U.S. Bank Nat. Assn. v. Naifeh
A142994M
| Cal. Ct. App. | Aug 17, 2016Background
- Naifeh and Ristic obtained a $500,000 WaMu loan secured by a deed of trust in 2007; WaMu was placed in FDIC receivership in 2008 and Chase acquired WaMu's interest in the loan.
- An Assignment of Deed of Trust (March 31, 2009) identified Chase as successor to WaMu and transferred all beneficial interest to Bank of America as trustee for the HY06 Trust.
- Naifeh defaulted in 2008; a trustee’s sale notice followed; Naifeh and Segall then recorded a series of false documents (2010) purporting to release liability and reconvey title to BofA.
- Trustee’s sale occurred May 24, 2010; a Trustee’s Deed Upon Sale conveyed title to BofA; Naifeh and Segall continued to record fraudulent instruments thereafter.
- BofA filed eight causes of action for cancellation of instruments in April 2011; Naifeh and others defaults ensued, with Naifeh testifying at trial despite defaults against her.
- Trial court allowed substitution of U.S. Bank as plaintiff, omitting the quiet title claim; the court held that cancellation of instruments was proven; after Jesinoski was decided, the case was remanded for consideration of rescission effects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Naifeh’s TILA rescission notice was timely and its effect on the security interest | Naifeh timely rescission; notices can void security interest without a lawsuit. | Rescission requires court involvement or a suit; notices alone do not automatically void the lien. | Remanded to determine timeliness under disclosures and appropriate rescission procedure. |
| Whether the quiet title dismissal precluded cancellation of instruments | Cancellation claims survive despite quiet title dismissal; substitution preserved standing. | Quiet title dismissal bar undermines cancellation claims as dependent on quiet title. | Dismissal of quiet title did not preclude cancellation of instruments. |
| Whether respondent had standing to pursue cancellation of instruments | Respondent had an interest through assignment chain (WaMu/Chase/BofA) and then U.S. Bank as successor. | Standing challenge based on securitization timing and post-PSA assignment validity. | Respondent had standing; assignments and trust structure supported title interest. |
| Whether the securitization/PSA framework invalidates the assignment to BofA | Untimely transfer to HY06 trust could void assignment to BofA. | Post-closing transfers may be voidable but not void; Glaski-based challenges lack standing. | Assignment to BofA was voidable, not void; appellants lack standing to challenge under PSA timing; no voiding of title shown. |
Key Cases Cited
- Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (Supreme Court 2015) (rescission effected by notice within three years)
- Yvanova v. New Century Mortgage Corp., 62 Cal.4th 919 (Cal. 2016) (standing to challenge assignments; Glaski limitations)
- Glaski v. Bank of America, 218 Cal.App.4th 1079 (Cal. App. 2013) (void/not voidable assignment depending on jurisdiction)
- Rajamin v. Deutsche Bank Nat’l Trust Co., 757 F.3d 79 ((2d Cir. 2014)) (standing to challenge PSA-based assignment; voidable vs void)
- Merritt v. Countrywide Fin. Corp., 759 F.3d 1023 (9th Cir. 2014) (courts may modify rescission procedures for equity)
- Yamamoto v. Bank of New York, 329 F.3d 1167 (9th Cir. 2003) (court may condition rescission; not automatic without lender consent)
- Fontenot v. Wells Fargo Bank, N.A., 198 Cal.App.4th 256 (Cal. App. 2011) (timing and transfer considerations in securitization)