In a lawsuit based on a contract, one party can seek relief based on the theory of rescission. Rescission can be considered an equitable judicial remedy. Under California Civil Code section 1689, rescission supports “extinction” of the obligation. Rescission can be pled as a basis for affirmative relief, or it can asserted as defense to …
Category Archives: Case law
Majd v. Bank of America – Violation of Dual Tracking Statute Supports Claim for Wrongful Foreclosure
California law now prohibits the practice of “dual tracking,” whereby a lender simultaneously pursues a default while also engaging in loan modification negotiations with the borrower. The question concerns the remedy available when there is a violation of the dual tracking law. The court in Kazem Majd v. Bank of America, N.A. (Jan. 14, 2016) …
Saterbak v. JPMorgan Chase Bank – New Opinion Disagrees with 2013 Decision in Glaski v. Bank of America
A 2013 decision from the Fifth District Court of Appeal (based in Fresno) has bedeviled the lending community. In Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, the court held that the borrower could state a “cognizable claim for wrongful foreclosure under the theory that the entity invoking the power of sale (i.e., Bank …
Orcilla v. Big Sur, Inc. – Unconscionability in Loan Modification Supports Claim for Wrongful Foreclosure
The recent decision in Orcilla v. Big Sur, Inc. (Feb. 11, 2016) __ Cal. App.4th __ continues the litigation fallout from the second depression (referred to in other parts of the country as the Great Recession). In Orcilla v. Big Sur, the lender completed a nonjudicial foreclosure on the plaintiff’s residence. The borrower sued to …
In re Perl – 9th Circuit Changes Rules Relating to Bankruptcy Stay and California Eviction Law
The law of evictions – titled as “unlawful detainer” in California – is a technical area. The law has statutory roots as far back as the Forcible Entry Act of 1381, which prohibited the use of self-help to retake possession of real property. That remains an important concept in an action based on the unlawful …
ChinaCast Education Corporation – Fraud of Officer Imputed to Corporation
Here is a recent decision that is not a surprise under a traditional agent-principal analysis. Even so, it has to sting, because the corporation loses twice – first, when it was defrauded by the former president, and second when the corporation was sued by shareholders for the diminished value of their securities. The fact pattern …
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Dorsey v. Superior Court – No Attorneys Fees in Small Claims Cases
As the jurisdiction of small claims court has increased (now up to $10,000), attorneys are called on more frequently to assist on appeal. (Ground rule – attorneys are not permitted to assist at the original trial, only on appeal.) In Dorsey v. Superior Court (Oct. 22, 2015) __ Cal.App.4th __, “The small claims court dispute …
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Tribeca Companies v. First American – Escrowholder Not Liable for $1 Million Claim
The recent decision in Tribeca Companies, LLC v. First American Title Insurance Company (Aug. 26, 2015) ___ Cal.App.4th ___ reaches an unsurprising result – an escrowholder is not liable for damages when it delivers money to the owner of the funds. If you continue to the end of the decision, however, you’ll find a peculiar …
Double Bogey, LP v. Enea – Alter Ego Status Under State Law Does Not Equate with Fiduciary Status Under Bankruptcy Law
The federal courts continue to narrow the circumstances in which a person can be denied relief in bankruptcy court based on breach of fiduciary duties. In Double Bogey, LP v. Enea, ___ F.3d ___ (9th Cir. July 22, 2015), an unpaid creditor sought to invoke nondischargeability on the grounds that the debtor, as the alter …
Bos v. Board of Trustees – 9th Circuit Narrows Fiduciary Non-Dischargeability in Bankruptcy
Several categories of debt are excluded from relief under the Bankruptcy Code, meaning that a debtor cannot obtain a discharge for these debts. In Bos v. Board of Trustees, ___ F.3d ___ (9th Cir. 2015), the Ninth Circuit considered whether an employer’s contractual requirement to contribute to an employee benefits fund made the employer a …