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FROM LEGAL DEPARTMENT AT CONSUMER RIGHTS DEFENDERS: NEWS FLASH, MAY 2016:
NEW CASE ALLOWING CHALLENGES AND DEFINATION OF “PREJUDICE” IN WRONGFUL FORECLOSURE CASES…”ON THE HEELS OF YVANOVA”
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Now Read this summary of Sciarratta decision esp. last sentence *****:
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
STATE OF CALIFORNIA
Plaintiff and Appellant,
U.S. BANK NATIONAL ASSOCIATION, as
trustee, etc., et al.,
Defendants and Respondents.
(Super. Ct. No. RIC1301485)
APPEAL from a judgment of the Superior Court of Riverside County, John
Vineyard, Judge. Reversed and remanded.
This is an action for wrongful foreclosure. The homeowner, Monica Sciarratta,alleges that as a result of a void assignment of her promissory note and deed of trust, the
entity that conducted a nonjudicial foreclosure sale on her home had no interest in eitherthe underlying debt or the subject property. In Yvanova v. New Century Mortgage Corp.(2016) 62 Cal.4th 919 (Yvanova), the California Supreme Court held that in a case such
as this—where a homeowner alleges a nonjudicial foreclosure sale was wrongful because
of a void assignment—the homeowner has standing to sue for wrongful foreclosure. (Id.
at pp. 942–943.) However, Yvanova did not address “any of the substantive elements of
the wrongful foreclosure tort” (id. at p. 924), and in particular did not address “prejudice
. . . as an element of wrongful foreclosure.” (Id. at p. 929, fn. 4.)
This case presents the question of “prejudice” left open in Yvanova: Where a
homeowner alleges foreclosure by one with no right to do so, do such allegations alone
establish the requisite prejudice or harm necessary to state a cause of action for wrongful
foreclosure? Or instead, to adequately plead prejudice, does the plaintiff-homeowner
have to allege the wrongful foreclosure interfered with his or her ability to pay on the
debt, or lead to a foreclosure that would not have otherwise occurred?
Although Yvanova did not address this precise issue, the policy considerations that
drove the standing analysis in Yvanova compel a similar result here. As the Supreme
Court stated in Yvanova, it would be an “‘odd result’ indeed” were a court to conclude a
homeowner had no recourse where anyone, even a stranger to the debt, had declared a
default and ordered a trustee’s sale. (Yvanova, supra, 62 Cal.4th at p. 938.)…. .
*******Accordingly, we conclude that a homeowner who has been foreclosed on by one with no right to do so—by those facts alone—sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure.
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