Developments of Interest

New Cases of Interest - January 7, 2013

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La Jolla Group II v. Bruce (2012) Cal.App.4th 461.  Plaintiffs in this case were purchasers of a home at a foreclosure sale, purchased the home in good faith, and thereafter brought a slander of title cross-complaint against the former homeowners and their attorneys who had filed an action to quiet title in the home and who had recorded a lis pendens on the basis that the purchasers purchased pursuant to a fraudulent second deed of trust.  The former homeowners and their attorney brought a motion to strike under the SLAPP statute.  The trial court granted the SLAPP motion, which was upheld by the court of appeal.

The court of appeal found that the purchaser could not state a viable claim for slander of title because of the absolute privilege that applied under Civil Code §47(b) to the recording of the lis pendens.  Additionally, the former owners had produced evidence which was not contradicted that established that the second deed of trust had been materially altered after it was signed and that the evidence of forgery established as a matter of law that the second deed of trust was void, and the buyers therefore could not acquire good title to the property as a result of their foreclosure sale purchase.  Accordingly, the SLAPP motion was properly granted because the buyers had no probability of prevailing on their claim.

Shuster v. BAC Home Loans Servicing, LP (2012) 211 Cal.App.4th 505.  This case also involves a home foreclosure with the purchaser having been sued by the borrower for wrongful foreclosure and breach of contract on the basis that the original deed of trust did not name a trustee.  After the borrowers had defaulted, a trustee was substituted in by the beneficiary and the substituted trustee recorded a notice of default, the borrowers failed to cure, and a notice of trustee sale was subsequently recorded.

The court held that "equity will not allow a trust to fail for lack of a trustee."  The failure to name an original trustee did not render the deed of trust unenforceable or prevent the subsequent appointment of a substitute trustee, or foreclosure of the deed of trust.

City of Pleasanton v. Board of Administration (2012) 211 Cal.App.4th 522.  In this case a city and a retired city employee sought to compel CalPERS to retroactively increase the retired employee's monthly retirement allowance.  The issue related to a portion of the compensation the employee had received as a division chief for the fire department, with CalPERS determining that that amount was not creditable for retirement purposes.  The court of appeal came down on the side of CalPERS, finding that CalPERS did not violate the due process rights of the employee by having a senior staff counsel of CalPERS also serve as the prosecutor at the hearing before the administrative law judge and as the advising attorney to the Board.  The court perceived no due process problem on the assumption that both sides' arguments on the issues were being presented to the Board at the same time, no agency staff involved in handling the employee's appeal voted or acted, in any supervisory capacity over the voting members of the Board, and there were no ex parte contacts between agency staff and other Board members.

The court attempts to distinguish Department of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Board (2006) 40 Cal.4th 1 and Nightlife Partners Ltd. v. City of Beverly Hills (2003) 108 Cal.App.4th 81. 

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