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California Appeals Court Says “Enough!” in Dismissing Homeowner’s Multiple Wrongful Foreclosure Claims – Glass & Goldberg | Financing, Property & Bankruptcy Law
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California Appeals Court Says “Enough!” in Dismissing Homeowner’s Multiple Wrongful Foreclosure Claims

California Appeals Court Says “Enough!” in Dismissing Homeowner’s Multiple Wrongful Foreclosure ClaimsA California appeals court has said “Enough!” to a homeowner’s ongoing wrongful foreclosure suits, dismissing all claims as barred by res judicata and collateral estoppel.

In Boyce v. T.D. Service Company, et. al., plaintiff signed a $1.15 million note secured by a deed of trust on his Santa Barbara home. Three years later, he defaulted on the loan and the lender sought to foreclose. To avoid this, plaintiff filed an emergency bankruptcy petition, the first in a three-year string of litigation that included an appeal of the bankruptcy court’s ruling that granted the trustee relief of stay, an unlawful detainer action after plaintiff refused to leave the home following the trustee’s sale and appealing a finding of summary judgment in the defendant’s favor in the unlawful detainer action.

After the home was sold and the plaintiff was evicted, he then filed additional suits for wrongful foreclosure, declaratory relief, quiet title and violations of the Unfair Practices Act against multiple entities involved in the foreclosure action, including the original and subsequent lenders, the trustee, the company that prepared and recorded the notices of default and trustee’s sale and the purchaser of the property. A trial court sustained defendants’ demurrers on the grounds of res judicata/collateral estoppel, which the plaintiff then appealed.

The Second Appellate District affirmed the trial court’s decision, finding that the prior bankruptcy court’s orders barred the wrongful foreclosure claims by res judicata, which extended to all defendants who had a substantial interest in the foreclosure action. The court also found that a res judicata bar was created by the unlawful detainer judgment.

In his opinion for the court, Associate Justice Kenneth R. Yegan wrote, “Appellant lost in the bankruptcy court. He lost in United States District Court. He lost in the unlawful detainer court. He lost in the Appellate Department of the Superior Court. He lost in Superior Court. He now loses here. As the late eminent federal appellate jurist Rugierro Aldisert would say, “Basta,” which translates from Italian to English as, Enough!”

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