Justia Banking Opinion Summaries

Plaintiffs Charles Best Jr. and Robbie Johnson Best alleged that defendants (collectively the Bank), attempted to collect a debt secured by the Bests’ home, despite having no legal right to do so. They alleged that, in the process, the Bank engaged in unlawful, unfair, and fraudulent debt collection practices. Based on these allegations, they raised six causes of action, including one under the Rosenthal Fair Debt Collection Practices Act. The trial court sustained the Bank’s demurrer to the entire complaint on the ground of res judicata; it ruled that the Bests were asserting the same cause(s) of action as in a prior federal action that they brought, unsuccessfully, against the Bank. In the nonpublished portion of its opinion, the Court of Appeal held that, as to three of the Best’s causes of action (including their Rosenthal Act cause of action) the trial court erred by sustaining the demurrer based on res judicata. As to the other three, the Court found the Bests did not articulate any reason why res judicata does not apply; thus, they have forfeited any such contention. In the published portion of its opinion, the Court held that the Rosenthal Act could apply to a nonjudicial foreclosure; the lower federal court opinions on which the Bank relied were superseded by controlling decisions of the United States Supreme Court, the Ninth Circuit, and the California Courts of Appeal. View "Best v. Ocwen Loan Servicing, LLC" on Justia Law

The Court of Appeal affirmed the district court's judgment sustaining CIT's demurrer without leave to amend based on res judicata. The court explained that appellant's present lawsuit involves the same primary right as three prior lawsuits that she brought against CIT, and plaintiff lost on the merits in all three prior lawsuits: one in the Los Angeles County Superior Court and two in the United States District Court. The court further explained that the prior adverse decisions by three trial and two appellate courts were not advisory opinions suggesting how appellant should proceed in the future. The court concluded that, pursuant to the doctrine of res judicata, the decisions constitute final judgments on the merits precluding further litigation against respondent concerning the same primary right. The court noted that, although the present appeal is frivolous, it will not order sanctions to be imposed on appellant. However, the court cautioned appellant that further attempts to litigate the subject matter of this lawsuit will result in sanctions. View "Colebrook v. CIT Bank, N.A." on Justia Law

Appellant and his wife obtained a home mortgage in 2006, but only the wife signed the promissory note. After appellant's wife died, appellant defaulted on the loan. Appellant alleged that the mortgage servicer, Specialized Loan Servicing, refused to communicate with him about the loan because he was not the named borrower. Specialized subsequently initiated foreclosure proceedings by causing a notice of default to be recorded. Appellant filed suit under the California Homeowner Bill of Rights (HBOR), Civil Code section 2923.4 et seq., seeking to enjoin the foreclosure proceedings. After Specialized agreed to postpone the foreclosure sale and appellant failed to make his payment, the foreclosure sale proceeded as planned and the property was purchased by a third party. Appellant then filed an amended complaint against Specialized. Specialized moved for summary judgment, which the trial court granted.The Court of Appeal affirmed, concluding that, by its terms, the HBOR creates liability only for material violations that have not been remedied before the foreclosure sale is recorded. The court held that where a mortgage servicer's violations stem from its failure to communicate with the borrower before recording a notice of default, the servicer may cure these violations by doing what respondent did here: postponing the foreclosure sale, communicating with the borrower about potential foreclosure alternatives, and fully considering any application by the borrower for a loan modification. After such corrective measures, any remaining violation relating to the recording of the notice of default is immaterial, and a new notice of default is therefore not required to avoid liability. Therefore, appellant has provided no basis for liability under the HBOR. The court also concluded that Specialized complied with section 2923.6 as a matter of law by conducting the foreclosure sale only after appellant failed to accept an offered trial-period modification plan. Finally, given the court's conclusions and the trial court's consideration of the merits of appellant's claims, the reinstatement of sections 2923.55 and 2923.6 did not warrant reconsideration. View "Billesbach v. Specialized Loan Servicing LLC" on Justia Law

Quail's 47,480-square-foot unincorporated Sonoma County property contained two houses, garages, and several outbuildings. In 2013, a building with hazardous and unpermitted electrical wiring, hazardous decking and stairs, unpermitted kitchens and plumbing, broken windows, and lacking power, was destroyed in a fire. Two outbuildings, unlawfully being used as dwellings, were also damaged. One report stated: “The [p]roperty . . . exists as a makeshift, illegal mobile home park and junkyard.” After many unsuccessful attempts to compel Quail to abate the conditions, the county obtained the appointment of a receiver under Health and Safety Code section 17980.7 and Code of Civil Procedure section 564 to oversee abatement work. The banks challenged a superior court order authorizing the receiver to finance its rehabilitation efforts through a loan secured by a “super-priority” lien on the property and a subsequent order authorizing the sale of the property free and clear of U.S. Bank’s lien.The court of appeal affirmed in part. Trial courts enjoy broad discretion in matters subject to a receivership, including the power to issue a receiver’s certificate with priority over pre-existing liens when warranted. The trial court did not abuse its discretion in subordinating U.S. Bank’s lien and confirming the sale of the property free and clear of liens so that the receiver could remediate the nuisance conditions promptly and effectively, but prioritizing the county’s enforcement fees and costs on equal footing with the receiver had no basis in the statutes. View "County of Sonoma v. U.S. Bank N.A." on Justia Law

Coinbase is an online digital currency platform that allows customers to send, receive, and store certain digital currencies. Archer opened a Coinbase account to purchase, trade, and store cryptocurrency. On October 23, 2017, a third party launched a new cryptocurrency, “Bitcoin Gold,” Coinbase monitored and evaluated Bitcoin Gold’s network and informed its customers via its website: “ ‘At this time, Coinbase cannot support Bitcoin Gold because its developers have not made the code available to the public to review. This is a major security risk.’ ” In 2018, the Bitcoin Gold network was attacked by hackers who stole millions of dollars of funds from trading platforms and individuals on its network.Archer sued Coinbase, based on Coinbase’s failure and refusal to allow him to receive his Bitcoin Gold currency and Coinbase’s retention of control over his Bitcoin Gold. The trial court rejected his claims of negligence, conversion, and breach of contract on summary judgment. The court of appeal affirmed. Archer failed to establish the existence of an agreement by Coinbase to provide the Bitcoin Gold to him and failed to demonstrate Coinbase acted in any way to deprive him of his Bitcoin Gold currency. View "Archer v. Coinbase, Inc." on Justia Law

Alviso filed suit against numerous parties, including Wells Fargo, that were allegedly involved in a sham transaction by which a seller purported to sell a property to a buyer who obtained a mortgage loan from Aviso to fund the purchase. The title insurer involved in the sham transaction, WFG Title, is Alviso's successor-in-interest and is not prosecuting the action. The trial court granted summary judgment for Wells Fargo, finding that it had no legal obligation to maintain public title records and further finding that equity did not justify displacing Wells Fargo as senior lienholder.The Court of Appeal affirmed and held that the trial court properly granted Wells Fargo's motion for summary judgment. The court held that a fraudulent or forged deed does not convey valid title and, because Wells Fargo was not negligent, neither equitable estoppel nor Civil Code section 3543 is applicable. Finally, the court held that Alviso's remaining arguments are forfeited. View "WFG National Title Insurance Co. v. Wells Fargo Bank NA" on Justia Law

In 2006, Adams obtained a loan secured by a deed of trust against Vallejo residential property. Adams obtained a loan from an individual, Gallegos, secured by a separate deed of trust recorded against the same property. Adams defaulted on the junior loan, resulting in foreclosure and a trustee’s sale in 2008. Gallegos was the purchaser. The property was still subject to the senior loan; Adams remained the "Borrower,” named on the deed of trust. In 2017, Adams filed for chapter 7 bankruptcy. After her discharge, Adams filed a complaint, alleging “Violations of the Homeowners’ Bill of Rights” (HBOR), based on her 2016-2017 negotiations for a loan modification. She claimed that the defendants recorded notices of default and of trustee’s sale on the senior loan and failed to provide her with a single point of contact while her application was pending. The court granted the defendants judgment on the pleadings.The court of appeal reversed. While the complaint failed to allege facts sufficient to state a cause of action under the HBOR the trial court abused its discretion when it denied Adams leave to amend. The facts alleged in the complaint together with matters that are subject to judicial notice do not establish that the property is Adams’s principal residence as required under HBOR but there is a reasonable possibility that amendment of the complaint would cure this defect. View "Adams v. Bank of America" on Justia Law

Abelardo Martinez, who was blind, brought an action against San Diego County Credit Union (Credit Union) claiming its website was incompatible with software permitting him to read website content. He alleged this defect denied him equal access to, and full enjoyment of, the Credit Union's website and its physical locations. Martinez asserted a single cause of action under the Unruh Civil Rights Act based on two alternate theories: (1) Credit Union's website violated the American Disabilities Act (ADA); and (2) Credit Union's actions constituted intentional discrimination prohibited by the Unruh Civil Rights Act. On the day scheduled for jury selection, the court dismissed the action on its own motion based on its understanding Martinez was intending to pursue only the ADA theory, and the court's finding Martinez had not sufficiently alleged Credit Union's website constitutes a "public accommodation" within the meaning of the ADA (although the court characterized its ruling as a nonsuit, the parties agree it was a conclusion based solely on Martinez's pleadings). Martinez appealed. The Court of Appeal found the trial court erred in dismissing the action at the pleadings stage based on the ADA's public-accommodation element: a disabled plaintiff can state a viable ADA claim for alleged unequal access to a private entity's website if there is a sufficient nexus between the claimed barriers and the plaintiff's ability to use or enjoy the goods and services offered at the defendant's physical facilities. Under this standard, the Court found Martinez alleged a sufficient nexus to state an ADA violation. The Court rejected the Credit Union's alternate argument that the dismissal was proper because the United States Congress has not enacted specific website accessibility standards. View "Martinez v. San Diego County Credit Union" on Justia Law

The owner of the unencumbered 25 percent interest in the real property is entitled to a proportionate share of surplus proceeds. The Court of Appeal's conclusion is based on Caito v. United California Bank (1978) 20 Cal.3d 694. The court held that the 1990 enactment of Civil Code section 2924k did not change the principles set forth in Caito.Applying this principle about the rights of junior lienors to the undisputed facts of this case, the court held that the creditor holding the second deed of trust encumbering an undivided 75 percent interest in the real property was entitled only to a 75 percent share of the surplus funds. The court held that the remaining 25 percent must be distributed to the person who owned the interest that was not encumbered by the second deed of trust. Accordingly, the court reversed the trial court's judgment. View "Zieve, Brodnax & Steele, LLP v. Dhindsa" on Justia Law

Freelance bookkeeper Elizabeth Mulder perpetrated a nearly five-year fraud against her client, plaintiff Kurtz-Ahlers. Both Kurtz-Ahlers and Mulder coincidentally had their checking accounts at defendant Bank of America (the Bank). Mulder ran her scam through her account at the Bank. After discovering the fraud, Kurtz-Ahlers notified the Bank and made a claim for its losses. The Bank denied the claim and Kurtz-Ahlers sued the Bank for negligence. After a two-week jury trial, the trial court granted the Bank’s motion for nonsuit, essentially holding the Bank owed Kurtz-Ahlers no duty to investigate or monitor Mulder’s account. Finding no reversible error in that conclusion, the Court of Appeal affirmed. View "Kurtz-Ahlers, LLC v. Bank of America N.A." on Justia Law