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James Alan Bush1211 East Santa Clara Avenue #4
San Jose, CA 95116(408) 217-8282
Plaintiff in pro per
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
CIVIL DIVISION
COMPLAINT FOR DAMAGES ANDINJUNCTIVE RELIEF FOR DEPRIVATIONOF PROPERTY UNDER COLOR OF LAW
[Title 42 U.S.C.S. 1983]
[U.S. Const., amend. XIV, 1, cl. 1.,Cal. Const., art. I, 7(a)]
))))
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James Alan Bush,
Plaintiff,
v.
Sunnyvale Department of PublicSafety, et al.,
Defendants.__________________________________
COMPLAINT FOR DEPRIVATION OF CIVIL RIGHTS UNDER COLOR OF LAW PAGE 1
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CONSPIRACY TO DEPRIVE PLAINTIFF OF PROPERTY
I. AN ALLEGATION OF CONSPIRACY TO COMMIT A CIVIL WRONG IS SUFFICIENT TO
STATE A CAUSE OF ACTION AGAINST ALL OF THE ALLEGED CONSPIRATORS IF
THE ALLEGATIONS IN THE COMPLAINT SHOW THAT EACH OF THEM PARTICIPATED
IN THE CONSPIRACY AND THAT ONE OR MORE OF THEM COMMITTED A CIVIL
WRONG PURSUANT TO THE CONSPIRACY CAUSING PLAINTIFF ACTUAL DAMAGES.
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A. Conditions for Liability for Conspiracy. Civil liability for
conspiracy to commit a civil wrong exists where a conspiracy
has been formed and operated to accomplish by concerted action
a criminal or unlawful purpose or a lawful purpose by criminal
or unlawful means which results in actual damage (Taylor v. S &
M Lamp Co. (1961) 190 Cal. App. 2d 700, 706, 12 Cal. Rptr. 323;
Clark v. Lesher (1951) 106 Cal. App. 2d 403, 409, 235 P.2d 71].
B. Liability of Co-conspirators. In an action for damages
arising from a civil conspiracy, the major significance of the
conspiracy lies in the fact that it renders each participant
in the wrongful act responsible as a joint tortfeasor for all
damages ensuing from the wrong, irrespective of whether or not
he/she was a direct actor and regardless of the degree of his/
her activity (Unruh v. Truck Ins. Exch. (1972) 7 Cal. 3d 616,
631, 102 Cal. Rptr. 815, 498 P.2d 1063]
C. Act of One During Conspiracy Is Act of All. The act of one
conspirators during a conspiracy is the act of all of the
conspirator if done in furtherance of the conspiracy (de Vries
v. Brumback (1960) 53 Cal. 2d 643, 648, 2 Cal. Rptr. 764, 349
P.2d 532).
D. Liability of One Who Committed No Overt Act and Gained No
Benefit. Since the act of one during a conspiracy is the act of
all if done in furtherance thereof, defendants who are charged
with participation in a conspiracy may be held liable who in
fact committed no overt act whatsoever and gained no benefit
therefrom (Wetherton v. Growers Farm Labor Assn (1969) 275
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Cal. App. 2d 168, 176, 79 Cal. Rptr. 543, disapproved on other
grounds, Applied Equip. Corp. v. Utton Saudi Arabia Ltd. (1994)
7 Cal. 4th 503, 52 1 n. 10, 28 Cal. Rptr. 2d 475, 869 P.2d 454).
E. Proposition 81 Did Not Change Rule of Joint and Several
Liability Among Conspirators. Despite the passage of the Fair
Responsibility Act of 1986 (Proposition 1), joint and several
liability for noneconomic damages is still the rule in a case
of civil conspiracy, because liability in a case of conspiracy
is not allocated based on comparative fault, but is premised
on the concerted action of all tortfeasors acting as one in
causing a single indivisible injury (Kesmodel v. Rand (2004) 1
19 Cal. App. 4th 1 128, 1 143, 15 Cal. Rptr. 3d 1 18; see Civ.
Code 8 1431.2).
II. TEXT
A. Acts which would be lawful if done by one are often illegal
if done in pursuance of a conspiracy. Carew v. Rutherford, 106
Mass. 10, 8 Am. Rep. 287; Sherry v. Perkins, 147 Mass. 214, 17 N.
E. 307; Vegelahn v. Guntner, 167 Mass. 97, 35 L. R. A. 722, 44
N. E. 1077; Cooke, Trade & Labor Combinations, 4, p. 14, note
2; Temperton v. Russell, 62 L. J. Q. B. N. S. 412; Doremus v.
Hennessy, 2 Ill. App. 391; Barr v. Essex Trades Council, 53 N.
J. Eq. 101, 30 Atl. 881; State v. Glidden, 55 Conn. 46, 8 Atl.
890.
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INTERFERENCE WITH CONTRACTUAL RELATIONSHIP
1. Supreme Court held that interference with a contractual
relationship by lawful but unjustified means is actionable [Imperial
Ice Co. v. Rossier (1941) 18 Cal. 2d 33, 35, 37-39, 112 P.2d 631].
2. Inducement of breach of contract is merely one type of broader tort
of interference with prospective economic advantage [Environmental
Planning & Info. Council v. Superior Court (1984) 36 Cal. 3d 188,
193, 203 Cal. Rptr. 127, 680 P.2d 1086; Buckaloo v. Johnson (1975) 14
Cal. 3d 815, 823, 122 Cal. Rptr. 745, 537 P.2d 865].
3. Interference with income, obstruction of mail, interception of
communications (where intent is to prevent or hinder ability to pay
bills) actionable under 1983 per case law. The right of a party
not to have a state impair its obligations of contract is protected
by U.S. Const., art. I, 10, cl. 1 [So. Cal. Gas Co. v. City of
Santa Ana (9th Cir. 2003) 336 F.3d 885, 887].
4. Intentional interference by third person with contractual
relationship, either by unlawful means or by means otherwise lawful
if there is lack of sufficient justification, is actionable in tort.
[Herron v. State Farm Mut. Ins. Co. (1961) 56 Cal. 2d 202, 205, 14
Cal. Rptr. 294, 363 P.2d 310; Wise v. Southern Pac. Co. (1963) 223
Cal. App. 2d 50, 65, 35 Cal. Rptr. 652]
5. Action arising from conspiracy to interfere with real estate
brokers contractual relationship was stated by general allegation
of formation of conspiracy, defendants wrongful acts, and damage
to plaintiff by breach. [Allen v. Powell (1967) 248 Cal. App. 2d 502,
508-509, 56 Cal. Rptr. 715]
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CASE LAW
I. DEFENDANTS DANIEL CORTEZ AND LAURENE REBER ARE LIABLE FOR THEIR
INTENTIONAL INTERFERENCE WITH PLAINTIFFS CONTRACTUAL RELATIONSHIP
WITH DEFENDANT ADVANTAGE HOMES BECAUSE PLAINTIFF HAD A VALID AND
EXISTING CONTRACT, DEFENDANTS KNEW OF THIS CONTRACT AND COMMITTED
INTENTIONAL ACTS DESIGNED TO INDUCE A DISRUPTION OF THE CONTRACT
WITH, OR A BREACH OF CONTRACT BY, DEFENDANT ADVANTAGE HOMES, AND
THEIR ACTS DID CAUSE ACTUAL DISRUPTION OF THE CONTRACT, RESULTING IN
DAMAGES TO PLAINTIFF.
A. Elements of Intentional Interference With Contractual
Relationship. To plead an actionable wrong for interference
with a contractual relationship, the plaintiff must allege that
(1) he had a valid and existing contract with a third party;
(2) defendant had knowledge of this contract; (3) defendant
committed intentional and unjustified acts designed to interfere
with or disrupt the contract; (4) actual interference with or
disruption of the relationship occurred; and (5) damages were
suffered as a result (Quelimane Co. v. Stewart Title Guar. Co.
(1998) 19 Cal. 4th 26, 55, 77 Cal. Rptr. 2d 709, 960 P.2d 513;
Savage v. Pacific Gas & Elec. Co. (1993) 21 Cal. App. 4th 434,
448, 26 Cal. Rptr. 2d 305).
B. Intent May Be Inferred From Conduct Substantially Certain to
Interfere With Relationship. A partys intent to interfere with
a contract may be established by inference as well as by direct
proof and may be inferred from conduct that is substantially
certain to interfere with the relationship (Savage v. Pacific Gas
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& Elec. Co. (1993) 21 Cal. App. 4th 434, 449, 26 Cal. Rptr. 2d
305).
C. Wrongfulness Independent of Interference With Contract is
Not Element of Intentional Interference With Contractual
Relationship. Because intentionally inducing or causing a breach
of an existing contract is wrongful in and of itself, plaintiff
in an action for intentional interference with an existing
contractual relationship is not required to plead or prove that
defendants conduct is wrongful apart from the interference with
the contract itself (Quelimane Co. v. Stewart Title Guar. Co.
(1998) 19 Cal. 4th 26, 55-56, 77 Cal. Rptr. 2d 709, 960 P.2d 513).
II. DEFENDANTS ARE LIABLE FOR THEIR INTENTIONAL INTERFERENCE WITH
PLAINTIFFS CONTRACTUAL RELATIONSHIP WITH DEFENDANTS STEVE DOE
AND ADVANTAGE HOMES, NOTWITHSTANDING THE FACT THAT THE DISRUPTED
CONTRACT IS TERMINABLE AT WILL.
A. Interference With Terminable-at-Will Contract Actionable. An
action may lie for interference when defendant has unjustifiably
interfered with a terminable-at-will contract to which plaintiff
is a party (Speegle v. Board of Fire Underwriters (1946) 29
Cal. 2d 34, 39-40, 172 P.2d 867; Savage v. Pacific Gas & Elec. Co.
(1993) 21 Cal. App. 4th 434, 448, 26 Cal. Rptr. 2d 305; Kozlowsky
v. Westminster Natl Bank (1970) 6 Cal. App. 3d 593, 598, 86 Cal.
Rptr. 52).
III. THE FACT THAT PLAINTIFF HAS OBTAINED A DECREE OF SPECIFIC
PERFORMANCE IN HIS CONTRACT ACTION AGAINST DEFENDANTS STEVE DOE
AND ADVANTAGE HOMES DOES NOT PRECLUDE HIM FROM RECOVERING DAMAGES
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FOR DEFENDANTS INTENTIONAL INTERFERENCE WITH THE CONTRACT BETWEEN
PLAINTIFF AND DEFENDANTS STEVE DOE AND ADVANTAGE HOMES
A. Specific Performance Not a Bar to Damages. When a third party
has interfered with the performance of a contract, a plaintiff
may bring an action for damages against the interferor,
regardless of the availability of specific performance against
the breaching contractual party (Owens v. Palos Verdes Monaco
(1983) 142 Cal. App. 3d 885, 872, 191 Cal. Rptr. 381; Duff v.
Engelberg (1965) 237 Cal. App. 2d 505, 507-509, 47 Cal. Rptr.
114).
IV. PLAINTIFF IS ENTITLED TO AN AWARD OF PUNITIVE DAMAGES AGAINST
DEFENDANTS DANIEL CORTEZ AND LAURENE WEBER BECAUSE DEFENDANTS
INTENTIONAL INTERFERENCE WITH PLAINTIFFS ECONOMIC RELATIONSHIP WITH
DEFENDANT ADVANTAGE HOMES WAS MALICIOUS.
A. Punitive Damages May Be Awarded for Malicious Intentional
Interference. Punitive damages are available in an action
for intentional interference with economic relations when the
plaintiff demonstrates that the acts of the defendant were
malicious (Duff v. Engelberg (1965) 237 Cal. App. 2d 505, 509, 47
Cal. Rptr. 114; Guillory v. Godfrey (1955) 134 Cal. App. 2d 628,
633, 286 P.2d 474).
V. PLAINTIFF HAS ALLEGED FACTS SUFFICIENT TO STATE A CAUSE OF ACTION
FOR CONSPIRACY TO INTERFERE WITH ECONOMIC RELATIONS BETWEEN
PLAINTIFF AND DEFENDANT ADVANTAGE HOMES BECAUSE PLAINTIFF HAS
ALLEGED THE FORMATION AND OPERATION OF A CONSPIRACY, ACTS DONE
PURSUANT THERETO, AND DAMAGES ARISING THEREFROM.
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A. Elements of Conspiracy to Interfere. To plead an actionable
wrong for conspiracy to interfere with economic relations, the
plaintiff must allege (1) the formation and operation of a
conspiracy, (2) wrongful acts done pursuant to the conspiracy,
and (3) damages arising from the conspiracy (Olivet v.
Frischling (1980) 104 Cal. App. 3d 831, 837, 164 Cal. Rptr. 87;
Wise v. Southern Pac. Co. (1963) 223 Cal. App. 2d 50, 64, 35 Cal.
Rptr. 652).
VI. DEFENDANTS SYLVANA HEALY, STEVE DOE AND TODD SU ARE LIABLE TO
PLAINTIFF FOR THEIR NEGLIGENT PERFORMANCE OF THEIR CONTRACT WITH
PLAINTIFF BECAUSE THIS PERFORMANCE CREATED A FORESEEABLE AND
UNREASONABLE RISK OF ECONOMIC HARM TO PLAINTIFF AND CAUSED DAMAGE
TO PLAINTIFF.
A. Criteria for Determining Duty of Care. The existence of a duty
of care in an action for negligent interference with economic
relations depends on six criteria: (1) the extent to which
the transaction was intended to affect the plaintiff, (2) the
foreseeability of harm to the plaintiff, (3) the degree of
certainty that the plaintiff suffered injury, (4) the closeness
of the connection between the defendants conduct and the
injury suffered, (5) the moral blame attached to the defendants
conduct and (6) the policy of preventing future harm (JAire
Corp. v. Gregory (1979) 24 Cal. 3d 799, 804, 157 Cal. Rptr. 407,
598 P.2d 60).
VII. UNLESS THE INTERFERING CONDUCT IS SHOWN TO BE PRIVILEGED OR
JUSTIFIED, AN OWNER, OFFICER, OR DIRECTOR OF A COMPANY MAY BE
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LIABLE FOR INTERFERING WITH A CONTRACT TO WHICH THE COMPANY WAS A
PARTY.
A. Owner, Officer, or Director of Company Not Shielded From
Liability. Unless the defendants can show that the conduct
was privileged or justified, a claim for interference with
an economic relationship founded in contract may be brought
against an owner, officer, or director of a company whose
contract was the subject of the litigation [Woods v. Fox Broad.
Sub., Inc. (2005) 129 Cal. App. 4th 344, 356, 28 Cal. Rptr.
463)].
B. Tort Liability May Be Imposed Under Alter Ego Doctrine. When a
defendants conduct is not otherwise privileged, the alter ego
doctrine cannot be used as a shield to prevent imposition of
tort liability for intentional interference with an economic
relationship on an owner, director, or manager who caused a
corporation to breach its contract [Shapoff v. Scull (1990) 222
Cal. App. 3d 1457, 1471-1473, 272 Cal. Rptr. 480].
C. Plaintiffs Election. Although it would be inconsistent to
impose liability on an alter ego for both breach of the
corporations contract and for the tort of interference, after
a judgment has been rendered on both claims, the plaintiff
is entitled to elect whether to proceed on the contract claim
or on the tort claim [Shapoff v. Scull (1990) 222 Cal. App. 3d
1457, 1462, 1473, 272 Cal. Rptr. 480].
IIX. DEFENDANT IS LIABLE TO PLAINTIFF FOR HIS/HER NEGLIGENT PERFORMANCE
OF HIS/HER CONTRACT WITH PLAINTIFF BECAUSE THIS PERFORMANCE CREATED
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A FORESEEABLE AND UNREASONABLE RISK OF ECONOMIC HARM TO PLAINTIFF
AND CAUSED DAMAGED TO PLAINTIFF].
A. Criteria for Determining Duty of Care. The existence of a duty
of care in an action for negligent interference with economic
relations depends on six criteria: (1) the extent to which
the transaction was intended to affect the plaintiff, (2) the
foreseeability of harm to the plaintiff, (3) the degree of
certainty that the plaintiff suffered injury, (4) the closeness
of the connection between the defendants conduct and the
injury suffered, (5) the moral blame attached to the defendants
conduct and (6) the policy of preventing future harm [JAire
Corp. v. Gregory (1979) 24 Cal. 3d 799, 804, 157 Cal. Rptr. 407,
598 P.2d 60].
B. Negligent Performance of Contract as Basis for Action. When
the negligent performance of a contract creates an unreasonable
and foreseeable risk of interference with a third partys
economic relations and the negligent performance does in
fact proximately cause injury to the third partys economic
relations, the negligent party may be liable to the third party
in tort [JAire Corp. v. Gregory (1979) 24 Cal. 3d 799, 804-
808, 157 Cal. Rptr. 407, 598 P.2d 60; Chameleon Engg Corp. v.
Air Dynamics Inc. (1980) 101 Cal. App. 3d 418, 420-423, 161 Cal.
Rptr. 463].
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ABUSE OF PROCESS
Attorney who assisted a party in carrying out the misuse of legal
process [Barquis v. Merchants Collection Assn (1972) 7 C3d 94, 97
n1, 101 CR 745]. An attorney who actively participated with a client
in misusing the system to promote a clients wrongful objective
might even be named as a co-conspirator [Weisenburg v. Molina (1976)
58 CA3d 478, 489, 129 CR 813; Anno, 97 ALR3d 688 (1980) (attorney
liability for abuse of process)].
Compensatory damages. Mental suffering [Spellens v. Spellens (1957)
49 C2d 210, 233, 317 P2d 613, 627] and for loss of the use and
enjoyment of property seized [White Lighting Co. v. Wolfson (1968)
68 C2d 336, 347, 66 CR 697, 703; Christensen v. Younger (1975) 47
CA3d 613, 618, 120 CR 923 (one who misuses legal process is liable
for pecuniary loss caused thereby)].
Proving malice. Inferences to be drawn from evidence as lying in
sound discretion of trial judge acting as trier of fact; intention
with which party did act as permissibly inferred from evidence of
partys subsequent conduct [Tranchina v. Arcinas (1947) 78 Cal. App.
2d 522, 524, 178 P.2d 65].
Supreme Court held that the tort of intentional interference
with prospective economic advantage applies when the defendant
interferes with a business or economic relationship not subject to
a legally binding agreement; but, nonetheless, containing a probable
future economic benefit to the plaintiff [Buckaloo v. Johnson (1975)
14 Cal. 3d 815, 822-823, 827, 122 Cal. Rptr. 745, 537 P.2d 865].
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CONSTRUCTIVE FRAUD AND BREACH OF FIDUCIARY DUTY
1. Requirements for action for constructive fraud. [Civ. Code 157]
2. Horning v. Shilberg (2005) 130 CA4th 197, 203, 29 CR3d 717, 723.
3. Brokers relationship with principal is fiduciary, and he must
disclose all facts within his knowledge that are cogent to sale
and which might affect principals willingness to sell. [Earle v.
Lambert, 23 Cal. Rptr. 79, 205 Cal. App. 2d 452]
4. With broker status comes fiduciary duties, which include obligation
of acting with utmost good faith and honesty toward seller, and
preclude broker from assuming a position adverse to seller without
sellers consent; there also flows a duty to disclose to seller all
facts within brokers knowledge which are material to the sale.
[Gray v. Fox, 198 Cal.Rptr. 720, 151 Cal.App.3d 482]
5. Brokers duty of good faith precludes broker from assuming a
position adverse to that of his principal unless the principal
consents and it places upon broker the legal obligation to disclose
to his principle all facts within his knowledge which are material
to matter in connection with which he is employed. [Timmsen v.
Forest E. Olsen, Inc., 86 Cal. Rptr. 359, 6 Cal. App. 3d 860]
6. Under California law, real estate broker has fiduciary duty to
investigate material facts of transaction, and cannot accept
information received from others as being true, and transmit it to
principal, without either verifying information or disclosing to
principal that information has not been verified. [In re King Street
Investments, Inc., 219 B.R. 848]
7. Presumption of negligence from violation of statute, ordinance, or
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regulation. Evid. Code 601, 606, 660, 669.
8. Broker who violates his duty to use reasonable care, skill and
diligence will be liable to principal for any losses which
principal sustains as result of brokers negligence or breach of
duty. [Timmsen v. Forest E. Olsen, Inc., 86 Cal. Rptr. 359, 6 Cal.
App. 3d 860]
9. Breach of real estate agents fiduciary duty to his or her client may
constitute negligence or fraud, depending on the circumstances of
case. [Assilzadeh v. California Federal Bank, 98 Cal. Rptr. 2d 176,
82 Cal. App. 4th 399]
10. A real estate agent, as a fiduciary, is liable to his principal
for constructive fraud even though his conduct is not actually
fraudulent. Assilzadeh, supra.
11. It is unlawful to cause any person to suffer any loss by reason of
any fraud or deceit practiced on them in the sale of a manufactured
home. [Health & Safety Code 18060.5(c)]
12. Fail to exercise reasonable supervision over the activities of
employees who negotiate or promote the sale of manufactured homes.
[Health & Safety Code 18060.5(h)]
UNLAWFUL FORECLOSURE
The California Trustees Sale. It is common practice in California
for a debtor, particularly the purchaser of real property, to secure
his obligation by a deed of trust under which the property purchased is
given as security for payment of the debt. The deed of trust includes
a power of sale which empowers the trustee to sell the property in the
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event of default by the trustor (the debtor) and apply the proceeds of
the sale to the obligation. The trustee acts on the instructions of the
beneficiary of the deed of trust (the creditor), and the relationship
between them is not a fiduciary one. Legal title to the property rests
in the trustee, the deed of trust is recorded, and no court action is
required for the trustee to convey valid title to a third party
The conduct of a sale under the power in a deed of trust is
regulated in California by Civil Code 2924-2924h.
If the debtor argues that the sale was wrongful and in violation
of the underlying contract, he may seek the intervention of the courts
either to restrain the sale or have it set aside after it is held.
1. Standing to challenge sale. Generally, only parties with an
interest in the secured loan or in the real property security
itself have standing to challenge or attempt to set aside a
nonjudcial foreclosure sale. [Royal Thrift & Loan Co. v. County
Escrow, Inc. (2004) 123 CA4th 24, 33, 20 CR3d 37, 44]
2. Setting aside a trustees sale. To set aside a trustees sale
requires substantial evidence of a failure to comply with the
procedural requirements to the challenging partys prejudice.
[6 Angels, Inc. v. Stuart-Wright Mortgage, Inc., supra, 85 CA4th
at 1284, 102 CR2d at 714; Knapp v. Doherty (2004) 123 CA4th 76, 86,
20 CR3d 1, 8, fn. 4; see Residential Capital, LLC v. Cal-Western
Reconveyance Corp. (2003) 108 CA4th 807, 822, 134 CR2d 162, 173 (only
a properly conducted foreclosure sale, free of substantial defects
in procedure, creates rights in the high bidder at the sale)]
3. Fraud or deceit. Fraud or deceit in the foreclosure process is
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likewise ground to set aside the sale. [South Bay Bldg. Enterprises,
Inc. v. Riviera Lend-Lease, Inc. (1999) 72 CA4th 1111, 1121, 85 CR2d
647, 652; Lo v. Jensen (2001) 88 CA4th 1093, 1095-1096, 106 CR2d 443,
444-445 (two competitive bidders joined together in violation of
Civ. Code 2924h(g) and in restraint of competition, resulting in
artificially low price). Additionally, the trustees or beneficiarys
fraudulent conduct during foreclosure proceedings can give rise to
tort damages. [South Bay Bldg. Enterprises, Inc. v. Riviera Lend-
Lease, Inc., supra, 72 CA4th at 1121-1122, 85 CR2d at 652 (trustee
and senior creditor fraudulently conspired to prevent others from
bidding in order to buy property at low price, thereby causing
junior lienholder to lose its security interest); see also CC
2924h(g) (criminalizing acts operating as fraud or deceit on any
beneficiary or junior lienholder)].
4. Mistake. A foreclosure sale may also be set aside where there has
been a mistake of such magnitude that to allow it to stand would
be inequitable to purchaser and parties. [see Bank of America Natl
Trust & Sav. Assn v. Reidy (1940) 15 C2d 243, 248,101 P2d 77, 80]
5. Presumption of negligence from violation of statute. Negligence
is inferred where attorneys fault is clear (expert testimony not
required) and prevailing standard and requisite skill are matters
of general knowledge. [Evid. Code 601, 606, 660, 669]
6. Inadequate sale price coupled with procedural irregularity. An
inadequate sale price coupled with a procedural irregularity may
warrant a set-aside of a completed foreclosure sale just as it may
be a basis for aborting a sale not yet completed. [Knapp v. Doherty
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(2004) 123 CA4th 76, 94-97, 20 CR3d 1, 14-17 (inadequate price
coupled with premature notice of trustees sale, in effect giving
too much notice of sale, not ground for set-aside)]
7. Statutorily-deficient notice. A completed trustees sale based on
a statutorily deficient notice of default and/or notice of sale
is invalid and may be set aside. [Miller v. Cote (1982) 127 CA3d
888, 894, 179 CR 753, 756-757 (notice of default premature and thus
specified default was no default); System Invest. Corp. v. Union Bank
(1971) 21 CA3d 137, 152-153, 98 CR 735, 744-745 (failure to state in
notice of default nature of payment duewhether interest, principal
or otherwise); compare Knapp v. Doherty (2004) 123 CA4th 76, 97-99,
20 CR3d 1, 17-19 (where no evidence presented that notice of default
did not properly state nature or amount of default, inaccuracy
regarding default date immaterial and not basis for set-aside)]
8. Recordation of Notice of Default. A nonjudicial foreclosure is
commenced by the trustee recording a notice of default in the
office of the county recorder for each county where the secured real
property (or any part thereof) is located. [Civ. Code 2924(a)(1)
(trustees power of shall be exercised until trustee first records
notice of default); see also Knapp v. Doherty (2004) 123 CA4th 76,
99, 20 CR3d 1, 18 (one of the signal purposes of the notice of
default is to advise the trustor of the amount required to cure the
default)].
9. Copies of notice mailed to trustor and certain interested parties.
The trustee must also mail a copy of the recorded notice of default
to the trustor (at his or her last known address, if different
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from that specified in the deed of trust), parties holding an
interest of record in the secured property who would be affected by
the foreclosure, and all parties who have duly recorded a request
for copy of the notice and notice of sale (pursuant to Civ. Code
2924b(a)). [Civ. Code 2924b(b)(1),(c) & (e)]
10. Notice of trustees sale. If the trustor does not reinstate the
secured obligation (i.e., cure the default) within three months
after the date of recordation of the notice of default, the trustee
may proceed to give a notice of sale. [CC 2924(a)(2), (3) &
2924f; Knapp v. Doherty, supra, 123 CA4th at 90-92, 20 CR3d at
11-13 (trustee must wait 3 calendar months before proceeding with
sale; but, sale not invalidated by slightly premature notice of sale
that was serviced on borrowers more than requisite 20 days before
initial sale date]
11. To whom notice given; 20-day presale deadline. The trustees notice
of sale must be sent by registered or certified mail, postage
prepaid, at least 20 days before the date of sale, to the trustor,
all other parties to whom the notice of default was required to be
given, plus any state taxing agency that has recorded a notice of
tax lien on the property. [Civ. Code 2924b(b)(2), (c)(3) & (e)]
12. Posting, publication and recordation also required. In addition to
the requisite mailed notice, written notice of the sale must be: (i)
posted (at least 20 days before the date of sale) in a public place
in the city (or judicial district) where the property is to be
sold and in a conspicuous place on the property to be sold; (ii)
published once a week for three consecutive calendar weeks (the
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first publication to be at least 20 days before the date of sale)
in a newspaper of general circulation in the city (or judicial
district or county) where the property is located; and (iii)
recorded with the county recorder of the county where the property
(or any part thereof) is located at least 14 days before the date
of sale. [Civ. Code 2924f(b)(1)]
13. Trustors interim right of reinstatement; five-day presale deadline.
Notwithstanding the trustees recordation of a notice of default and
notice of sale, the trustor has the right to reinstate the secured
obligation by paying all amounts in default (plus the trustees
costs and expenses, see CC 2924c(c) & (d)) no later than five
business days before the date of sale set forth in the initial
recorded notice of sale. [CC 2924c(e) (nothing contained herein
shall give rise to a right of reinstatement during the period of
five business days prior to the date of sale); see Hicks v. E.T.
Legg & Assocs. (2001) 89 CA4th 496, 504, 108 CR2d 10, 16] Thus,
even though the lender has accelerated the loan and declared all
sums due by the recorded notice of default, the statutory right of
reinstatement enables the trustor to avoid foreclosure by paying
only the nonaccelerated amounts actually in default (plus trustees
fees).
14. Distribution of sale proceeds. Proceeds from the trustees
foreclosure sale are applied (i) first, to pay the trustees fees
and expenses in exercising the power of sale and conducting the
sale; (ii) next, to satisfy the debt to the beneficiary (lender);
(iii) next, to the payment of junior creditors in the order of
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their priority; and (iv) the balance, if any, to the trustor (or
its successor in interest). [Civ. Code 2924k(a); Caito v. United
Calif. Bank (1978) 20 C3d 694, 701, 144 CR 751, 754; South Bay Bldf.
Enterprises, Inc. v. Riviera Lend-Lease, Inc. (1999) 72 CA4th 1111,
1118, 85 CR2d 647, 651, fn.6]
15. Irregularity in postponement procedure. A trustees sale may be
avoided for noncompliance with the statutory sale postponement
requirements [Residential Capital, LLC v. Cal-Western Reconveyance
Corp. (2003) 108 CA4th 807, 823, 134 CR2d 162, 174]; however,
the postponement irregularity must arise from the foreclosure
proceeding itself, e.g., in connection with any statutorily required
notices or the bidding process at the sale. [Nguyen v. Calhoun
(2003) 105 CA4th 428, 445, 129 CR2d 436, 450 (alleged nonreceipt of
fax regarding sale postponment did not constitute irregularity in
foreclosure proceeding itself)]
16. Breach of lenders promise to postpone sale. A trusteees sale may
be aborted where the foreclosure sale is conducted in violation of
the lenders oral promise to ponstpone it, so long as the promise
is supported by good consideration. [Raedeke v. Gibraltar Sav.
& Loan Assn (1974) 10 C3d 665, 673, 111 CR 693, 697-698 (borrowers
had cognizable cause of action to avoid sale where they procured
responsible prospective purchaser in reliance on lenders promise
to postpone sale); compare Nguyen v. Calhoun, supra, 105 CA4th at
444-445, 129 CR2d at 450 (borrowers had no basis for avoiding sale
where they failed to notify lender in timely and accurate manner
that prospective purchaser had funding to pay off their defaulted
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loan)]
17. Liability of attorney to party from whom he receives no
compensation. The fact that attorney is receiving all his
compensation from one party to a transaction does not prevent the
relationship of attorney and client from existing with respect to
the other; an attorney who voluntarily undertakes to record for the
mortgagee a mortgage executed by the attorneys client is acting
for the mortgagee as well, and would be liable to the latter if he
negligently delayed the recording and another encumbrance slipped
in ahead of it [Lawall v. Groman, 180 Pa 532, 37 A 98]. To the
effect that reliance need not be shown to establish proximate cause
[Ishmael v. Millington, 241 Cal. App. 2d 520, 50 Cal. Rptr. 592].
18. To be actionable, the attorneys negligence need not be the sole
cause of the clients loss [Ishmael v. Millington, 241 Cal. App. 2d
520, 50 Cal. Rptr. 592]; it is sufficient if the attorneys negligence
is a cause in fact [Starr v. Mooslin, 14 Cal. App. 3d 988, 92 Cal.
Rptr. 583].
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CALIFORNIA CIVIL CODE SECTION 2923.5
(a) (1) A mortgagee, trustee, beneficiary, or authorized agent may not
file a notice of default pursuant to Section 2924 until 30 days
after contact is made as required by paragraph (2) or 30 days
after satisfying the due diligence requirements as described in
subdivision (g).
(2) A mortgagee, beneficiary, or authorized agent shall contact
the borrower in person or by telephone in order to assess the
borrowers financial situation and explore options for the borrower
to avoid foreclosure. During the initial contact, the mortgagee,
beneficiary, or authorized agent shall advise the borrower that
he or she has the right to request a subsequent meeting and, if
requested, the mortgagee, beneficiary, or authorized agent shall
schedule the meeting to occur within 14 days. The assessment of the
borrowers financial situation and discussion of options may occur
during the first contact, or at the subsequent meeting scheduled
for that purpose. In either case, the borrower shall be provided
the toll-free telephone number made available by the United
States Department of Housing and Urban Development (HUD) to find
a HUD-certified housing counseling agency. Any meeting may occur
telephonically.
(b) A notice of default filed pursuant to Section 2924 shall include a
declaration from the mortgagee, beneficiary, or authorized agent
that it has contacted the borrower, tried with due diligence to
contact the borrower as required by this section, or the borrower
has surrendered the property to the mortgagee, trustee, beneficiary,
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or authorized agent.
(c) If a mortgagee, trustee, beneficiary, or authorized agent had already
filed the notice of default prior to the enactment of this section
and did not subsequently file a notice of rescission, then the
mortgagee, trustee, beneficiary, or authorized agent shall, as part
of the notice of sale filed pursuant to Section 2924f, include a
declaration that either:
(1) States that the borrower was contacted to assess the borrowers
financial situation and to explore options for the borrower to avoid
foreclosure.
(2) Lists the efforts made, if any, to contact the borrower in the event
no contact was made.
(d) A mortgagees, beneficiarys, or authorized agents loss mitigation
personnel may participate by telephone during any contact required
by this section.
(e) For purposes of this section, a borrower shall include a
mortgagor or trustor.
(f) A borrower may designate a HUD-certified housing counseling
agency, attorney, or other advisor to discuss with the mortgagee,
beneficiary, or authorized agent, on the borrowers behalf, options
for the borrower to avoid foreclosure. That contact made at the
direction of the borrower shall satisfy the contact requirements of
paragraph (2) of subdivision (a). Any loan modification or workout
plan offered at the meeting by the mortgagee, beneficiary, or
authorized agent is subject to approval by the borrower.
(g) A notice of default may be filed pursuant to Section 2924 when a
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mortgagee, beneficiary, or authorized agent has not contacted a
borrower as required by paragraph (2) of subdivision (a) provided
that the failure to contact the borrower occurred despite the due
diligence of the mortgagee, beneficiary, or authorized agent. For
purposes of this section, due diligence shall require and mean
all of the following:
(1) A mortgagee, beneficiary, or authorized agent shall first attempt to
contact a borrower by sending a first-class letter that includes
the toll-free telephone number made available by HUD to find a HUD-
certified housing counseling agency.
(2) (A) After the letter has been sent, the mortgagee, beneficiary, or
authorized agent shall attempt to contact the borrower by telephone
at least three times at different hours and on different days.
Telephone calls shall be made to the primary telephone number on
file.
(B) A mortgagee, beneficiary, or authorized agent may attempt to contact
a borrower using an automated system to dial borrowers, provided
that, if the telephone call is answered, the call is connected to
a live representative of the mortgagee, beneficiary, or authorized
agent.
(C) A mortgagee, beneficiary, or authorized agent satisfies the telephone
contact requirements of this paragraph if it determines, after
attempting contact pursuant to this paragraph, that the borrowers
primary telephone number and secondary telephone number or numbers
on file, if any, have been disconnected.
(3) If the borrower does not respond within two weeks after the
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telephone call requirements of paragraph (2) have been satisfied,
the mortgagee, beneficiary, or authorized agent shall then send a
certified letter, with return receipt requested.
(4) The mortgagee, beneficiary, or authorized agent shall provide a
means for the borrower to contact it in a timely manner, including
a toll-free telephone number that will provide access to a live
representative during business hours.
(5) The mortgagee, beneficiary, or authorized agent has posted a
prominent link on the homepage of its Internet Web site, if any, to
the following information:
(A) Options that may be available to borrowers who are unable to afford
their mortgage payments and who wish to avoid foreclosure, and
instructions to borrowers advising them on steps to take to explore
those options.
(B) A list of financial documents borrowers should collect and be
prepared to present to the mortgagee, beneficiary, or authorized
agent when discussing options for avoiding foreclosure.
(C) A toll-free telephone number for borrowers who wish to discuss
options for avoiding foreclosure with their mortgagee, beneficiary,
or authorized agent.
(D) The toll-free telephone number made available by HUD to find a HUD-
certified housing counseling agency.
(h) Subdivisions (a), (c), and (g) shall not apply if any of the
following occurs:
(1) The borrower has surrendered the property as evidenced by either
a letter confirming the surrender or delivery of the keys to the
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exceeds the anticipated recovery through foreclosure on a net
present value basis.
(b) It is the intent of the Legislature that the mortgagee, beneficiary,
or authorized agent offer the borrower a loan modification or
workout plan if such a modification or plan is consistent with its
contractual or other authority.
(c) This section shall remain in effect only until January 1, 2013, and
as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2013, deletes or extends that date.
CALIFORNIA CIVIL CODE SECTION 2924
(a) Every transfer of an interest in property, other than in trust,
made only as a security for the performance of another act, is to
be deemed a mortgage, except when in the case of personal property
it is accompanied by actual change of possession, in which case it
is to be deemed a pledge. Where, by a mortgage created after July
27, 1917, of any estate in real property, other than an estate at
will or for years, less than two, or in any transfer in trust made
after July 27, 1917, of a like estate to secure the performance of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of
the obligation for which that mortgage or transfer is a security,
the power shall not be exercised except where the mortgage or
transfer is made pursuant to an order, judgment, or decree of
a court of record, or to secure the payment of bonds or other
evidences of indebtedness authorized or permitted to be issued by
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the Commissioner of Corporations, or is made by a public utility
subject to the provisions of the Public Utilities Act, until all of
the following apply:
(1) The trustee, mortgagee, or beneficiary, or any of their authorized
agents shall first file for record, in the office of the recorder of
each county wherein the mortgaged or trust property or some part
or parcel thereof is situated, a notice of default. That notice of
default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by stating
the name or names of the trustor or trustors and giving the book
and page, or instrument number, if applicable, where the mortgage
or deed of trust is recorded or a description of the mortgaged or
trust property.
(B) A statement that a breach of the obligation for which the
mortgage or transfer in trust is security has occurred.
(C) A statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default.
(D) If the default is curable pursuant to Section 2924c, the
statement specified in paragraph (1) of subdivision (b) of Section
2924c.
(2) Not less than three months shall elapse from the filing of the
notice of default.
(3) After the lapse of the three months described in paragraph
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(2), the mortgagee, trustee or other person authorized to take the sale
shall give notice of sale, stating the time and place thereof, in
the manner and for a time not less than that set forth in Section
2924f.
(b) In performing acts required by this article, the trustee shall
incur no liability for any good faith error resulting from reliance
on information provided in good faith by the beneficiary regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to Title
1.6c (commencing with Section 1788) of Part 4.
(c) A recital in the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing
of copies of notices or the publication of a copy of the notice
of default or the personal delivery of the copy of the notice
of default or the posting of copies of the notice of sale or the
publication of a copy thereof shall constitute prima facie evidence
of compliance with these requirements and conclusive evidence
thereof in favor of bona fide purchasers and encumbrancers for value
and without notice.
(d) All of the following shall constitute privileged communications
pursuant to Section 47:
(1) The mailing, publication, and delivery of notices as required by
this section.
(2) Performance of the procedures set forth in this article.
(3) Performance of the functions and procedures set forth in this
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article if those functions and procedures are necessary to carry
out the duties described in Sections 729.040, 729.050, and 729.080 of
the Code of Civil Procedure.
(e) There is a rebuttable presumption that the beneficiary actually
knew of all unpaid loan payments on the obligation owed to the
beneficiary and secured by the deed of trust or mortgage subject to
the notice of default. However, the failure to include an actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
CALIFORNIA CIVIL CODE SECTION 2924.3
(a) Except as provided in subdivisions (b) and (c), a person who has
undertaken as an agent of a mortgagee, beneficiary, or owner of a
promissory note secured directly or collaterally by a mortgage or
deed of trust on real property or an estate for years therein, to
make collections of payments from an obligor under the note, shall
mail the following notices, postage prepaid, to each mortgagee,
beneficiary or owner for whom the agent has agreed to make
collections from the obligor under the note:
(1) A copy of the notice of default filed in the office of the
county recorder pursuant to Section 2924 on account of a breach of
obligation under the promissory note on which the agent has agreed
to make collections of payments, within 15 days after recordation.
(2) Notice that a notice of default has been recorded pursuant to
Section 2924 on account of a breach of an obligation secured by a
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mortgage or deed of trust against the same property or estate for
years therein having priority over the mortgage or deed of trust
securing the obligation described in paragraph (1), within 15 days
after recordation or within three business days after the agent
receives the information, whichever is later.
(3) Notice of the time and place scheduled for the sale of the real
property or estate for years therein pursuant to Section 2924f
under a power of sale in a mortgage or deed of trust securing an
obligation described in paragraphs (1) or (2), not less than 15 days
before the scheduled date of the sale or not later than the next
business day after the agent receives the information, whichever is
later.
(b) An agent who has undertaken to make collections on behalf of
mortgagees, beneficiaries or owners of promissory notes secured by
mortgages or deeds of trust on real property or an estate for years
therein shall not be required to comply with the provisions of
subdivision (a) with respect to a mortgagee, beneficiary or owner
who is entitled to receive notice pursuant to subdivision (c) of
Section 2924b or for whom a request for notice has been recorded
pursuant to subdivision (b) of Section 2924b if the agent reasonably
believes that the address of the mortgagee, beneficiary, or owner
described in Section 2924b is the current business or residence
address of that person.
(c) An agent who has undertaken to make collections on behalf of
mortgagees, beneficiaries or owners of promissory notes secured
by mortgages or deeds of trust on real property or an estate for
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years therein shall not be required to comply with the provisions
of paragraph (1) or (2) of subdivision (a) if the agent knows or
reasonably believes that the default has already been cured by or
on behalf of the obligor.
(d) Any failure to comply with the provisions of this section shall
not affect the validity of a sale in favor of a bona fide purchaser
or the rights of an encumbrancer for value and without notice.
CALIFORNIA CIVIL CODE SECTION 2924.5
No clause in any deed of trust or mortgage on property containing four
or fewer residential units or on which four or fewer residential
units are to be constructed or in any obligation secured by any
deed of trust or mortgage on property containing four or fewer
residential units or on which four or fewer residential units are
to be constructed that provides for the acceleration of the due
date of the obligation upon the sale, conveyance, alienation, lease,
succession, assignment or other transfer of the property subject to
the deed of trust or mortgage shall be valid unless the clause is
set forth, in its entirety in both the body of the deed of trust or
mortgage and the promissory note or other document evidencing the
secured obligation. This section shall apply to all such deeds of
trust, mortgages, and obligations secured thereby executed on or
after July 1, 1972.
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CALIFORNIA CIVIL CODE SECTION 2924.6
(a) An obligee may not accelerate the maturity date of the principal and
accrued interest on any loan secured by a mortgage or deed of trust
on residential real property solely by reason of any one or more of
the following transfers in the title to the real property:
(1) A transfer resulting from the death of an obligor where the
transfer is to the spouse who is also an obligor.
(2) A transfer by an obligor where the spouse becomes a coowner of
the property.
(3) A transfer resulting from a decree of dissolution of the marriage
or legal separation or from a property settlement agreement
incidental to such a decree which requires the obligor to continue
to make the loan payments by which a spouse who is an obligor
becomes the sole owner of the property.
(4) A transfer by an obligor or obligors into an inter vivos trust in
which the obligor or obligors are beneficiaries.
(5) Such real property or any portion thereof is made subject to a
junior encumbrance or lien.
(b) Any waiver of the provisions of this section by an obligor is
void and unenforceable and is contrary to public policy.
(c) For the purposes of this section, residential real property
means any real property which contains at least one but not more
than four housing units.
(d) This act applies only to loans executed or refinanced on or after
January 1, 1976.
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CALIFORNIA CIVIL CODE SECTION 2924.7
(a) The provisions of any deed of trust or mortgage on real property
which authorize any beneficiary, trustee, mortgagee, or his or her
agent or successor in interest, to accelerate the maturity date
of the principal and interest on any loan secured thereby or to
exercise any power of sale or other remedy contained therein
upon the failure of the trustor or mortgagor to pay, at the times
provided for under the terms of the deed of trust or mortgage, any
taxes, rents, assessments, or insurance premiums with respect to
the property or the loan, or any advances made by the beneficiary,
mortgagee, or his or her agent or successor in interest shall be
enforceable whether or not impairment of the security interest
in the property has resulted from the failure of the trustor or
mortgagor to pay the taxes, rents, assessments, insurance premiums,
or advances.
(b) The provisions of any deed of trust or mortgage on real property
which authorize any beneficiary, trustee, mortgagee, or his or
her agent or successor in interest, to receive and control the
disbursement of the proceeds of any policy of fire, flood, or other
hazard insurance respecting the property shall be enforceable
whether or not impairment of the security interest in the property
has resulted from the event that caused the proceeds of the
insurance policy to become payable.
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CALIFORNIA CIVIL CODE SECTION 2924.8
(a) Upon posting a notice of sale pursuant to Section 2924f, a trustee
or authorized agent shall also post the following notice, in the
manner required for posting the notice of sale on the property
to be sold, and a mortgagee, trustee, beneficiary, or authorized
agent shall mail, at the same time in an envelope addressed to the
Resident of property subject to foreclosure sale the following
notice in English and the languages described in Section 1632:
Foreclosure process has begun on this property, which may affect
your right to continue to live in this property. Twenty days or
more after the date of this notice, this property may be sold at
foreclosure. If you are renting this property, the new property
owner may either give you a new lease or rental agreement or
provide you with a 60-day eviction notice. However, other laws may
prohibit an eviction in this circumstance or provide you with a
longer notice before eviction. You may wish to contact a lawyer or
your local legal aid or housing counseling agency to discuss any
rights you may have.
(b) It shall be an infraction to tear down the notice described
in subdivision (a) within 72 hours of posting. Violators shall be
subject to a fine of one hundred dollars ($100).
(c) A state government entity shall make available translations of
the notice described in subdivision (a) which may be used by a
mortgagee, trustee, beneficiary, or authorized agent to satisfy the
requirements of this section.
(d) This section shall only apply to loans secured by residential
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real property, and if the billing address for the mortgage note is
different than the property address.
(e) This section shall remain in effect only until January 1, 2013,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2013, deletes or extends that
date.
CALIFORNIA CIVIL CODE SECTION 2924A
If, by the terms of any trust or deed of trust a power of sale is
conferred upon the trustee, the attorney for the trustee, or any
duly authorized agent, may conduct the sale and act in the sale as
the auctioneer for the trustee.
CALIFORNIA CIVIL CODE SECTION 2924B
(a) Any person desiring a copy of any notice of default and of any
notice of sale under any deed of trust or mortgage with power of
sale upon real property or an estate for years therein, as to which
deed of trust or mortgage the power of sale cannot be exercised
until these notices are given for the time and in the manner
provided in Section 2924 may, at any time subsequent to recordation
of the deed of trust or mortgage and prior to recordation of notice
of default thereunder, cause to be filed for record in the office
of the recorder of any county in which any part or parcel of the
real property is situated, a duly acknowledged request for a copy
of the notice of default and of sale. This request shall be signed
and acknowledged by the person making the request, specifying the
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name and address of the person to whom the notice is to be mailed,
shall identify the deed of trust or mortgage by stating the names
of the parties thereto, the date of recordation thereof, and the
book and page where the deed of trust or mortgage is recorded or
the recorders number, and shall be in substantially the following
form:
In accordance with Section 2924b, Civil Code, request is hereby made
that a copy of any notice of default and a copy of any notice of
sale under the deed of trust (or mortgage) recorded _ _ _ _ _ _ ,
_ _ _ _ , in Book _ _ _ _ _ page _ _ _ _ records of _ _ _ _ County,
(or filed for record with recorders serial number _ _ _ _ , _ _
_ _ _ _ _ County) California, executed by _ _ _ _ as trustor (or
mortgagor) in which _ _ _ _ _ _ _ _ is named as beneficiary
(or mortgagee) and _ _ _ _ _ _ _ _ _ _ _ _ _ _ as trustee be
mailed to _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ at _ _ _ _ _ _ _ _
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ .
Name Address
NOTICE: A copy of any notice of default and of any notice of sale will
be sent only to the address contained in this recorded request. If
your address changes, a new request must be recorded.
Signature _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Upon the filing for record of the request, the recorder shall index
in the general index of grantors the names of the trustors (or
mortgagor) recited therein and the names of persons requesting
copies.
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(b) The mortgagee, trustee, or other person authorized to record
the notice of default or the notice of sale shall do each of the
following:
(1) Within 10 business days following recordation of the notice of
default, deposit or cause to be deposited in the United States
mail an envelope, sent by registered or certified mail with postage
prepaid, containing a copy of the notice with the recording date
shown thereon, addressed to each person whose name and address
are set forth in a duly recorded request therefor, directed to the
address designated in the request and to each trustor or mortgagor
at his or her last known address if different than the address
specified in the deed of trust or mortgage with power of sale.
(2) At least 20 days before the date of sale, deposit or cause to be
deposited in the United States mail an envelope, sent by registered
or certified mail with postage prepaid, containing a copy of the
notice of the time and place of sale, addressed to each person
whose name and address are set forth in a duly recorded request
therefor, directed to the address designated in the request and
to each trustor or mortgagor at his or her last known address
if different than the address specified in the deed of trust or
mortgage with power of sale.
(3) As used in paragraphs (1) and (2), the last known address of
each trustor or mortgagor means the last business or residence
physical address actually known by the mortgagee, beneficiary,
trustee, or other person authorized to record the notice of default.
For the purposes of this subdivision, an address is actually known if
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it is contained in the original deed of trust or mortgage, or in
any subsequent written notification of a change of physical address
from the trustor or mortgagor pursuant to the deed of trust or
mortgage. For the purposes of this subdivision, physical address
does not include an e-mail or any form of electronic address for
a trustor or mortgagor. The beneficiary shall inform the trustee
of the trustors last address actually known by the beneficiary.
However, the trustee shall incur no liability for failing to send
any notice to the last address unless the trustee has actual
knowledge of it.
(4) A person authorized to record the notice of default or the
notice of sale shall include an agent for the mortgagee or
beneficiary, an agent of the named trustee, any person designated
in an executed substitution of trustee, or an agent of that
substituted trustee.
(c) The mortgagee, trustee, or other person authorized to record the
notice of default or the notice of sale shall do the following:
(1) Within one month following recordation of the notice of default,
deposit or cause to be deposited in the United States mail an
envelope, sent by registered or certified mail with postage prepaid,
containing a copy of the notice with the recording date shown
thereon, addressed to each person set forth in paragraph (2),
provided that the estate or interest of any person entitled to
receive notice under this subdivision is acquired by an instrument
sufficient to impart constructive notice of the estate or interest
in the land or portion thereof which is subject to the deed of
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trust or mortgage being foreclosed, and provided the instrument is
recorded in the office of the county recorder so as to impart that
constructive notice prior to the recording date of the notice of
default and provided the instrument as so recorded sets forth a
mailing address which the county recorder shall use, as instructed
within the instrument, for the return of the instrument after
recording, and which address shall be the address used for the
purposes of mailing notices herein.
(2) The persons to whom notice shall be mailed under this
subdivision are:
(A) The successor in interest, as of the recording date of the
notice of default, of the estate or interest or any portion thereof
of the trustor or mortgagor of the deed of trust or mortgage being
foreclosed.
(B) The beneficiary or mortgagee of any deed of trust or mortgage
recorded subsequent to the deed of trust or mortgage being
foreclosed, or recorded prior to or concurrently with the deed
of trust or mortgage being foreclosed but subject to a recorded
agreement or a recorded statement of subordination to the deed of
trust or mortgage being foreclosed.
(C) The assignee of any interest of the beneficiary or mortgagee
described in subparagraph (B), as of the recording date of the
notice of default.
(D) The vendee of any contract of sale, or the lessee of any lease,
of the estate or interest being foreclosed which is recorded
subsequent to the deed of trust or mortgage being foreclosed,
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or recorded prior to or concurrently with the deed of trust or
mortgage being foreclosed but subject to a recorded agreement or
statement of subordination to the deed of trust or mortgage being
foreclosed.
(E) The successor in interest to the vendee or lessee described
in subparagraph (D), as of the recording date of the notice of
default.
(F) The office of the Controller, Sacramento, California, where, as
of the recording date of the notice of default, a Notice of Lien
for Postponed Property Taxes has been recorded against the real
property to which the notice of default applies.
(3) At least 20 days before the date of sale, deposit or cause to be
deposited in the United States mail an envelope, sent by registered
or certified mail with postage prepaid, containing a copy of the
notice of the time and place of sale addressed to each person to
whom a copy of the notice of default is to be mailed as provided
in paragraphs (1) and (2), and addressed to the office of any
state taxing agency, Sacramento, California, which has recorded,
subsequent to the deed of trust or mortgage being foreclosed, a
notice of tax lien prior to the recording date of the notice of
default against the real property to which the notice of default
applies.
(4) Provide a copy of the notice of sale to the Internal Revenue
Service, in accordance with Section 7425 of the Internal Revenue
Code and any applicable federal regulation, if a Notice of Federal
Tax Lien under Internal Revenue Laws has been recorded, subsequent
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to the deed of trust or mortgage being foreclosed, against the
real property to which the notice of sale applies. The failure to
provide the Internal Revenue Service with a copy of the notice
of sale pursuant to this paragraph shall be sufficient cause to
rescind the trustees sale and invalidate the trustees deed, at
the option of either the successful bidder at the trustees sale or
the trustee, and in either case with the consent of the beneficiary.
Any option to rescind the trustees sale pursuant to this paragraph
shall be exercised prior to any transfer of the property by the
successful bidder to a bona fide purchaser for value. A recision of
the trustees sale pursuant to this paragraph may be recorded in a
notice of recision pursuant to Section 1058.5.
(5) The mailing of notices in the manner set forth in paragraph (1)
shall not impose upon any licensed attorney, agent, or employee of
any person entitled to receive notices as herein set forth any duty
to communicate the notice to the entitled person from the fact that
the mailing address used by the county recorder is the address of
the attorney, agent, or employee.
(d) Any deed of trust or mortgage with power of sale hereafter
executed upon real property or an estate for years therein may
contain a request that a copy of any notice of default and a copy
of any notice of sale thereunder shall be mailed to any person
or party thereto at the address of the person given therein, and
a copy of any notice of default and of any notice of sale shall
be mailed to each of these at the same time and in the same
manner required as though a separate request therefor had been
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filed by each of these persons as herein authorized. If any deed
of trust or mortgage with power of sale executed after September
19, 1939, except a deed of trust or mortgage of any of the classes
excepted from the provisions of Section 2924, does not contain a
mailing address of the trustor or mortgagor therein named, and
if no request for special notice by the trustor or mortgagor in
substantially the form set forth in this section has subsequently
been recorded, a copy of the notice of default shall be published
once a week for at least four weeks in a newspaper of general
circulation in the county in which the property is situated, the
publication to commence within 10 business days after the filing of
the notice of default. In lieu of publication, a copy of the notice
of default may be delivered personally to the trustor or mortgagor
within the 10 business days or at any time before publication is
completed, or by posting the notice of default in a conspicuous
place on the property and mailing the notice to the last known
address of the trustor or mortgagor.
(e) Any person required to mail a copy of a notice of default or
notice of sale to each trustor or mortgagor pursuant to subdivision
(b) or (c) by registered or certified mail shall simultaneously
cause to be deposited in the United States mail, with postage
prepaid and mailed by first-class mail, an envelope containing an
additional copy of the required notice addressed to each trustor
or mortgagor at the same address to which the notice is sent by
registered or certified mail pursuant to subdivision (b) or (c).
The person shall execute and retain an affidavit identifying the
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notice mailed, showing the name and residence or business address
of that person, that he or she is over the age of 18 years, the
date of deposit in the mail, the name and address of the trustor
or mortgagor to whom sent, and that the envelope was sealed and
deposited in the mail with postage fully prepaid. In the absence of
fraud, the affidavit required by this subdivision shall establish a
conclusive presumption of mailing.
(f) No request for a copy of any notice filed for record pursuant
to this section, no statement or allegation in the request, and
no record thereof shall affect the title to real property or be
deemed notice to any person that any person requesting copies of
notice has or claims any right, title, or interest in, or lien or
charge upon the property described in the deed of trust or mortgage
referred to therein.
(g) Business day, as used in this section, has the meaning
specified in Section 9.
CALIFORNIA CIVIL CODE SECTION 2924C
(a) (1) Whenever all or a portion of the principal sum of any obligation
secured by deed of trust or mortgage on real property or an estate
for years therein hereafter executed has, prior to the maturity
date fixed in that obligation, become due or been declared due by
reason of default in payment of interest or of any installment of
principal, or by reason of failure of trustor or mortgagor to pay,
in accordance with the terms of that obligation or of the deed
of trust or mortgage, taxes, assessments, premiums for insurance,
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or advances made by beneficiary or mortgagee in accordance with
the terms of that obligation or of the deed of trust or mortgage,
the trustor or mortgagor or his or her successor in interest
in the mortgaged or trust property or any part thereof, or any
beneficiary under a subordinate deed of trust or any other person
having a subordinate lien or encumbrance of record thereon, at
any time within the period specified in subdivision (e), if the
power of sale therein is to be exercised, or, otherwise at any
time prior to entry of the decree of foreclosure, may pay to the
beneficiary or the mortgagee or their successors in interest,
respectively, the entire amount due, at the time payment is
tendered, with respect to (A) all amounts of principal, interest,
taxes, assessments, insurance premiums, or advances actually
known by the beneficiary to be, and that are, in default and shown
in the notice of default, under the terms of the deed of trust
or mortgage and the obligation secured thereby, (B) all amounts
in default on recurring obligations not shown in the notice of
default, and (C) all reasonable costs and expenses, subject to
subdivision (c), which are actually incurred in enforcing the terms
of the obligation, deed of trust, or mortgage, and trustees or
attorneys fees, subject to subdivision (d), other than the portion
of principal as would not then be due had no default occurred, and
thereby cure the default theretofore existing, and thereupon, all
proceedings theretofore had or instituted shall be dismissed or
discontinued and the obligation and deed of trust or mortgage shall
be reinstated and shall be and remain in force and effect, the
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same as if the acceleration had not occurred. This section does
not apply to bonds or other evidences of indebtedness authorized
or permitted to be issued by the Commissioner of Corporations or
made by a public utility subject to the Public Utilities Code. For
the purposes of this subdivision, the term recurring obligation
means all amounts of principal and interest on the loan, or rents,
subject to the deed of trust or mortgage in default due after
the notice of default is recorded; all amounts of principal and
interest or rents advanced on senior liens or leaseholds which
are advanced after the recordation of the notice of default; and
payments of taxes, assessments, and hazard insurance advanced after
recordation of the notice of default. Where the beneficiary or
mortgagee has made no advances on defaults which would constitute
recurring obligations, the beneficiary or mortgagee may require the
trustor or mortgagor to provide reliable written evidence that the
amounts have been paid prior to reinstatement.
(2) If the trustor, mortgagor, or other person authorized to cure
the default pursuant to this subdivision does cure the default,
the beneficiary or mortgagee or the agent for the beneficiary or
mortgagee shall, within 21 days following the reinstatement,
execute and deliver to the trustee a notice of rescission which
rescinds the declaration of default and demand for sale and advises
the trustee of the date of reinstatement. The trustee shall cause
the notice of rescission to be recorded within 30 days of receipt
of the notice of rescission and of all allowable fees and costs.
No charge, except for the recording fee, shall be made against
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