Barrionuevo v. Chase Bank, N.A.
2012 U.S. Dist. LEXIS 109935
| N.D. Cal. | 2012Background
- Barrionuevos sued Chase and California Reconveyance on Feb. 3, 2012 over attempted nonjudicial foreclosure on their California Deed of Trust tied to WaMu’s loan.
- The 2006 DOT secured a $1,720,000 loan; Washington Mutual was the lender/beneficiary and California Reconveyance the trustee.
- WaMu was securitized/sold to a trust (WMALT 2006-AR4) and WaMu was closed in 2008 with FDIC as receiver; Chase later acquired WaMu’s assets.
- California Reconveyance issued a Notice of Default in April 2009 and multiple Notices of Trustee’s Sale, alleging contact with borrowers per Cal. Civ. Code § 2923.5.
- Plaintiffs allege wrongful foreclosure, slander of title, § 2923.5 violation, and § 17200 violation; defendants moved to dismiss under Rule 12(b)(6), which this court denied.
- Court discussed tender rule exceptions, concluding dismissal was inappropriate at pleading stage and that plaintiffs stated plausible wrongful foreclosure and related claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tender defeat bars the action at pleading stage | Barrionuevos argue tender not required due to pre-sale challenge. | Chase/Reconveyance argue lack of tender bars standing under California law. | Tender rule not dismissed at pleading stage; exceptions apply; not dispositive now. |
| Whether wrongful foreclosure claim is plausible given authority to foreclose | Plaintiffs allege they were not the true beneficiary; improper foreclosure authority. | Defendants argue authority to foreclose suffices and assignment/recordation issues are unclear. | Plaintiffs sufficiently pled wrongful foreclosure; need for factual development at this stage. |
| Whether slander of title claim is pleadable | Publication of Notices disparaging title was false and damage occurred. | Not explicitly addressed in brief; defendants challenge lack of privilege/justification. | Slander of title pleaded plausibly; publication, falsity, lack of privilege, and pecuniary loss alleged. |
| Whether § 2923.5 compliance and due diligence are adequately alleged | Defendants failed to contact borrower prior to NOD per § 2923.5; declaration contested. | Defendants claim due diligence satisfied by their notice; plaintiffs dispute. | Plausible noncompliance with § 2923.5; factual allegations support defeat of motion. |
| Whether § 17200 claim survives as derivative standing | § 17200 relies on underlying § 2923.5 violation; standing shown by foreclosure threat. | Standing argued to depend on actual loss; challenged by defendants. | § 17200 claim survives as derivative of pleaded § 2923.5 violation. |
Key Cases Cited
- Dimock v. Emerald Properties LLC, 81 Cal.App.4th 868 (Cal.App.2000) (distinguishes void vs voidable foreclosure and tender rules)
- Little v. CFS Financial Corp., 188 Cal.App.3d 1354 (Cal.App.1986) (conclusive presumption language affects void vs voidable sale)
- Kachlon v. Markowitz, 168 Cal.App.4th 316 (Cal.App.2008) (trustee vs beneficiary; authority to foreclose)
- Mabry v. Superior Court, 185 Cal.App.4th 208 (Cal.App.2010) (due diligence and pre-notice contact; tender not always required)
- Ohlendorf v. American Home Mortgage Servicing, 279 F.R.D. 575 (E.D. Cal.2010) (nonparty foreclosure authority can support wrongful foreclosure claim)
- Argueta v. JPMorgan Chase Bank, 787 F.Supp.2d 1099 (E.D. Cal.2011) (discussion of §2923.5 and due diligence; pleading standards)
- Sumner Hill Homeowners’ Assn., Inc. v. Rio Mesa Holdings, LLC, 205 Cal.App.4th 999 (Cal.App.2012) (elements of slander of title and damages; pecuniary loss recoverable)