owner-occupied property (defined in CC
2924.15). Borrowers failure to allege compliance with this requirement
was not fatal to their claim, however, because defendant conceded this
element by requesting judicial notice of their 2923.5 declaration, in
which defendant did not dispute owner-occupancy.
A 2923.5 declaration attests to a servicers due diligence in
attempting to contact the borrower. Here, borrowers alleged that
defendant never contacted them pre-NOD, nor had defendant complied
with 2923.5s due diligence requirements. Further, defendants
2923.5 declaration was invalid because it was signed by someone who
lacked personal knowledge of its contents. The court found personal
knowledge not required to sign a declaration.
26
Borrowers 2923.5
claim survived anyway, though, because their allegation that they
were never contacted is a triable issue. While the claim survived, the
court denied borrowers request for an injunction, reasoning that the
borrowers may delay the foreclosure by prevailing on the merits.
As in Barrionuevo (above), borrowers authority to foreclose theory is
premised on the original lenders securitization of the note before
defendant invalidly purchased it. Other courts have found that
securitization of the . . . note does not result in loss of the power of sale
under a DOT, but this court disagrees. Securitizing the note sells the
proceeds from the mortgage, and it would be illogical if the seller
somehow retained the right to foreclose on the property.

Class Certification on Contract, Rosenthal Act, & UCL Claims
Based in TPP Agreements

26
Notably, the court did not discuss CC 2924.17, which became effective January 1,
2013 as part of HBOR. This statute requires servicers to review 2923.5 declarations
and ensure that their contents are supported by competent and reliable evidence.
In this case, the NOD was recorded in 2012, and 2924.17 may have then not
applied, even though the litigation began in 2013.


21

Gaudin v. Saxon Mortg. Servs. Inc., 2013 WL 4029043 (N.D. Cal.
Aug. 5, 2013): The court certified the proposed class in this HAMP TPP
breach of contract case because all essential certification elements
were met. Notably, the named plaintiffs basic claim that compliance
with TPP requirements created an enforceable contract requiring
defendant to provide her with a permanent modificationraised
common and typical questions that pertained to a defined,
ascertainable class: borrowers who complied with the same TPP
agreement, with the same servicer, and were never given permanent
modifications. The court analyzed each claim to determine whether
they predominate and are superior to the individual class members.
All contract elements (performance, breach, consideration, and
damages) must meet the predominance and superiority requirement
for the breach of contract claim to survive class certification. Here, not
only were TPP payments themselves ruled consideration, but so too
was applying for a modification (which requires burdensome
documentation), jeopardizing credit ratings by reduced mortgage
payments, and risking a pointless loan extension (with additional
interest and late payments) if a permanent modification was never
granted. This consideration was common to all class as participants in
the same TPP agreement.
Under the FDCPA, entities that collect a debt which was not in
default at the time it was obtained are not considered debt
collectors. There is no similar restriction in the Rosenthal Act. To
bring a valid claim under the Rosenthal Act, then, a borrower does not
need to be in default, whereas an FDCPA claim requires default to
have standing. Plaintiffs Rosenthal Act claims also meet class
certification requirements because the Rosenthal violations are in the
four corners of the TPP, common to all class members.
There are three possible prongs within a UCL claim: unlawful, unfair,
and fraudulent. The unlawful prong bases a UCL violation on another
actionable claim. Here, the Rosenthal Act violation provides the basis
for borrowers unlawful claim. The unfair prong involves an evaluation
of harm to the plaintiff and benefit to the defendant, a public policy, or
unfair competition. Here, the TPP agreement itself, and defendants
uniform practice of denying permanent modifications, provide the
basis for an unfair inquiry. Fraudulent practices must be likely to

22

deceive the public. Defendants systemic practice of denying
modifications based on certain criteria, after a borrower complied with
their TPP, could deceive the public. All three UCL prongs are
actionable as to the entire class.


Valid Dual Tracking Claim After Voluntarily Postponed Sale
Young v. Deutsche Bank Natl Trust Co., 2013 WL 3992710 (E.D.
Cal. Aug. 2, 2013): A HBOR dual tracking claim may still be viable
even when no foreclosure sale is currently scheduled. Here, borrower
alleged they submitted a complete modification application to their
servicer, who then recorded an NTS without evaluating the
application. After borrower filed his complaint, the servicer voluntarily
postponed the sale and a modification evaluation is underway. The
court still granted borrower leave to amend their complaint to include
a dual tracking claim because the NTS violated the statute, even if the
statutes goals (a postponed sale and a modification evaluation) are
currently being met. That the NOD was recorded pre-HBOR (before
1/1/13) is irrelevant because borrower only alleges that the NTS and
the scheduling of the foreclosure sale violated dual tracking provisions.

Pre-Default Foreclosure Claim; Delayed Discovery Rule; UCL
Standing; HOLA Preemption; Duty of Care
Gerbery v. Wells Fargo Bank, N.A., 2013 WL 3946065 (S.D. Cal.
July 31, 2013): Claim ripeness is determined by: 1) whether delayed
review of the issue would cause hardship to the parties, and 2) whether
the issues are fit for judicial decision or would benefit from further
factual development. Importantly, the injury to plaintiff does not need
to have occurred, if the injury is certainly impending. In this case,
borrowers brought UCL, fraud, negligent misrepresentation,
promissory estoppel, and contract claims while current on their
mortgage payments. The court nevertheless found these claims ripe
because borrowers mortgage payments have increased by over $2,000,
an economic injury sufficient to satisfy the ripeness inquiry. Further,
delayed review would drive borrowers closer to foreclosure, and
defendants conduct has already occurred, even if the ultimate harm
has not.

23

Borrowers claims were nevertheless time barred. Usually, statute of
limitations clocks begin when the conduct or transaction transpired.
Under the doctrine of delayed discovery, SOL clocks can toll until the
plaintiff discovered (or had reasonable opportunity to discover) the
misconduct. To take advantage of this tolling, a borrower must show:
1) when and how they made their discovery; and 2) why it was
unreasonable for them to discover the misconduct sooner. Here, the
court dismissed borrowers claims with leave to amend because
borrowers made no attempt to assert the doctrine besides claiming
that that were unaware of defendants fraud until 2011 (the loan
originated in 2007 and they brought suit in 2013).
UCL standing requires a distinct and palpable injury that was
caused by the UCL violation. Here, borrowers alleged injuries
foreclosure risk, forgone opportunities to refinance, and hiring an
attorney and expertsare not particular enough to constitute UCL
standing. The court advised borrowers to plead the increased mortgage
payments as an injury.
Applying a HOLA preemption analysis to a national bank, this court
nevertheless found borrowers UCL, fraud, and negligent
misrepresentation claims not preempted. Even though defendants
conduct arguably qualifies as servicing, and would therefore fall
under the purview of HOLA and OTS regulations, the specific type of
alleged misrepresentation here, promising to honestly and fairly
evaluate borrowers modification application, rel[ies] on the general
duty not to misrepresent material facts, and is not preempted.
To claim negligent misrepresentation, a borrower must show some
type of legal relationship giving rise to a duty of care between
themselves and their servicer. Generally, servicers do not owe a duty of
care to a borrower because their relationship does not exceed the usual
lender-borrower relationship. The court cites two exceptions to this
rule. First, if the servicers activities go beyond that usual relationship.
Second, if the servicers actions meet the conditions of a six-factor test
developed by the California Supreme Court. Here, borrowers claim
that defendant attempted to induce them into skipping mortgage
payments so defendant could eventually foreclose, meets both
exceptions. [W]hen the lender takes action intended to induce a
borrower to enter into a particular loan transaction that is not only

24

intended to protect the lender - the lenders activities have exceeded
those of a conventional lender. Additionally, the court found the
dramatic increase in borrowers mortgage payments a basis for
establishing a duty of care according to the six-factor California
Supreme Court test. The payments were a foreseeable and certain
financial strain, directly resulting from defendants
misrepresentations, for which defendant was morally to blame, and
finding a duty of care here is in the publics interest. Even with this
duty of care though, borrowers need to amend their complaint to meet
the specificity requirements for negligent misrepresentation claims.

HOLA Preemption & Laws of General Applicability

Babb v. Wachovia Mortg., FSB, 2013 WL 3985001 (C.D. Cal. July
26, 2013): The Home Owners Loan Act and its attendant OTS
regulations govern federal savings associations. This court adopts the
view that a national bank may assert HOLA preemption defensively if
it purchased a loan that originated with a federal savings associated.
Other California federal district courts have focused on the conduct
being litigated, rather than loan origination, to determine whether
HOLA applies. Here though, Wells Fargo was allowed to assert HOLA
preemption because it acquired a loan originated by a FSA.
27

Under HOLA, state laws of general applicability . . . are preempted if
their enforcement would impact federal savings associations in
relation to loan-related fees, disclosures and advertising, processing,
origination, or servicing. Here, borrowers based their promissory
estoppel claim on their servicers delayed response to the modification
application. The servicers actions, though, amounted to loan
servicing, expressly preempted under HOLA. Borrowers other claims
(breach of contract, breach of implied covenant of good faith and fair
dealing, negligence, negligent and intentional interference with
prospective economic advantage, fraud, and UCL), all based on state
laws of general applicability, were also preempted by HOLA and

27
Also, the court uses Wachovia to describe defendant, only noting in the
Background that Wachovia was later acquired by Wells Fargo. Even if this court
did adopt the conduct-related approach, it is unclear from the opinion whose
servicing conduct is at issue, Wells Fargos or Wachovias.

25

dismissed. The court equated the modification process with loan
servicing in every instance.

National Housing Acts Servicing Standards & Federal
Jurisdiction
Smith v. Deutsche Bank Natl Trust, 2013 WL 3863947 (E.D. Cal.
July 24, 2013): Federal courts exercise original jurisdiction over all
civil actions arising under [federal] law. The mere mention of a
federal law does not, however, automatically bestow federal subject
matter jurisdiction. A claim arises under federal law only if it
involves a determination respecting the validity, construction, or effect
of such a law and the result of the action depends on that
determination. In other words, the federal question must be
substantial. While not dispositive, the lack of a private right of action
in the federal law often indicates that federal jurisdiction is
inappropriate. Here, defendant removed borrowers original state case
to federal court based on a wrongful foreclosure claim, which stemmed
from a violation of the foreclosure prevention servicing requirements in
the National Housing Act. The court agreed that this was too tenuous
a thread on which to base jurisdiction. Neither the NHA nor its
foreclosure prevention provisions provide for a private right of action.
Further, the question before the court a state based wrongful
foreclosure claimdoes not delve into the validity, construction, or
effect of the NHA provisions. The case was remanded to the more
appropriate state court.

Breach of Contract and Promissory Estoppel Claims Based on
Modification Offer Letter
Loftis v. Homeward Residential, Inc., 2013 WL 4045808 (C.D. Cal.
June 11, 2013): To plead a breach of contract claim, borrowers must
allege a contract, their performance, defendants breach, and damages.
Here, defendants congratulatory letter, alerting borrowers of their
modification eligibility, constituted an express contract. The letter
instructed borrowers that they could accept the offer by (1)
completing and returning the agreement and (2) continuing to make
TPP payments. Borrowers performed by fulfilling these instructions

26

and defendant breached by refusing to modify, and instead, raising the
loans interest rate. Damages are often difficult to show, if borrowers
default, not the servicers refusal to modify, led to foreclosure. Here
though, borrowers successfully pled damages by alleging they were
current on their mortgage and TPP payments before defendant raised
their interest rate. It was this raise (contract breach) that led to
increased monthly payments, eventual default, and foreclosure.
Defendants statute of frauds defense failed. The offer letter was
printed on defendants letterhead and signed, complying with the
statute of frauds: a writing subscribed by the party to be charged.
Defendants failure to return a signed copy to borrowers does not
change this analysis because the letter already memorialized the
contract in writing, and defendant intended to be bound by the
contract if the borrower fulfilled its requirements.
Borrowers promissory estoppel claim survives for similar reasons.
First, the offer letter constitutes a clear and unambiguous promise: if
you comply . . . we will modify your mortgage loan. Borrowers alleged
lost refinancing, bankruptcy, and sale opportunities, and the court
agreed that this constituted reasonable, detrimental reliance.
Defendant argued that borrowers had time to pursue these
opportunities between the alleged breach and the foreclosure sale. The
court determined potential opportunities occurring after the breach do
not negate reliance.

Correction to August newsletter:
Caldwell v. Wells Fargo Bank, N.A., 2013 WL 3789808 (N.D. Cal.
July 16, 2013).
Original: CC 2923.6(g) allows for resubmission of an application for
a first lien loan modification. Dual tracking protections therefore do
not protect a borrower who previously defaulted on a modification
plan. Here, the court found the borrower unlikely to prevail on the
merits (for purposes of a TRO request) of her dual tracking claim
despite an alleged change in income, because her default on her first
modification disqualified her from any further modification evaluation.
Revised: CC 2923.6(g) provides dual-tracking protections for
resubmission of an application for a loan modification if there has been

27

a material change in the borrowers financial circumstances since the
date of the borrowers previous application, which has been
documented and submitted to the servicer. Here, the court determined
that Wells Fargo evaluated the borrowers second loan modification
application and denied the application based on its internal policy of
denying second modifications to borrowers who previously defaulted on
a modification constitutes an evaluation under HBOR. The borrower
was deemed unlikely to prevail on the merits of her dual tracking
claim because of Wells Fargos proper denial under its internal
modification evaluation policy, not because her previous default
disqualified her from HBORs dual tracking protections on a second
modification evaluation. Under CC 2923.6, she was entitled to a
second evaluation because of her change in financial circumstances.
She received an evaluation and was denied.













28

Recent Regulatory Updates

HAMP Supplemental Directive 13-06 (Aug. 30, 2013)
Borrower Notice of Interest Rate Step-Ups
HAMP Tier-1 modifications will soon reach the end of their initial five-
year terms. After the first five years, the interest rates on the loan
increase by one percent each year until they reach a pre-determined
cap. At least 120 days (but not more than 240 days) before the first
adjusted payment is due, servicers must notify borrowers of the
increase. As the interest rates increase over time, servicers must notify
the borrowers of each additional increase at least 60 days (but not
more than 120) before the borrowers first payment is due.
Servicing Transfers
When a loan is transferred from one servicer to another, the new
servicer must abide by any TPP agreement already in-place between
the previous servicer and the borrower. This is true even if the new
servicer determines that the old servicer incorrectly calculated
borrowers TPP payments. The borrower must be allowed to complete
the trial period plan pursuant to the terms of the trial period plan
notice.
Upon successful completion of a TPP, the new servicer must offer the
borrowers a permanent loan modification. If the TPP payment amount
incorrectly exceeded the correct TPP amount by 10% or more, the new
servicer must re-run the waterfall to determine accurate permanent
modification payments. If the TPP payments were incorrectly less than
what they should have been, the servicer does not need to re-run the
waterfall.
Death & Divorce: Impact on Non-Occupants and Non-Borrowers
Non-occupants who inherit or are awarded property after death or
divorce, when the original borrower was successfully completing a
TPP, must now be treated as occupant non-borrowers and co-borrowers
under HAMP Handbook, Chapter 2, sections 8.9.1 and 8.9.2.

29

Non-borrowers who inherit or are awarded the property when the
original borrower was not in a TPP plan may apply for HAMP and
given a TPP plan if they qualify. These new owners should be
evaluate[d] . . . as if he or she was the borrower. If investor guidelines
on a particular loan allow for the loans assumption, servicers should
process the assumption and loan modification simultaneously.
Return of Fully Executed Modification Agreement
Servicers must sign and return a permanent modification agreement to
the borrowers no later than 30 days after receiving the signed-
borrower copy of the agreement, and the borrowers compliance with
the TPP.

Fannie Mae Servicing Guide Announcement SCV 201317 (Aug.
28, 2013)
Widows & Orphans
New owners widows, orphans, or other survivors of the original
borrowermust be allowed to assume the loan, make mortgage
payments, and enter into foreclosure prevention alternatives, even if
the new owner is not on the original note. Further, servicers must
implement policies and procedures that will allow them to quickly
identify the party that took over ownership of the property, and to
communicate with that person. If the loan is delinquent and the new
owner cannot bring it current, they must be evaluated for foreclosure
prevention alternatives.
Unemployment Forbearance
Before a borrowers first unemployment forbearance period expires, or
when the borrower alerts their servicer that they have been re-
employed, the servicer must re-evaluate the borrower for a second
unemployment forbearance, or for another foreclosure prevention
alternative, whichever is applicable. Before a borrowers extended
unemployment forbearance period is set to expire, or if the borrower
becomes re-employed, the servicer must evaluate the borrower for
another foreclosure prevention alternative.


30




HAMP Rules on Loss Mitigation

Tuesday, September 24, 2013
12:00pm to 1:30pm Pacific Time
1.5 Hours of MCLE Credit

Reserve your webinar seat! Register now!

This free webinar will introduce the basic structure of the federal Home Affordable
Modification Program (HAMP) and place it in the context of other available
modification programs. We will review topics including eligibility, how modifications
are done, and servicer requirements for timing and notice. Updates on recent
developments will be included.

Presenter: Alys Cohen, staff attorney, National Consumer Law Center
The HBOR Collaborative is comprised of San Francisco-based housing
advocacy center, the National Housing Law Project (NHLP), and its project partners,
Western Center on Law & Poverty, the National Consumer Law Center, and Tenants
Together. The HBOR Collaborative is funded by the Office of the California Attorney
General under the national Mortgage Settlement. The HBOR Collaborative offers
free training, technical assistance, litigation support, and legal resources to
Californias consumer attorneys and the judiciary on all aspects of the new California
Homeowner Bill of Rights (HBOR). The goal of the Collaborative is to ensure that
Californias homeowners and tenants receive the intended benefits secured for
them under the Homeowner Bill of Rights by providing legal representation with a
broad array of support services and practice resources. To learn more about
California HBOR and all upcoming trainings, consumer attorneys should go
to http://calhbor.org/. Register here or at the HBOR Collaborative for this training.

After registering, you will receive a confirmation email containing information
about joining the webinar.

System Requirements:
PC-based Attendees: Require Windows 8, 7, Vista XP, or 2003 Server, Mac-based
Attendees: Require Mac OSX 10.6 or newer, Mobile attendees: IPhone, IPad,
Android phone or Android tablet.

Questions?
If you need help registering for this webinar, please contact jhiemenz@nclc.org

31

SAVE THE DATE!
Wednesday October 23
rd
, 2013

The HBOR Collaborative presents:
REPRESENTING HOMEOWNERS & TENANTS UNDER
THE HOMEOWNER BILL OF RIGHTS

This free training will be held at:
Sierra Curtis Neighborhood Association
2791 24th Street, Sacramento





The HBOR Collaborative presents a free all-day training on the nuts and bolts of
representing tenants and homeowners under Californias Homeowner Bill of
Rights (HBOR). The training will cover HBOR basics and provide practical tips for
representing clients. HBOR became effective on January 1, 2013 and codifies the
broad intentions of the National Mortgage Settlements pre-foreclosure
protections. It also provides tenants in foreclosed properties with a host of
substantive and procedural protections. The training will cover the interplay of
HBOR with NMS, CFPB servicing rules, and the Protecting Tenants at Foreclosure
Act. We will also discuss HBORs attorney fee provisions. Registration
information will be available in mid-September.

The HBOR Collaborative, a partnership of four organizations, National Housing
Law Project, National Consumer Law Center, Tenants Together and Western
Center on Law and Poverty, offers free training, technical assistance, litigation
support, and legal resources to Californias consumer attorneys and the judiciary
on all aspects of the new California Homeowner Bill of Rights, including its tenant
protections. The goal of the Collaborative is to ensure that Californias
homeowners and tenants receive the intended benefits secured for them under
the Homeowner Bill of Rights by providing legal representation with a broad
array of support services and practice resources.

To contact the HBOR Collaborative team or for more information on
our services for attorneys, please visit http://calhbor.org/


5 Hours of MCLE Credit, including 1 hour of
Ethics
Continental breakfast and lunch will be
provided.


32

The HBOR Collaborative and its services, including this free training for
attorneys, are funded by a grant from the Office of the Attorney General of
California from the National Mortgage Settlement to assist California
consumers. This training would not be possible without the invaluable support
of our partners the California State Bar and Housing Opportunities
Collaborative.

Note: Please visit our web site at www.calhbor.org for information on
other upcoming trainings.
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COL?\iY OF SASTA CL\RA
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1- 12-:\ 1' -00 \)6\
ORDER
The appcJ! by appellants Vidal Preciado ("Preciado"), Roland Luke ("Luke"), nnd
Kenm:th I-[cnderson ("Henderson") (collectively, "Appellants") from the un!lIwfu! detainer
judgments entered on M:lfCh Hi, 2012, C;l.mc on regubrly for hearing and was heard and
submitted on August 16. 2013. We hereby hol d as follows:
I'roceduraill is tory
This is:m appeal from IWO related unlawful detainer actions.
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Respondent '1l1e Bank of
New York Mellon ("Bank") is the owner of 1343 State St reet, in Alviso, Cali fornia. On July
25,20 11 , B.lnk (lcquired title to this property (It a trustee's sale pursuant to foreclosure upon a
det'd of trusl. TIle property W(lS previously owned by Precbdo and occupied by Appell ants.
, 's "efe for Case l-ll-CV -215285 :':0. , . I 2 AI'QO 1 360) i!.' <:! I.
I ICV 215 25 S ("preJI 1"0. 112:\ N )O 13 61). order 10 avoid t o:lfusio:l. the C krk' s T rar\lcrip:.s in rNO
elses " ill be eileJ as ""CT-2S6"" nrod respectively. A sir. gle Repo:-.er s Tra.""lsc:i;J: ("RT' ) "ns
as the tri als took pbee al the SJme lime.
ORDER
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On September 1. 2011. 113m: sen 'cd :1 wlinen nolice 1o Appell ants to qui t and deli \'cr
possession ofl he property wit lun three days, 30 d<! ys. or 90 days (depending 0 :1 thei:
SHlIUS).: After \\';!. iling more ,h.," 90 days, !Junk fi lt'd two unl owful detainer complai nts il.g3inst
Appell :!.nl' on December 19, 20 11.
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TIl e complai nts incom e!l:- described the p:,open)' e..5 being
loc:ll cd in San Jose instead of 1\1 \' iso. Appd l:1nt s fi led indi\'i dua] answers to the complaints.
:md Henderson nnd l uke also filed indivi du:!.I prejudgment cJ3ims of ri ght 10 po15ession,'
Trial on Ihc un!:\w(ul dClaint' T aCli om w:u h!:ld on March lei , 201 2, befo:e Li e
lionomhk- SOCt:.llcS Mnnouki:m.' That same day, It j udgment was cnlered in eilch Cil5C which
I\w:m.l ed B:mk possession of the property, rent, :md d3m3ges.' lIowe','(:r, 5heriff
sOIl ht 10 (':-. :: n l1C tlt c wri t. it \\';15 disco\'t' red thaI the property w:n incorrectl y listed as in
I 51\ n Jose. The sheri ff was un:'Lbl e 10 cxecute the \\Ti t due to this :md Bank moved an
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, ex pJ.o"'te or-J er 10 amend the judgment. On Apri l 13. 2012. the court 3.."1 a:ne::din g
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10 change the propcny address to Alviso, '
AI Appellants' request. the court st3yed Appell:!.nts' evicti on (or ':0 enys. cp to !:'.d
i:-:;:I ud:n .. \ p: i! 2S, 20 12.
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Appell:mts filcd indi \"idU3! noticcJ of 3ppca1 \ 12.: ch 16.
20 12 to
,\ppc::. l::.hi lit y
A finzl j udgment in :l limited civil casc is appe:ll3b1c to L1c :l?pell ate division of 6 :
court. (Code Civ. Prot., 90 ..;,], subd. (a). ) The court entered i::
limiterl civil cases on 16. 201 2. Accordingly. the judgments are apPcJ.b:'!e 10
Appclb te Dh"ision.
1/1
: Stt CT .. 2!6. pp. 9 .. !2. CT 283, pp 9 12.
I 5: e CT .. 2!6. pp. 1 12. PI' . 1 12
Sec CT .. 2!6. pp 20 25. JO .. J I. CT .. 2&8 , rp 10N . 27jO. 45"": 6 )
'On Ihl! Wll e ely. i'!ecml o li k d "Ionl>ful filrec1osu:e 'SJinil UJlIl other (See cr .. 2M.
p 20C0 .. W)
StC CT2!6. pp IjO ! jO. CT .. 2&8, rp II J &-I .
See CT .. 286, Pi" 1J2 .. 165. CT 188. rp SH IS
I Sce CT. 2S6. P? 166 .. 167.Cr2n . r? 119 .. 120.
Sn CT 156. p 23J . CT .. 2u' pp. 1291J2
I' See C1.286. pj). 26] .. 265. 270212. CT ::!!. r p 161 .. t6-1. t69 .. 171 .
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On nppcal. Appellants make the following Ilrgumcnts:
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111e Appci1n!c Division must conduct an independent review of the entire
rt:conl pursuant to People II. Wende ;
"111e SCfyicc Process was liucrcd \\ith gross procedural irregulari ties";
Ihnk of Amctk' a did not produce evidence sufficient to prove that Lite
forcdosurc sale was conducted in st rict compliance wit h Civil (ode section
291..: :mc! thll ti tk was duly perfected; and
Uank improperly filed two SCp:l!2.IC unlawful detainer actions fa: the same
propeny.
StantianlornCl"iew
In an appeal from an unlawful detainer jUdgment, "(wJc revicw the trial coun's findings
of (:lct to determine whether the)' arc sUfponed by subs1:mtial evidence," (Palm Properry
b ll"eS/l/l i!Jl/S, LLC v. (2011) 19'; Cal.App.4th 1419. 1425.) To the extent the tri al COUtt
drew conc:lusions of b w based upon its findings of fan, we review those concl usions of law
no\'o. (/d. at pp. 14251426.)
I' rop!!.'" Y. Wende is In:tpplicable 10 Ch'il Appc:lls
Ap?ellants' first argument is that the Appellate Division must conduct an independent
rc\'icw oflhe enti re record pursuant to People \'. Wendr (1979) 25 Cal.3d 436. Howe\'er. a
Wendt' review only upplics to criminal uppeals. (See In re Sade C. (1996) 13 Cal.4th 952, 98';')
In civil ::tppc31s, the nppellnte coens ue 110/ required to perform an u.'1lSsi5!cd stud\" of
thc record rC\'jcw of the law relevant 10 a p:my' s contentions on appeal. (Air CO!lriefl
Intt rnal. \P. Employmt lll Dewfopmel:t (2007) 150 CaLApp.4lh 923, 928; GUlhrry,'. Slale
o/California (1998) 63 CnLApp.4lh 11 08, I! 15.) Instead. a part(s failure to perform its duty
to providt! nrgument, citations to the record, nnd legal authority in support of a contention mly
be trelteu as a waiver of the issue. (A nw)(f Corp. \'. Hamil/on & Samuels (2002) 100
Cal.App.4th 1286, 130 1; Peopft ex ref. l Oll! Cen/llry flu. Co. \'. Hili/ding Permit Consultonts.
II/C, (2000) 86 Cal. App.4th 280, 284; GMhrey, sllpra, at pp. I I I $. 1116.) Thus. ApprllalllS'
requC5t for an independent Wende review is improper.
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Apl'd lal1l s that they ww: not properly ser\'ed Wilh notices terminating their
As:\ 1l1\:T\.'quisilc \0 minS an unlawful detainer tl etion. a tenant must be ser.'cd wilh
dlhc[ a 3, 30. ,'I' 90 ,I:\rs' 1I0li ce, dcp(,lIding on the individual' s slatus ns n tenant. (Code Ci \' ,
\'\w .. 11 61. 1161:1. 11 61 b.) Code of Civil Procedure section 116i! provides three methods
l, r these noli,'cs: ( I) by personal dcli\"cl')" \0 the !('n:l nl (pcrsoru[ service); or (2) jfthe
ICII :lnl is at-sen! from hi s residence :md Usu:li pl3cc of business, by Jcu\'ing a copy \\i lh a person
t' f suitable age and di scret ion at either pInel.'. and sending a copy through the mail to the ten:mfi
(substituted service); or (3) if a place of residence and usual place of business cannot
h: :l sCCMJincd or n person of suitable :le or discretion C!lrulot be found there, then by :lffixing II
((l PY in :l pbcc ll n thc property :lnd ddi\'cring a cepy to (l person residing there, if
5\I\:h n pencn can be found,:!.:1d al $o a copy through th: m:lil addressed to the tenant a1
the place where the propeny is sitUlltcd (post:md mllil service), A noti ce is \'alid and
cnfl)r,'cable only if the lessor has strictly complied '\i th these statutori ly m:mdlllcd requirements
f",r 5eryice. (LMomio \'. -'(otta (1998) 67 Cal.App.4lh 110, 11 314; Liebo\'ich v.
ShClhrokHh:my (1 997) Clll.App.-i lh 511, 5 I 3,)
AI trial. Henderson testified that he did not receive any notice to quit. (RT, p. 14: 1115.)
In rcsponse, )) :mk' s counsel Ihal llllthe- occupants were- sefyed with a notice 10 quit
on Scpleillber I, 2011 . Bank' s counsd referred the court 10 Exhibit B of Dank's complainl
wh ich CO:ltaincJ the proofs of ser\'ice for the notices. (RT, p. 14: 1623.) In the proofs of
sen'ice, registered process sener Kris VOfS.JIZ (,-Vorsatz") declared that he served the notices
('II September I, 20 II. (CT 286, pp. 11.12; CT 288, ['[I 11 . 12) ,\ ecornin8 to the proofs of
scrvice, "[aJftt:r dU!: and diligcr11 cOort" "orsatz posted a copy of the notices on 1343 Stale
Street, S3" Jose, ClI1ifomi3. (id) Thereafter, Versatz mailed a copy of e<!ch notice :o n post
oOi cl." box that was designated as Presiado' s mailing address. (Id.) The court then entered
judpllenl for Bank. (RT, p. 14:26 27.)
2S II ---------------
II unkH stJl ed, all sect ion ;lre to the Code of C:\'il Procedure.
4
ORDER
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Where serv;ce is carri ed out by a registered process server, Evidence Code section 647
2 appl ies to c\imin31C the necessity of calling the process server as:l 31lfial. (Pa/III
3 I'roprrty /III'l'stlll l' lIts, L!.C \', )'adegar, slIpra, 194 CaLApp.41h :H p. 1427.) Under Evidence
4 Codc section 647. "[I]hc return of a process server [ I uJ:on process or notice establishes n
.s presumption. affecting Ihc burden of producing evidence. of thc facts slaled in the return ," A5
6 U:mk did not produce VO(5317. as a witness, the question is whether Vorsalz's proofs of scryicc
7 Dlnk complied w;lh thc noti ce requi rcmentsof seCl ion 11 62.
8 In Iligh/nnd Plas/lcs, Inc. \'. Enders (1980) 109 Cal.AppJd Supp. 1, thc coun analyzed
9 whelher there was sufficient evidence that the landlord complied wilh the "post and mail"
10 provision of section 1162. The court noted thlt this code section does not requi re:1 showing of
II rcasonlble diligence in atlempting personal service before utili zing the substi tuted service
12 provisior.s, as requi red in Code ofCivj l Procedure section 41 5.20, subdivi sion (b). (ld at p. 6.)
13 It docs requi re, however, "that if the tenant c:mnot be located for personll service that the
14 person mlking this substituted service first determine either thlllhe tenant ' S', .. place of
15 residence and business cannot be ascertained, that a person of suitable age or di scretion there
16 CMnot b: found .. .. ' .. (ld) In Highland Plastics, the deputy marshll lestified Ihat when he
\7 attempted to serve the 30day notice on dd:: ndant. no O:lC answered his knock on the door of
18 the premises which had been identified to him as the place of residence and busi ness of
19 defendant. (ld. at pp. 6-7,) When there was no response to the deputy's knock, he then posted
20 the not ice "in a conspicuous place on the property" and mai led a copy to the place where the
21 propeny was si tuated. (lei. at p. 7.) Thus, the court conduded that there was substantial
22 evidence supporting the trial court 's finding that there hJd been (! proper service of the not ice
23 utili zing the "pOSt :lnd nl:lij" provi sions :ls neither the nOr:l person of sui table age and
24 di scretion coul d be found. (lei.)
25 Similarly, in flo:::: \'. Lewis (1989) 215 Cal. App.3d 314, the court held that tri al coun
26 properly found that the landlord's "post and mail" procedure of service of n IhrcedlY notice
27 pursuant to section 1162 was :ldequate, In that case, testimony at trial established that the
28 landlord's agent went to apartment, rang the bell and knocked on the door. When no one
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ORDER
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:mswC'red.the employee l:lpC'd n copy of lhe notice to the door :md slipped another copy under
2 the door. He Ihen posted another copy by mlil to the (cnlnt. (It/. at p. 3! 6.) Since no
3 one \\-:lS pres,"nt when the procC'ss serve, went 10 Ih," :!.p:;nmenl. and mair' service \\-:lS
4 authoriud under settion 1162. (ld. at p. 31 i.)
5 As explained :!.bove. no sho\\inS ofre:lSon3ble dilisen,"e in 3ltempting personal sen"ice
6 before utilizing the substituted service pro\'isions is rC'quired under the statule. (See Ho:: v.
7 L,'" is. supra. 215 Cal.App.3d at p" 317.) Ne\"enheless. "post ilnd m3il" scn'ice is not
S 3uthorized 3S a first-reson melhod of sm;ce. Here, Vors:ltz's deelnrntion does not establish
9 Ihat Bank complied wilh seclion 1162 as it does show Ihll person:li serviee was fver auempted.
10 The proofs of service do nOI st He Ih:ll Appell:!nts were not home or Ihul no one of a suitable age
II was home whC'n the sen'er posted the r!otiC'e "in:l conspicuous pbce:"
12 In its opposition brier". Bm.!.:. argue,; th:!.t Appellants m:!.y not eh:llknge service of the
13 notices as Ihey did nOI include this lS enlffinn:lIiw defense in their answers. Dank is mistaken.
14 An affirmative defense is e.!l o.!Iegation of new m:mer in thC' answer th:lt is not responsi\'e to an
15 essential allegation in the eompb.int. In other words. an 2flinnati\'e defense is an allegation
16 relied on by the deicndant that is not put in issue by the phintifr s complaint. ,'. l O/lra
17 2i Cal.AppAlh 694. 69S; Stare Farm .\fut. Au/o. IllS Co \". Sllprrior Court (199 1) 228
t S Cnl .AppJd 721. 725.) Where the answer :llleg:s f:l.cts showing th:lt some essential allegation of
19 the complaint is not true. those f:lets lre not "new m:ltler:' but only a tr3.\"ersc. (Ibid.) Because
20 proper serdee of the tennin:l.tion notices W:lS an essentid element of Dank' s unlnwful detainer
21 actions. Appel!:l.nts general denbl of e:lch s!Jlem: m of lhe compbint sufficiently put the
22 service of the notices:n issue:!.nd Appellants were not required to pleld ineffective notice as an
23 af1innalil'C' defense. (See BeviIJ v. Zoura. supra. 27 Cal.App.4lh at p. 698.)
24 According!y, the judgment for possession must be reversed because Bnnk f3i1ed to
25 est3bl ish proper senite of the noti ces. (See \". Shah -okhkhany. supra, 56
26 Cal.App.4th at p. 514.)
27 III
28 III
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Sale ill Complia nce with Ch' iI Coll e 2924 ct seq, and the IJccti of Tnn t
2 "I listoricallya cause of action for unlawful detainer was available only to a land lord
3 against his tenant." (Gross v. Superior COllrt ( 1985) 171 Cal.App.3d 265. 271 .) The remedy
.: lUIS been expanded by stat ute to :ldditional categories of plaint iffs (sec Code Civ. Proc. , 11( 1)
5 :l nd defendants (sec Code Civ. Proc., 116Ia). The: purpose of section 1161 a of Ihc Code of
6 Civil Procedure was to make clear that one i1cquiring ownership through foreclosure could nl sa
7 evict by a summary procedure. (Sec Gross v. SlIperior COllrt. lIIpra, 17 1 Cnl.App.3d 01 p. 271 .)
8 In 30 un lawful detainer action brought pursuanl lo Code of Civill'rocedurc section
9 1161a, subdivision (b)(3), the piaintiffmusl show that h: acquired the property nt a regulnrl y
10 conducted sa le nnd Ihereafter "duly perfected" hi s title. (Slcplu:I1S \'. lIollis (1987) 196
I I Cal.App.3d 948, 952; Emlls \'. Superior COlirt (1977) 67 C(lI.AppJ d 162, 169.) "[Wlhere the
12 pl.:iillli ff in the unlawful detainer action is the purchaser at a Irustee' s sale, he or she 'need only
!3 prove:l sale in compliance wi th the stat ute: and deed of trust, followed by purchase at sueh sale,
I': :!Ild Ihe defendant mly raise objections only on Ihal phase of the issue of ti tJe.' " (O/d Nat '/
J 5 Fill Sm 's v. Stibtrl (1987) 194 Cal. App.j d 460. 465.) "The statute" with which a post
16 foreclosure plaintiff must prove compliance is Civil Code secti on 2924. (Seidell v. Ilng/o
17 Cali/oril la Trll st Co. (1942) 55 Cnl.App.2d 9D, 920.) On appel l, Appcl13.nts asserted thl ! Dank
18 did 1I0t lIlt'et its butdt'll in thi s regard.
19 ;\lll ial, Bunk pro\'ided the Trust ee' s Deed UponS.,le, recordt'd August S, 20 11 . (Sec
20 RT, p. 5: 1.11 .) The Trustee's Deed Upon Sale purportedly showed Ihat Bank purchased the
21 property li t the truSlcc' s sule held on July 25, 2011. (Sec CT 286, pp. 6S.) Luke then testified
22 that he III the (mcti on, rind that Iht' property "went back \0 [lank of Americu." (St'c itT, p.
23 6:2526.) I'lccittdo testifi ed thaI the loan was ori!;inally with Count-ywi de, :tnd tht'n
24 COl1rurywide W:IS "1:lkcl1 over by Bank of America." (Sec RT, p. 6:1728.) Tht' court
25 I' C) llOnded, "\Veil, [ don' l know what Bank of Ameri ca di d or didn't do, bUlthey hrlvc {I deed
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26 Illl' re showin!! it's dilly nUlhl' nticntcd, the det'd that Bank of New YorK Mellon owns the propt'rty
27 illre." (Sec RT, p. 7:16-1 9.) When I\ ppcllanls pre: sst'd !lank 10 provt' it ownt'd tht' property, the
18
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ORDER
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court st:l1ed, "Thcy h:l.vc a dced showing thJt they O\m the property. and that's 011 they need to
2 do." (SC'C' RT, p. 8:21 23 ,)
J The tri al court erred \\hen it found that the Trmtee' s Deed Upon Sok was sufficient
.: proo f thai Ihnk acqui red the property :lt 11 regularly conducted sak and thcn:after "duly
5 pcrfected" its titk, "{TJit le is du ly perfcctC'd whcn nil steps hJ\'C' ix:C'n taken to make it perfect.
6 i.e" \0 COllVCY to the purchaser that whi ch he h:ts purchJsC'd, \':did and good beyond:l ll
7 re:lsonJbk doubt. which includC' s good record (i lk. but is nol li mi!ed to good record lil le, as
8 between the p;lr1ies to the tr:msJction. The lerm 'duly' implies th:lt all of those elements
9 !1eccssJ:-)' to J valid sJle exist, el Se there would nOI be J SJlc at (Kessler Bridge (1958)
10 161 Cal App.2d Supp. 837. 84 1 ci tations omitted].) Uncb:l decd of trust, power of
II sale upon the trustor's default veSls in the trusteC'. (Ca/I' o I'. HSBe Balik USA, NA. (201 I) 199
12 Cal.AppAth 118, 122.) Therefore, in order to provC' compli:lnce with section 2924, the plaintiff
13 must necessarily provC' the s:llC' was conducted by the t:ustee.
I": Here, the Trustee's Deed Upon Sale indicates was sold by Recontrust
15 Comp:my, i\",A. :!cting os trustee. However. th: of Trmt identifies Comr:1onwe]!th Lar:d
16 Title Comp:!ny as the trustee. (See CT 286, p. 121.) Ihr.k did r:ot provide any evidence
17 C' slaolishing Recontrust's authority 10 conduct the trustC' c' s sale. As BmT..: failed to p:ovide :!.!ly
18 evidence that Recontrust was substituted for the trustee, Ba.'lk was nOI entitled to
19 jcdgmer.:.
20 ,.\prellanls' ,\rgumenIJ
21 Given our decision to reverse the judgments, we need not rcach Appclb.ms' rem:!ining
22 argument s.
23 III
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ORDER
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of th:- Di\ i5:0:-:

Ii onolllhk R;;' - --' O--
Ap;"C'lbl:' Dl\UIO::!
D., ,, -Zil.lo-i-.L2
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ORDER
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23 23 56 133 237 237 238 240 241 241 250 261 288 333 333 343 337 243 335 336 332 188 338 257 334 3400002006 3400002007 339 666 3400002113 3400002114 3400002115 3400002116 400002190 3400000006 3035 3400002008 3400002009
SUPERIOR COURT OF CALIFORNIA,
MINUTE ORDER
TIME: 09:00:00 AM
J UDICIAL OFFICER PRESIDING: Raymond Cadei
COUNTY OF SACRAMENTO
GORDON D SCHABER COURTHOUSE
DATE: 08/22/2013
DEPT: 54
CLERK: D. Ahee
REPORTER/ERM:
BAILIFF/COURT ATTENDANT: C. Chambers
CASE INIT.DATE: 02/29/2012
CASE NO: 34-2012-00119643-CU-BC-GDS
CASE TITLE: Lovelace vs. Nationstar Mortgage LLC
CASE CATEGORY: Civil - Unlimited
EVENT ID/DOCUMENT ID: ,9864587
EVENT TYPE: Hearing on Demurrer - Civil Lawand Motion - Demurrer/J OP
MOVING PARTY: Nationstar Mortgage LLC
CAUSAL DOCUMENT/DATE FILED: Demurrer, 04/15/2013
STOLO
APPEARANCES STOLO
Stolo
Nature of Proceeding: Hearing on Demurrer to Second Amended Complaint

TENTATIVE RULING

Defendant Nationstar Mortgage LLC's ("Nationstar") demurrer to the second amended complaint
("SAC") of Plaintiffs J eff and Stacey Lovelace (the "Lovelaces") is OVERRULED.
This is a nonjudicial foreclosure case. The court previously sustained Nationstar's demurrers to the
original and first amended complaints. The SAC contains a single cause of action for breach of contract.
The contract at issue is the Trial Period Plan ("TPP") attached to the SAC as Exhibit C. The Lovelaces
have alleged six different breaches of the TPP and have pleaded each breach as a separate "count"
within their breach of contract cause of action. Nationstar demurs on grounds that the allegations fail to
state a cause of action.
In the first count, the Lovelaces allege that that the TPP required them to (1) execute and return the
TPP, (2) make certain payments on a temporary basis, and (3) contact Nationstar at the conclusion of
the trial period so that the latter could performa "re-review" to determine the Lovelaces' eligibility for a
permanent modification. (Nationstar's predecessor in interest--not Nationstar--is actually identified in the
TPP, but the Lovelaces allege that Nationstar succeeded to its predecessor's benefits and obligations in
the TPP.) The Lovelaces further allege that they fully performed under the TPP, but that Nationstar
failed to perform the re-review needed to determine eligibility for a permanent modification. Because
these allegations suffice to state a breach of contract cause of action, Nationstar's demurrer is overruled.
In overruling the demurrer, the court rejects Nationstar's argument that the Lovelaces have merely
alleged oral promises to modify their loan, which Nationstar argues are unenforceable given the statute
of frauds. (See Moving Memo. at 5:8-23 [citing CC 2922].) Even if some of the Lovelaces' allegations
in the SAC depart from the terms of the TPP, and thus could be considered unenforceable oral
promises, the TPP contains written promises that satisfy the statute of frauds. The TPP provides:
"To accept this offer and enter into the Trial Period Modification, all borrowers must sign both copies of
the enclosed Trial Period Plan. You must then return BOTH signed copies to us - along with your first
MINUTE ORDER
DATE: 08/22/2013 Page 1
DEPT: 54 Calendar No.
CASE TITLE: Lovelace vs. Nationstar Mortgage LLC CASE NO: 34-2012-00119643-CU-BC-GDS
trial period payment in the amount of $2,800.00 - no later than 03/13/11."
(SAC, Exh. C.) The TPP at Exhibit C is signed, and the Lovelaces allege that they made the required
payments. The TPP further provides, "Once your final payment has been submitted, contact us for a
re-reviewof your modification." The Lovelaces alleges that they made contact when they made their last
trial payment.
Given that the TPP is a signed, written instrument that imposed a duty upon Nationstar to conduct a
re-reviewof the Lovelaces' eligibility at the end of the trial period, Nartionstar's argument that the alleged
promises are unenforceable under the statute of frauds is unpersuasive.
In rejecting Nationstar's statute-of-frauds argument, the court notes Nationstar's argument in the Reply
that some of the terms that the Lovelaces allege are part of the TPP are found in a letter to which the
TPP is attached. Thus, reasons Nationstar, promises appearing in the letter are not part of the TPP and
cannot be used to overcome the demurrer. The court disagrees because the letter can be construed to
constitute a part of and/or explain the TPP.
The letter and accompanying document headed "TRIAL PERIOD PLAN/MODIFICATION AGREEMENT"
are numbered sequentially "1" through "4." The final page, where the Lovelaces were required to
provide signatures, contains a header with the words "Page Three" and the words "FORBEARANCE
AGREEMENT." Thus, exactly how the letter and attachments interrelate is somewhat ambiguous. In
addition, the court notes in this regard that the attachment does not contain an integration clause.
Moreover, the letter arguably explains terms in the attachment itself. Thus, for example, where the
attachment states that a permanent modification would be forwarded "[i]f/[o]nce we are able to finalize
your modified loan terms," the letter directed the Lovelaces to contact Nationstar for re-reviewat the end
of the trial period and provided that the trial loan payments "[we]re an estimate of what your payment(s)
will be IF we are able to modify your loan under the terms of the program." Read together, these
provisions could be construed to require the Lovelaces to trigger the re-review, at which time Nationstar
would determine whether the Lovelaces qualified for a permanent modification under applicable program
guidelines.
Suffice it to say that, at this point in the case, the court cannot conclude as a matter of lawthat the letter
plays no role in establishing the terms of the TPP. Thus, the court rejects Natonstar's corollary
argument that the parol evidence bar precludes reference to the letter.
Likewise, the court rejects Nationstar's argument that the written promise to conduct a re-review can
only be construed as an "agreement to agree in the future." (Moving Memo. at 6:8-16.) The TPP can be
construed to obligate Nationstar to performa re-review to determine whether the Lovelaces qualified for
a permanent loan modification. (See SAC, Exh. C at 1 ["You are eligible for the [TPP......] The monthly
trial period payments...are an estimate of what your payment(s) will be IF we are able to modify your
loan under the terms of the program"] [ellipses added].) Thus, although the TPP does not represent an
agreement that the Lovelaces would qualify for a permanent modification, it can be construed to
represent an agreement that Nationstar would performthe re-reviewto determine whether the Lovelaces
qualified for a permanent modification under programguidelines. Because such a construction does not
reduce the TPP to an agreement to agree in the future, Nationstar's contrary argument is unavailing.
Next, Nationstar argues that the demurrer should be sustained because the written TPP was not based
upon new legal consideration. (See Moving Memo. at 6:18-7:2.) The Lovelaces, however, allege that
they expended time to submit financial documentation in order to obtain the TPP. (See SAC, 47.) The
TPP can be construed to support this allegation. (See SAC, Exh. C at ["The monthly trial period
payments are based on the income information that you previously provided"].) At least one court has
MINUTE ORDER
DATE: 08/22/2013 Page 2
DEPT: 54 Calendar No.
CASE TITLE: Lovelace vs. Nationstar Mortgage LLC CASE NO: 34-2012-00119643-CU-BC-GDS
held that, in the context of a trial loan modification, time and energy expended to submit financial
documentation is consideration sufficient to support a breach of contract cause of action. (See Ansanelli
v. JP Morgan Chase Bank, N.A. (C.D. Cal., Mar. 28, 2011) 2011 U.S. Dist. LEXIS 32350, at *9-11 [citing
California cases].) Given the Lovelaces' allegation that they expended time and energy to their
detriment, the court rejects Nationstar's "no new consideration" argument.
Next, Nationstar argues that the lawdoes not require themto offer a permanent loan modification. The
court need not reach this issue because the Lovelaces have pleaded a breach of contract cause of
action based on Nationstar's alleged failure to re-review their eligibility for a permanent modification.
Whether that re-review would have resulted in the Lovelaces' qualification for a permanent modification
under applicable guidelines involves factual issues that the court cannot currently decide. The fact
remains, however, that the Lovelaces have alleged a promise that Nationstar did not performand which
deprived the Lovelaces of an opportunity to qualify for a permanent modification. Liberally construing
these allegations, as the court must on demurrer, the Lovelaces have stated a breach of contract cause
of action.
The court notes that it must overrule Nationstar's demurrer if the allegations state a cause of action on
any theory. Although the Lovelaces have formatted the SAC into separate counts, each count is merely
a portion of a single cause of action for breach of contract. Because the first count based upon the
alleged failure to conduct the re-reviewstates a cause of action, it is irrelevant whether other counts also
state causes of action. Indeed, the court cannot sustain a demurrer to a mere count or other portion of a
cause of action. (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4
th
1680, 1682.) If Nationstar wished
to eliminate discrete counts in the SAC, it was required to file a motion to strike, not a demurrer. (Id. at
1682-1683.)
Nationstar argues next that the demurrer should be sustained because the Lovelaces have not alleged
damages resulting fromany breach. As previously discussed, the Lovelaces have alleged detriment in
the formof lost time and energy associated with the submission of financial records. Absent authority for
the proposition that such detriment cannot constitute damage as a matter of law, the court rejects
Nationstar's no-damage argument.
Finally, Nationstar argues that the demurrer should be sustained because the Lovelaces impermissibly
added co-defendants without leave of court. The Lovelaces counter that they were required to name the
newdefendants as indispensable parties. Whether or not the Lovelaces were required to obtain leave of
court to add the newdefendants to the SAC, the court is not persuaded that any failure to do so entitles
Nationstar to an order sustaining a demurrer. Nationstar has no evident standing to demur on behalf of
the newly named defendants. Moreover, it is unclear that the allegations relative to the newly named
defendants bear upon the question whether the Lovelaces have stated a cause of action against
Nationstar. And to the extent Nationstar wished to strike allegations directed against newly named
defendants as improper, it was required to file a motion to strike not a demurrer. Accordingly, the
allegations directed at newly named defendants do not lead the court to sustain Nationstar's demurrer.
Nationstar's request for judicial notice of recorded land documents is UNOPPOSED and GRANTED. In
taking judicial notice of these documents, the court accepts the fact of their existence, not the truth of
their contents. (Herrera v. Deutsche Bank Nat'l Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)
Counsel are advised that the Sacramento County Superior Court's Local Rules were revised and
renumbered as of 01/01/13. When giving notice of the court's tentative ruling system, counsel should
cite Local Rule 1.06, not former Local Rule 3.04.
Nationstar is directed to file its answer no later than September 3, 2013.
MINUTE ORDER
DATE: 08/22/2013 Page 3
DEPT: 54 Calendar No.
CASE TITLE: Lovelace vs. Nationstar Mortgage LLC CASE NO: 34-2012-00119643-CU-BC-GDS
The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or further notice is
required.

COURT RULING

There being no request for oral argument, the Court affirmed the tentative ruling.

STOLO
MINUTE ORDER
DATE: 08/22/2013 Page 4
DEPT: 54 Calendar No.
MINUTE ORDER
DATE: 08/22/2013 Page 4
DEPT: 54 Calendar No.
123
23 23 56 133 237 237 238 240 241 241 250 261 288 333 333 343 337 243 335 336 332 188 338 257 334 3400002006 3400002007 339 666 3400002113 3400002114 3400002115 3400002116 400002190 3400000006 3035 3400002008 3400002009
SUPERIOR COURT OF CALIFORNIA,
MINUTE ORDER
TIME: 09:00:00 AM
J UDICIAL OFFICER PRESIDING: Raymond Cadei
COUNTY OF SACRAMENTO
GORDON D SCHABER COURTHOUSE
DATE: 08/19/2013
DEPT: 54
CLERK: D. Ahee, K. Pratchen
REPORTER/ERM: S. Adams CSR#12554
BAILIFF/COURT ATTENDANT: C. Chambers
CASE INIT.DATE: 06/07/2013
CASE NO: 34-2013-00144866-CU-WE-GDS
CASE TITLE: Rogers vs. OneWest Bank FSB
CASE CATEGORY: Civil - Unlimited
EVENT TYPE: Motion for Preliminary Injunction
STOLO
APPEARANCES STOLO
Aldon L Bolanos, counsel, present for Plaintiff(s).
Deanna Rogers, Plaintiff is present.
Walter Dauterman, counsel, present for the Plaintiff.
Elizabeth Rogers was present.
Tiffany Rochet, counsel, present telephonically for the Defendant.
Stolo
Nature of Proceeding: TRO OSC RE: Preliminary Injunction

TENTATIVE RULING

Plaintiff Deanne Rogers' motion for preliminary injunction is GRANTED.
Plaintiff moves for an injunction preventing Defendant OneWest Bank FSB or its agents fromtaking any
action to sell, transfer, encumber, or otherwise interfere in any manner whatsoever to her title to her
home at 8340 Linderhof Way, Sacramento, CA 95828.
This is an action for violation of the California Homeowner Bill of Rights (Civ. Code 2923.6 and
2923.7.) Plaintiff alleges that violated the Homeowner Bill of Rights by dual-tracking her into foreclosure
with multiple points of contact.
CCP Section 527 generally authorizes a court to enter a preliminary injunction. "To obtain a preliminary
injunction, a plaintiff ordinarily is required to present evidence of the irreparable injury or interim harm
that it will suffer if an injunction is not issued pending an adjudication of the merits. Past California
decisions further establish that, as a general matter, the question whether a preliminary injunction should
be granted involves two interrelated factors: (1) the likelihood that the plaintiff will prevail on the merits,
and (2) the relative balance of harms that is likely to result from the granting or denial of interim
injunctive relief." (White v. Davis (2003) 30 Cal.4th 528, 554.)
"[T]he party seeking the injunction must present sufficient evidentiary facts to establish a likelihood that it
will prevail." (Tahoe Keys Property Owners' Assn. v. State Water Resources Control Board (1994) 23
Cal.App.4th 1459, 1478.) In support of her motion, Plaintiff presents evidence that on April 15, 2013 she
contacted Defendant regarding a possible loan modification. (Declaration of Deanna Rogers ("Rogers
Declaration"), 3.) On April 23, 2013, Plaintiff received a Residential Mortgage Assistance ("RMA")
MINUTE ORDER
DATE: 08/19/2013 Page 1
DEPT: 54 Calendar No.
CASE TITLE: Rogers vs. OneWest Bank FSB CASE NO: 34-2013-00144866-CU-WE-GDS
package fromDefendant. (Id., Ex. 1.) Plaintiff sent a completed package on May 6, 2013. (Id., 4, Ex.
2.) On May 10
th
, J ohn fromOneWest called and left Plaintiff a voicemail indicating that he would be the
single point of contact and that the application was being processed. (Id. 5.) Plaintiff attempted to
return J ohn's call on multiple occasions, but her call was not returned. (Id.) On May 29, 2013, Plaintiff
found the Notice of Trustee's sale posted to her door. (Id. 6.) In response, Plaintiff phoned Defendants
and spoke with Brian Fearon who indicated that he would be the single point of contact and that her loan
was being processed and no further documents were required. (Id. 7.) Mr. Fearon refused to consider
postponing the Trustee's Sale. (Id.) On J une 5, 2013, Plaintiff called Defendant to check on the status
of her application. She spoke with "Donita" who indicated that she was the single point of contact and
that no additional paperwork would be required. (Id. 8.) Plaintiff later received a call from Donita
requesting that she resubmit her information directly to the underwriter. (Id. 9.) Plaintiff has not
received any notification that her loan modification had been denied or rejected. (Id. 11.)
Plaintiff argues that Defendant's conduct violated various provisions of the recently-enacted Homeowner
Bill of Rights. Plaintiff contends that Civil Code 2923.6(c) prohibits a lender fromrecording a notice of
default or notice of sale, or conducting a trustee's sale while a loan modification application is pending. A
lender must make a written determination that the borrower is not eligible for a loan modification before it
may proceed with the foreclosure process. (Civil Code 2923.6(c)(1).) Plaintiff also argues that
Defendant violated the "single point of contact" rule which provides that "upon request froma borrower
who requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a
single point of contact and provide to the borrower one or more direct means of communication with the
single point of contact." (Civ. Code 2923.7(a).)
Civ. Code 2923.6
In opposition, Defendant argues that it did not receive Plaintiff's RMA by May 28, 2013 (day of the Notice
of Trustee's Sale was recorded.) Defendant correctly notes that the RMA package attached as Exhibit 2
to Plaintiff's declaration is not signed or dated. (See Rogers Declaration, Ex. 2.) Plaintiff's declaration
states that she mailed the RMA on May 6, 2013.
Defendant further argues that in November 2012, Plaintiff applied for, but was denied a HAMP loan
modification because she had insufficient income to qualify for the modification. (Declaration of Charles
Boyle ("Boyle Decl."), 8.) Plaintiff's HAMP application was denied in April 2013. (Id. 9.) According
to Defendant, pursuant to Civ. Code 2923.6(g), it was not obligated to re-review Plaintiff for a loan
modification without sufficient showing that Plaintiff's financial condition changed since her HAMP denial.
Civ. Code 2923.6(g) provides
In order to minimize the risk of borrowers submitting multiple applications for first lien loan modifications
for the purpose of delay, the mortgage servicer shall not be obligated to evaluate applications from
borrowers who have already been evaluated or afforded a fair opportunity to be evaluated for a first lien
loan modification prior to J anuary 1, 2013, or who have been evaluated or afforded a fair opportunity to
be evaluated consistent with the requirements of this section, unless there has been a material change
in the borrower's financial circumstances since the date of the borrower's previous application and that
change is documented by the borrower and submitted to the mortgage servicer.
(Civ. Code 2923.6(g).)
In reply, Plaintiff argues that Civ. Code 2923.6(g) does not apply here because the Homeowners' Bill of
Rights does not apply retroactively to a 2012 loan modification request. While the Homeowners' Bill of
Right was effective J anuary 1, 2013, the Court is not convinced that the retroactivity doctrine applies
here. (See e.g. Michael J. Weber Living Trust v. Wells Fargo Bank, N.A. (N.D. Cal. Mar. 25, 2013) 2013
U.S. Dist. LEXIS 41797, *11-12 [because Plaintiff had not demonstrated that there was a material
MINUTE ORDER
DATE: 08/19/2013 Page 2
DEPT: 54 Calendar No.
CASE TITLE: Rogers vs. OneWest Bank FSB CASE NO: 34-2013-00144866-CU-WE-GDS
change in his financial circumstances since his last denial in J une 2012, Plaintiff had not demonstrated
that it is likely to succeed on its Homeowners' Bill of Rights causes of action.].) Moreover, as drafted
Civ. Code 2923.6(g) applies to evaluations made prior to J anuary 1, 2013.
Given the above, for the purposes of this motion only, the Court finds that Plaintiff has not shown a
likelihood of prevailing on her Civ. Code 2923.6 cause of action.
Civ. Code 2923.7
In opposition, Defendant argues that it assigned Ben Work as Plaintiff's single point of contact and "loan
counselor" as noted in Defendant's letters sent on May 31, J une 6, J une 14 and J une 25. (See Boyle
Decl., 12.) According to Defendant, Plaintiff concedes that she took it upon herself to contact various
representatives at OneWest before she was assigned a single point of contact. (Opposition, 4:28-5:1.)
"The single point of contact provision. . . is intended to prevent borrowers from being given the
runaround, being told one thing by one bank employee while something entirely different is being
pursued by another. Under the legislation, the single point of contact must be responsible for, among
other things, "[h]aving access to current information and personnel sufficient to timely, accurately, and
adequately inform the borrower of the current status of" his loan modification request and "[h]aving
access to individuals with the ability and authority to stop foreclosure proceedings when necessary."
(Jolley v. Chase Home Finance, LLC (2013) 213 Cal. App. 4th 872, 904-905 [internal citations omitted].)
In reply, Plaintiff proffers a May 20, 2013 email from Brian Fearon from OneWest seeking updated
information on Plaintiff's application. (Reply Declaration of Deanna Rogers, Ex. 1.) Plaintiff responded,
and on May 29, 2013, Mr. Fearon directed Plaintiff to reapply for HAMP. (Id.) Plaintiff contends that this
email demonstrates that Defendant received the completed loan modification application as early as
May 20, 2013 and that Mr. Fearon was another point of contact.
The Court finds that for the purposes of this motion only, that Plaintiff has presented sufficient
evidentiary facts to establish a likelihood that she will prevail. (Tahoe Keys Property Owners' Assn.,
supra, 23 Cal.App.4th at 1478.) Given the May 20
th
email, it appears that Mr. Fearon was Plaintiff's
single point of contact. Although Mr. Fearon directed Plaintiff to reapply for HAMP, "the single point of
contact shall remain assigned to the borrower's account until the mortgage servicer determines that all
loss mitigation options offered by, or through, the mortgage servicer have been exhausted or the
borrower's account becomes current." (Civ. Code 2923.7(c).) Thus, it appears that Mr. Fearon should
have remained Plaintiff's single point of contact because he had not yet determined that all loss
mitigation options had been exhausted. Based on the foregoing, the Court concludes that Plaintiff has
met her burden to demonstrate a
likelihood of prevailing on the merits of her claims.
Balance of the Harms
The Court agrees that Plaintiff will undoubtedly suffer great injury if her residence is sold. Accordingly,
the relevant factors favor Plaintiff, and the court will grant the motion for preliminary injunction.
Bond is set in the amount of $10,000.
The prevailing party shall prepare a formal order for the Court's signature pursuant to C.R.C. 3.1312.
Although the notice of motion provided notice of the Court's tentative ruling systemas required by Local
Rule 1.06, the notice does not comply with the current rule. Moving counsel is directed to review the
Local Rules, effective J anuary 1, 2013.
MINUTE ORDER
DATE: 08/19/2013 Page 3
DEPT: 54 Calendar No.
CASE TITLE: Rogers vs. OneWest Bank FSB CASE NO: 34-2013-00144866-CU-WE-GDS
COURT RULING

The matter was argued and submitted. The Court affirmed the tentative ruling. The $10,000 bond to be
posted by close of business on 8/20/13.
STOLO
MINUTE ORDER
DATE: 08/19/2013 Page 4
DEPT: 54 Calendar No.
MINUTE ORDER
DATE: 08/19/2013 Page 4
DEPT: 54 Calendar No.
Judge Donna Geck
Department 4 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107
CIVIL LAW & MOTION
Deutsche Bank National Trust Company vs Robert Pastor et al
Case No: 1417736
Hearing Date: Fri Aug 09, 2013 9:30

Nature of Proceedings: Motion: Quash/Dismiss UD Complaint
This is an unlawful detainer action following a foreclosure sale. The property at
issue is located at 25 Canejo Road, Santa Barbara, California 93103. Plaintiff
Deutsche Bank National Trust Company acquired the property at a public auction
on September 29, 2011. Plaintiffs ownership is evidenced by a trustees deed upon
sale that was recorded with the Santa Barbara County Recorders Office on October
4, 2011. On March 11, 2013, plaintiff caused to be served on defendant Robert
Pastor, a tenant at the property, a written notice requiring him to vacate the
premises within 90 days. On May 16, 2013, plaintiff caused to be served on
defendant Brooke Robbins, also a tenant at the property, a written notice requiring
her to vacate the premises within 30 days. Plaintiff alleges that Brooke Robbinss
parents, Vincent and Virginia Robbins, the former owners of the property, still
occupy the property and therefore the code section requiring 90 days notice to
vacate did not apply to Brooke Robbins.

Defendants Robert Pastor and Brooke Robbins now move for an order quashing
service of the summons on the ground that Brooke Robbins was not served with the
notice to vacate at least 90 days prior to the filing of the unlawful detainer action on
June 25, 2013. Defendants also contend that the two notices to vacate that were
served on them are void because they did not contain the mandatory language to
tenants concerning reclaiming abandoned property.

A defendant may file a motion to quash service of the summons and complaint on
the ground that the court lacks jurisdiction. Code of Civil Procedure Section 418.10
provides, in relevant part:

(a) A defendant, on or before the last day of his or her time to plead or within any
further time that the court may for good cause allow, may serve and file a notice of
motion for one or more of the following purposes:

(1) To quash service of summons on the ground of lack of jurisdiction of the court
over him or her.

A motion to quash is the proper procedure to challenge an unlawful detainer
complaint on the ground that the court lacks personal jurisdiction. Parsons v.
Superior Court (2007) 149 Cal.App.4th Supp. 1. In Parsons, plaintiff landlord
served defendants, the owners of a houseboat, with a 30-day notice to terminate
their tenancy. After defendants failed and refused to vacate the tenancy, plaintiff
filed an unlawful detainer complaint and obtained a court order allowing it to serve
the complaint by posting. Defendants responded by filing a motion to quash service
of the summons on the ground that the Floating Home Residency Law (Civ. Code
800.70) requires a 60-day notice to terminate a houseboat tenancy. The trial court
denied the motion, but the appellate division of the superior court reversed and
ordered the trial court to hold further proceedings on the merits of the motion. The
court found that defendants use of a motion to quash was proper because the
challenge to the notice extended beyond the face of the complaint to the issue
whether a 30-day or 60-day notice was required and the issue could only be resolved
by competent evidence. Id., at 7.

California cases also hold that if an unlawful detainer action is filed prematurely,
i.e., before expiration of the applicable notice period, the complaint is defective and
must be dismissed. See, Lamanna v. Vognar (1993) 17 Cal.App.4th Supp. 4, 6
(holding that unlawful detainer action for nonpayment of rent filed prematurely
because 3-day notice period had not yet expired). The only recourse in such cases is
to refile the complaint after the claim has properly ripened into a cause of action.
Lee v. Bank of America (1994) 27 Cal.App.4th 197, 205.

In the case at bar, defendant Brooke Robbins contends that she is covered by Code
of Civil Procedure Section 1161b, subdivision (a), which provides:

Notwithstanding Section 1161a, a tenant or subtenant in possession of a rental
housing unit under a month-to-month lease or periodic tenancy at the time the
property is sold in foreclosure shall be given 90 days written notice to quit pursuant
to Section 1162 before the tenant or subtenant may be removed from the property
as prescribed in this chapter.

Section 1161b, subdivision (d), provides an exception to the 90-day notice
requirement and states:

This section shall not apply if any party to the note remains in the property as a
tenant, subtenant, or occupant.

Plaintiff alleges in its complaint that Vincent and Virginia Robbins, the former
borrowers, are still co-occupant[s] of the property therefore it was only necessary
to serve Brooke Robbins with a 30-day notice to vacate the premises, pursuant to
Code of Civil Procedure Section 1161a, subdivision (c). (Comp., 8, 10.) In the
motion to quash, Brooke Robbins disputes this allegation, claiming that her parents
vacated the property after a judgment of eviction was entered against them on May
9, 2013 in Santa Barbara Superior Court Case No. 1414898. (B. Robbins Dec., 11.)
Brooke Robbins says that her parents have not remained at the property, and are
not co-occupants of the property, but instead, reside with her brother, Brian
Robbins, at 3626 San Remo Drive in Santa Barbara. (Ibid.) The court
finds this evidence persuasive and will grant the motion to quash as to defendant
Brooke Robbins for failure to serve her with a 90-day notice unless plaintiff can
present more persuasive evidence to the contrary at the hearing on the motion. (In
an unlawful detainer action, any opposition to a motion to quash may be filed up to
the day before the hearing or may be made orally at the hearing. Cal. Rules of
Court, Rule 3.1327(b)(c).) Assuming a 90-day notice was required, the complaint
filed on June 25, 2013 was too early because Brooke Robbins was only served with
the notice to vacate 40 days earlier, on May 16, 2013.

Defendants argue that the notices to vacate are void for the additional reason that
they did not contain language regarding defendants right to reclaim abandoned
property, as required by Civil Code Section 1946.1, subdivision (h). That section
provides:

Any notice given by an owner pursuant to this section shall contain, in
substantially the same form, the following:

State law permits former tenants to reclaim abandoned personal property left at
the former address of the tenant, subject to certain conditions. You may or may not
be able to reclaim property without incurring additional costs, depending on the
cost of storing the property and the length of time before it is reclaimed. In general,
these costs will be lower the sooner you contact your former landlord after being
notified that property belonging to you was left behind after you moved out.

Defendants contend that Civil Code Section 1946.1(h) and Code of Civil Procedure
Section 1161b(a) co-exist and that they were entitled to a 90 days notice that
included language about their right to reclaim abandoned property. The court
disagrees. The language about reclaiming abandoned property only applies when
an owner of residential property gives notice pursuant to this section, i.e., Civil
Code Section 1946.1. That section requires that a lease be terminated with either a
60-day or 30-day notice, depending on how long the tenant has resided at the
property. The code section has no application here, where notice
to vacate was given pursuant to Code of Civil Procedure Section 1161b(a). The
motion to quash for failure to include the language in Civil Code Section 1946.1(h)
in the notices will therefore be denied.

Tentative Ruling:
The motion to quash service of the summons on defendant Brooke Robbins is
granted, unless plaintiff can present persuasive evidence that Vincent and Virginia
Robbins are still co-occupants in possession of the subject property. In all other
respects, the motion to quash is denied. Defendant Robert Pastor is ordered to file
his answer to the complaint within 5 days of the date of this ruling.