Kolodge v. Boyd
| Decision Date | 05 April 2001 |
| Docket Number | No. A091181.,A091181. |
| Citation | 105 Cal.Rptr.2d 749,99 Cal.App.4th 349 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Robert S. KOLODGE, Plaintiff and Appellant, v. Michael E. BOYD, Defendant and Respondent. |
Martin Reilley, Cheryl P. Martinsen, Lanahan & Reilley, LLP, Santa Rosa, CA, for Appellant.
Robert T. Dolan, Gaglione & Dolan, Los Angeles, CA, for Respondent.
Plaintiff Robert S. Kolodge appeals from the summary judgment granted in favor of defendant Michael E. Boyd in an action for damages for negligence and negligent misrepresentation in appraising certain real property. Appellant contends the trial court erred in concluding he made a "full credit bid" at a nonjudicial foreclosure sale, because the amount of his bid was less than the total outstanding mortgage debt. In the alternative, appellant maintains that even if he made a full credit bid, the full credit bid rule as construed by the California Supreme Court in Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 44 Cal.Rptr.2d 352, 900 P.2d 601 does not as a matter of law bar his causes of action for negligence and negligent misrepresentation, as the trial court found. Appellant argues, finally, that the trial court also erred in finding he did not reasonably rely on respondent's allegedly negligent misrepresentation at the time he entered his bid, as there is a triable issue as to that material fact.
We shall conclude there is a triable issue as to whether appellant entered a full credit bid, and for that reason reverse the judgment and remand the matter. We shall also determine that, if it is properly determined that appellant made a full credit bid, the full credit bid rule would not bar his claims unless he did not reasonably rely on respondent's appraisal in entering his bid at the foreclosure sale, and, as to that issue, we find the trial court erred in finding no triable issue of disputed fact.
Between May 20, 1992, and June 2, 1993, appellant made a series of three loans to Yvonne Power in the total amount of $660,000. The first loan, evidenced by a promissory note secured by real property owned by Power located at 7071 and 7059 Bucktown Lane in Vacaville, was made on May 20, 1992 for $400,000. On May 18, 1992, a few days before appellant made the initial loan, respondent appraised 7071 Bucktown Lane as having a value of $800,000 and 7059 Bucktown Lane as having a value of $1 million. The $400,000 loan was in second position on 7059 Bucktown Lane behind a first mortgage of approximately $850,000 held by First Republic Bank. The $400,000 loan was also secured by 7071 Bucktown Lane, and was in first position on that property. On October 27, 1992, appellant loaned Power an additional $80,000, which was secured by 7071 and 7059 Bucktown Lane. In June 1993, appellant made a third loan to Power of $180,000, which was also secured by the two Bucktown Lane properties and was in a junior position to his prior two loans. The complaint alleges appellant relied on respondent's 1992 appraisals when making all three loans.
Power defaulted on all three notes and ultimately filed for bankruptcy protection on September 1, 1995. In a declaration, appellant stated that at the time Power filed for bankruptcy "she owed me a total in excess of $1 million, comprised of $660,000 in principal plus interest, late charges, and $108,678.51 I paid to senior lienors and or property tax obligations, in order to protect my junior secured position" plus other expenses he incurred in order to maintain the property and "protect the value of my security." During the course of the bankruptcy proceedings appellant moved to lift the bankruptcy stay so that he could foreclose on the security properties. In December 1995 appellant's counsel in the bankruptcy proceeding sought and obtained a new appraisal of the Bucktown Lane properties from Palmer, Groth & Pietka, Inc., a licensed real estate appraiser. This appraisal stated that the current combined value of both properties as of November 1995 was $985,000, substantially less than respondent's earlier $1,800,000 valuation of the two properties. Appellant testified at deposition that he paid for this appraisal, and that he was "shocked" when at some unspecified time he received a copy. The record is unclear whether appellant introduced and relied on the new appraisal in the bankruptcy proceeding.
In February 1996, appellant foreclosed on the third loan of $180,000. A trustee's sale was held on February 28, 1996. The "Trustee's Deed Upon Sale" states that the unpaid debt on the note at issue was $180,000, that appellant was the foreclosing beneficiary, that he was the highest bidder, and that the $180,000 he paid was "in full satisfaction of the indebtedness then secured by said Deed of Trust."
Appellant commenced this litigation on February 27,1997, by filing a complaint asserting causes of action against respondent and others for negligence and misrepresentation. Less than a month later respondent filed a motion for summary judgment, asserting that, under the decision of the California Supreme Court in Alliance Mortgage Co. v. Rothwell, supra, 10 Cal.4th 1226, 44 Cal.Rptr.2d 352, 900 P.2d 601, "[t]he decision by [appellant] to enter a full credit bid on the $180,000 loan as a matter of law precludes his claiming damages against [respondent]." After hearing argument, the trial court granted the motion. The court's ruling stated that appellant The ruling went on to note that appellant's action was also barred because his "alleged reliance on the 1992 appraisal was unreasonable in light of the subsequent appraisal...." The trial court determined that appellant "has not demonstrated that a triable issue of fact remains to any cause of action against [respondent]."
The threshold question is whether appellant made a full credit bid. If he did, the remaining questions are whether his causes of action for negligence and misrepresentation are foreclosed either because Alliance Mortgage Co. v. Rothwell, supra, 10 Cal.4th 1226, 44 Cal.Rptr.2d 352, 900 P.2d 601 only permits a lender who made such a bid to sue a third party tortfeasor for fraud (not negligence or negligent misrepresentation), or because appellant did not rely on respondent's appraisals in making his full credit bid, as required by Alliance Mortgage.
A trial court ruling on a motion for summary judgment is subject to de novo review. (Buss v. Superior Court (1997) 16 Cal.4th 35, 60, 65 Cal.Rptr.2d 366, 939 P.2d 766; Lazar v. Hertz Corp. (1999) 69 Cal. App.4th 1494, 1506-1507, 82 Cal.Rptr.2d 368.) Our review is limited to the facts shown in the affidavits supporting and opposing the motion and the uncontested factual allegations set forth in the pleadings. In this court, as in the trial court, the moving party's affidavits are strictly construed, and the opponent's affidavits are liberally construed. Due to the drastic nature of summary judgment, any doubts about the propriety of granting the motion must be resolved in favor of the party opposing the motion. (Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, 874, 191 Cal. Rptr. 619, 663 P.2d 177; Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 398 P.2d 785; Stratton v. First Nat. Life Ins. Co. (1989) 210 Cal.App.3d 1071, 1083, 258 Cal.Rptr. 721.) While we review a summary judgment ruling under the same general principles applicable at the trial level, we must independently determine the construction and effect of the facts presented to the trial court as a matter of law. (1 Eisenberg et al., Cal. Prac. Guide: Civ. Appeals and Writs (The Rutter Group 2000) ¶ 8:165, p. 8-95 et seq. and cases there cited.)
The Evidence Does Not Satisfactorily Establish That Appellant Made a Full Credit Bid.
(Romo v. Stewart Title of California (1995) 35 Cal.App.4th 1609, 1614, 42 Cal.Rptr.2d 414, fn. omitted.)
Acknowledging the interrelationship between foreclosure and antideficiency statutes (Alliance Mortgage Co., supra, 10 Cal.4th at p. 1236, 44 Cal.Rptr.2d 352, 900 P.2d 601), the Supreme Court designed the full credit bid rule to ensure the integrity of nonjudicial foreclosure sales insofar as such sales may relate to the debtor protection policies of the...
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