Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_02-cv-06405/USCOURTS-caed-1_02-cv-06405-13/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331(a) Fed. Question: Real Property

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IN THE UNITED STATES DISTRICT COURT FOR THE 

EASTERN DISTRICT OF CALIFORNIA

COUNTRYWIDE HOME LOANS, Inc. a 

New York Corporation,

Plaintiff,

v.

UNITED STATES OF AMERICA, acting 

through the Internal Revenue Service, et. al.

Defendants.

___________________________________

LA JOLLA GROUP II, a California general 

partnership, and TERRANCE FRAIZER,

Counter-Claimants,

 v.

COUNTRYWIDE HOME LOANS, INC., a 

New York corporation; NEVADA TRUST 

DEED SERVICES, INC., a Nevada 

corporation; LA SALLE NATIONAL 

BANK as TRUSTEE FOR AVONDALE 

HOME EQUITY LOAN TRUST 1998-1, an 

entity form unknown; UNITED STATES 

OF AMERICA, acting through the 

INTERNAL REVENUE SERVICE; CTC 

REAL ESTATE SERVICES, a California 

corporation; ROBERT G. GONZALES, an 

individual; and MARISELA GONZALES, 

an individual,

Counter-Defendants.

1:02 – CV - 6405 AWI SMS

ORDER SETTING AMOUNT OF 

EQUITABLE LIEN

(DOC. 317)

Case 1:02-cv-06405-AWI-GSA Document 322 Filed 04/04/13 Page 1 of 6
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INTRODUCTION

Plaintiff, Countrywidc Home Loans, Inc., (hereinafter “Countrywide”) seeks an 

order setting the amount of the equitable lien pursuant to the Judgment entered by this 

Court on May 27, 2011.

FACTUAL AND LEGAL BACKGROUND

On February 9, 1994, Marisela and Robert G. Gonzales executed a deed of trust in 

favor of Victoria Mortgage Company (hereinafter “Victoria”) in the amount of 

$189,000.00 affecting the real property located at 765 E. Woodhaven, Fresno, California. 

On July 14, 1994 the beneficial interest under the deed of trust with Victoria was 

assigned to Countrywide.

On February 25, 1998 the Gonzaleses executed a second deed of trust in favor of 

Avondale Federal Savings Bank (hereinafter “Avondale”) in the amount of $189,000.00. 

Defendant La Salle National bank is the successor in interest to Avondale.

On August 18, 2000, the Internal Revenue Service (hereinafter “IRS”) recorded a 

Notice of Federal Tax Lien with the Fresno County recorder, relating to tax assessments 

made in 1997, 1998, and 1999. The tax assessments against Robert Gonzales between 

tax, penalties, and interest were in the amounts of $3,483.28 in 1997, $7,989.61 in 1998, 

and $8,847.82 in 1999.

Thereafter the Gonzaleses defaulted on the Countrywide loan and Countrywide 

began non-judicial foreclosure proceedings by recording a Notice of Default and Election 

to Sell Under Deed of Trust on April 6, 2001. The Gonzaleses cured the default under the 

Countrywide loan prior to a trustee’s sale. Rather than rescinding the Notice of Default, 

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Countrywide, in error, executed and caused to be recorded a full reconveyance of the 

deed of trust on August 3, 2001.

The Gonzaleses made the August and September 2001 payments then again fell 

into default. Countrywide again began non-judicial foreclosure proceedings by recording 

a Notice of Default and Election to Sell Under Deed of Trust on January 4, 2002.

On March 15, 2002, Robert Gonzales filed for bankruptcy in the United States 

Bankruptcy Court, Eastern District of California (Fresno). The Countrywide and La Salle 

foreclosure sales were automatically stayed. Countrywide obtained relief from the stay 

and a trustee’s sale under the La Salle Trust deed was conducted on August 15, 2002. La 

Jolla Group II and Terrance Frazier submitted the successful bid of $24,200.00. La Jolla 

Group II (“La Jolla”) is a general partnership consisting Alan Boyajian and Lee Kleim. 

La Jolla has been in the business of buying, selling and leasing residential foreclosure 

properties since 1987. Frazier began buying property on his own behalf in 1995. Boyajian 

and Frazier personally attended the sale. 

Prior to his purchase of the real property, Boyajian estimated its value at $235,000.

Neither Boyajian nor Frazier had obtained a preliminary report, guarantee, or 

commitment from a title company prior to bidding at the foreclosure sale. Boyajian

investigated the state of title of the real property by requesting from First American Title 

Company copies of “open” trust deeds, i.e., trust deeds which had not been reconveyed. 

Due to the erroneous reconveyance the search yielded no results.

On April 28, 2002 and May 3, 2002 Boyajian sought and obtained from First 

American documents concerning liens against the real property. Provided in response to 

Case 1:02-cv-06405-AWI-GSA Document 322 Filed 04/04/13 Page 3 of 6
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Boyajian’s request was the second Countrywide Home Loans Notice of Default that had 

been filed on January 4, 2002. Boyajian knew that there was an inconsistency between 

the reconveyance and the notice of default but believed that the latter was filed as a 

mistake. Boyajian did not attempt to contact the trustee to determine whether the notice 

of default was a mistake. Nor did Boyajian attempt to contact anyone at Countrywide

concerning the apparent discrepancy. Boyajian further failed to contact Nevada Trust to 

determine their lien holder priority in light of the Countrywide Notice of Default.

Boyajian’s decision not to contact any of the three entities was informed by his 

experience that none would give out the information that he sought. 

Countrywide presented evidence to suggest that in contacting either Countrywide 

or Nevada Trust prior to the foreclosure sale Boyajian would have discovered that the 

Countrywide Loan had not been paid in full and that Countrywide still held an active 

interest in the real property. 

Based on the foregoing factual background the Ninth Circuit determined that La 

Jolla and Fraizer were not bona fide purchasers for value. The inconsistencies articulated 

above put defendants on notice because they had knowledge of circumstances, which, 

upon reasonable inquiry, would have led to discovery of Countrywide’s unrecorded lien.

The Ninth Circuit held that Countrywide is not entitled to rescission based on 

either of the two theories advanced: collusion between the defendants or failure to give 

adequate notice to the IRS. The former was rejected because Countrywide has not proved 

that it was prejudiced by any collusion between the defendants, i.e. there is no evidence 

to suggest that the procedural irregularity contributed to the inadequacy of the price of the 

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real property sale. The latter was rejected because Cal. Civ. Code § 2924b(c)(4), 

obligating trustees to notify the IRS of foreclosure sales, was enacted after the sale of the 

real property in question.

The Ninth Circuit came to the conclusion that the erroneous Notice of Full 

Reconveyance converted Countrywide’s senior deed of trust into an equitable lien of 

equal priority. 

DISCUSSION

This Court now rules on Countrywide’s motion for order setting the amount of the 

equitable lien found by the Ninth Circuit. No part of this order is to be interpreted as 

changing the nature Countrywide’s equitable lien. This order merely sets the amount.

A. Amount of the Equitable Lien

Countrywide provided to this court an itemization of indebtedness as follows:

Unpaid Principal Balance $166,707.67

Accrued Interest 9/01/02 to 

1/18/13

$121,128.55

Late Charges at $125.41 per 

month

$188.61

Escrow Advance Balance $51,983.99

Property Inspections $0.00

Corporate Advance Balance $2,609.25

Recording and 

Reconveyance Fees

$48.00

Total Due $394,650.06

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The foregoing itemization was provided as part of Countrywide’s motion for order 

setting amount of equitable lien and the accompanying declaration of Mortgage 

Resolution Specialist, Ryan Lo. This Court independently recalculated the figures put 

forth by Countrywide and has found that the figure of $394,650.06 is $51,983.99 higher 

than the figure reached by the court of $342,666.07 based on Countrywide’s figures.

ORDER

Accordingly, the amount of the equitable lien of Countrywide Home Loans Inc. is 

set at the sum of $342,666.07 as of January 18, 2013 and $31.9713 per diem thereafter, 

against the property located at 765 E. Woodhaven Avenue, Fresno California and legally 

described as:

LOT 14 of TRACT No. 3374, Mount Vernon Place No. 1, in the City of Fresno, 

State of California. According to the Map Thereof, recorded August 24, 1984 in 

Book 41, at Pages 97 to 100 Inclusive of Maps, Fresno County Records.

IT IS SO ORDERED.

Dated: April 4, 2013 

 SENIOR DISTRICT JUDGE DEAC_Signature-END:

0m8i788

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