Judge Daniel M. Crowley, Case Number: 24STCV14625, Date: 2024-10-02 Tentative Ruling

Plaintiff Mark Leonard (“Leonard”) (“Plaintiff”) moves for summary judgment against Defendant Min S. Lee (“Lee”) (“Defendant”). (Notice of Motion, pg. 2; C.C.P. §§437c, 1107.7.) Plaintiff moves on the grounds that no triable issue of material fact exists and, as a matter of law, Plaintiff is entitled to summary judgment on his sole cause of action for unlawful detainer regarding possession of the property located at 3425 Midvale Ave., Los Angeles, CA 90034 (“Subject Property”). (Notice of Motion, pg. 2.)

Plaintiff’s 8/23/24 request for judicial notice of (1) “Deed of Trust” dated October 23, 2022, recorded in the Official Records of Los Angeles County on or about October 26, 2022, as Document Number 20221020239 (P-COE, Exh. 1); (2) “Substitution of Trustee” dated February 1, 2023, recorded in the Official Records of Los Angeles County on or about February 7, 2023, as Document Number 20230077165 (P-COE, Exh. 2); (3) “Notice of Default” dated February 2, 2023, recorded in the Official Records of Los Angeles County on or about February 7, 2023, as Document Number 20230077166 (P-COE, Exh. 3); (4) “Notice of Trustee’s Sale” dated May 15, 2023, recorded in the Official Records of Los Angeles County on or about May 17, 2023, as Document Number 20230320172 (P-COE, Exh. 4); and (5) “Trustee’s Deed Upon Sale” dated April 2, 2024, recorded in the Official Records of Los Angeles County on or about April 3, 2024, as Document Number 20240215383 (P-COE, Exh. 5), is granted.

On May 31, 2024, Plaintiff had Defendant served with a Three-Day Notice to Vacate Premises and Land. (Decl. of Aguirre ¶¶2-3, Exhs. 1-2.) On June 11, 2024, Plaintiff filed the operative Complaint against Defendant for unlawful detainer. On July 8, 2024, Defendant filed an Answer.

On August 23, 2024, Plaintiff filed the instant motion for summary judgment. Defendant filed an opposition on October 1, 2024. As of the date of this hearing no reply has been filed.

Plaintiff alleges he is the legal owner of 3425 Midvale Ave., Los Angeles, CA 90034 (“Subject Property”) and is entitled to possession. (Complaint ¶¶1-2.) Plaintiff alleges on or about January 24, 2024, he acquired ownership of the Subject Property at a nonjudicial foreclosure sale duly noticed and conducted in accordance with Civil Code §2924, and his title was perfected by the recordation of a Trustee’s Deed Upon Sale (“TDUS”) in his favor, in the Official Records of Los Angeles County, California on April 3, 2024. (Complaint ¶9, Exh. 1.)

Plaintiff alleges on information and belief that Defendant is currently in possession of the Subject Property or claims a right to occupancy or possession of the Subject Property without any right to do so. (Complaint ¶10.)

Plaintiff alleges on or about May 31, 2024, he caused to be served upon Defendant (by a registered process server) a written notice requiring Defendant to quit/vacate and deliver possession of the Subject Property to Plaintiff (“Notice to Quit”). (Complaint ¶11, Exhs. 2-3.)

Plaintiff alleges more than three (3) days have passed since the service of the Notice to Quit and Defendant has failed and refused to deliver possession of the Subject Property. (Complaint ¶13.) Plaintiff alleges Defendant continues to be in possession of the Subject Property, willfully and without permission of Plaintiff. (Complaint ¶13.)

Plaintiff alleges the reasonable value of the use and occupancy of the Subject Property is a sum not less than $107.28 per day. (Complaint ¶14.) Plaintiff alleges Defendant’s unlawful detention of the Subject Property has caused Plaintiff damages, and such damages will continue to accrue, at a sum not less than $107.28 per day until the time of judgment. (Complaint ¶14.)

Plaintiff requests restitution and possession of the Subject Property, costs of suit, and damages for the unlawful detention of the Subject Property in a sum not less than $107.28 per day from the date of filing the complaint through the date of judgment, for each day Defendant remains in possession of the Subject Property. (Prayer ¶¶1-3.)

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (C.C.P. §437c(c).)

The elements of a claim for unlawful detainer based upon sale of real property at a trustee’s sale are set forth in C.C.P. §1161a, and require that the plaintiff show: (1) the sale was conducted in compliance with Civil Code §2924; (2) proper service of a notice to quit; and (3) the defendant’s failure to vacate the subject property within the time prescribed in the notice to quit. (C.C.P. §1161a(b)-(c).)

A recital in the trustee’s deed upon sale of compliance with all of the requirements of Civil Code §2924, regarding the mailing of copies of notices, or the publication of a copy of the notice of default, or the personal delivery of the copy of the notice of default, or the posting of copies of the notice of sale or the publication of a copy thereof shall constitute prima facie evidence of compliance with these requirements. (Civ. Code §2924(c).)

Further, a provision in a deed of trust may provide that such recitals in a trustee’s deed may be prima facie proof of the regularity of the sale, and that no further evidence is necessary to establish title and right to possession of the purchaser. (Sorensen v. Hall (1934) 219 Cal. 680, 682-683; see Pacific States Savings & Loan Co. v. O’Neill (1936) 7 Cal.2d 596, 599.)

Plaintiff submitted evidence that he acquired title to the Subject Property at a trustee’s sale conducted in accordance with Civil Code §2924. Specifically, Plaintiff submitted evidence that the Deed of Trust was secured by the Subject Property. (P-USSF 1.) On February 7, 2023, Lenders T.D. Service, Inc. was substituted as the successor trustee under the Deed of Trust and, immediately thereafter, the trustee of the Deed of Trust recorded a Notice of Default against the Subject Property. (P-USSF 3-4.) On May 17, 2023, more than 90 days later, the trustee of the Deed of Trust recorded a Notice of Trustee’s Sale against the Subject Property. (P-USSF 5.) Afterward, on January 24, 2024, the trustee of the Deed of Trust conducted a non-judicial foreclosure sale, whereby Plaintiff obtained ownership of the Subject Property. (P-USSF 6.) Finally, on April 3, 2024, a Trustee’s Deed Upon Sale was recorded, conveying ownership of the Subject Property to Plaintiff. (P-USSF 7.)

The Trustee’s Deed Upon Sale contained a recital of compliance with the Deed of Trust and Civil Code §2924. Specifically, the recorded Trustee’s Deed Upon Sale contains a recital of compliance with applicable law and the provisions of the Deed of Trust, as follows:

This conveyance is made in compliance with the terms and provisions of the Deed of Trust executed by MIN S. LEE, A MARRIED WOMAN AS HER SOLE AND SEPARATE PROPERTY and recorded on 10/26/2022, in Book Page Instrument Number 20221020239 of Official records, in the office of the Recorder of LOS ANGELES County, California, under the authority and powers vested in the Trustee designated in the Deed of Trust or as the duly appointed Trustee, default having occurred under the Deed of Trust and pursuant to the Notice of Default and Election to Sell under the Deed of Trust recorded 02/07/2023, in Book Page Instrument Number 20230077166 of Official records, Trustee having complied with all applicable statutory requirements of the State of California and performed all duties required by the Deed of Trust including sending of a Notice of Default and Election to SELL within 10 days after its recording and a Notice of Sale at least 20 days prior to the Sale Date by certified mail, postage pre-paid to each person entitled to notice in compliance with California Civil Code 2924b.

Notice of Trustee’s Sale was published once a week for three consecutive weeks commencing 05/23/2023 in DAILY COMMERCE, a newspaper, and at least 20 days before the date fixed therein for sale a copy of the Notice of Trustee’s Sale was posted in a conspicuous place on the property described above and in one public place in the city where the sale was to be held. At the time and place fixed in said notice, Trustee did, by public announcement, and in said provided, postpone the sale from time to time thereafter and did sell the property described above on 01/24/2024 at public auction to the Grantee herein. Grantee being the highest qualified bidder therefor, for $l,422,198.92 cash, lawful money of the United States, or by the satisfaction of the indebtedness then secured by said Deed of Trust.

Plaintiff submitted evidence that he properly served a three-day Notice to Quit on Defendant. (P-USSF 9-10.) Finally, Plaintiff submitted evidence that Defendant remains in possession of the Subject Property. (P-USSF 11.)

Plaintiff met his burden to demonstrate there is no triable issue of material fact and it is entitled to judgment as a matter of law. Plaintiff shifts the burden to Defendant to raise a triable issue of material fact.

Defendant raises a triable issue of material fact as to whether the foreclosure sale to Plaintiff was duly perfected and deemed final.

Civil Code §2924m, a recently enacted California foreclosure statute made effective January 1, 2021, provides, “a Trustee’s Sale of property under a power of sale contained in a deed of trust or mortgage on real property containing one to four residential units pursuant to Section 2924g shall not be deemed final” when the winning bidder, as here, is not a prospective owner-occupant, requiring a post-sale notice of the foreclosure in the manner and form prescribed by §2924m(e). (See Civ. Code §2924m(c)(1).)

Civil Code §2924m illustrates out the conditions for a sale to deemed final and sets forth the procedures in the event the sale is not final. (See Civ. Code §2924m(e)-(h).) The enactment of Civil Code §2924m created a post-sale opportunity up to 45-days for “prospective owner-occupants” of the subject property to match the highest and best bid at the auction. (See Civ. Code §2924m.)

The post-sale notice required by the statutes states that the Trustee or an authorized agent, “not later than 48 hours after the Trustee’s Sale of property under §2924g, to post on the internet website set forth in the Notice of Trustee’s Sale, a) the date on which the trustee’s sale took place, b) the amount of the last and highest bid at the trustee’s sale, and c) an address at which the trustee can receive documents sent by U.S. mail and by a method of delivery providing overnight delivery.” (See Civ. Code §2924m(e)(1).)

“The term ‘deemed final’ in §2924m means the point in time when the foreclosure sale is considered completed and equitable title transfers from the mortgagor/trustor to the buyer. Thus, title in four or fewer residential units remains with the mortgagor/trustor until the sale is ‘deemed final’ pursuant to §2924m(c). Cal. Civ. Code § 2924m(f).” (In re Spikes (Bankr. E.D. Cal. Aug. 5, 2024, No. 23-21965) 2024 WL 3649505, at pg. *3.)

“‘Deemed finality’ is deferred for up to 45 days if during the initial 15 days any eligible tenant buyer or prospective owner-occupant (or certain related entities) submits a bid or nonbinding written notice of intent to bid. Cal. Civ. Code §2924m(c)(4)(B); [In re Hager (Bankr. E.D. Cal. 2023) 651 B.R. 873, 882.] [¶] As noted, title to the property remains with the mortgagor or trustor until the sale is ‘deemed final’ as provided in § 2924m. Cal. Civ. Code § 2924m(f). [¶] This procedure for finality prevails over any conflicting finality and perfection provisions in § 2924h. Cal. Civ. Code § 2924m(h).” (In re Spikes, 2024 WL 3649505, at pg. *4.)

When the internet posting requirement under §2924m(e)(1) is not made or is defective, the veracity of the statements by the Trustee made in the Trustee’s Deed is deemed false. “[C]onventional foreclosure law teaches that a false trustee declaration invalidates the ensuing trustee’s deed.” (In re Spikes, 2024 WL 3649505, at pg. *4.) “It is apparent that the internet posting is intended to be available to the general public and to persons who are interested in becoming owner-occupants, rather than real estate foreclosure portfolio investors who would not be owner-occupants. It follows that the §2924m(e) internet announcement needs to be in plain English and needs to be set forth in substantially the same format as stated in the statute.” (In re Spikes, 2024 WL 3649505, at pg. *5.)

Here, Plaintiff’s title was not duly perfected and deemed final because neither TDSERVICE or its authorized agent can prove compliance with §2924m(e)(1). The website, www.servicelinkasap.com, provided in the Notice of Trustee’s Sale in the Los Angeles County Recorder’s Office, assigned instrument number 20230320172 (“NOTS”) (Plaintiff’s Exhibit 8 at pg. 2) does not provide the general public, in plain English and in substantially the same format as stated in the statute, the information necessary to be in compliance.

Therefore, there exists an issue of material fact as to whether Plaintiff’s sale cannot be “deemed final” under §2924m(e), and whether title remains in Defendant pursuant to Civil Code §2924m(h). (See In re Spikes, 2024 WL 3649505, at pgs. *6-*7.)

Hon. Daniel M. Crowley

Judge of the Superior Court