Complaints Amended, Cases Remanded in CA Foreclosures

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MORTGAGE EXPERT
3 · 25 · 13

California foreclosures continue despite the lengthy process in the state’s courts — with a number of cases being sent back to lower courts for further legal proceedings. Several plaintiffs have obtained rulings in cases dealing with questions of oft-amended complaints.

In Lopez v. JP Morgan Chase, a hearing on Chase’s motion to dismiss the first amended complaint for failure to amend will be held on April 25.

The case was sent back to the Superior Court to allow plaintiffs to file an amended complaint in a case alleging a “whole slew” of invalid recordings, with plaintiffs focusing particularly on an entity not named as a defendant: Washington Mutual.

An order was filed on March 18 in Chao v. Aurora Loan Services LLC resolving a discovery dispute about whether the plaintiffs should be able to depose Aurora a second time regarding the storage, tracking and production of data on the loan files and servicing history of putative class members, including how foreclosure status is tracked and communicated.

Aurora argued that some topics — such as the identity of the person who created the spread sheets, the date and location of creation, and similar inquiries — could be answered in writing. In response, the plaintiffs said the spreadsheets were so different that they ought to get a chance to ask about the data. The court ruled that it was not going to foreclose a Rule 30(b) (6) deposition given the plaintiffs’ representations about how different the spreadsheets were but that the process would begin with Aurora providing written answers.

Mauder and Alice Chao filed the lawsuit claiming that Aurora Loan Services engaged in fraudulent, unfair and unlawful business practices with respect to its mortgage “workout agreements.”

The appeals court on Feb. 28 reversed the trial court’s decision for Countrywide in Pantoja v. Countrywide. Countrywide was ordered to respond to the allegations in Pantoja’s complaint. The appeals court revived the case by ruling that Pantoja had alleged a cause of action. One of the attorneys involved in the case has asked the court to publish the decision. The request is not unusual. When the court has decided that a case will not be published, i.e., included in the law books, but one of the attorneys involved in the case disagrees, they often petition the court to ask them to reconsider the decision not to publish the case.

In an 18-page complaint with only one cause of action, Pantoja alleged that Countrywide committed unfair business practices and violated several sections of California law by failing to inform Pantoja of transfers of his promissory note to a different beneficiary, failing to provide a proper declaration, failing to explore options to avoid foreclosure as provided under California law and failing to engage in good faith loan modification or workout discussions under California law.

A Feb. 14 court ruling in Maconick v. Chase Home Finance LLC determined that, because plaintiff Rupert Maconick had not paid the debt secured by the deed of trust, he could not state a quiet title action against the defendants.

Maconick borrowed $2.2 million from the now-failed Washington Mutual Bank and executed a deed of trust on his residence securing payment of the loan. Maconick contended that when WaMu’s assets were purchased in September 2008 by JPMorgan Chase Bank, N.A., from the Federal Deposit Insurance Corp., Chase had not acquired the note and deed of trust. As a consequence, title to the property was allegedly vested in him alone.

Non-judicial foreclosure proceedings on Maconick’s residence began in January 2011, but the notice of default and notice of trustee’s sale were rescinded by notice recorded on April 29, 2011. Maconick asserted without contradiction that he was current on the note. Shortly before the rescission notice was filed, Maconick sued JPMorgan and others for predatory lending practices. The complaint included a cause of action to quiet title to the property.

Flaherty v. Bank Of America, N.A., was remanded to the trial court on Jan. 3. The appellate court held that the trial court did not err when it required Vince Flaherty to post a bond, but that the court erred when it calculated the amount based on Flaherty’s past amounts due. Flaherty had filed an appeal over the requirement and amount of the bond ordered as part of a preliminary injunction issued in his favor to halt a foreclosure by the bank.

In Dennis L. Bretches et al., v. OneWest Bank, Dennis and Lucinda Bretches filed a second amended complaint alleging claims arising out of the foreclosure of their home. The Bretcheses, acting without leave of court, attempted to file a third amended complaint in lieu of an opposition. The trial court ruled on Dec. 19 that the amended complaint was ineffective because the plaintiffs had not obtained permission to amend their pleading.

On appeal, the Bretcheses argued that the trial court abused its discretion. The appellate agreed and reversed, ordering the trial court to allow the plaintiffs to file the amended complaint to state causes of action for breach of contract, conversion and violation of California’s Business and Professions Code.

The judgment of dismissal in Fonvergne v. First American Loanstar Trustee Services was appealed by Elizabeth Carol Fonvergne. Her claim to quiet title against defendant First American, now known as First American Trustee Servicing Solutions LLC, and Wells Fargo appeared to be that there were statutory notice defects before the trustee’s sale that rendered the sale of her residence to third-party U.S. Bank (not a named defendant) void and (2) the trustee’s sale should have been halted because Fonvergne filed a lis pendens.

The dismissal was reversed as to Wells Fargo but affirmed in the other aspects. The court said it reversed because Fonvergne made a showing during oral argument at the Court of Appeal that there was a reasonable possibility she could amend her complaint. The court’s opinion was released on Nov. 6.

The federal trial court ruled against homeowner John P. McGough on Oct. 22 in McGough v. Wells Fargo Bank, N.A., declaring that McGough had failed to state a claim against the defendants. The court also found that any further amendment of the claims would be futile and granted the defendants’ motions to dismiss in their entirety.

McGough was fighting the foreclosure on his home, claiming that one of the defendants had not been properly substituted as trustee at the time it recorded the notice of default against him. “Plaintiff’s claims on this basis are unavailing, given that the law at the time of the conduct permitted such a procedure,” the court said.

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