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Herrera v Deutsch 5-31-11 Cal 3rd District

SEE HERRERA DECISION GOES PUBLIC MAKING IT BINDING ON OTHER COURTS

The Substitution of Trustee recites that the Bank “is the present beneficiary under” the 2003 deed of trust. As in Poseidon, this fact is hearsay and disputed; the trial court could not take judicial notice of it. Nor does taking judicial notice of the Assignment of Deed of Trust establish that the Bank is the beneficiary under the 2003 deed of trust. The assignment recites that JPMorgan Chase Bank, “successor in interest to WASHINGTON MUTUAL BANK, SUCCESSOR IN INTEREST TO LONG BEACH MORTGAGE COMPANY” assigns all beneficial interest under the 2003 deed of trust to the Bank. The recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. Defendants offered no evidence to establish that JPMorgan Chase Bank had the beneficial interest under the 2003 deed of trust to assign to the Bank. The truthfulness of the contents of the Assignment of Deed of Trust remains subject to dispute (StorMedia, supra, 20 Cal.4th at p. 457, fn. 9), and plaintiffs dispute the truthfulness of the contents of all of the recorded documents.

STUNNING APPELLATE DECISION “GETS IT” AND DEALS DEUTSCH A BLOW FROM WHICH IT CANNOT RECOVER

The Rules of Evidence Finally Prevail — NO Presumptions and NO Judicial Notice

Slowly but surely, every point made on this blog, started 3 1/2 years ago, is coming true. Don’t lose hope. I knew that eventually the cards would fall the other way. The reason I knew is that the basic law being applied in this decision is inescapable. The failure of the trial judge to apply basic law was reversible error. The failure of the homeowner to properly plead his case might have had something to do with that, but the Appellate Court got the main points anyway. So here are some of the quotes that highlight the decision: (Special Thank You to Jake Naumer)

Plaintiffs Robert and Gail Herrera lost their house in South Lake Tahoe to a nonjudicial foreclosure sale. They brought suit to set aside that sale. They challenge whether the parties that conducted the sale, defendants Deutsche Bank National Trust Company (the Bank) and California Reconveyance Company (CRC), were in fact the beneficiary and trustee, respectively, under a deed of trust secured by their property, and thus had authority to conduct the sale.

Defendants also provided a declaration by a custodian of records for CRC, in which the custodian did not expressly declare that the Bank was the beneficiary and CRC the trustee. Instead, she merely declared that an Assignment of Deed of Trust and a Substitution of Trustee had been recorded and these recorded documents indicated the Bank had been assigned the deed of trust and that CRC had been substituted as trustee.

The Bank claimed to be the owner of the Property by virtue of a trustee’s deed recorded “by an entity purporting to be the trustee.”

Plaintiffs alleged CRC was not the trustee and had no authority to conduct a trustee’s sale, and believed no such sale had taken place. They further alleged any promissory note supporting the 2003 deed of trust was “time barred by the statute” and the maker, if any, “was lulled into believing that no action would be taken to enforce the 2003 [deed of trust] because no collection actions were taken within a reasonable time and no legally required notices of deficiency were sent or recorded.”

Plaintiffs alleged the original promissory note and deed of trust no longer existed and the Bank’s deed was invalid “as it is based solely upon purported copies which have no force and effect.”

The third cause of action was to quiet title to the Property. Plaintiffs alleged defendants had no original, verifiable promissory note or deed of trust and had no standing to foreclose. They further alleged all rights, title and interest asserted by defendants “were sublimated into a non-functional `security’ instrument that gives no one entity rights in individual notes and deeds of trust.” No defendant had an interest in the Property, but they had placed a cloud upon plaintiffs’ title.

The Bank and CRC moved for summary judgment or summary adjudication on each cause of action, contending there was no triable issue of fact as to any of plaintiffs’ claims. They claimed the undisputed evidence showed that the loan was in default, the Bank was the beneficiary under the deed of trust and CRC was the trustee. The default was not cured and CRC properly noticed the trustee’s sale. Notice of the sale was sent to plaintiffs and California law did not require the original promissory note to foreclose. The Bank and CRC further contended that to quiet title, plaintiffs must allege tender, or an offer of tender, of the amount owed.

defendants [Bank and CRC] requested that the court take judicial notice of certain documents pursuant to Evidence Code sections 451, subdivision (f) and 452, subdivisions (d), (g) and (h). These documents were:
(1) the Trustee’s Deed upon Sale recorded August 13, 2008, under which plaintiffs took title to the Property;
(2) a Grant Deed recorded December 13, 2002, showing the transfer of the Property to Sheryl Kotz;
(3) the Deed of Trust recorded April 30, 2003, with Sheryl Kotz as trustor and Long Beach Mortgage Company as trustee and beneficiary (the 2003 deed of trust);
(4) an Assignment of Deed of Trust recorded February 27, 2009, assigning all interest under the 2003 deed of trust to the Bank by JPMorgan Chase Bank, as successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company;
(5) a Substitution of Trustee recorded February 27, 2009, under which the Bank substituted CRC as trustee under the 2003 deed of trust;
(6) a “Notice of Default and Election to Sell [the Property] Under Deed of Trust” recorded February 27, 2009;
(7) a Notice of Trustee’s Sale under the 2003 deed of trust recorded May 29, 2009; and
(8) a Trustee’s Deed upon Sale recorded July 6, 2009, under which the Bank, as foreclosing beneficiary, was the grantee of the Property.

plaintiffs admitted the description of the Property and that they purchased it on June 24, 2008, at a foreclosure sale; they disputed all of the remaining facts. They asserted that the Brignac declaration was without foundation and contained hearsay and that all of the recorded documents contained hearsay.

They [Plaintiffs-Homeowners] contended defendants failed to meet their burden of proof for summary judgment because their request for judicial notice and Brignac’s declaration were inadmissible hearsay. They further contended the notice of default and the notice of trustee’s sale failed to meet statutory requirements of California law. Finally, they asserted defendants lacked standing to foreclose because they had not produced even a copy of the promissory note.
Plaintiffs moved to strike the declaration of Brignac as lacking foundation and containing hearsay. They also opposed the request for judicial notice. They argued the recorded documents were all hearsay. Citing only the Federal Rules of Evidence and federal case law grounded on the federal rules, plaintiffs argued a court cannot take judicial notice of disputed facts contained in a hearsay document. Plaintiffs disputed “virtually everything” in the recorded documents, arguing one can record anything, regardless of its accuracy or correctness.

Thus, initial issues framed by the pleadings are whether the Bank was the beneficiary under the 2003 deed of trust and whether CRC was the trustee under that deed of trust.

plaintiffs contend the trial court erred in taking judicial notice of the disputed facts contained within the recorded documents. We agree.

“Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. (Love v. Wolf (1964) 226 Cal.App.2d 378, 403.) “When judicial notice is taken of a document, . . . the truthfulness and proper interpretation of the document are disputable.” (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9 (StorMedia).)

Defendants also relied on Brignac’s declaration, which declared that the 2003 deed of trust permitted the beneficiary to appoint successor trustees. Brignac, however, did not simply declare the identity of the beneficiary and the new trustee under the 2003 deed of trust. Instead, she declared that an Assignment of Deed of Trust and a Substitution of Trustee were recorded on February 27, 2009. These facts add nothing to the judicially noticed documents; they establish only that the documents were recorded.
Brignac further declared that “[t]he Assignment of Deed of Trust indicates that JPMorgan Bank [sic], successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company, transfers all beneficial interest in connection with the [deed of trust] to Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4.” (Italics added.) This declaration is insufficient to show the Bank is the beneficiary under the 2003 deed of trust. A supporting declaration must be made on personal knowledge and “show affirmatively that the affiant is competent to testify to the matters stated.”

At oral argument, defendants contended that the recorded documents were actually business records and admissible under the business record exception. We note that Brignac did not provide any information in her declaration establishing that the sources of the information and the manner and time of preparation were such as to indicate trustworthiness. (Evid. Code, § 1271, subd. (d).)5 Information concerning this foundational element was conspicuously lacking.6 Yet, this information was critical in light of the evidentiary gap establishing the purported assignments from Long Beach Mortgage Company to Washington Mutual Bank to JPMorgan Chase Bank. The records used to generate the information in the Assignment of Deed of Trust, if they exist, were undoubtedly records not prepared by CRC, but records prepared by Long Beach Mortgage Company, Washington Mutual and JPMorgan Chase. Defendants have not shown how Brignac could have provided information about the source of that information or how those documents were prepared. (See Cooley v. Superior Court (2006) 140 Cal.App.4th 1039

the timing of those purported assignments relative to the recording of those events on the Assignment of Deed of Trust cannot be found in the Brignac declaration or anywhere else in the record.
We also note that Brignac did not identify either the February 27, 2009 Assignment of Deed of Trust, or another key document, the February 27, 2009 Substitution of Trustee, as business records in her declaration. Rather, she referenced both documents in her declaration by stating that “[a] recorded copy” was attached as an exhibit. In light of the request for judicial notice, we take this statement to mean that the exhibits represented copies of records on file at the county recorder’s office.7

had the documents reflecting the assignments and the substitution been offered as business records, there would have been no need to request that the court take judicial notice of them. Accordingly, we reject defendants’ newly advanced theory.
Brignac’s declaration is lacking in yet another way. It is confusing as to the effect of the Substitution of Trustee. She declares, “The Substitution by Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4 substitutes the original trustee, Long Beach Mortgage Company for California Reconveyance Company.” Brignac’s declaration (and defendants’ statement of undisputed facts) can be read to state that the Bank substituted Long Beach Mortgage Company for CRC as trustee, rather than that CRC was substituted for Long Beach Mortgage Company. We must strictly construe this statement against the moving party. (Mann, supra, 38 Cal.3d at p. 35.) Even if we were to construe Brignac’s declaration to state that the Bank substituted CRC as trustee under the 2003 deed of trust, it would be insufficient to establish CRC is the trustee. A declaration that the Substitution of Trustee by the Bank made CRC trustee would require admissible evidence that the Bank was the beneficiary under the 2003 deed of trust and thus had the authority to substitute the trustee. As explained ante, defendants failed to provide admissible evidence that the Bank was the beneficiary under the 2003 deed of trust.

[SUMMARY JUDGMENT FOR DEUTSCH WAS REVERSED AND REMANDED. DEUTSCH, WHO PROBABLY DOESN’T EVEN KNOW THE CASE IS PENDING, IS SCREWED]

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: Assignment of Deed of Trust, authority to substitute the trustee, Brignac, business records, California Reconveyance Company, COMPETENCE OF WITNESS, CRC, creditor, DEED OF TRUST, Deutsche Bank National Trust Company, disclosure, evidence, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, hearsay, Herrera, JPMorgan Chase Bank, judicial notice, Long Beach Mortgage Company, quiet title, rescission, RESPA, securitization, Substitution of Trustee, TILA audit, TIMING OF ASSIGNMENTS, trustee, Washington Mutual Bank | 92 Comments »