Coker v. J.P. Morgan
California anti-deficiency statutes are cryptic and often complicated, but can provide some relief to borrowers who lose their home.
Coker involved a borrower who defaulted on her mortgage. J.P. Morgan agreed to a short sale for less than the loan if the borrower agreed to be responsible for the balance. After the short sale, the bank pursued the borrower. The Court of Appeals held that California Code of Civil Procedure §580b applies to short sales, invalidating the agreement of the borrower to be personally responsible for a deficiency.
Section 580b prohibits deficiency judgments for loans made by a seller of real property and secured by the property and to loans made in connection with the purchase of a 1-4 unit residence occupied by the buyer. The statute is not limited to foreclosures.
J.P. Morgan should have known better, but may have had great success with persuading other borrowers to agree to personal liability without having to resort to the courts. Maybe banks and bankers would fare better in the court of public opinion if they would just know the rules and follow them.
Diamond v. Superior Court (Casa Del Valle HOA)
An HOA tried to foreclose on a condominium owner over a $9,750.00 special roof assessment. The trial court held that the HOA substantially complied with the notice provisions in the Davis-Stirling Common Interest Development Act, denying the owner’s motion for summary judgment.
On an application for a peremptory writ of mandate, the court of appeals held that the HOA needed to comply strictly with the notice requirements and that failure to do so was fatal to the foreclosure action,
An HOA has tremendous power to regulate its members. The California Court of Appeals, however, tempered this power by recognizing that rendering homeless a woman of limited means who had owned her condominium since 1978 over less than $10,000.00 was not fair when the HOA did not even follow the proper procedures.
In a side note, this opinion was originally ordered not to be published in the official reports. After the original decision, the HOA petitioned for a rehearing. The Court of Appeals denied the petition and decided to publish the opinion. Sometimes it is best to accept defeat graciously rather than run the risk of setting an unfavorable precedent.
Click for ABA Journal article.
In an age of outrageously high tuition and disappointingly low employment numbers, McGeorge Law School in Sacramento is facing reality by cutting its student body by 40%. This can only be a first step to redefining the delivery of a legal education.
New Law Sends Tweeting Jurors to Jail | CEB Blog – Your Partner In Practice.
What more needs to be said other than, “Be careful, you California jurors.”
Shaun Martin’s California Appellate Report.
The appellate department of the Los Angeles Superior Court held that it was not a material breach of a lease when a tenant failed to obtain personal property renter’s insurance. As a result, a breach of this obligation will not support a notice to quit.
Click for PDF of opinion
The case does not address the issue of when a landlord requires tenants to obtain property and liability coverage. Requiring a tenant to have liability coverage is far more important to a landlord, who will often face suit, however questionable, for the negligence of an uninsured tenant.
What good is a lease term requiring renter’s insurance? Unfortunately for landlords– not much.