JOHN E. BOUZANE, ESQ. SBN: 79804 ., || LAW OFFICES OF JOHN E. BOUZANE ? ||634 OAK COURT SAN BERNARDINO, CA 92410 909-889-5151 909-889-3900 (FAX) 5 || Attorney for PLAINTIFF SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF STANISLAUS 21 ||U.S. BANK NATIONAL ASSOCIATION, ) Case No: 645068 Plaintiff, TRIAL BRIEF a DATE: 9/2/10 M4 Time: 8:30 A.M. ANTHONY J. MARTIN Dept: 22 Defendants, 16 TO DEFENANT, ANTHONY J. MARTIN AND TO HIS ATTORNEY OF RECORD, 20 2; || TIMOTHY L. Mc CANDLESS 2 PLEASE TAKE NOTICE that Plaintiff submits the following trial brief 7 INTRODUCTION AND STATEMENT OF FACTS. | This is a post foreclosure unlawful detainer action that is brought pursuant to | Code of Civil Procedure § 1161a after the completion of a Trustee's Sale and pertection| ||of the Trustee’s Deed after sale‘The salient facts of this action are: (1) Plaintiff, U.S. Bank National Association acquired the assets and liabilities of Downey Savings and Loan through the FDIC on 11/21/08 (attached hereto, marked Exhibit “t” and incorporated herein by reference is a true and correct copy of the Assumption Agreement), this transaction occurred by the FDIC, through the Office of the Office of the Thrift Supervision ordered Downey Financial Corp. and Downey Savings and Loan to cease operations on 9/5/08 (Attached| | hereto, marked Exhibit “2” and incorporated herein by reference is a true and correct copy of the Cease and Desist Order dated 9/5/08; (2) Downey Savings and Loan, the foreclosing beneficiary of that certain Deed of Trust dated 2/23/06, which listed Defendant, Anthony J. Martin, as Trustor, acquired the subject property at a aTrustee’s Sale that took place in accordance with Civil Code § 2924 et seq; (3) The Trustee's Deed Upon Sale was recorded on 5/22/09 (Attached hereto, marked Exhibits 3, 4, & 5 || are certified copies of the Notice of Default, Notice of Sale and Trustee's Deed Upon Sale); (4) Defendants were lawfully served with the Notice to Quit on 5/23/09; (5) || Defendants failed to vacate the subject property prior to the expiration of the notice and remain in possession of the subject property. Defendant's answer on file denies the material allegations of the complaint and | raises a number of affirmative defenses. Plaintiff expects Defendant to argue (1) that the Trustee's Deed Upon Sale is invalid due to pre-sale deficiencies; and (2) that U.S. Bank National Trust does not have ‘standing to bring this action; Plaintiff submits that the defenses raised by Defendant are invalid and cannot be litigated in this action as those defenses are an attack on the underlying loan obligationand pre-sale procedures which cannot be raised in a post foreclosure unlawful detainer | action, Moreover, Plaintiff submits that any argument based on a violation of Civil Code § 2923.5 cannot be made in the instant case and not viable after the recent decision in Mabry v. Superior Court (2010) 185 Cal. App. 4” 208). \ PLAINTIFF HAS PRESENTED A PRIMA FACIE CASE FOR UNLAWFUL DETAINER A. General Consideration Civil Code Section 1161a is the statutory basis for an unlawful detainer after the property is sold at a duly conducted trustee's sale Thus, when the property is sold at a foreclosure sale the occupant, who can be either the prior owner, or the person who is in possession of the property, may be subject fo an unlawful detainer action after ttle has been perfected. (Code of Civil Procedure Section 1161a(b)(2); Evans v. Superior Court (1977) 67 Cal. App. 3° 162. B. An Original or Certified Copy of Recorded Documents are Self- authenticating and Creates of Rebuttable Presumption as to Validity of the Recorded Document A certified copy of the trustee's deed is self-authenticating and needs no further foundation for its introduction into evidence at trial. (Evidence Code § 1600). | Further, once a recorded document, like a certified copy of a trustee's deed, qualifies for introduction into evidence under Evidence Code § 1600, it constitutes prima} facie evidence of the existence and content of the original recorded document. (Evidence Code § 1600(a)) and shifts the burden of proof on the validity of the recorded document to the opposing party. C. The Verified Complaint Sets Forth a Prima Facie Case for Judgment for | Plaintiff TRIAL BRIEFThe complaint in the instant case sets forth the prima facie allegations of an eviction action pursuant to Civil Code Section 1161a to wit: (1) the property was sold at a duly conducted trustee's sale, (2) Plaintiff was the purchaser at the trustee’s sale, (3) Plaintiff received a trustee's deed after the sale and duly perfected the title, (4) that Defendants were properly served with a Notice to Quit, (5) that Defendants failed to vacate in accordance with the Notice to Vacate and (6) that Defendants have wrongfully! held over. Plaintiff will introduce the original trustee's deed which is presumed to be true and constitutes prima facie evidence of the validity of the trustee’s deed upon sale. (Evidence Code § 1600). Based on the foregoing Plaintiffs are entitled to a judgment for possession of the subject property and monetary damages at the rate of $75.00 per day from 5/27/09 to the date of judgment. Plaintiffs are also entitled to their court costs. in the instant case Defendant is attempting to go behind the Trustee's Deed and argue that the trustee's deed in invalid. However, Defendant cannot and will not be able to produce any evidence to rebut the presumed validity of the Trustee's Deed Upon Sale. u NATURE OF UNLAWFUL DETAINER ACTIONS The unlawful detainer action is a summary procedure that is statutorily driven (Code of Civil Procedure Section 1161, et seq.) The primary purpose of the unlawful detainer action is to afford the landlord with an expeditious remedy for the recovery of possession. (Gray v. Whitmore (1971) 17 Cal. App. 3 4, 17-19). in addition to, but only incidentally, the landlord may recover a monetary judgment for the amount of any rent owed with interest. (Code of Civil Procedure Section 1174(a)8(b); Briggs vs. Elec. Memories & Magnetics Corp. (1975) 53 Cal. App. 3°* 900). TRIAL BRIEDue to the summary nature of an unlawful proceeding and the shorter time periods involved to get to trial the issues to be litigated in this type of action are very narrow, Thus, the only triable issues that can be litigated in an unlawful detainer action are those that go to the right of the landlord to recover possession of the subject property. (Vasey v. California Dance Co., Ine. (1977) 70 Cal. App. 3° 742, 748-747; Glendale Federal Bank v. Hadden (1999) 73 Cal. App. 4" 1150) A. The Defenses that a Defendant Can Raise in a Code of Civil Procedure § 11612 Action is Very Limited In recognition of these general principals our courts have limited which affirmative defenses can be pled in an action for unlawful detainer to those affirmative defenses directly relevant to the issue of the tenant's right to retain possession of the subject property. (Barela v. Superior Court (Valdlez) (1984) 30 Cal. 3° 244, 249, see approved Judicial Counsel Form “Answer-Unlawful Detainer Actions” Thus, any affirmative defense unrelated to the issue of possession is disallowed. | (ES. Bills, Inc. vs. Tzucanow (1985) 38 Cal. 3" 824, 830; Green vs, Superior Court (1984) 38 Cal. 2" 616, 632-633). Additionally, since the Defendant bears the burden of pleading all of the essential] elements of the affirmative defenses raised in the answer those defenses must be | supported by specific factual allegations. (See Rutter Group, Landlord/Tenant | Practice Guide, Section 8: 298-299; and Judicial Counsel Official Form Answer- Unlawful Detainer item 3)) Moreover, Defendant cannot attack the validity of the trustee’s sale without first | showing that he has tendered the amount due on the underlying obligation or has the ability to tender the amount due i H TRIAL BRIEF 57 m PLAINTIFF IS ENTITLED TO A JUDGMENT FOR POSSESSION 3 Our courts have routinely held that because of the summary nature of an * || Unlawful Detainer Action issues of litle may not be litigated in an Uniawiul Detainer 5 || Action. (Hugh vs. Cavanaugh (1962) 205 Cal. App. 2°° 495, 498-499; Evans vs. ‘Superior Court (1977) 67 Cal. App. 162, 168) : A. Plaint ® || Procedure § 1161a Action ’s Prima Facie Case in a Post Foreclosure Code of Civil ° Ithas also been held by the California Supreme Court that where the “plaintiff in| 20 || an unlawful detainer action is the purchaser at a trustee's sale, he or she need 14 || only prove a sale in compliance with the statute and the deed of trust, followed by’ 2 || the purchase at such sale, and the defendant may raise objections only on only 22 | that phase of the issue of title. Matters affecting the validity of the trust deed or 14 || primary obligation itself, or other basis defects in Plaintiff's title, are neither 15 |! properly raised in this summary proceeding, for possession, nor are they 16 || included by the judgment”. (Old National Financial Services, Inc, vs. Siebert (1987) 194 Cal. App. 3" 460, quoting from Chancey vs. Trausettel (1937) 9 Cal. 2" 158, 160). (Emphasis added) ed in a trustee's Deed Upon Sale complies | | Moreover, ifthe recitals con | with the requirement of Section 2924 et seq. then such deed is conclusively | presumed valid as to a bona fide purchaser for value and creates a rebuttable % || presumption in favor of a non-bona fide purchaser. (See Civil Code Section 2924 | et seq.) all Once Plaintif proves the prima facie case outlined in section 1 above the burden hifts to the Defendant to prove her affirmative defense. However, as stated above those defenses are very narrow in a post foreclosure unlawful detainer case. ‘TRIAL BRIEF 6u 16 First, it is well settled that issues that do not relate to possession of the subject property, such as attacks on Plaintiff's title, cannot be litigated in the Unlawful Detainer action. Plaintiff contends that the issue of title cannot be litigated in the instant case (See| High vs. Cavanaugh, supra) and that the title upon which Defendants are claiming ownership was properly foreclosed upon. Itis also well settled that a trustee's deed upon sale is superior to all other claims. (See Civil Code Section 2924 et seq.) Thus, in an unlawful detainer action in which plaintiff sought possession of property it had purchased at a trustee’s sale, defendant assertions of noncompliance with the procedure for trustee's sales set forth in Civ. Code, § 2924, does not raise a triable issue of fact, where the defendant fails to show by competent evidence that he/she had offered to do equity by tendering the amount of the debt for which the property was given as security, (MCA, Inc. vs. Universal Diversified Corporation (1972) 27 Cal. App. 3° 170, 177) In MCA, Inc. the court of appeal dealt with the very issue that is presented in this case, That is what defenses can be raised in a Code of Civil Procedure § 11612 action. The MCA court stated: “ The extent, however, to which a plaintiff's title may be a triable issue in an action brought pursuant to Code of Civil Procedure section 1161a, subdivision 3 was discussed by the California Supreme Court in Cheney v. Trauzettel, 9 Cal.2d 158, 160 [ 69 P.2d 832]; In our opinion the plaintiff need only prove a sale in compliance with the statute [Civ. Code, § 2924] and deed of trust, followed by purchase at such sale, and the defendant may raise objections only on that phase of the issue of title.’ (Emphasis added) (See also, Crummer v. Whitehead, 230 Cal. App.2d 264, 268} [40 CaLRptr. 826]; Kartheiser v. Superior Court, 174 Cal.App.2d 617, 620 [ 345 P.2d 135}, and Bliss v. Securily-First Nai. Bank, 81 Cal App.2d 50, 58-59 [ 183 P.2d 3121) “irrespective of the merits of [other] defenses raised by the answer, the alleged equitable grounds of altack on plaintiffs title have no place in the present summary proceeding, for if such issues are permissible, the proceeding entirely loses its summan character. ... Matters affecting the validity of the trust deed or primary obligation itself, orother basic defects in the plaintiff's title, are neither properly raised in this summary proceeding for possession [Code Civ. Proc., § 1164a, subd. 3}, nor are they concluded by the judgment.” ( Cheney v. Trauzettel, supra, at p. 160; see also, Higgins v. Coyne, 25 Cal App 2d 69, 73 [ 170 P.2d 25}; Seidell v. Anglo-California Trust Co. 55 Cal.App.2d 913, 924 [ 132 P.2d 12}; Delpy v. Ono, 22 Cal App.2d 301, 303 [ 70 P.2d || 960}, Cf. Union Oil Co. v. Chandler, 4 Cal App.3d 716) The MCA court went on to state “As a consequence, defendant's attacks upon plaintiffs title other than by attempting to. show plaintiff's noncompliance with Civil Code section 2924 did not constitute valid defenses to plaintiff's action, and therefore did not raise triable issues of fact. In addition, defendant's assertion of plaintiff's noncompliance with Civil Code section 2924 did not raise a triable issue "because we do nol find in the record any offer on the part of [defendant] to pay the full amount of the debt for which the property was given as security. Some disposition on the part of {defendant} to do equity by tendering the amount of the debt due is a prerequisite to [a] demand for a judgment cancelling the sale. ( Py v. Pleitner, 70 Cal.App.2d 576, 582 | 161 P.2d 393], and cases cited trustes See also Shimpones v. Stickney, 219 Cal. 637, 649 | 28 P.2d 6731)" ((Crummer v. Whitehead, supra, at pp. 268-269; see also, Humboldt etc. Society v. March, 136 Cal 321, 324 [ 68 P. 968].)” ‘The logic behind the MCA decision is still valid today. Here, Defendant will attempt to litigate some super technical defense which Defendant will claim should defeat Plaintiff's right to reclaim possession of the subject property following the successful completion of the non-judicial foreclosure proceeding. it must be noted that Defendant also attempted to delay the prosecution of this, matter by filing Bankruptcy Case No: 10-90072 on 1/11/10 which was converted to a Chapter 7 proceeding on 3/9/10. In that proceeding Plaintiff was forced to file a Motion TRIAL BRIEF @for Relief From Stay pursuant to 11 U.S.C. 362a to pursue it’s state court remedies. The filing of the bankruptcy case is simply further evidence of Defendant's bad faith defense in this action. Vv U.S. BANK NATIONAL ASSOCATION HAS STANDING TO BRING THIS ACTION On November 21, 2008, “the United States Treasury Department's Office of Thrift Supervision declared Downey insolvent and appointed the FDIC as Downey's receiver. The FDIC accepted the receivership pursuant to 12 U.S.C pursuant to 12 U.S.C. §1821(C\(3N(A).” (Salazar v. Trustee Corps (2009 WL 690185 (S.D. Cal). ‘The Federal Deposit Insurance Corporation (FDIC) as receiver for Downey Savings and Loan, sold the banking operation of Downey Savings and Loan, to U.S. Bank National Association, (See Bank Acquistion Information press release that is attached to Plaintiff's Request for Judicial Notice). A copy of the Purchase and Assumption Agreement thal the FDIC used to sell the assets and liabilities of Downey Savings to U.S. National Bank is also attached to the Request to Take Judicial Notice). “The FDIC, as the receiver of an institution, succeeds to ‘all rights, titles, powers and privileges of that institution, including taking over all the institutions assets and | obligations.” (See Salazar v. Trustee Corp, supra; 12 U.S.C. § 1821(d)(2(A}(B), (H); (Sharpe vs. FDIC (9" Cir 1997) 126 F. 2" 1147). As receiver for Downey the FDIC has the right to find a buyer for the assets and liabilities of that institution and sell off the assets and liabilities 12 U.S.C. § 1823). Thus, since the FDIC (1) had the authority to take over the assets and liabilities of Downey Savings pursuant to 12 U.S.C. 1821 et seq.; (2) had authority to sell those assets and liabilities; (3) do so pursuant to its charter on 11/21/08 and (4) U.S. National Bank Association purchased the assets and liabilities of Downey on 11/21/08, U.S. ‘TRIAL BRIEF 9National Bank Association, as the successor in interest to the FDIC, would stand in the same shoes as Downey Savings and would have the standing to bring this action v DEFENDANT'S DEFENSE UNDER CIVIL CODE SECTON 2923.5 IS BARRED BY MABRY V. SUPERIOR COURT (2010) 185 Cal. App. 208 Civil Code § 2923.5 which was effective on 9/6/08 requires a lender, prior to recording @ Notice of Default, to contact the borrower to determine (1) if the borrower has the financial ability to stay in the subject property; and (2) whether the borrower could qualify for a loan modification or some other loan assistance program Civil Code § 2923.5 was the legislature's response to the “foreclosure crisis” of 2007-2009 and applied to Trust Deeds executed from 1/1/03 to 12/31/07. In the instant case the Notice of Default was recorded prior the effective date of Civil Code § 2923.5. Thus, Plaintiff's predecessor-in-interest was not required to attach a declaration on compliance with Civil Code § 2823.5 to the Notice of Default However, Civil Code §2923.5 also requires that if the Notice of Default was on a trust deed recorded during the period from 1/1/03 to 12/31/07 was recorded without the required declaration then such a Declaration would be required on any Notice of Sale recorded after the effective date of the statute. On 6/10/10 Division 3 of the Fourth District Court of Appeal issued a long awaited) decision on the effect of Civil Code § 2923.5 and what remedies would be available to the borrower if a violation of Civil Code § 2923.5 occurred In Mabry v. Superior Court (2010) 185 Cal. App. 4!" 208 the court held (1) that a borrower had a private cause of action to enforce the provisions of Civil Code § 2923.5; and (2) that the remedy for a violation of Civil Code § 2923.5 would be a postponement of the sale if and only if the action under 2923.5 was brought prior to the sale. TRIAL BRIEF 1in the instant case Defendant did not file an action under 2923.5 challenging the Notice of Sale prior to the foreclosure sale. Thus, Defendant cannot challenge the instant unlawful detainer case based on the alleged violation of Civil Code § 2923.5. Moreover, as stated above Defendant's allege defense under Civil Code § 2923.5 is an attack on the pre-sale procedures which simply cannot be litigated in the instant case. Finally, Defendant's alleged defense under Civil Code § 2923.5 is also barred by Defendant's failure to tender the amount due on the underlying loan obligation. CONCLUSION The evidence is this case will clearly show that (1) Downey Savings and Loan ch listed Defendant, was the original beneficiary of the Deed of Trust dated 2/9/06 wi Anthony J. Martin as the original trustor for the mortgage encumbering the subject property located at 1312 Harbour Town Lane, Modesto, CA; (2) Downey Saving and Loan caused a Notice of Default and Election to Sell Under the Deed of Trust to be recorded on 11/29/07; (3) Downey Savings and Loan caused a Notice of Sale to be recorded on 10/21/08; (4) on 5/22/09 the Trustee's Deed Upon Sale was duly recorded in the Office of County Recorder naming Downey Savings and Loan as the Grantee, (5) Downey and Savings and Loan was acquired by Plaintiff, U.S. Bank National Trust Association pursuant to a Assumption and Purchase Agreement and Loan Sale Agreement between the FDIC and Downey Savings and Loan which became final on 10/28/09, (6) Defendant was lawfully served with a Notice to Quit on May 5/23/09; (7) | Defendant has remained in possession of the subject property since the expiration of |the Notice to Quit; and (8) the daly fair market rental value ofthe subject property is $75.00 per day Based on the foregoing Plaintiff will be able to prove its prima facie case and is entitied to a judgment in this matter.16 a8 ay Dated: 8/31/10 Li ices of John E. Bouzane y,John E. Bouzane TRIAL BRIEF 22