Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
7
SUPERIOR COURT OF THE STATE OF CALIFORNIA
8
IN AND FOR THE COUNTY OF STANISLAUS
9
10
U.S. BANK NATIONAL ASSOCIATION, Case No.: 645068
11
as successor in interest to the Federal
12 Deposit Insurance Corporation Including DEFENDANT ANTHONY MARTIN’S
Any Assignors or Successors In Interest, FIRST MOTION IN LIMINE TO PRECLUDE
13 THE
Plaintiff, ADMISSION OF THE TRUSTEE’S DEED
14
AFTER SALE, MEMORANDUM
15 vs. OF POINTS AND AUTHORITIES
20
21
22
23
24
Defendant Anthony J. Martin hereby submits his Motion In Limine to preclude the
25
admission of the Trustee’s Deed After Sale as follows:
26
I.
27
INTRODUCTION
28
Plaintiff’s sole proof of ownership and right to possession in the Subject Property arises
1
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
out of a void Trustee’s Deed After Sale. Defendant respectfully moves the court for an Order
1
denying admission of the Trustee Deed After Sale, in that Plaintiff cannot lay the necessary
2
evidentiary foundation that U.S. Bank, N.A. ever had the lawful right to proceed with the
3
foreclosure of the Defendant’s property in the first instance, because title was never perfected
4
between the demise of Downey Savings, the seizure of the title by the FDIC, and the alleged
5
purchase of the Subject Property by U.S. Bank, N.A.
6 Defendant contends that Plaintiff was never maintained a recorded interest in the subject
7 real property at any time during the foreclosure proceedings in this case. The heart of
8 Defendant’s case is the fact that Plaintiff never had the power of sale to proceed with the
9 foreclosure.
10
Under virtually every case of this nature, the plaintiff has a secured interest in deed of
trust which was assigned, acknowledged and recorded pursuant to Civil Code section 2932.5.
11
The power of sale may only be exercised under California Code of Civil Procedure section 2924,
12
if and only if, the secured interest of the current beneficiary has been properly acknowledged and
13
recorded. In this case however, no such evidence is provided, because although the FDIC “may”
14
have conveyed the secured interest of Downey Savings and Loan to U.S. Bank, a Receiver Deed
15
was never recorded by U.S. Bank as to this particular piece of property.
16 What is particularly interesting in this case is that there was a change of beneficiary on
17 November 11, 2008, when the FDIC seized the assets of Downey Savings and sold them to U.S.
18 Bank, N.A. However, there is no written documentation known to the Defendant that the Subject
19 Property was conveyed by the FDIC to US Bank. The normal process of such a take-over is that
20
the FDIC issues Receiver Deeds for all real property sold in order that the new beneficiary may
assert its secured interest by recording the new Receiver’s Deed. Proper acknowledgement and
21
recordation of the Receiver’s Deed vests the new beneficiary with the power of sale pursuant to
22
Civil Code section 2932.5. For all intents and purposes on November 11, 2008, Downey
23
Savings & Loan no longer existed and was no longer maintained a secured interest in the Subject
24
Property. Whatever interest had been vested in Downey Savings in the Subject Property was
25
vested in U.S. Bank, N.A., by virtue of a Receiver’s Deed conveyed by the FDIC.
26 Civil Code section 2932.5 provides that the assignee of a negotiable secured instrument
27 may exercise the power of sale provided the assignment was properly acknowledge and
28 recorded. In this case, no recordation of the Receiver’s Deed was ever accomplished.
2
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
Thus, there is a major substantive failure in the non-judicial foreclosure process and the
1
transaction cannot stand. In order for U.S. Bank to have proceeding the first instance under Civil
2
Code section 2924 et seq., it was required to be record owner, which is was not.
3
As such, Plaintiff U.S. Bank, N.A. is not entitled to obtain possession of the Subject
4
Property as such evidence overcomes the rebuttable presumption of correctness of the sale.
5
Secured interests in real property are demonstrated by recordation so that the entire world
6 will know that a party maintains a secured interest therein. That’s why interests in real property
7 are recorded and deeds are submitted as evidence to assert rights of interest and title
8 It is a fundamental precept of property law that in order to enforce the power of sale, the
9 beneficiary of a deed of trust must be able to prove the existence of their secured interest in the
10
subject property. Here, U.S. Bank has never demonstrated that it ever had such a secured interest
and as such the Trustee’s Deed After Sale must be excluded from admission as evidence.
11
12
II.
13
HISTORICAL PERSPECTIVE
14
The public records of the Office of the County Recorder for Stanislaus County as it
15
relates to the property located at: 1312 Harbour Town Lane, Modesto, California 95357,
16 (hereinafter “Subject Property”). Defendant Anthony J. Martin was the title owner of the Subject
17 Property until Plaintiff conducted an invalid non-judicial foreclosure proceeding on May 15,
18 2009. Prior to the execution of a Trustee’s Deed After Sale against the Subject Property,
19 Plaintiff U.S. Bank, N.A. did not maintain a secured interest in the Subject Property. Although
20
Plaintiff alleges in general that the assets of Downey Savings & Loan (hereinafter “Downey”)
were sold by the Federal Deposit Insurance Corporation (hereinafter “FDIC” to Plaintiff U.S.
21
Bank, N.A., the public records do not reflect that the Subject Property at issue in this case was
22
ever conveyed either by Downey, and the public records of Stanislaus County Recorder do not
23
show that an assignment of the Deed of Trust was ever executed and recorded.
24
The ability to enforce the power of sale of a secured instrument in real property is
25
controlled by Civil Code section 2932.5, which allows an assignee to proceed with a non-judicial
26 foreclosure providing that the assignment is properly acknowledged and recorded. Here, no
27 assignment was ever recorded by Downey, the FDIC or Plaintiff U.S. Bank. Plaintiff did not
28 maintain a properly acknowledged and recorded security instrument in the Subject Property, at
3
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
any time during the non-judicial foreclosure process. Further, Plaintiff’s only claim in the
1
Subject Property is the Trustee’s Deed After Sale.
2
On February 23, 2006, Defendant executed a deed of trust in the Subject Property
3
with Downey Savings and Loan listed as the beneficiary, as Instrument No. 2006-0028155-00.
4
On November 29, 2007, Downey Savings & Loan Association caused its authorized
5
agent DSL Service Company to record a Notice of Default in the office of the County Recorder
6 for Stanislaus County as Instrument No. 2007-0143679-00.
7 On September 8, 2008, The United States of America before the Office of Thrift
8 Supervision served an Order to Cease and Desist on Downey Saving & Loan Association,
9 precluding the bank from continuing its unsafe and unsound business practices.
10
On November 21, 2008, the Federal Deposit Insurance Corporation, was appointed as
receiver for Downey Savings & Loan. The FDIC then sold the assets of Downey Savings &
11
Loan to U.S. Bank, N.A
12
The foregoing Purchase and Assumption Agreement sets forth on Page 11 at
13
Paragraph 3.3 as follows:
14
“THE CONVEYANCE OF ALL ASSETS, INCLUDING REAL AND PERSONAL
15
PROPERTY INTERESTS, PURCHASES BY THE ASSUMING BANK UNDER THIS
16 AGREEMENT SHALL BE MADE, AS NECESSARY, BY RECEIVER’S DEED OR
17 RECEIVER’S BILL OF SALE, “AS IS”, “WHERE IS”, WITHOUT RECOURSE
18 AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS
19 AGREEMENT, WITHOUT ANY WARRANTIES WHATSOEVER WITH RESPECT
20
TO SUCH ASSETS, EXPRESS OR IMPLIED, WITH RESPECT TO TITLE,
ENFORDCEABLITY, COLLECTIBILITY, DOCUMENTATION OR FREEDOM
21
FROM LIENS OR ENCUMBRANCES (IN WHOLE OR IN PART), OR ANY OTHER
22
MATTERS.” (Emphasis added.)
23
24
As such, Plaintiff alleges that the FDIC sold the Subject Property to Plaintiff U.S. Bank
25
under the Purchase and Assumption Agreement of November 21, 2008, then U.S. Bank was
26 conveyed either a Receiver’s Deed or Receiver’s Bill of Sale. That Receiver’s Deed or
27 Receiver’s Bill of Sale was never recorded with the Office of the County Recorder is Stanislaus
28 County. As of November 21, 2008, Downey Savings & Loan was no longer the beneficiary of
4
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
the Deed of Trust recorded on February 23, 2006.
1
No Receiver’s Deed was ever recorded by U.S. Bank, N.A. as the new beneficiary of
2
the Deed of Trust executed by Defendants. In order to enforce the power of sale pursuant to
3
California Civil Code section 2924, the secured instrument must be properly acknowledged and
4
recorded pursuant to California Civil Code section 2932.5.
5
Downey Savings & Loan Association did not own a secured interest in the Subject
6 Property after November 11, 2008, but its agent DSL Service Company continued with the non-
7 judicial foreclosure, and ultimately the Trustee’s Deed After Sale was executed as though
8 Downey Savings & Loan was the beneficiary, however, that was not the correct state of affairs.
9 Thus, Downey Savings did not have the power to continue with the foreclosure of the
10
Subject Property after it lost the asset to the FDIC.
Further, the agent of Downey Savings was not lawfully empowered to executed a
11
Trustee’s Deed After Sale once Downey Savings no longer owned a security interest, and
12
U.S. Bank did not record the Receiver’s Deed.
13
There is no evidence that Plaintiff U.S. Bank, N.A. ever entered into a written agency
14
agreement with DSL Services to proceed with the non-judicial foreclosure of the Subject
15
Property and Plaintiff U.S. Bank did not give notice that it was the new beneficiary under the
16 Deed of Trust.
17 Plaintiff U.S. Bank failed to comply with California Civil Code section 2923.5, by failing
18 to contact Defendant to assess his options to foreclosure prior to selling the Subject Property.
19 Given all the foregoing, the non-judicial foreclosure of the Subject Property was invalid,
20
Plaintiff U.S. Bank, N.A. is not the lawful owner of the Subject Property, and Plaintiff U.S.
Bank, N.A. is not entitled to obtain possession of the Subject Property pursuant to Code of Civil
21
Procedure section 1161a.
22
III.
23
US BANK WAS NEVER A HOLDER IN DUE COURSE AT
24
THE TIME OF THE RECORDATION OF THE
25
NOTICE OF DEFAULT OR AT ANY TIME.
26 Plaintiff US Bank was not a holder in due course at the time of the recordation of the
27 Notice of Default and did not have the power of sale pursuant to California Civil Code
28 section 2932.5, which provides: § 2932.5. "Where a power to sell real property is given to a
5
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money,
1
the power is part of the security and vests in any person who by assignment becomes entitled to
2
payment of the money secured by the instrument. The power of sale may be exercised by the
3
assignee if the assignment is duly acknowledged and recorded." (Emphasis added.)
4
Here, US Bank has never demonstrated the passage of title from Downey Savings to
5
FDIC to US Bank. At the purported time of an assignment from Downey Savings to US Bank,
6 Downey Savings was out of business, did not exist and could not lawful make an assignment of
7 property which was seized by the FDIC. The FDIC has a mechanism whereby properties it seizes
8 are conveyed by Receiver’s Deed to the buyer. While the FDIC sold the assets of Downey
9 Savings to US Bank, there is no record proof that this particular property as at issue was every
10
conveyed by the FDIC to US Bank, as no Receiver’s Deed has ever been recorded by US Bank
prior to the foreclosure sale, and certainly no Receiver’s Deed has been forthcoming from US
11
Bank since it filed its motion in limine. The failure to comply with California Civil Code section
12
2932.5, is fatal to the non-judicial foreclosure process.
13
California Civil Code § 2932.5 provides as follows:
14
Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an
15
instrument intended to secure the payment of money, the power is part of the security and
16 vests in any person who by assignment becomes entitled to payment of the money
17 secured by the instrument. The power of sale may be exercised by the assignee if the
18 assignment is duly acknowledged and recorded.
19
20
The operative words in the statute are, “The power of sale may be exercised by the
assignee if the assignment is duly acknowledged and recorded.” (Emphasis added.) That is to put
21
the world on notice of the new beneficiaries claim of interest in the Subject Property, in order to
22
avoid fraud, or counter claims of title and position of interest. In this case, Plaintiff U.S. Bank
23
never recorded a Receiver’s Deed to perfect its newly acquired interest, if in fact the FDIC ever
24
conveyed the Subject Property in the first instance. Further, after November 11, 2008, Downey
25
Savings & Loan no longer existed as an entity, had no assets, all of which were seized by the
26 FDIC. As such, Downey Savings and Loan could not have continued the non-judicial foreclosure
27 process in it own right.
28
6
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
Notwithstanding the termination of Downey Savings & Loan, the seizure of its assets by
1
the FDIC, the non-judicial foreclosure proceeded according to the terms expressed to the trustee
2
by Downey. DSL Services Company proceeded with the foreclosure, sold the property and
3
executed an invalid Trustee’s Deed After Sale.
4
The foregoing failures are material failures in the process. The trustee’s failure to
5
comply with the statutorily mandated procedures for a foreclosure sale is an important basis for
6 attacking the foreclosure sale. Although the trustor bears the onus of establishing the impropriety
7 of the sale, the presumption can be rebutted by contrary evidence. Wolfe v. Lipsy (1985) 163
8 Cal.App.3d 633, 639; and the courts will carefully scrutinize the proceedings to assure that the
9 trustor’s rights were not violated. Stirton v. Pastor (1960) 177 Cal.App.2d 232, 234.
10
More particularly, the power of sale under a deed of trust will be strictly construed, and in
its execution the true must act in good faith and strictly follow the requirements of the deed with
11
respect to the manner of sale. The sale will be scrutinized by courts with great care and will not
12
be sustained unless conducted with all fairness, regularity and scrupulous integrity …..” Pierson
13
v. Fischer (1955) 131 Cal.App.2d 208, 214.
14
Here, the foreclosure proceeded even thought the beneficiary lost its interest in the
15
property and the new beneficiary never recorded its “new” interest in the property as mandated
16 by Civil Code section 2932.5.
17 IV.
18 LEGAL ANALYSIS
19 ISSUES OF TITLE CAN BE CHALLENGED IN AN
20
UNLAWFUL DETAINER PROCEEDING.
As a threshold matter, we note an unlawful detainer action "is a summary proceeding, the
21
primary purpose of which is to obtain the possession of real property in the situations specified
22
by statute. [Citations.] ... [Citation.] The sole issue before the court is the right to possession; ..."
23
Vasey v. California Dance Co. (1977) 70 Cal.App.3d 742, 746-747, 139 Cal.Rptr. 72. With
24
certain exception, "title cannot be tried in an unlawful detainer action." Greenhut v. Wooden
25
(1982) 129 Cal.App.3d 64, 69 [180 Cal.Rptr. 786. This case is one of those exceptions in which
26 the issue of title can be tried.
27 ///
28 ///
7
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
V.
1
PLAINTIFF CANNOT LAY SUFFICIENT EVIDENTIARY
2
FOUNDATION FOR ADMISSION OF THE TRUSTEE’S
3
DEED AFTER SALE.
4
Given the irregularities of the foreclosure process, the alleged beneficiary did not have
5
the power of sale. Such irregularities should constitute sufficient grounds to set aside the entire
6 non-judicial foreclosure process. Therefore, the Trustee's Deed After Sale should not be admitted
7 as no lawful basis exists for its execution. The purpose of a motion in limine is to avoid
8 attempting to "unring the bell". In as much as no lawful basis exists for admission of the
9 Trustee's Deed After Sale, the document should be excluded.
10
Evidence Code § 350 provides: “No evidence is admissible except relevant evidence.”
In this case, the Trustee’s Deed After Sale is not relevant to prove ownership of the property
11
given the irregularities in the break of title from Downey Savings to FDIC to US Bank, if in fact
12
the FDIC ever conveyed the subject property to US Bank. Although US Bank filed its own
13
motion for summary judgment, the court ruled in pertinent part as follows: “… Further, the Court
14
finds the Defendant has met his burden of establishing triable issues of fact to rebut the
15
presumption of validity of the sale and the issue of whether Plaintiff had the right to proceed
16 with foreclosure. Namely the evidence of a gap in title and security interest from Downey
17 Savings & Loan through the FDIC to Plaintiff during the time of the foreclosure proceeding, as
18 well as missing evidence to show whether the Trustee, DSL Service Company, was authorized to
19 act as Plaintiff’s agent in continuing to pursue the sale once Downey Savings & Loan had lost its
20
security interest….”
Unless US Bank can produce sufficient evidence of the “gap in title and security interest”
21
then US Bank cannot establish that it ever was a holder in due course and entitled to proceed as a
22
beneficiary with the foreclosure. Further, evidence must be admitted by US Bank that DSL
23
Service Company was lawfully authorized to act as US Bank’s agent in continuing to pursue the
24
sale of the property, after Downey Savings had lost its security interest. As such, plaintiff can not
25
furnish sufficient evidence to form an evidentiary foundation that the Trustee’s Deed After Sale
26 is a relevant document. If the irregularities of the sale are not cured…then the Trustee’s Deed
27 After Sale must fail, and not be admitted.
28
8
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE
VI.
1
CONCLUSION
2
Defendant Anthony J. Martin respectfully requests that the court grant the Motion in
3
Limine to preclude the admission of Plaintiff’s Trustee’s Deed After Sale, in the absence of more
4
and further evidence to support that Plaintiff was a lawful holder in due course during the
5
foreclosure, admissible evidence that Plaintiff US Bank was conveyed the security interest of
6 Downey Savings by the FDIC, and that DSL Service Company was lawfully authorized to
7 proceed with the foreclosure.
8
Dated: August 4, 2010 LAW OFFICES OF
9 TIMOTHY MCCANDLESS ESQ.
10
11
_____________________________________
12 Timothy L. McCandless, Esq.,
13
Attorney for Defendants
ANTHONY J. MARTIN
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9
_____________________________________________________________________________________
DEFENDANT’S MOTION IN LIMINE TO PRECLUDE ADMISSION OF THE TRUSTEE’S DEED AFTER SALE