Biancalana v. T.D. Service Co. 10/31/11 CA6

SUPREME COURT CASES

Laws-info.com » Cases » California » Court of Appeal » 2012 » Biancalana v. T.D. Service Co. 10/31/11 CA6

State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: H035400

Case Date: 02/15/2012

Preview:Filed 10/31/11

CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT

DAVID BIANCALANA, Plaintiff and Appellant, v. T.D. SERVICE COMPANY, Defendant and Respondent.

H035400 (Santa Cruz County Super. Ct. No. CV162804)

Plaintiff David Biancalana successfully bid on a piece of real property at a trustee's sale. Defendant trustee T.D. Service Company (TD) subsequently discovered it had erroneously conveyed the delinquency amount ($21,894.17) to the auctioneer, instead of the correct opening credit bid of $219,105 submitted by the beneficiary to TD. TD informed Biancalana of the error, declined to issue a trustee's deed on sale and returned his cashier's check. Biancalana retendered the check to TD and demanded it issue the trustee's deed. When it failed to do so, he sued for quiet title, specific performance, declaratory and injunctive relief. TD's motion for summary judgment was initially denied. After TD successfully moved for reconsideration on the grounds of "new law," the trial court granted TD's motion and entered judgment in its favor. On appeal, Biancalana argues that the trial court erred in granting TD's motion for summary judgment as there was no irregularity in the foreclosure sale process. Biancalana also argues that the trial court erred in granting TD's motion for reconsideration as the case it determined constituted "new law"( i.e., Millennium Rock

Mortgage, Inc. v. T.D. Service Co. (2009) 179 Cal.App.4th 804 (Millennium Rock)) did not represent a change in the law, but simply applied existing law to a new fact pattern. We agree that the trial court erred in granting TD's motion for summary judgment and shall reverse the judgment.1 I. FACTUAL AND PROCEDURAL BACKGROUND A. The foreclosure sale

On or about July 22, 2008, TD was substituted in as trustee under a deed of trust securing real property located at 434 Winchester Drive in Watsonville, California (the subject property). TD subsequently provided notice that the subject property would be sold at a foreclosure sale scheduled to take place on September 10, 2008. The beneficiary submitted a specified credit bid in the amount of $219,105 for TD to use as the opening bid for the sale. However, TD erroneously submitted the delinquency amount of $21,894.17 to the auctioneer as the opening credit bid on the subject property. While researching upcoming foreclosure sales, Biancalana learned of the scheduled sale of the subject property and, on the day of the sale, called the telephone number TD listed on the sales notice to inquire about the opening bid. The recording advised that the opening bid for the property was $21,894.17. After checking comparable property values and asking a colleague to physically view the property, Biancalana again called the recording. The amount of the opening bid was unchanged. Biancalana decided to bid on the property, so he obtained a cashier's check in the amount of $22,000 and proceeded to the auction site. Having arrived before the scheduled start of the sale, Biancalana discussed this property and other foreclosures with the auctioneer. The auctioneer called TD twice before the start of the sale and spoke to

Based on that finding, we need not and do not consider whether the trial court properly granted reconsideration of its prior order denying TD's motion for summary judgment.

1

2

two different employees, both of whom advised him the opening bid for the property was $21,894.17. The auctioneer was not instructed by TD to make any further bids on the property over and above the opening bid. The sale commenced and the auctioneer, as instructed, announced that the opening bid on the subject property was $21,894.17. Biancalana submitted a bid of $21,896 and, when no other bids were forthcoming, the auctioneer declared this as the high bid. The auctioneer accepted a cashier's check in the amount of $22,000 from Biancalana. TD discovered the mistake when it reviewed sales figures from September 10, 2008. On September 11 or 12, 2008, TD notified Biancalana that the opening bid it submitted was incorrect, that the sale was void and that a new foreclosure sale would be scheduled. TD did not issue a trustee's deed upon sale and returned Biancalana's cashier's check. Biancalana rejected the check and sent it back to TD. When TD refused to issue the deed, Biancalana sued TD, among other defendants,2 for quiet title, specific performance, declaratory and injunctive relief. B. TD's motion for summary judgment

TD moved for summary judgment, arguing that the sale was invalid because its error precluded the beneficiary's proper opening bid of $219,105 from being announced at the auction. This procedural defect, coupled with the inadequate price, meant the sale was improper and voidable. Since the trustee's deed had not been issued, and TD was willing to return Biancalana's cashier's check, TD was entitled to a judgment in its favor. In his opposition, Biancalana argued there was no procedural irregularity in the sale, and TD could not void the sale merely because it mistakenly submitted the incorrect amount as the beneficiary's opening credit bid. Relying on 6 Angels, Inc. v. StuartWright Mortgage, Inc. (2001) 85 Cal.App.4th 1279 (6 Angels), Biancalana contended that The parties do not discuss the status of the proceedings with respect to these other defendants, and they are not parties to the appeal.
2

3

TD's mistake was committed outside the procedures set forth in the statutory foreclosure scheme and thus the sale could not be voided. The trial court heard the motion on September 14, 2009, and denied it. C. TD's motion for reconsideration

TD subsequently moved for reconsideration of its summary judgment motion, citing Millennium Rock, supra, 179 Cal.App.4th 804, as representing "a change in the law." According to TD, Millennium Rock involved "virtually identical" circumstances and, in that case, the Court of Appeal determined that a foreclosure sale was voidable due to the announcement of an incorrect opening credit bid. Biancalana argued reconsideration was not warranted because Millennium Rock did not represent a change in the law relating to foreclosure sales, but merely applied existing law to a different set of facts. Biancalana also noted that, in Millennium Rock, the operative mistake was made by the auctioneer, not the beneficiary's agent, and was thus part of the sales process. After granting reconsideration, the trial court granted TD's motion for summary judgment, finding "the mistake made by the trustee in causing the credit bid submitted by the foreclosing beneficiary to be reported incorrectly at the foreclosure sale was within the scope of the statutory duties of the foreclosure trustee and directly resulted in a grossly inadequate price received at the sale as compared with the amount of the credit bid submitted by the foreclosing beneficiary. As a result, [Biancalana] is seeking a windfall profit at the expense of the innocent beneficiary and it is therefore appropriate, since no trustee's deed upon sale was recorded, for the sale to be set aside and reheld with the checks submitted by [Biancalana] having been returned to him." Biancalana timely appealed.

4

II.

DISCUSSION A. Standard of review

The standard of review for an order granting a motion for summary judgment is de novo. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860 (Aguilar).) The trial court's stated reasons for granting summary judgment are not binding on the reviewing court, which reviews the trial court's ruling, not its rationale. (Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878.) On appeal from a summary judgment, we apply the same three-step process as the trial court. "Because summary judgment is defined by the material allegations in the pleadings, we first look to the pleadings to identify the elements of the causes of action for which relief is sought." (Baptist v. Robinson (2006) 143 Cal.App.4th 151, 159.) We then examine the moving party's motion. A defendant moving for summary judgment has the initial burden of showing that a cause of action lacks merit because one or more elements of the cause of action cannot be established or there is a complete defense to that cause of action. (Code Civ. Proc.,

Download Biancalana v. T.D. Service Co. 10/31/11 CA6.pdf