Glaski v. Bank of America CA5
218 Cal. App. 4th 1079
| Cal. Ct. App. | 2013Background
- Thomas Glaski obtained a $650,000 adjustable-rate loan from Washington Mutual (WaMu) in July 2005, secured by a deed of trust naming WaMu as beneficiary and California Reconveyance as trustee.
- WaMu-originated loans were pooled into the WaMu Mortgage Pass-Through Certificates Series 2005-AR17 Trust (a New York law securitized trust) with a stated closing date of December 21, 2005 (or within 90 days).
- Glaski defaulted; notices of default and trustee’s sale were recorded in late 2008–2009, and a trustee’s sale was held May 27, 2009; Bank of America acquired the property via credit bid and a trustee’s deed was recorded June 15, 2009.
- The SAC alleges two principal defects: (1) certain documents (assignments and a notice of sale) bear forged signatures of Deborah Brignac, and (2) Glaski’s loan was not validly transferred into the securitized trust before the trust’s closing date, so later assignments into the trust were ineffective.
- Trial court sustained defendants’ demurrer to all causes of action; the Court of Appeal reversed as to wrongful foreclosure, quiet title, declaratory relief, cancellation, and UCL claims, but affirmed dismissal of the specific fraud claims for failure to plead reliance with particularity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff pleaded actionable fraud based on forged/false foreclosure documents | Glaski: forgeries and false assignments caused him to rely and lose his home; seeks damages | Defendants: plaintiff failed to plead specific acts of reliance and resulting damage | Court: fraud claims insufficiently pleaded (lack of particularized reliance); fraud causes of action dismissed without leave to amend |
| Whether borrower can challenge post-closing transfers into a New York securitized trust | Glaski: transfers into the trust after its closing date are void under New York trust law, so defendants lacked authority to foreclose | Defendants: chain-of-title challenges are barred by California foreclosure scheme (Gomes) or are merely disputes between parties to assignment; borrower lacks standing | Court: borrower has standing to challenge transfers that are void (not merely voidable); post-closing transfers that contravene the trust instrument are void under New York law and may be challenged by the mortgagor |
| Whether Gomes bars challenges to the authority to foreclose when based on defects in assignment/ownership | Glaski: Gomes is limited and does not preclude challenges alleging specific defects rendering assignments void | Defendants: Gomes precludes inquiry into authority of party initiating foreclosure under California’s comprehensive nonjudicial foreclosure scheme | Court: Gomes does not bar claims alleging concrete facts (e.g., post-closing void transfers) showing the foreclosing party lacked authority; wrongful foreclosure claim may proceed |
| Whether tender is required to state wrongful foreclosure/quiet title when foreclosure is based on lack of authority | Glaski: tender not required where foreclosure is void (not voidable); tender is an equitable doctrine inappropriate at pleading stage | Defendants: plaintiff failed to allege tender, so equitable relief (setting aside sale) or cancellation is barred | Court: tender not required where foreclosure is alleged to be void for lack of authority; demurrer cannot be sustained on tender grounds at pleading stage |
Key Cases Cited
- Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149 (Cal. Ct. App.) (limits pre-foreclosure inquiries into a nominee’s authority but is narrow)
- Herrera v. Deutsche Bank Nat. Trust Co., 196 Cal. App. 4th 1366 (Cal. Ct. App.) (chain-of-title defects can preclude summary judgment on wrongful foreclosure)
- McCall v. PacifiCare of Cal., Inc., 25 Cal. 4th 412 (Cal.) (standard of review on demurrer: de novo, pleadings construed broadly)
- Lazar v. Superior Court, 12 Cal. 4th 631 (Cal.) (fraud must be pled with particularity)
- Karlsen v. American Sav. & Loan Assn., 15 Cal. App. 3d 112 (Cal. Ct. App.) (tender generally required to set aside a voidable trustee’s sale)