Sohal et al v. Federal Home Loan Mortgage Corporation et al

Filing 100

NOTICE OF QUESTIONS FOR HEARING. Signed by Judge Jeffrey S. White on November 8, 2012. (jswlc3, COURT STAFF) (Filed on 11/8/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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ROBERTA SOHAL, et al.,

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For the Northern District of California

United States District Court

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No. C 11-01941 JSW

Plaintiffs,
v.

NOTICE OF QUESTIONS FOR
HEARING ON MOTIONS FOR
SUMMARY JUDGMENT

FEDERAL HOME LOAN MORTGAGE
CORPORATION, et al.,

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Defendants.
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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD, PLEASE TAKE

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NOTICE OF THE FOLLOWING TENTATIVE RULING AND QUESTIONS FOR THE

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HEARING SCHEDULED ON NOVEMBER 9, 2012 at 9:00 A.M.:

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The Court has reviewed the parties’ memoranda of points and authorities and, thus, does

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not wish to hear the parties reargue matters addressed in those pleadings. If the parties intend to

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rely on legal authorities not cited in their briefs, they are ORDERED to notify the Court and

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opposing counsel of these authorities reasonably in advance of the hearing and to make copies

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available at the hearing. If the parties submit such additional authorities, they are ORDERED

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to submit the citations to the authorities only, with pin cites and without argument or additional

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briefing. Cf. N.D. Civil Local Rule 7-3(d). The parties will be given the opportunity at oral

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argument to explain their reliance on such authority. The Court suggests that associates or of

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counsel attorneys who are working on this case be permitted to address some or all of the

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Court’s questions contained herein.

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The parties each shall have twenty (20) minutes to address the questions that follow.
1.

The Substitution of Trustee identifies Wells Fargo as the “present beneficiary” under the
Deed of Trust. What is the import, if any, of the fact that Wells Fargo did not execute an
assignment of the Deed of Trust in favor of Freddie Mac until January 13, 2011?

2.

Defendants argue that, notwithstanding the provisions of California Civil Code Section
2934, the parties could - and did - contractually create their own substitution procedure.
In support of this argument, Defendants cite to Section 24 of the Deed of Trust, which
provides that “Lender, at its option, may from time to time appoint a successor trustee to
any Trustee appointed hereunder by an instrument executed and acknowledged by
Lender...”

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Once Wells Fargo sold the Promissory Note and Deed of Trust to Freddie Mac, did
Wells Fargo legally remain the “Lender?” If not, what is Defendants’ best argument
that the parties complied with the terms Section 24 when the Substitution of Trustee was
executed? That is, where in the record is there evidence that the Substitution of Trustee
was “executed and acknowledged” by Freddie Mac? The Court notes that it is troubled
by the fact that the Substitution of Trustee identifies Wells Fargo as the “present
beneficiary” and does not suggest that Wells Fargo is acting on behalf of Freddie Mac.

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For the Northern District of California

United States District Court

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3.

California courts have concluded that “[n]either Civil Code section 2934a, which
governs the substitution of trustees, ... precludes an attorney-in-fact from signing a
Substitution of Trustee. Aceves v. U.S. Bank, N.A., 193 Cal. App. 4th 218, 232 (2011)
(citing cases). In Aceves, the trust deed also did not preclude an attorney-in-fact from
signing a substitution of trustee. How do Plaintiffs distinguish Aceves?

4.

Defendants argue that “the law is clear that technical defects in the foreclosure process
do not render the trustee’s sale void absent actual prejudice,” and that Plaintiffs have not
shown the alleged irregularity in the foreclosure proceedings resulted in prejudice. See,
e.g., Fontenot v. Wells Fargo Bank, N.A., 198 Cal. App. 4th 256, 272 (2011) (“a plaintiff
in a suit for wrongful foreclosure has generally been required to demonstrate the alleged
imperfection in the foreclosure process was prejudicial to the plaintiff’s interests”).

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a.

Do Defendants have any authority that the defect or irregularity alleged by
Plaintiffs, i.e. that Cal Western was not the proper Trustee, is a “technical” or
“procedural” defect in the proceedings?

b.

Do Defendants have any authority where courts have required a showing of
prejudice if a plaintiff has established that a trustee’s sale was void, rather than
voidable?

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5.

Plaintiffs ask the Court not to consider any evidence created after the Declaration of
Colleen Kelley, dated May 6, 2011, and offered in support of this motion, which
characterize Wells Fargo as Freddie Mac’s agent. (Plaintiffs’ Opp. Br. at 3-18-21.) The
Court wants to confirm that the only evidence Plaintiffs seek to exclude is any evidence
proffered by Defendants to support their argument that Wells Fargo acted as Freddie
Mac’s agent when it began to pursue non-judicial foreclosure proceedings. Is that a
correct understanding of Plaintiffs’ position?

6.

a.

With respect to Plaintiffs’ claims for fraud and negligent misrepresentation, what
are the specific statements that Plaintiffs allege are fraudulent?

b.

Ms. Lockett attested that, after the conversation that she had with Kevin on
January 11, 2011, she was told that the Trustee’s Sale had been postponed. What

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is Defendants’ best argument that this does not present a genuine issue of
disputed material fact on that aspect of the fraud and negligent misrepresentation
claims?

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c.

What actions did Plaintiffs take, or fail to take, in purported reliance on the
alleged promises to negotiate with them to modify their loan and to postpone the
Trustee’s Sale? In responding to this question, Plaintiffs shall be prepared to
support their position with evidence in the existing record.

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IT IS SO ORDERED.
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Dated: November 8, 2012
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JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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