The Ryan Firm is proud to announce a recent victory obtained in the California Court of Appeal, Sixth District, in Taptelis v. Homeward Opportunities Fund I Trust 2019-2 by Senior Attorney Mike Stoltzman. Our firm successfully affirmed the judgment, securing a favorable outcome for our client. The result is the culmination of excellent briefing supplemented by strategic arguments on appeal.
In Taptelis, a foreclosing beneficiary of a loan secured by a deed of trust, Homeward, obtained real property after a nonjudicial foreclosure. After receiving title to the property, Homeward lawfully initiated an unlawful detainer matter against the former borrower. Homeward prevailed at trial, regained possession of the subject property, and thereafter sold the property to a bona fide purchaser third party.
On appeal, the former borrower argued that Homeward’s judgment must be reversed because the record disclosed that Homeward did not establish “duly perfected title,” a prerequisite to obtaining a judgment for unlawful detainer in a post-foreclosure eviction. The former borrower’s argument was premised on the false assertion that if a foreclosed borrower initiates litigation and records a lis pendens against the Subject Property, that the foreclosure purchaser’s title is clouded in a manner that prevents the purchaser from obtaining “duly perfected title.” As argued by The Ryan Firm on behalf of Homeward, this was a novel argument without support in California law. Our team diligently navigated through the complexities of the case, leaving no stone unturned in our pursuit of justice for our client.
In its now depublished opinion, the Sixth District originally agreed with Taptelis and reversed Homeward’s judgment for unlawful detainer. The Court of Appeal reasoned “Homeward was required to, at its option, either expunge the lis pendens or resolve the wrongful foreclosure litigation before it could serve the notice to quit necessary to initiate an unlawful detainer action.” This was a radical departure from existing foundational unlawful detainer law and, if upheld, would completely eviscerate the “summary” procedure of a California unlawful detainer.
The Ryan Firm immediately petitioned the Court of Appeal for rehearing on a number of grounds. Namely, that the lis pendens in this case was void based on the former borrower’s failure to record the lis pendens with the required proof of service, and because the Court’s holding is based on a demonstrable legal error.
The Sixth District granted the petition for rehearing and ordered further briefing. After considering the further briefing, the Court of Appeal reversed its prior opinion and affirmed Homeward’s judgment for unlawful detainer in full. In doing so, the Court of Appeal recognized that the lis pendens in this case was absolutely void and did not represent any purported cloud on title that would disrupt Homeward’s duly perfected title established before initiating the unlawful detainer process. This decision reaffirms our commitment to excellence and the tireless advocacy we provide to each of our clients.
The Ryan Firm remains at the forefront of secured lending litigation and post-foreclosure unlawful detainer matters, both at the trial court and on appeal. Please join us in congratulating Mr. Stoltzman on his masterful briefing and argument, as well as his terrific result for our client and the mortgage and property investor industry. If you have any questions or require further information regarding this case or any other legal matter, please do not hesitate to contact us. We are here to serve you and provide the assistance you need.