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Brenda Bardasian et al v. the Superior Court of Sacramento County

December 15, 2011

BRENDA BARDASIAN ET AL., PETITIONERS,
v.
THE SUPERIOR COURT OF SACRAMENTO COUNTY, RESPONDENT; SANTA CLARA PARTNER'S MORTGAGE CORPORATION ET AL., REAL PARTIES IN INTEREST.



ORIGINAL PROCEEDINGS in mandate. David I. Brown, Judge. Peremptory writ issued. (Super. Ct. No. 34201000082041)

The opinion of the court was delivered by: Robie , J.

CERTIFIED FOR PUBLICATION

Before a notice of default may be filed, a lender must contact the borrower in person or by phone to assess the borrower's financial situation and explore options to prevent foreclosure. (Civ. Code, § 2923.5, subd. (a) (hereafter section 2923.5).) Here, petitioners Brenda Bardasian (Brenda) and Matt Bardasian moved for a preliminary injunction to enjoin the trustee's sale of their house because the lender had not complied with section 2923.5. Real parties in interest Marix Servicing LLC (Marix) and JP Morgan Chase Bank, N.A. (JP Morgan Chase) opposed the motion. The trial court ruled the Bardasians "established that [the lender] did not comply with Civil Code section 2923.5 prior to the issuance of the notice of default." The trial court enjoined the foreclosure sale "pending compliance with Civil Code 2923.5." The trial court, however, required the Bardasians to "post a preliminary injunction bond in the amount of $20,000" and make $500 monthly payments to Marix because the Bardasians are "behind almost $100,000 on [their] payments, and it is inequitable to allow [them] to continue to live in the house for free. . . ."

The Bardasians did not post the $20,000 bond or make the first $500 monthly payment, so the trial court granted Marix's motion to dissolve the preliminary injunction.

On the Bardasians' petition for writ of mandate in this court, we hold the trial court could not order the Bardasians to post an undertaking*fn1 because it ruled on the merits that the lender had not complied with section 2923.5. Because the trial court erred in ordering the Bardasians to post an undertaking, the trial court likewise erred in dissolving the injunction for their failure to do so. We will therefore direct the trial court to vacate its order dissolving the injunction and to modify its order granting the injunction to delete the bond requirement and monthly $500 payment.

FACTUAL AND PROCEDURAL BACKGROUND

In July 2010, the Bardasians filed a complaint against Santa Clara Partner's Mortgage Corporation and others alleging fraud and related causes of action arising out of the Bardasians' mortgage loan that closed in October 2005 for their house on Vallejo Drive in Orangevale.

On September 16, 2010, a notice of default was recorded against the property. A declaration attached to the notice of default stated, "Bank of America Home Loans . . . has contacted the borrower to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure." The declaration was signed by a "Mortgage Servicing Specialist" of "BAC Home Loans."

In December 2010, the Bardasians filed a motion for a preliminary injunction to enjoin a trustee's sale of their home. The grounds for the motion included the following: "[t]he [n]notice of [d]efault did not comply with Civil Code section 2923.5 which requires as a prerequisite to the issuance of a [n]notice of [d]efault that a borrower be contacted by phone or in person to assess their financial condition and explore options to foreclosure." The matter was removed to federal district court before the trial court issued a ruling and was therefore dropped from the trial court's calendar.

In March 2011, the Bardasians filed a new motion for preliminary injunction to enjoin Bank of America and BAC Home Loans from conducting a trustee's sale of their home. Attached was Brenda's declaration stating, "At no [time] prior to the issuance of the Notice of Default has any person or entity acting on behalf of anyone claiming to be my lender or anyone contacted me to explore options to foreclosure or to assess my financial condition." "At no time was there any personal meeting or telephonic meeting between me or any defendant or any person acting on their behalf to discuss options to foreclosure or to assess my financial condition." "At all times I was available to meet with or talk to by telephone anyone acting on [behalf of] any defendants . . . either in person or telephonically, to provide me options other than foreclosure."

BAC Homes Loans and Bank of America responded they were the wrong parties to the lawsuit. The current servicer of the loan was Marix and the current investor was JP Morgan Chase.

On April 6, 2011, the Bardasians moved ex parte for a temporary restraining order to restrain the trustee's sale of their home that was scheduled for April 14, 2011, and for an order to show cause why the preliminary injunction should not issue.

Also on April 6, 2011, the Bardasians amended the operative complaint to substitute Marix and JP Morgan Chase ...


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