Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-05676/USCOURTS-cand-3_15-cv-05676-5/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1345 Foreclosure

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOHN F. LUNDY,

Plaintiff,

v.

SELENE FINANCE, LP, et al.,

Defendants.

Case No. 15-cv-05676-JST 

ORDER TO SHOW CAUSE

Re: ECF Nos. 26, 28, 31, 33, 57

In this wrongful foreclosure case, Plaintiff John F. Lundy challenges an upcoming 

foreclosure sale and requests injunctive relief, declarative relief, and damages. ECF No. 1-1 at 26-

28. Currently before the Court are four Motions to Dismiss, ECF Nos. 26, 31, 33, 57, and a 

Motion to Expunge Lis Pendens, ECF No. 28. Three of these motions are set to be heard on 

March 10, 2016. ECF Nos. 26, 28, 33.

The crux of Plaintiff’s claims is that the assignment of the note and deed of trust to his 

property from Defendant Bank of America, N.A. to Defendant Wilmington Savings Fund Society, 

FSB, was void because Bank of America was never a valid beneficiary, and therefore that 

Wilmington lacked authority to initiate foreclosure proceedings. See ECF No. 1-1 (“Complaint”) 

¶¶ 11-17. One of Defendants’ central arguments in their motions is that, as a third party to the 

assignments underlying the foreclosure, Plaintiff lacks standing to challenge them. See, e.g., ECF 

No. 26 at 16; ECF No. 33-1 at 17. Plaintiff responds that he possesses such standing. See, e.g., 

ECF No. 49 at 25.

The Court notes that the California Supreme Court has recently addressed this issue in 

Yvanova v. New Century Mortg. Corp., __ P.3d __, No. S218973, 2016 WL 639526 (Cal. Feb. 18, 

2016). Yvanova acknowledged that California courts were split on this issue ‒ namely, “whether 

the borrower on a home loan secured by a deed of trust may base an action for wrongful 

Case 3:15-cv-05676-JST Document 63 Filed 03/04/16 Page 1 of 3
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United States District Court

Northern District of California

foreclosure on allegations a purported assignment of the note and deed of trust to the foreclosing 

party bore defects rendering the assignment void.” Id. at *1. The California Supreme Court 

agreed with Glaski v. Bank of Am., N.A., 218 Cal. App. 4th 1079 (2013), and held that plaintiffs 

do indeed possess standing to challenge a foreclosure based on alleged defects of the underlying 

assignment. Id. at *9. A contrary holding, the court noted, would suggest that “anyone, even a 

stranger to the debt, could declare a default and order a trustee’s sale — and the borrower would 

be left with no recourse because, after all, he or she owed the debt to someone, though not to the 

foreclosing entity.” Id. at 12.

Critically, however, Yvanova made clear that its holding was limited only to claims that 

occur after the foreclosure sale was completed, and declined to address whether “a borrower may 

attempt to preempt a threatened nonjudicial foreclosure by a suit questioning the foreclosing 

party’s right to proceed.” Id. at 1. The California Supreme Court had previously granted review 

of a case that addresses this issue in the pre-foreclosure context, but stayed briefing on that case in 

light of the pending decision in Yvanova. See Keshtgar v. U.S. Bank, 334 P.3d 686 (Cal. 2014) 

(granting petition for review). As of the date of this order, the Keshtgar case remains before the 

California Supreme Court.

Because this case involves a pre-foreclosure claim, Yvanova does not conclusively resolve 

the issue. The California Supreme Court’s order granting review in Keshtgar, however, suggests 

that the court will likely soon address this issue in a pre-foreclosure context.

Accordingly, all parties are hereby ORDERED TO SHOW CAUSE why this case should 

not be stayed to allow the California Supreme Court to resolve, in its upcoming Keshtgar opinion, 

the issue of standing raised by Defendants. If no party files an objection, this Court will (1) stay 

proceedings in this case in light of the proceedings before the California Supreme Court; 

(2) temporarily enjoin Defendants from initiating and/or further pursuing foreclosure proceedings

against Plaintiff until further order from this Court; and (3) vacate all currently scheduled hearings 

on the motions pending before it.

If any party does object, proceedings in this case shall continue as scheduled, and the Court 

will address both this Order to Show Cause and the motions before it.

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United States District Court

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Responses to this Order to Show Cause shall be filed by March 11, 2016. The hearing 

scheduled for March 10, 2016 is hereby continued to March 17, 2016.

IT IS SO ORDERED.

Dated: March 4, 2016

______________________________________

JON S. TIGAR

United States District Judge

Case 3:15-cv-05676-JST Document 63 Filed 03/04/16 Page 3 of 3