sacchi good on tender rule

8/2/2019 Sacchi Good on Tender Rule

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PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION FOR RECONSIDERATION

OF THE COURTS JUNE 6, 2011 ORDER GRANTING PRELIMINARY INJUNCTION

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Vito Torchia, Jr. (SBN 244687)[email protected] Colby (SBN 196686)[email protected] LAW, PC4000 MacArthur Blvd., Suite 1110Newport Beach, California 92660Telephone: (800) 946-8655Facsimile: (888) 801-6274

Attorneys for Plaintiffs,ANGELA SACCHI and ROBERT SACCHI

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

ANGELA SACCHI, an individual; andROBERT SACCHI, an individual,

Plaintiffs,

vs.

MORTGAGE ELECTRONICREGISTRATION SYSTEMS, INC., a

Delaware corporation, as nominee forAMERICAN HOME MORTGAGECORPORATION d/b/a AMERICANBROKERS CONDUIT; AMERICANHOME MORTGAGE SERVICING,INC., a Delaware corporation;AMERICAN HOME MORTGAGECORPORATION d/b/a AMERICANBROKERS CONDUIT, a New York

corporation; RESIDENTIAL CREDITSOLUTIONS, INC., a Delawarecorporation; FIDELITY NATIONALTITLE COMPANY d/b/a DEFAULTRESOLUTION NETWORK, aCalifornia corporation; DEFAULTRESOLUTION NETWORK, an

Case No.: CV 11-01 58 AHM (CWx)

[Assigned to the HonorableA. Howard Matz, Courtroom 14]

PLAINTIFFS OPPOSITION TODEFENDANTS MOTION FORRECONSIDERATION OF THECOURTS JUNE 6, 2011 ORDERGRANTING PRELIMINARY

INJUNCTION, OR IN THEALTERNATIVE, TO DISSOLVETHE PRELIMINARYINJUNCTION; MEMORANDUMOF POINTS AND AUTHORITIESIN SUPPORT THEREOF;DECLARATION OF DERONCOLBY, ESQ.

Date: August 1, 2011Time: 10:00 a.m.Ctrm: 14

Action Filed: January 21, 2011Action Removed: February 24, 2011Trial Date: None Set

Case 2:11-cv-01658-AHM -CW Document 58 Filed 07/11/11 Page 1 of 13 Page ID #:1576


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unknown entity; POWER DEFAULTSERVICES, Inc., a Texas Corporation;LANDAMERICACOMMONWEALTH, an entity ofunknown form; and DOES 1 to 1000,inclusive,

Defendants.

TO THE HONORABLE COURT AND ALL PARTIES AND THEIR

ATTORNEYS OF RECORD, IF ANY:

Plaintiffs Angela and Robert Sacchi (Plaintiffs) hereby file the following

Opposition (the Opposition) to Defendants AMERICAN MORTGAGE

SERVICING, INC. (AHMSI), POWER DEFAULT SERVICES, INC.

(POWER DEFAULT), RESIDENTIAL CREDIT SOLUTIONS, INC. (RCS)

and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (MERS)

(collectively, Defendants) Notice of Motion and Motion for Reconsideration of

the Courts June 6, 2011 Order Granting Preliminary Injunction, or in the

Alternative, to Dissolve the Preliminary Injunction (Motion for

Reconsideration).

The Opposition will be made for the reasons set forth in the accompanying

Memorandum of Points and Authorities and the files and records on file with the

Court in this action, and any additional arguments that may be presented to and

received by the Court.

Dated: July 11, 2011 Respectfully submitted,BROOKSTONE LAW, PC

By:Deron ColbyAttorneys for PlaintiffsROBERT and ANGELA SACCH



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MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTIONDefendants make the instant motion, seeking for the Court to change its

mind, on the following grounds:

(1) The decision was in clear errorthe only evidence being acomment made by the Court prior to the Court taking the matter

under careful consideration and almost 3 weeks after such

consideration, issuing carefully crafted civil minutes;

(2) New case lawThe new law that Defendants refer to is a case,Ferguson v. Avelo Mortg., LLC, ___ Cal. Rptr. 3d, ___, 2011 WL

2139143 (June 1, 2011) that was indeed decided and published prior

to the hearing on this matter (June 6, 2011), destroying the new law

argument. Moreover, as Deron Colby, Esq., explains in his declaration

attached hereto, an attorney in an unlawful detainer action tried on

June 6th

presented the unlawful detainer court with the Ferguson case.

The Ferguson case is both factually and legally distinguishable as

well; and

(3) New material factsDefendants argue that the injunction should bedissolved because as of the date of the motion (June 27, 2011), the

bond had not been issued. The bond was posted on June 30, 2011,

prior to the Courts deadline of July 5, 2011 (See Doc. 55, top of page

17 of 17.) Defendants also argue that the injunction should be

dissolved because Defendants have recorded a new substitution of

trustee and cancelled the notice of trustees sale, thereby violating theCourts own order which enjoined Defendants from taking any

affirmative steps toward foreclosing on Plaintiffs, which would

necessarily include recording additional documents, such as the



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substitution of trustee, and cancelling the notice of trustees sale, both

of which constitute acts in furtherance of foreclosing on Plaintiffs.

II. ARGUMENTA.Reconsideration Granted In Only Extreme SituationsReconsideration is a drastic remedy. To succeed, a party must set forth facts

or law of a strongly convincing nature to induce the court to reverse its prior

decision. [Kern-Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665

(E.D.Cal.1986), affirmed in part and reversed in part on other grounds, 828 F.2d

514 (9th Cir.1987).] Further, a motion for reconsideration should not be granted,

absent highly unusual circumstances, unless the district court is presented with

newly discovered evidence, committed clear error, or if there is an intervening

change in the controlling law. [Orange Street Partners v. Arnold, 179 F.3d 656,

665 (9th Cir.1999).]

Motions for reconsideration are not the place for parties to make new

arguments not raised in their original briefs. [Northwest Acceptance Corp. v.

Lynnwood Equip., Inc., 841 F.2d 918, 925-6 (9th Cir.1988).] Nor is reconsideration

to be used to ask the court to rethink what it has already thought. [United States v.

Rezzonico, 32 F.Supp.2d 1112, 1116 (D.Ariz.1998).] A party seeking

reconsideration must show more than a disagreement with the court's decision, and

recapitulation of the cases and arguments considered by the court before rendering

its original decision fails to carry the moving party's burden. [U.S. v. Westlands

Water Dist., 134 F.Supp.2d 1111, 1131 (E.D.Cal.2001).]Reconsideration is an extraordinary remedy, to be used sparingly in the

interests of finality and conservation of judicial resources. [Kona Enterprises, Inc.

v. Estate of Bishop (9th Cir. 2000) 229 F.3d 877, 890 (citation omitted).] Further,

a motion for reconsideration may not be used to raise arguments or present



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evidence for the first time when it could have reasonably been raised previously.

[Id.] The moving party must show that it could not, with reasonable diligence, have

discovered and produced the evidence at the prior proceeding. [Blue Mountain

Dev. Co. v. Carville (1982) 132 Cal.App.3d 1005, 1013-1014.]

B.Defendants Have Not Shown Any Clear Error Regarding a FactualFinding

Findings that are reviewed for clear error are limited to errors regarding

factual findings underlying the district courts decision. [U.S. v. Bassagnani (9th

Cir. 2009) 575 F.3d 879, 883; U.S. v. Montano (9th Cir. 2001) 250 F.3d 709, 712.]

Defendants have presented no evidence that there were any clear errors regarding

factual findings underlying the Courts decision. In fact, at the hearing on June 6th

,

the Court specifically asked Mr. Chvat, Defendants counsel, if he thought there

were any facts that were materially incorrect in the Courts tentative ruling. Mr.

Chvats response was I read the tentative. I read the factual the Courts

breakdown. I didnt notice anything that jumped out at me. [Doc. 56, p. 18, lns. 8-

20.] It appears now, in retrospect, that Defendants have changed their collective

minds. As explained in more detail herein, Defendants do not provide any factual

findings that were in error justifying the Court granting the instant Motion.

Defendants first argue that the preliminary injunction was issued in clear

error and point to a comment by the Court during the June 6th hearing. Although

the Court did issue an order on June 6, 2011, that the preliminary injunction was

granted with the requirement of the $7,500 bond, the Courts June 24th minutes say

that the Court hereby reiterates its decision to extend the injunction, albeitconditioning the extension upon Plaintiff posting a $7,500 bond. [Doc. 55, top of

p. 17.] As such, it appears now in retrospect that there might be some confusion as

to whether the Court issued a preliminary injunction (as reflected in the Courts

Civil Minutes, Doc. No. 51) or merely extended the temporary restraining order.



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Defendants seem to take exception with the Courts comment that it does not

seem inconsistent with non-judicial foreclosure law, once litigation has been filed

challenging a partys right to foreclose, to place the burden on foreclosing parties

to establish the right to effectuate the foreclosure. In fact, during oral argument at

the June 6th hearing, Mr. Chvat, counsel for Defendants, acknowledged that if [a

partys right to foreclose is] challenged, then the only way to get out of a lawsuit is

to show [that party] has authority. [Exhibit 1 to Defendants Motion, p. 14, lns.

13-14.] The Court went on to clarify its position in stating: the distinction Im

drawing [is] between contending someone doesnt have authority, which is not

whats at issue here and right now, as opposed to contending that someone who

might have authority has to demonstrate. Those are two related, but very different

propositions. [Exhibit 1 to Defendants Motion, p. 16, lns. 11-16.]

Without legal support, Defendants allege that it is not Defendants burden to

show that they have a right to foreclose. In commenting as it did, the Court was

merely acknowledged what seems logical, and necessary given the foreclosing

parties unique access to information; namely, that when challenged it is the

foreclosing parties burden to show that they have the right to foreclose. Otherwise,

as the Court noted, anyone with the will and desire could foreclose on any

homeowner with impunity and without regard to the statutory framework.

Defendants have not shown that the Courts ruling is in clear error.

Defendants arguments are legal in nature, not factual. Even Defendants legal

arguments are flawed and strain the Courts reasoning. As such, Plaintiffs

respectfully request that this Court deny Defendants motion for reconsideration.

C.At the Time of the June 6th Hearing, the Ferguson Case Was NotNew Law and, Additionally, Can be Distinguished

Motions for reconsideration may properly be denied where the motion fails

to state new law or facts. [MGIC Indemnity Corp. v. Weisman, 803 F.2d 500, 505



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(9th Cir.1986).] As stated above, arguments may not be presented for the first time

in a motion for reconsideration when it could have reasonably been raised

previously. [Kona Enterprises, Inc.,229 F.3d at 890.] A motion for

reconsideration will be denied absent a strong showing of diligence. [Garcia v.

Hejmadi (1997) 58 Cal.App.4th 674, 690.] This diligence requirement applies to

motions for reconsideration based upon new facts as well as new law. [Baldwin v.

Home Savings of America (1997) 59 Cal.App.4th 1192, 1200.] It requires that the

moving party show that the new law was unavailable prior to the hearing on the

original motion. [Scott Co. v. United States Fidelity & Guaranty Ins. Co. (2003)

107 Cal.App.4th 197, 205-206.]

Defendants contend that this Court should reverse itself because ofFerguson

v. Avelo Mortg., LLC, ___ Cal. Rptr. 3d, ___, 2011 WL 2139143 (June 1, 2011), a

case that was decided and published before the hearing on June 6th. Because the

Ferguson case was decided and published prior to the hearing in this matter, it is

not new law justifying this Court reversing its decision. Defendants counsel

could have raised the Ferguson case in support of his clients position at the

hearing but didnt. As such, Defendants are now barred from asserting that

Ferguson is new law and for this reason alone the Motion for Reconsideration

should be denied.

Interestingly enough, also on June 6th at approximately 2:00 p.m. (mere

hours after the hearing on the motion to dismiss and preliminary injunction), Deron

Colby, counsel for Plaintiffs, represented a defendant in an unlawful detainer trial

right across the street in the Los Angeles Superior Court. The matter is entitled

Deutsche Bank National Trust Company, as Trustee, v. Thelma Squeezer, L.A.Superior Court No. 11U01671. [Colby Dec., p. 1, 2.] During the trial, opposing

counsel referred specifically to the Ferguson case in making the argument that

defendant Squeezer should not have the right to introduce evidence of a

backdated Assignment of Deed of Trust because Ferguson forbids such



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evidence, in a post-foreclosure unlawful detainer action, where the party

complaining has not made a full tender. [Colby Dec., p. 1, 3.] The Judge in that

action took the matter under submission and ordered the parties to submit

supplemental briefs focused on Ferguson. [Colby Dec., p. 1, 4.] As of the date of

this Opposition, the Judge in that matter has not rendered a decision. [Colby Dec.,

p. 1, 5.] Respectfully and without impugning Mr. Chvats professionalism, which

Plaintiffs find exemplary, it would seem reasonable that if one attorney can find

and use Ferguson, Defendants counsel could have as well.

Additionally, a motion for reconsideration is appropriate only where there

is an intervening change in the controlling law. [Kona Enterprises, Inc.,229

F.3d at 890.] Defendants have not and cannot show that there was a change in

controlling law.

The Ferguson case is simply a regurgitation of previously decided post-

foreclosure cases as well as arguments Defendants made in several previous

pleadings, including the motion to dismiss and opposition to motion for

preliminary injunction. Defendants offer nothing to explain how Ferguson

constitutes an intervening change in the controlling law or even more broadly as

new law.

Ferguson also differs from the instant case in several key ways. First,

Ferguson was a post-foreclosure quiet title action where the plaintiff did not

object prior to the foreclosure. [Ferguson, 2011 WL 2139143 at * 2.] The issue in

Ferguson was when bringing a quiet title action whether a plaintiff must plead

tender. [Id. at *2] The plaintiff in Ferguson was bringing a quiet title action in an

attempt to set aside a foreclosure sale that had already occurred, not stop athreatened foreclosure sale as is the case here. [Id.] The Ferguson case is replete

with references to cases that deal with setting aside foreclosure sales. [Id. at *3-6.]

Ferguson does not address, in any way, the law as it relates to challenging a partys

right to foreclose prior to a foreclosure sale.



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For purposes of this opposition, Plaintiffs concede that it might be more

difficult to challenge a foreclosure sale after the fact mainly due to the onerous

presumption of validity embodied in California Civil Code 2924. As the

Ferguson court said, setting aside a nonjudicial foreclosure sale is an equitable

remedy. [Id. at *3, citing toLo v. Jensen, 88 Cal. App. 4th 1093, 1098.] But this is

not the issue at hand. The issue at hand is whether the Court had the power and

right to grant an injunction to prevent a foreclosure under the facts presented.

Ferguson does not address this situation, and, as such, cannot be considered new

law, or even relevant law, on the subject.

As for MERS and MERS right to act as a nominal beneficiary, this issue

is certainly not one of first impression in Ferguson. Ferguson does nothing to

change the discussion and does not represent any new law on the subject.

Finally, as has become the mantra for so many foreclosing parties,

Defendants again reiterate their argument that the Tender Rule bars any and all

challenges to their right to foreclose. In making this argument again here,

Defendants dont explain, and cannot explain, how Ferguson changed the

argument in any way. Ferguson merely regurgitated the law relating to the Tender

Rule, even acknowledging that a tender may not be required where it would be

inequitable to do so. [Id. at *3, citing to Onofrio v. Rice (1997) 55 Cal.App.4th,

413, 424 andDimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 876-878.]

In fact, and more importantly, if a foreclosure sale has not yet taken place,

Plaintiffs do not necessarily need to tender the full balance of the loan. [Vissuet v.

Indymac Mortg. Services (S.D.Cal. March 19, 2010) 2010 WL 1031013 at *2-3.]

As the court in Vissuetexplains:

In the present case, however, the trustees sale has not occurred yet,and OneWest has failed to cite to any case that would establish asimilar bright-line rule requiring tender where the plaintiff is merelyattempting to prevent a trustee sale from proceeding. Moreover, it is



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well-established that an offer to pay debt may not be required wheredoing so would be inequitable. See Pantoja v. Countrywide Home

Loans, Inc., 640 F.Supp.2d 1177, 1184 (N.D.Cal.2009) (citationsomitted). As the California Supreme Court has stated:

[T]here are not a few cases holding that, where a party has the rightto avoid a sale, he is not bound to tender any payment in redemption.Whatever may be the correct rule, viewing the question generally, it iscertainly not the law that an offer to pay the debt must be made, whereit would be inequitable to exact such offer of the party complaining ofthe sale. Under the circumstances disclosed by this record, thedefendant would be subjected to very evident injustice and hardship ifher right to attack the sale were made dependent upon an offer by herto pay the whole debt. Humboldt Sav. Bank v. McCleverty, 161 Cal.

285, 291, 119 P. 82 (1911) (internal citations omitted).

[Id. (footnote and internal citations omitted).]

As this Court explained in its June 24th Minutes, holding that the Tender

Rule is absolute and without question would in many instances eliminate any

possibility of challenging wrongful foreclosures. Most homeowners do not have

ready access to funds necessary to pay off loan balances. It would be grossly

inequitable to allow homes to be taken through error or malfeasance just because

that homeowner lacked the funds to tender full payment. [Doc. 55, top of p. 16.]

Defendants could have, and should have, raised the Ferguson case at the

original hearing. Defendants have not shown a change in any controlling law.

Ferguson does not stand for the proposition that the Tender Rule is an absolute bar

to any pre-foreclosure action to prevent what might amount to a wrongful

foreclosure. As such, Plaintiffs respectfully request that this Court deny

Defendants Motion for Reconsideration.

Case 2:11-cv-01658-AHM -CW Document 58 Filed 07/11/11 Page 10 of 13 Page ID#:1585


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D.Defendants Steps to Correct Their Errors Not Only Does NotRepresent New Facts but also Arguably Violates the Courts

Injunction

First and foremost, the Court previously ordered Defendants to cease taking

any and all steps toward foreclosing on Plaintiffs. Despite this, Defendants have

now recorded a substitution of trustee, an act that certainly can be characterized as

taking steps in furtherance of foreclosure. Additionally, Defendants have

rescinded a notice of trustee sale. [Motion, p. 9, lns. 12-17, citing to the

Declaration of Lori Long-Hamby, 3, 4 and Exhibits 1 and 2 attached

thereto.] It seems that Defendants simply cannot help themselves. They are intent

on foreclosing on Plaintiffs, even if it means violating a valid, current court order.

This Court has the option of sanctioning Defendants for violating the Courts

order. Specifically, [a] court has power to adjudge in civil contempt any person

who willfully disobeys a specific and definite order requiring him to do or to

refrain from doing an act. [Shuffler v. Heritage Bank (9th Cir. 1983) 720 F.2d

1141, 1146.] A person fails to act as ordered by the court when he fails to take all

the reasonable steps within [his] power to insure compliance with the [courts]

order. [Id. at 1146-1147.]

Defendants claim that the filing of the substitution of trustee constitutes a

new fact. A new fact, is one that, in the exercise of reasonable due diligence,

could not have been known to Defendants at the time of the June 6th hearing.

Defendants could have filed the substitution of trustee well in advance of the June

6th

hearing. It is lost on Plaintiffs how an affirmative act, performed by Defendants

in an effort to correct an error, constitutes a new fact. Defendants made theconscious decision to wait until after the June 6th hearing to record a new

substitution of trustee.

Defendants imply that the bond has not been issued. This is simply not the

case. On June 30, 2011, Plaintiffs deposited a cashiers check in the amount of



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$7,500 with this Court as ordered by the Court in its June 6, 2011 Minutes. [See

the Courts June 6, 2011 Minutes stamped Paid, June 30, 2011 in the lower right

hand corner, attached as Exhibit A.]

Defendants want to make this case about a substitution of trustee only. This

case is about much more than that. This case is about, as the Court noted, the

convoluted history and background of this loan. As the Court also noted in its

June 24th Minutes, Defendants attempt to downplay the alleged irregularities in the

tortuous flow of the transactions associated with the loan in this case. [Doc. 55,

middle of p. 8.] A further example of how this case reaches well beyond a

substitution of trustee appears in the transcript of the June 6th hearing. Specifically

and noticeably absent from any of Defendants discussions is the amorphous and

elusive Calyon.

First Defendants counsel, Mr. Chvat, calls Calyon an administrative agent

for dozens or so of banks and investors. [Exhibit 1 to Defendants Motion, p. 7,

lns. 23-25 to p. 8, lns. 1, 21-23.] Without saying it, it seems that Mr. Chvat is

calling Calyon a Trustee, but even that is unclear. Mr. Chvat goes on to say that

the Deed and Note were transferred to Calyon pursuant to the Repurchase

Agreement. [Id. at p. 8, lns. 23-25.] And that the Servicing Agreement between

Calyon and RCS allows for RCS to be listed as the beneficial interest holder in the

MERS system. [Id. at p. 12, lns. 20-25.] The point is that Calyons interests seem

pervasive but Calyon never appears in any of the public documents.

Unbeknownst to Plaintiffs, interests in their loan are being passed around like a hot

potato through the use of side letters, repurchase agreements, servicing

agreements, and lenders, trustees, administrative agents, beneficiaries, servicers,are all taking actions behind the scenes.



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III. CONCLUSIONWHEREFORE, based on the foregoing, Plaintiffs request the Court deny

Defendants Motion for Reconsideration and keep the injunction in place.

Dated: July 11, 2011 Respectfully submitted,

BROOKSTONE LAW, PC

By:Deron ColbyAttorneys for PlaintiffsROBERT and ANGELA SACCHI


sacchi good on tender rule

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