CALIFORNIA HOMEOWNER BILL OF RIGHTS COLLABORATIVE DEFINES IMPORTANCE OF THE PRECIADO CASE IN 2013 -- TWO DIFFERENT TRUSTEES--NON COMPLIANCE WITH 2924

7/29/2019 CALIFORNIA HOMEOWNER BILL OF RIGHTS COLLABORATIVE DEFINES IMPORTANCE OF THE PRECIADO CASE IN 2013

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SEPTEMBER 11, 2013

Bank of New York Mellon v. Preciado | Here,

the trustees deed upon sale identifies one

trustee, but the DOT identifies another. The

trial court erred in accepting the recordedtrustees deed upon sale as conclusive

evidence of compliance with 2924, and the

appellate division reversed.CCP 1162 Notice Requirements; CCP 1161as Required Compliance with CC 2924

Bank of New York Mellon v. Preciado, Nos. 1-12-AP-001360 & 1-12-AP-001361 (Cal. App. Div.

Super. Ct. Aug. 19, 2013): To be effective, UD notices to quit must be properly served: 1) by personal

service; 2) or if personal service failed, by leaving the notice with a person of suitable age and

discretion at the residence or business of the tenant (or former borrower) and then mailing a copy;

3) or if the first two methods failed, by posting a notice at the residence and mailing a copy. CC

1162. Here, the process servers affidavit stated that after due and diligent effort, he executed post

and mail service. The trial court accepted this statement as evidence of compliance with CC 1162,but the appellate division reversed. The statute indicates that post and mail is the lastavailable

method of service, not the first. Since the affidavit does not specifically assert that personal service

was ever attempted, the trial court erred in assuming that service complied with CC 1162. Further,

defendants appeal based on defective service was not barred because they failed to assert it as an

affirmative defense. Proper service is an essential [UD] element and tenants general denial of

each statement in the complaint put service at issue.


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Post-foreclosure UD plaintiffs must also demonstrate duly perfected title and compliance with CC

2924 foreclosure procedures. CCP 1161a. Duly perfected title encompasses all aspects of

purchasing the property, not just recorded title. The trial court relied on plaintiffs trustees deed

upon sale, showing plaintiffs purchased the property at the foreclosure sale. The court ignored

contradicting testimony alleging that the property was sold to the loans servicer, not plaintiff.

Further, to prove compliance with section 2924, the plaintiff must necessarily prove the sale was

conducted by the trustee. Here, the trustees deed upon sale identifies one trustee, but the DOT

identifies another. The trial court erred in accepting the recorded trustees deed upon sale as

conclusive evidence of compliance with 2924, and the appellate division reversed.


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COL?\iY OF SASTA CL\RAAPPELL \TE 1>1\'1510;';

THE BANK OF I\CW YORK. t E L L O N ,Plaintiff and R e s p o n d ~ n t ,

v.VIDAL A. PRECIADO, ET AL

Ddendants and Appellants.

Case Nos. \-12 -:\1'-00 1360 nnd1-12 -:\ 1'-00 \)6\

ORDER

The appcJ! by appellants Vidal Preciado ("Prec iado"), Roland Luke ("Luke"), nndKenm:th I-[cnderson ("Henderson") (collectively, "Appellants") from the un!lIwfu! detainerjudgments entered on M:lfCh Hi, 2012, C;l.mc on regubrly for hearing and wa s heard andsubmitted on August 16. 20 13. We he reby hold as follows:I'rocedurai l l is tory

This is:m app eal from IWO related un lawful detainer actions. 1 Respondent '1l1e Bank ofNew York Mellon ("Bank") is the owner of 1343 State Street, in Alv iso, Cali fornia. On July25,20 11 , B.lnk (lcquired title to this prop erty (It a trustee's sale pu rsuant to foreclosure upon adet'd of trusl. TIle property W(lS previously owned by Precbdo and occupied by Appellants.

, S e p : l f n C 1 ~ f k 's T r J n s c r i p t ~ "efe : l : p n f ~ d for Case l-ll -CV -215285 A ~ t 1 e ~ 1 :':0. , . I2 AI'QO1360) i!.'



1,I6;89

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On September 1. 2011. 11 3m: sen 'cd :1 wlinen nolice 1o Appe llants to qui t and deli \'crpossession oflhe property wit lun three days, 30 d

u d s ~ 10 change the propc ny address to Alviso, 'AI Appellants' request. the court st3yed Appell:!.nts' evic tion (or ':0 enys. cp to !:'.d

i:-:;:Iud:n ..\ p: i! 2S, 20 12.9 Appell:mts filcd indi \"idU3! noticcJ of 3ppca1 ~ \ 12.:ch 16.20 12 m ~ n t to,\p pc ::. l::.hi lit y

A finz l judgment in :l limited civil casc is appe:ll3b1 c to L1c :l?pellate division of 6 :~ p court. (Code Civ. Prot ., 90 .;,] , subd. (a). ) The b cou rt entered u d g : : l ~ n : i::

limiterl civil cases on 16. 201 2. Accordingly. the judgments are apPcJ.b:'!e 10Appclb te Dh"ision.1/1

: St t CT . 2!6 . pp. 9 . !2. CT 283, pp 9 12.I 5 : e CT . 2!6. pp. 1 12. c r 2 8 ~ . PI' . 1 12 Se c CT .2!6. pp 2025 . JO . J I. CT .2&8 , rp 10 N . 27jO. 45"":6 )'On Ihl ! Wlle e ly . i'!ecmlo lik d "I on l>ful filrec1osu:e 'S Jin il UJlIl other (See cr .2M.p 20C0 ..W )StC CT2!6 . pp IjO ! jO. CT . 2&8, rp IIJ&-I. Se e CT . 286, Pi" 1J2 . 165. CT 188 . rp SH ISI Sce CT.2S6. P? 166 . 167.C r2n . r? 119 . 120 . Sn CT156. p 23J . CT .2u ' pp. 1291J2I' See C1 .286. pj ). 26] . 265. 270212. CT::!!. r p 161 . t6-1. t69 . 171 .

2OlllER



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On nppcal. Appellants make the following Ilrgumcnts:I )2)J)

4)

111e Appci1n!c Division mu st conduct an independent review of the entirert:conl pur suant to People II. Wende ;"111e SCfy icc Process was liuc rcd \\ith gross procedural irregularities";Ihnk of Amctk'a did not produce ev ide nce su fficient to prov e that Liteforcdosurc sale was conduc ted in st ric t compliance wit h Civil (ode section291..: :mc! thll ti tk was duly perfec ted; andUank improperly filed two SCp:l!2.IC unlawful deta iner actions fa: the samepropeny.

StantianlornCl"iewIn an appeal from an unlawful detainer jUdgment, "(wJc revicw the trial coun's findin gsof (:lct to determine whether the)' arc sUfponed by subs1:mtial evidence," (Palm Properryb ll"eS /l/l i!Jl/S, LLC v. a d ~ g (20 11) 19'; Cal.App.4 th 1419. 1425 .) To the extent the trial COUttdrew conc:lus ions of b w based upon its findings of fan , we review those conclusions of lawno\'o. (/d. at pp. 14251426.)I'rop! .'" Y. Wend e is In :tpplicable 10 Ch'il Appc:lls

Ap?ellants' first argu men t is that the App ellate Division mu st conduct an independe ntrc\'icw oflhe enti re record pur sua nt to People \'. Wendr (1979) 25 Cal.3d 436. Howe\'er. aWen dt' rev iew only upplics to criminal uppeals. (See In re Sade C. (1996) 13 Cal.4th 952, 98';')

In civ il ::tppc31s, the nppellnte coens ue 110/ required to perform an u.'1lSsi5!cd stud\" ofthc record rC\'jcw of the law relevant 10 a p:my's contenti ons on appeal. (Air CO!lrieflInt t rnal. \P. Employm t lll Dewfopmel:t ~ p l . (2007) 150 CaLApp.4lh 923, 928; GUlhrry,'. Slaleo/California (1998) 63 CnLApp .4lh 11 08, I! 15 .) Instead. a part(s failure to perform its dutyto providt! nrgument, citations to the record, nnd legal authority in support of a contention mlybe trelteu as a waiver of the issue. (A nw)(f Corp . \'. Hamil/on & Samuels (2002) 100Ca l.App.4th 1286, 130 1; Peopft ex ref. lOl! Cen/llry flu. Co. \'. Hili/ding Perm it Consultonts.II/C, (2000) 86 Cal. App.4th 280, 284 ; GMhrey, sllpra, at pp. I I I$.1116.) Thus. ApprllalllS'req uC5 t for an independent Wende review is imp roper.

3ORDER



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Apl'd lal1ls t ~ l I l ! that they ww: not properly ser\'ed Wilh notices terminating theirAs:\ 1l1\:T\.'quisilc \0 minS an unlawful detainer tletion. a tenant must be ser.'cd wilh

dlhc[ a 3, 30. ,'I' 90 ,I:\rs' 1I0lice, dcp(,lIding on the individual's slatus ns n tenant. (Code Ci \',\'\w .. 11 61. 1161:1. 11 61b.) Code ofCivil Procedure section 116i! provides three methodsl, r thes e noli,'c s: ( I) by pe rso na l dcli\"cl')" 0 the !('n:lnl (pcrsoru[ service); or (2) jftheICI :lnl is at-se n! from hi s residence :md Usu:li pl3cc of bu siness , by Jcu\'ing a copy \\i lh a persont' f suitable age and di sc ret io n at either pInel.'. and sending a copy through the mail to the ten:mfi

i d c n (s ub stituted ser vice); or (3) i f a place of residence and usual place of business cannoth: :lsCCMJincd or n person of suita ble :le or discretion C!lrulot be found there, then by :lffixing II( (lPY in :l c O I 1 ~ pbcc ll n thc property :lnd ddi\'cring a cepy to (l person residing there, if5\I\:h n pencn can be found,:!.:1d al $o ~ ' n d a copy through th: m:lil addressed to the tenant a1the place where the propeny is sitUlltcd (post:md mllil service), A notice is \'alid andcnfl)r,'cab le only if the le sso r has strictly complied '\i th thes e statuto ri ly m:mdlllcd requirementsf",r 5eryice. (LM om io \'. -'(otta (1998) 67 Cal.App.4lh 110, 11 314; Liebo\'ich v.ShClhrokHh :my (1 997) Clll.App.-i lh 511, 5I3,)

AI trial. Hen der son testified that he did not receive any notice to quit. (RT, p. 14 :1115.)In rcs ponse, )) :mk ' s coun sel ~ p l : ! . i n e - Ihal llllthe- occupants were- sefyed with a no tice 10 quiton Sc pleillber I, 20 11 . Bank ' s couns d referred the court 10 Exhib it B of Dank's complainlwh ich COltaincJ the proofs of ser\'ice for the notices. (RT, p. 14 :1623.) In the proofs ofsen'ice, reg istered proc ess sener Kris VOS.JIZ (,-Vorsatz") declared that he served the notices( ' I I September I, 20 II . (CT 286, pp. 11.12; CT 288 , [ '[I 11 . 12) ,\ ecornin8 to the proo fs ofscrvice, "[aJftt:r dU!: and diligc r1 1cOort" "orsatz posted a copy of the notices on 1343 StaleStreet, S3" Jose, ClI1ifomi3 . (id) Thereafter, Versatz mailed a copy of e



Where serv;ce is carried out by a registered process se rver, Evidence Code sec tion 6472 appl ies to c\imin31C the necess ity ofcalling the proce ss server as:l \ \ ~ t n e s s 31lfial. (Pa/III3 I 'roprrty /III'l'stlll l'lIts, L!.C \', )'adegar, slIpra, 194 CaLApp.41h :H p. 1427 .) Unde r Evidence4 Codc section 647. "[I]hc return of a process server [ I uJ:on process or notice estab lishes n.s pre sump tion. affect ing Ihc bu rden of producing evidence. of thc facts slaled in the retu rn ," A56 U:mk did not produce VO(531 7as a witness, the question is whether Vorsalz's proo fs of scry icc7 Dlnk complied w;lh thc notice re quircmentso f seCl io n 11 62.8 In Iligh/nnd Plas/lcs, Inc. \'. Enders (1980) 109 Cal.AppJd Supp. 1, thc coun ana lyzed9 wh elher there was suffic ient evidence that the landlord comp lied wilh the "post and mail"

10 provision of section 1162 . The court noted thlt this code sec tion does not requi re:1 showing ofII rcasonlble diligence in atlempting personal service before utili zing the substi tuted se rvice12 provisior.s, as requi red in Code ofCivjl Procedu re section 41 5.20, subd ivi sion (b). (ld at p. 6.)13 It docs requi re, howe ver , "that if the tenant c:mnot be located fo r personll se rv ice that the14 perso n mlking this substituted service first determine either thlllhe ten ant 'S' , . . place of15 residence and busine ss cannot be ascertained, that a person ofsuitable age or disc retion there16 CMnot b: found . . .. .. (ld) In Highland Plastics, the deputy marshll lestified Ihat when he\7 attempted to serve the 30 day notice on dd::ndant. no O:lC answe red his knock on the door of18 the prem ises wh ich had been identified to him as the place of re sidence and busi ness of19 defendant. (ld. at pp. 6-7,) Wh en the re was no response to the deputy's knoc k, he then posted20 the not ice "in a conspicuous place on the prop erty" and mai led a cop y to the place whe re the21 propeny was si tuated. (lei. at p. 7.) Thus, the court conduded that there wa s subs tantial22 evidence supporting the tria l cou rt 's find ing that there hJd been (! proper se rv ice of the not ice23 utiliz in g the "pOSt :lnd nl:lij" provi sions :ls neither the d e f e n d ~ n t nOr:l person of sui tab le age and24 discretion co uld be found . (lei.)25 Similarly, in flo:::: \'. Lewis (1989) 215 Ca l.App.3d 314, the cou rt held th at trial cou n26 prope rly found that the landlord's "post and mail" procedu re of service of n IhrcedlY notice27 pur suan t to sect ion 1162 was :ldequa te , In that case, testimony at tria l established that the28 land lord's agent went to apartment, rang the bell an d knocked on the door. When no one

5ORDER



:mswC'red.the employee l:lpC'd n copy of lhe notice to the door :md slipped another copy under2 the doo r. He Ihen posted another copy by mlil : ! d d r e ~ 5 ! d to the (cnlnt. (It/. at p. 3! 6.) Since no3 one \\-:lS pres,"nt when the procC'ss serve, went 10 Ih," :!.p:;nmenl. ~ p o s t and mair' se rvice \\-:lS4 authoriud unde r settion 1162. (ld. at p. 31 i.)5 As explained :!.bove. no sho\\inS ofre:lSon3ble dilisen,"e in 3ltempting personal sen"ice6 before utilizing the substituted service pro\'isions is rC'quired under the statule. (See Ho:: v.7 L,'" is. supra. 215 Cal.App.3d at p" 317 .) Ne\"enheless. "post ilnd m3il" scn'ice is notS 3uthori zed 3S a first -reson melhod of sm;ce. Here, Vors:ltz's deelnrntion does not establish9 Ihat Bank complied wilh seclion 1162 as it does show Ihll person:l i serviee was fver auempted.

10 The proofs of service do nOI st He Ih:ll Appell:!nts were not home or Ihul no one of a sui table ageII was home whC'n the sen'er pos ted the r!otiC'e "in:l conspicuous pbce:"12 In its opposition brier". Bm.!.:. argue,; th:!.t Appellants m:!.y not eh:llknge service of the13 notices as Ihey did nOI include this lS enlffinn:lIiw defense in their answers. Dank is mistaken.14 An affirmative defense is e.!l o.!Iegation of new m:mer in thC' answer th:lt is not responsi\'e to an15 essential allegation in the eompb.int. In other words. an 2flinnati\'e defense is an allegation16 relied on by the deicndant that is not put in issue by the phintifr s complaint. ( B ~ l ' i I l ,'. l O/lra17 9 9 ~ ) 2i Cal.AppAlh 694. 69S ; Stare Farm .\fut. Au/o. IllS Co \". Sllprrior Court (199 1) 228tS Cnl .AppJd 721. 725 .) Where the answer :llleg:s f:l.cts showing th:lt som e essent ial allegation of19 the complaint is not true. tho se f:lets lre not "new m:ltler:' but only a tr3.\"ersc. (Ibid .) Because20 proper serdee of the tennin:l.tion notices W:lS an essentid element of Dank 's unlnwful detainer21 actions. Appel!:l.nts general denbl of e:lch s!Jlem : mof lhe compbint sufficiently put the22 service of the notices:n issue:!.nd Appellants were not required to pleld ineffec tive notice as an23 af1innal il'C' defense. (See BeviIJ v. Zoura. supra . 27 Cal.App.4lh at p. 698.)24 Acco rding!y , the judgment for poss ession mus t be reversed because Bnnk f3i1ed to25 est3bl ish proper senite of the no tices. (See L i ~ b o l ' i c h \". Shah -okhkhany. supra, 5626 Cal.App.4th at p. 514.)27 III28 III

6ORDER



Sale ill Co mplia nce with Ch' iI Co lle 2924 ct seq, and th e IJccti of T n n t2 "I listoricallya cau se of action for unlawful detainer was ava ilable only to a land lord3 against his tenant ." (Gross v. Superior COllrt ( 1985) 171Cal.App.3d 265. 271 .) The remedy.: lUIS been expanded by stat ute to :ldd itional categories of plaintiffs (sec Code Civ. Proc. , 11( 1)5 :lnd defendants (sec Code Civ. Proc., 116Ia). The: purpose of section 1161 a of Ihc Code of6 Civ il Procedure was to make clear that one i1cquiring owne rship through foreclosure could nlsa7 evict by a summary procedure. (Sec Gross v. SlIperior COllrt. lIIpra, 17 1Cn l.App .3d 01 p. 271 .)8 In 30 un lawful deta iner action brou ght pur suanl lo Code of Civ ill'rocedu rc section9 116 1a, su bdivision (b )(3), the piaintiffmusl show that h: acquired the property nt a reguln rly

10 co ndu cted sa le nnd Ihe reaft er "du ly perfected" his title. (Slcplu:I1S \'. lIollis (1987) 196I I Cal.App.3d 948, 952; Emlls \'. Superior COlirt (1977) 67 C(lI.Ap pJ d 162, 169 .) "[Wlhere the12 pl.:iillliff in the unlawfu l detainer action is the purchaser at a Irustee' s sa le, he or she 'need only!3 prove:l sa le in com pliance wi th th e stat ute: and deed of trust, follow ed by purchase at sueh sale,I': :!Ild Ihe defendan t mly rai se objections only on Iha l phase of the issue of ti tJe.' " (O/d Nat '/J5 Fil l Sm 's v. Stibtrl (1987) 194 Cal.App .j d 460 . 465 .) "The statu te" with which a post16 fo reclosure plaint iff mu st prove co mp liance is Civil Code sec tion 2924 . (Seidell v. Ilng/o 17 Cal i /ori l la Trllst Co . (1942) 55 Cnl.App.2d 9D, 920 .) On appell, Appcl13.nts asse rted thl ! Dank18 did 1I0t lIlt'et its m , t i n ~ butdt'll in this rega rd .19 ;\lll ia l, Bunk pro\'ided the Trustee ' s Deed UponS.,le, record t'd August S, 20 11 . (Sec20 RT , p. 5:1.11 .) The Tru stee's Deed Upon Sale purportedly showed Iha t Bank purchased the21 property lit the truSlcc's su le held on July 25, 2011. (S ec CT 286, pp . 6S .) Luke th en testified22 tha t he w ~ III the (mction, rind that Iht' prope rty "went back \0 [lank of Americu." (St'c itT, p.23 6:25 26 .) I'lccittdo testified thaI the loan was ori!;inally with Cou nt-y wide, :tnd tht'n24 COl1rurywide W:IS "1 :lkcl1 over by Bank of America ." (Sec RT, p. 6:1728 .) Th t' court25 I'C) llOnded, "\Veil, [ don' l know what Bank of Am eri ca did or didn't do, bUlthey hrlvc {I deedI26 Illl're sho win !! it's dilly nUlh l'ntic ntcd, the det'd that Bank of New YorK Mellon owns the prop t'rty27 illre." (Sec RT , p. 7:16-19.) When I\ ppcllanls pre:sst'd !lank 10 provt' it own t'd tht' property, the18

7ORDER



court st:l1ed, "Thcy h:l.vc a dced showing thJt they O\m the property. and that' s 011 they need to2 do ." (SC'C' RT, p. 8:21 23 ,)J The trial court erred \\hen it found that the Trmtee' s Deed Upon Sok was sufficient.: proo f thai Ihnk acqui red the property :lt 11 regularly conducted sak and thcn:after "duly5 pcrfected" its titk , "{TJit le is du ly perfcctC'd whcn nil steps hJ\'C' ix:C'n taken to make it perfect.6 i.e" \0 COllVCY to the purchaser that which he h:ts purchJsC'd, \':did and good beyond:l ll7 re:lsonJbk doubt. which includC' s good rec ord (i lk. but is nol limi!ed to good record lil le, as8 between the p;lr1ies to the tr:msJction. The lerm 'duly' implies th :lt all of those e lements9 !1eccssJ:-)' to J valid sJle exist, elSe there would nOI be J SJlc at ~ 1 J . (Kessler Bridge (19 58 )

10 161 Cal App.2d Supp. 837. 841 n l e r n ~ l ci tations om itted].) Uncb:l decd of trust, power ofII sale upon the trustor's default veSls in the trusteC'. (Ca/I'o I'. HSBe Balik USA, NA . (201 ) 19912 Cal.AppAth 118, 122 .) Therefore, in order to p rovC' compli:lnce with section 2924, the plaint iff13 must necessarily provC' the s:llC' was conducted by the t:ustee.I": Here, the Trustee's Deed Upon Sale indicates p e r t y was so ld by Recontrust15 Comp:my, i\",A. :!cting os tru stee. However. th: D ~ e d of Trmt identifies Comr:1onwe]!th Lar:d16 Title Comp:!ny as the trustee. (S ee CT 286, p. 121.) Ihr.k did r:ot provide any evidence17 C'slao lishing Recontrust's au thority 10 conduct the trus tC'c' s sale. As BmT..: failed to p:ovide :!.!ly18 evidence that Recontrust was substituted for the o r i g i n ~ l trustee , Ba.'lk was nOI entitled to19 jcdgmer.:.20 ,.\prellanls' r ~ c m a i n i n ,\rgumenIJ21 Given our decision to reverse the judgments, we need not rcach Appclb.ms ' rem:!ining22 arguments.23 II I2-1 11/25 11/26 //I27 //I28 11/

8ORDER


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CALIFORNIA HOMEOWNER BILL OF RIGHTS COLLABORATIVE DEFINES IMPORTANCE OF THE PRECIADO CASE IN 2013 -- TWO DIFFERENT TRUSTEES--NON COMPLIANCE WITH 2924