The ruling, dated September 7, 2012, represents another break through where a Federal judge actually applies the law and distinguishes the GOMES case from the typical WAMU-CHASE transfer scenario.
The link provides the full case and the key language is saved below. The bottom line:
“The court agrees with the premise, however, that judicial action may be used to challenge a non-judicial foreclosure process where the specific facts alleged in the complaint, taken as true at the pleading stage, demonstrate a failure to effect a valid transfer of beneficial interest in a manner that renders void the initiation of non-judicial foreclosure”
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
|SAN JOSE DIVISION MAURICIO MENA AND ALMA MENA,
JP MORGAN CHASE BANK, N.A.; U.S. BANK, N.A.; BANK OF AMERICA, N.A.,
|Case No.: 12-1257 PSG
ORDER GRANTING-IN-PART DEFENDANTS’ MOTION TO DISMISS
In Gomes v. Countrywide Home Loans, Inc., the court reiterated the non-judicial nature of California’s foreclosure scheme and courts’ refusal “to read any additional requirements into the non-judicial foreclosure statute.”36 The court in Gomes distinguished the issue before it, which was whether “the note-holder’s nominee [must] prove its authority to initiate a foreclosure proceeding” from other, non-binding cases in which district courts had allowed to proceed an action to determine whether the “wrong party had initiated the foreclosure process” due to an irregularity in the assignment of deed of trust. Other district court have relied in part on this distinction in allowing a plaintiff’s wrongful foreclosure claims where the plaintiff asserts a “specific factual basis” for which to challenge whether the party authorizing the foreclosure had such authority.
Plaintiffs argue that this case presents a specific factual basis for challenging the authority underlying the initiation of the foreclosure process. Whether Plaintiffs are correct that the allegations suffice to sustain the causes of action will be explored below. The court agrees with the premise, however, that judicial action may be used to challenge a non-judicial foreclosure process where the specific facts alleged in the complaint, taken as true at the pleading stage, demonstrate a failure to effect a valid transfer of beneficial interest in a manner that renders void the initiation of non-judicial foreclosure. This is consistent with California Civil Code Â§ 2924(a) allowing only a “trustee, mortgagee, or beneficiary, or any of their authorized agents” to initiate the foreclosure process. The court therefore turns to the allegations of wrongful foreclosure and slander of title to determine whether they establish that the entity or entities proceeding under the non-judicial foreclosure scheme held no beneficial interest in the Property at the pertinent time and lacked authority under the statute to proceed.
Slander of title “occurs when a person, without a privilege to do so, publishes a false statement that disparages title to property and causes pecuniary loss.” ”The recordation of an instrument facially valid but without underlying merit will give rise to an action for slander of title.”
In order to state a claim for slander of title, Plaintiffs must allege: “1) a publication, 2) which is without privilege or justification, 3) which is false, and 4) which causes direct and immediate pecuniary loss.”
As discussed above, the court does not find that Civil Code Section 2924(a) absolves the lawful nominee or trustee from acting only on behalf of a legitimate beneficial interest.
Plaintiffs have state a facially plausible claim that the non-judicial foreclosure process was not founded on a valid, beneficial interest.
PAUL S. GREWAL
United States Magistrate Judge