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In Re Eleazar Salazar United States Bankruptcy Court Southern District of California

In Re Eleazar Salazar United States Bankruptcy Court Southern District of California

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Published by Foreclosure Fraud
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Categories:Types, Research, Law
Published by: Foreclosure Fraud on Apr 13, 2011
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04/20/2013

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Case10-17456-MM13Filed
04/11/11
Doc48Pg.1of16
12345678
9
10111213Inre:14ELEAZARSALAZAR,15
WRITTENDECISION-FORPUBLICATION
ENTERED
'IJP
R112011
LED
APR112011
ClERK,U.S.BANKRUPTCYCOURTSOUTHERNDISTRICTOFCALIFORNIABY
l-»
DEPUTY
UNITEDSTATESBANKRUPTCYCOURTSOUTHERNDISTRICTOFCALIFORNIA)BANKRUPTCYNO:10-17456-MM13
)
)CHAPTER:13
)
)MEMORANDUMDECISIONREMOTION)FORRELIEFFROMAUTOMATICSTAY
)
)RS#RVP-l
)
)DATE:1125/11)TIME:11:00a.m.)CRTRM:1))JUDGE:MargaretM.Mann
)))
))
))
 
MEMORANDUMDECISION
Case10-17456-MM13Filed04/11/11Doc48Pg.2of16
1USBankNationalAssociation("USBank"),TrusteefortheC-BASSMortgageLoanAsset-2BackedCertificates,Series2006-CB2,nonjudiciallyforeclosedontheresidenceofDebtorEleazar3Salazar("Salazar"),byexercisingthepowerofsaleunderthedeedoftrust.Atthetimeitforeclosed,4USBankwasnottheoriginalbeneficiaryofrecord,andithadnotrecordedanassignmentofthedeed5oftrustconveyingtoitaninterestinthedeedoftrust.6Aftertheforeclosure,twolawsuitswerefiledinstatecourt:Salazarfiledtoinvalidatethe7foreclosuresaleandtoseekdamagesagainstUSBankandotherparties,'andUSBankfiledtoregain8possessionoftheresidencethroughanunlawfuldetaineractionagainstSalazar.Theunlawfuldetainer9suitwasonthevergeoftrialwhenSalazarfiledhischapter13bankruptcycase.10Inhisbankruptcy,SalazarseekstoreinstateUSBank'sloanagainsthisresidenceandcurethe11default,andUSBankseeksrelieffromstayinthebankruptcytoproceedwithitsunlawfuldetainer12
action.'
Salazaropposesstayrelief,arguingUSBankdoesnothavestandingtoseekrelieffromstay13becausetheforeclosuresalewasdefective,duetoUSBank'sfailuretorecordanassignmentofits14interestbeforeforeclosuresasrequiredbyCaliforniaCivilCodesection2932.5.
3
USBankresponds15thatCivilCodesection2932.5isnotapplicabletoitsdeedoftrust,andMERS'statusastheoriginal16beneficiaryofthedeedoftrustobviatedtherecordingoftheassignmenttoUSBank.17WhileUSBankmeetstheminimaltestforstandingtoseekrelieffromstay,Salazar's18foreclosuresalechallengemuststillbeaddressedtoresolvethemeritsofUSBank'srelieffromstay19motion.RelyinguponcontrollingCaliforniastatutoryanddecisionalauthority,theCourtconcludes20MERS'originalinvolvementinthisloandoesnotprovidetalismanicprotectionagainstUSBank's21foreclosuredeficiencies.USBank'sfailuretorecorditsbeneficiarystatusbeforeforeclosureleft22Salazarwithequitabletitletohisresidence.Althoughthisequitabletitlemustbefinallyestablishedin2324
Theforeclosuresuitwasremovedtodistrictcourt,whichwasremandedtostatecourtafterthefederalclaimsweredismissed.
25
2
TheCourthassubjectmatterjurisdictionoverthisproceedingpursuantto28U.S.C.
§
1334(2010).
26
Thisisacoreproceedingunder28U.S.C.§lS7(b)(2)(G)(2010).
27
3
AllstatutoryreferenceshereafteraretoCaliforniaCodesunlessotherwisespecified.
28
2
 
MEMORANDUMDECISION
Case10-17456-MM13Filed
04/11/11
Doc48Pg.3of16
1anadversaryproceedingratherthanarelieffromstaymotion,Salazarhasdemonstratedaprimafacie2casethattheforeclosuresalewasvoid.Salazarthushasasignificantpropertyinterestentitledto3protectionbytheautomaticstay,andtheCourtdeniesreliefatthistime.
4
I.BACKGROUND
5AccreditedHomeLenders,Inc.("Accredited")madealoan("Loan")toSalazarinOctober20056securedbyhisresidencelocatedat1268EmeraldWay,Calexico,California("Property").Salazar7executedapromissorynote("Note")toAccreditedtodocumenttheLoan.TosecuretheLoan,Salazar8executedafourpartydeedoftrust("DOT")amongSalazaras"Borrower",Accreditedas"Lender,"9ChicagoTitleCompanyastrustee,andMERSasbeneficiary.10UndertheDOT,theLender'srightsregardingtheLoanarepervasive.TheLenderisentitledto
11
receiveallpaymentsundertheNoteandtoenforcetheDOT,includingtheexclusiverighttoconducta12nonjudicialforeclosure.
4
13MERShasnoneoftheserightsundertheDOT,SandisnotevenmentionedintheNote.MERS
14
isnotgivenanyindependentauthoritytoenforcetheDOTunderitstermsandMERS'statusas15beneficiaryundertheDOTisonly"nominal."WhiletheBorroweracknowledgesintheDOTthat16MERScanexerciseLender'srightsas"necessarytocomplywithlaworcustom.:"this1718
4
UndertheDOT,theLenderhastheexclusiverightto:"(i)therepaymentoftheLoan,andall19renewals,extensionsandmodificationsoftheNote;and(ii)theperformanceofBorrower'scovenantsandagreementsunderthisSecurityInstrumentandtheNote."Inaddition,underthecovenantsexecuted20betweenLenderandSalazar,Lenderisgrantedexclusiveauthoritytoacceleraterepayment,"givenotice21toBorrowerpriortoacceleration,"and"invokethepowerofsale"throughwrittennoticetotheTrusteeintheeventofdefault,andappointsuccessortrustees.DOTatpp.3,13.22TheDOTdefinesMERSasa"separatecorporationthatisactingsolelyasanomineeforLender23andLender'ssuccessorsandassigns."TheDOTstates,"MERSisthebeneficiaryunderthisSecurityInstrument."DOTatp.2.24
6
TheDOTonpagethreeinthedescriptionofcollateralsection,providesthat"Borrowerunderstandsand25agreesthatMERSholdsonlylegaltitletotheinterestsgrantedbyBorrowerinthisSecurityInstrument,but,
if
necessarytocomplywithlaworcustom,
MERS(asnomineeofLenderandLender'ssuccessorsandassigns)has26theright:toexerciseanyorallofthoseinterests,including,butnotlimitedto,therighttoforecloseandselltheProperty;andtotakeanyactionrequiredofLenderincluding,butnotlimitedto,releasingorcancellingthis27SecurityInstrument."DOTatp.3(emphasisadded).283

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