Angell v. Superior Court
| Decision Date | 16 July 1999 |
| Docket Number | No. E022187,E022187 |
| Citation | 86 Cal.Rptr.2d 657,73 Cal.App.4th 691 |
| Court | California Court of Appeals Court of Appeals |
| Parties | , 99 Cal. Daily Op. Serv. 5736, 1999 Daily Journal D.A.R. 7307 Kendall L. ANGELL et al., Petitioners, v. The SUPERIOR COURT of San Bernardino County, Respondent; Verdugo Trustee Service Corporation et al., Real Parties in Interest. |
When does a mistake or irregularity in a nonjudicial foreclosure sale justify the trustee's refusal to issue a trust deed after accepting a high bid? We hold that a material mistake which is discovered after the acceptance of a bid but before issuance of a trustee's deed justifies the trustee's refusal to complete the sale. Accordingly, we affirm the trial court's decision granting the trustee's summary judgment motion.
Glendale Federal Bank held a single deed of trust to secure payment of two promissory notes on a certain apartment building on 17th Street in San Bernardino. One note was for $2,750,000 and the second note was for $350,000. In early 1996, the debtor advised Glendale Federal Bank that it would be unable to make payments on its loans. The bank officer in charge of the account was under the impression that each loan was secured by its own deed of trust. She therefore authorized Verdugo Trustee Service Corporation to act as foreclosure trustee and directed it to foreclose the presumed second deed of trust for $350,000. She reasoned that "if a third-party purchased the subject property at the trustee's sale, then the third-party would have purchased it subject to the obligation secured by the senior loan ($2.4 million)."
A notice of default was then prepared and recorded. It recites that the amount owed is $14,850.52 and that the debt is due to one note in the sum of $350,000. A notice of sale was also prepared and recorded. It states that the property would be sold on the courthouse steps at noon on September 11, 1996, and that the amount due was $377,011.75.
Since the deed of trust actually included both notes, the notice of default and the notice of sale were in error. The actual reinstatement amount was $124,429.93, and the actual unpaid balance was $2,938,542.21.
One of the buyers, Kendall Angell, submitted a declaration that states: 1 A Verdugo employee confirmed that Mr. Angell talked to several Verdugo employees on the morning of the sale.
Petitioner Angell stated in his deposition that he investigated the rentals on the property the morning of the sale and formed the opinion that the property was worth between $800,000 and $1,000,000. Petitioner Yunis thought that the property was worth $1,000,000.
At the sale, Glendale Federal entered a credit bid of $340,000. Petitioners then bid $340,000.01 and the property was sold to them. Petitioners tendered the amount due in cashier's checks.
In the afternoon of September 11th, after the sale, petitioner Angell called Verdugo and was incorrectly told that the deed of trust was a first deed of trust. Later that afternoon, petitioner Yunis called Verdugo and Verdugo's employee informed him that the total obligation against the property was over $2 million, not $340,000. Petitioners then stopped payment on their cashier's checks. Nevertheless, petitioners also signed an agreement that afternoon to sell the property for the sum of $895,000.
The next morning, petitioners went to Verdugo's office and asked that the sale be canceled and their checks returned. Verdugo agreed and returned the cashier's checks to petitioners. Petitioners claimed, and Verdugo employees denied, that the checks were returned with the understanding that petitioners had five days to consult legal counsel and return the money and confirm the sale. They later did so, claiming the security for the $2.4 million dollar note was extinguished by the trustee's sale. Their subsequent tender of the amount bid at the sale was refused.
Subsequently, another foreclosure sale was scheduled but canceled when the debtor gave Glendale a deed in lieu of foreclosure. The property was sold to a third party purchaser on May 1, 1997, for $1.3 million.
Petitioners then filed this action alleging that they are the true owners of the property.
Verdugo filed a cross-complaint for declaratory relief and rescission. This cross-complaint was not resolved by the trial court's granting of the summary judgment motions. Accordingly, we asked Verdugo whether it would be willing to dismiss the cross-complaint in order to comply with the one final judgment rule. Verdugo declined, stating that it would prefer that we amend the trial court judgment to provide that the cross-complaint is dismissed for mootness. It asserts that, if done in this manner, the cross-complaint would be revived in the event we reversed the judgment.
Mr. Angell naturally desires consideration of his appeal on the merits. He therefore requests that this court treat his appeal as a petition for an extraordinary writ if we are not willing to amend the trial court judgment in the manner requested by Verdugo.
The "one final judgment rule" provides that an appeal may be taken from a final judgment, but not an interlocutory judgment. (Code Civ. Proc., § 904.1, subd. (a)(1).) To determine whether a particular declaratory judgment is final, the " 'general test' " is " '... that where no issue is left for future consideration except the fact of compliance or noncompliance with the terms of the first decree, that decree is final, but where anything further in the nature of judicial action on the part of the court is essential to a final determination of the rights of the parties, the decree is interlocutory.' " (Olson v. Cory (1983) 35 Cal.3d 390, 399, 197 Cal.Rptr. 843, 673 P.2d 720, quoting from Lyon v. Goss (1942) 19 Cal.2d 659, 670, 123 P.2d 11; accord, Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 741, 29 Cal.Rptr.2d 804, 872 P.2d 143.)
Therefore, "an appeal cannot be taken from a judgment that fails to complete the disposition of all the causes of action between the parties even if the causes of action disposed of by the judgment have been ordered to be tried separately, or may be characterized as 'separate and independent' from those remaining." (Morehart v. County of Santa Barbara, supra, 7 Cal.4th 725, 743, 29 Cal.Rptr.2d 804, 872 P.2d 143 [].) "A petition for a writ, not an appeal, is the authorized means for obtaining review of judgments and orders that lack the finality required by Code of Civil Procedure section 904.1, subdivision (a)." (Morehart, supra, at pp. 743-744, 29 Cal.Rptr.2d 804, 872 P.2d 143.)
The same rule applies when some of the causes of action are alleged in a cross-complaint. Thus, when a judgment resolves a complaint, but does not dispose of a cross-complaint pending between the same parties, the judgment is not final and thus not appealable. (Southern Pacific Land Co. v. Westlake Farms, Inc. (1987) 188 Cal.App.3d 807, 825-826, 233 Cal.Rptr. 794.) In that event, the appeal must be dismissed (Nicholson v. Henderson (1944) 25 Cal.2d 375, 381, 153 P.2d 945), unless the appellate court chooses to treat the improper appeal as a petition for an extraordinary writ. (Morehart v. County of Santa Barbara, supra, 7 Cal.4th 725, 744-747, 29 Cal.Rptr.2d 804, 872 P.2d 143.)
Here, the presence of an unresolved cross-complaint defeats appealability. Although Verdugo asks us to amend the trial court judgment to preserve appealability, none of the cases it cites were decided after Morehart. We therefore conclude that the judgment is not appealable.
We then must decide whether to dismiss the appeal or treat the appeal as a petition for an extraordinary writ. A purported appeal from a nonappealable order may be considered to be a petition for an extraordinary writ if (1) the briefs and record before us contain in substance all the elements prescribed by rule 56 of the California Rules of Court for an original mandate proceeding and (2) there are extraordinary circumstances justifying the exercise of that discretionary power. (Morehart v. County of Santa Barbara, supra, 7 Cal.4th 725, 745-747, 29 Cal.Rptr.2d 804, 872 P.2d 143; Olson v. Cory, supra, 35 Cal.3d 390, 400-401, 197 Cal.Rptr. 843, 673 P.2d 720.)
The first requirement is met by the record here. In addition, we find that the second requirement is also met because it is Verdugo that has the outstanding cross-complaint. Since the existence of the unresolved cross-complaint destroys appealability, Verdugo could defeat petitioner's...
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