Biancalana v. T.D. Service Co.
56 Cal. 4th 807
| Cal. | 2013Background
- Biancalana sought to quiet title to 434 Winchester Dr., Watsonville, after claiming he was highest bidder at a 9/10/2008 trustee's sale.
- EMC Mortgage Corp. was beneficiary; T.D. Service Co. was trustee conducting the nonjudicial foreclosure sale.
- Notice of sale stated total debt and that opening bid could be less than indebtedness; provided a phone number to learn the opening bid.
- Biancalana learned from the phone line that opening bid would be $21,894.17, then bid $21,896 with a $22,000 cashier’s check.
- On sale day, auctioneer announced opening bid of $21,894.17 and Biancalana was declared the highest bidder; two days later, sale was voided by TD because the price was not high enough.
- TD later refused to issue deed; Biancalana sued for relief; trial court granted summary judgment for TD, then Court of Appeal reversed, and Supreme Court granted TD’s review to reverse.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the trustee’s pre-deed error an irregularity in the statutory sale process? | Biancalana argues error was outside process and should not void sale. | TD contends error occurred within process; allows voiding if price is grossly inadequate. | Yes; error qualifies as irregularity justifying voiding. |
| Does gross inadequacy of price authorize voiding when error occurred pre-deed? | Biancalana says no gross inadequacy if market value unknown. | TD asserts price was grossly inadequate (21,896 vs 219,105 bid). | Yes; gross inadequacy supported by disparity between announced bid and actual bid. |
| Whether trustee could void sale given the trustee’s error was made by the trustee, not the beneficiary; policy concerns aside? | Biancalana argues ruling would invite manipulation and undermine finality. | TD argues trustee acted within discretionary authority to protect sale integrity. | trustee had discretionary authority to void; public policy supports correcting mistake before deed. |
Key Cases Cited
- Millennium Rock Mortgage, Inc. v. TD Service Co., 179 Cal.App.4th 804 (Cal. Ct. App. 2009) (auctioneer error justified voiding the sale; gross price inadequacy component)
- 6 Angels, Inc. v. Stuart-Wright Mortgage, Inc., 85 Cal.App.4th 1279 (Cal. Ct. App. 2001) (clerical error by beneficiary outside sale proceedings; error dehors the sale proceedings)
- Crofoot v. Tarman, 147 Cal.App.2d 443 (Cal. Ct. App. 1957) (trial court not compelled to void sale for date misinformation; discretion exists)
- Bank of Seoul & Trust Co. v. Marcione, 198 Cal.App.3d 113 (Cal. Ct. App. 1988) (trustee’s duty to obtain best price; sale regularity presumption after deed)
- Moeller v. Lien, 25 Cal.App.4th 822 (Cal. App. 1994) (sale finality; conclusive presumption after deed; pre-deed irregularities justify voiding)
- Residential Capital v. Cal-Western Reconveyance Corp., 108 Cal.App.4th 807 (Cal. Ct. App. 2003) (procedural defect detected before deed; bidder not prejudiced; remedy return of sale price)
- Felton v. Le Breton, 92 Cal. 457 (Cal. 1891) (rule of beneficiary bidding authority in equity; trustee may bid on beneficiary’s behalf)
- Scott v. Security Title Ins. & Guar. Co., 9 Cal.2d 606 (Cal. 1937) (trustees acting as agents of mortgagors/trustors; good faith duties)