Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caeb-9_15-ap-09061/USCOURTS-caeb-9_15-ap-09061-0/pdf.json

Parties Involved:
Indian Village Estates, LLC
Plaintiff
Gold Strike Heights Association
Defendant
Gold Strike Heights Homeowners Association
Defendant
Community Assessment Recovery Services
Defendant
Gary Farrar
Trustee

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j FILED 

E167 

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF CALIFORNIA 

POSTED ON WEBSITE 

NOT FOR PUBLICATION 

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF CALIFORNIA 

Inre ) CaseNo. 15-90811-E-7 

) 

GOLD STRIKE HEIGHTS ) 

HOMEOWNERS ASSOCIATION, ) 

) 

Debtor. ) 

) 

INDIAN VILLAGE ESTATES, LLC, ) Adv. Proc. No. 15-906 1 

) 

Plaintiff, ) 

V. 

GOLD STRIKE HEIGHTS 

ASSOCIATION, a California corporation; 

et al., 

Defendants 

This Memorandum Decision is not appropriate for publication. 

It may be cited for persuasive value on the matters addressed. 

MEMORANDUM OPINION AND DECISION DENYING 

MOTION FOR SUMMARY JUDGMENT 

AND 

DETERMINING FACTS PURSUANT TO FED. R. CIV. P. 56(g) 

and 

FED. R. BANKR. P. 7056 

Indian Village Estates, LLC ("Plaintiff' or "Indian Village") initiated this adversary 

proceeding against Gold Strike Heights Association, et al. ("Defendants") by filing a complaint with 

the Calaveras County Superior Court on September 7, 2015 (the "Complaint"). In its Complaint, 

Plaintiff requests a judgment for the following: 

Filed 08/17/16 Case 15-09061 Doc 61
1 1. For a declaration that the 2002 and the 2007 corporate entities are now and have 

always been separate and distinctive corporate entities and have not been merged 

2 either by official action or by operation of law. 

3 2. For a declaration that the non-judicial foreclosure of Plaintiff's 31 lots was wrongful. 

4 3. For an order vacating any and all Trustee's Deeds that may have been recorded. 

5 4. For an order vacating and setting aside the foreclosure sale. 

6 5. For an order quieting title in favor of Plaintiff and against all Defendants. 

7 6. For compensatory, special, general, and punitive damages according to proof against 

all Defendants. 

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7. For civil penalties pursuant to the applicable statutes and reasonable attorneys' fees 

9 according to proof. 

10 8. For costs of suit herein incurred. 

11 9. For such other and further relief as the Court may deem proper and just. 

12 Gold Strike Heights Homeowners Association ("Gold Strike 2007") filed a bankruptcy 

13 petition with this court on August 20, 2015. Gary Farrar, the Chapter 7 Trustee, removed the instant 

14 case to the United States Bankruptcy Court, Eastern District of California on November 18, 2015. 

15 On June 9, 2016, Clifford W. Stevens, attorney for the Chapter 7 Trustee, filed the instant 

16 Motion for Summary Judgment or alternatively for Partial Summary Judgment (the "Motion"). The 

17 Motion requests that the court grant summary judgment in his favor and against Plaintiff on each of 

18 the six causes of action in the complaint, or alternatively, the Defendant-Trustee requests the court 

19 grant partial summary judgment in his favor and against Plaintiff as to any individual causes of 

20 action or specific requested relief that involves validating the foreclosure, setting aside the sale of 

21 the Property, or cancelling the trustee's deeds upon sale. 

22 I/I 

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FACTS ASSERTED AS UNDISPUTED BY DEFENDANT-TRUSTEE 

AND RESPONSE BY PLAINTIFF 

The parties have proffered the following information as to disputed and undisputed facts: 

MOVING DEFENDANT- MOVING DEFENDANT- PLAINTIFF'S RESPONSE 

TRUSTEE'S TRUSTEE'S AND SUPPORTING 

UNDISPUTED FACTS SUPPORTING EVIDENCE 

(Dckts. 37, 53) AUTHORITY Dckts. 43, 50 

Identified by Paragraph Identified by Paragraph 

Number in Original Number in Original 

Document Document 

1. The subject property in this Complaint at ¶ 13 (Request Undisputed. 

case consists of thirty-one for Judicial Notice, Exhibit 

(31) lots in the Gold Strike A) 

Heights Subdivision in 

Calaveras County, California 

that were previously owned 

by Plaintiff Indian Village 

Estates, LLC. (Collectively 

"the Property") 

Each of the 31 Trustee's Trustee's Deeds (Exhibit D) Undisputed. 

Deeds contains the following 

recitals: "All requirements of 

law regarding the mailing of 

copies of notices or the 

publication of the notice of 

Default or the personal 

delivery of the copy of the 

Notice of Default and the 

posting and publication of 

copies of Notice of Sale have 

been complied with. The 90 

day redemption period 

pursuant to California Code 

of Civil Procedure §5715 has 

passed and the prior owner of 

the property has not exercised 

the right of redemption." 

Indian Village Estates, Complaint at pp. 11-16 Undisputed. 

LLC filed this lawsuit in the (Exhibit A) 

Superior Court of California, 

Calaveras County on March 

20, 2015, alleging causes of 

action for wrongful 

foreclosure of the property, 

quiet title and slander of title 

with regard to the Property. 

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Indian Village Estates, Complaint at ¶ 16 (Exhibit Undisputed. 

LLC also seeks to set aside A) 

the trustee's sale and cancel 

the trustee's deeds that 

resulted from the foreclosure. 

There is no record that Declaration of Clifford Undisputed. 

Indian Village Estates, LLC a Stevens ¶ 5. 

Notice of Pendency of Action 

(or us pendens) in Calaveras 

County with regard to its real 

property claims. 

Gold Strike Heights Declaration of Clifford Undisputed. 

Homeowners Association Stevens ¶ 3. 

filed its Chapter 7 

Bankruptcy Petition on 

August 20, 2015. 

Gary Farrar is the Declaration of Clifford Undisputed. 

Chapter 7 Trustee in the Gold Stevens ¶ 3. 

Strike Heights Homeowners 

Association bankruptcy case 

(15-908 1 1). 

On March 8, 2016, the Joint Discovery Plan Undisputed. 

parties filed a Joint Discovery (Request for Judicial Notice, 

Plan designating March 24, Exhibit E). 

2016 as the last day for the 

parties to complete their 

Initial Disclosures. 

After the March 17, 2016 Scheduling Order (Request Undisputed. 

status conference, the court for Judicial Notice, Exhibit F) 

issued a Scheduling Order 

establishing that the last date 

to make initial disclosures 

was March 24, 2016. 

UNDISPUTED FACTS RESPONSE 

ASSERTED BY CONFIRMING 

PLAINTIFF (Dckt. 44) UNDISPUTED FACT 

(Dckt. 53) 

1. Defendant Gold Strike Undisputed 

Heights Homeowners 

Association is the debtor in 

bankruptcy case. 

ri 

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10. On January 12, 2015, a Defendant-Trustee's Request Undisputed. 

"Trustee's Deed" was for Judicial Notice, Exhibit 

recorded by Gold Strike 

Heights Homeowners 

Association for each of the 

31 lots with the Calaveras 

County Recorder that states 

that the purchaser of each lot 

was Gold Strike Heights 

Homeowners Association. 

DEFENDANT-TRUSTEE UNDISPUTED FACT 

RESPONSE ASSERTED BY 

(Dckt. 53) PLAINTIFF 

(Dckt._50) 

Undisputed 1. Defendant Gold Strike 

Heights Homeowners 

Association is the D=debtor 

in bankruptcy case. 

Undisputed. EVIDENCE: 10. On January 12, 2015, a 

Trustee's Request for Judicial "Trustee's Deed" was 

Notice, Exhibit "D". recorded by Gold Strike 

Heights Homeowners 

Association for each of the 

31 lots with the Calaveras 

County Recorder that states 

that the purchaser of each lot 

was Gold Strike Heights 

Homeowners Association. 

PLAINTIFF'S OPPOSITION 

Plaintiff filed a response to Defendant-Trustee's Motion on July 21, 2016. Dckt. 49. The 

Plaintiff asserts that there are material facts in dispute that preclude summary judgment. According 

to the Plaintiff, although the Defendant-Trustee claims that Gold Strike 2007 initiated the nonjudicial foreclosure that is the subject of this dispute, all documentary evidence, which includes all 

the recorded foreclosure notices issued prior to and subsequent to the foreclosure, state that it is nondebtor and suspended corporation Gold Strike Heights Association ("Gold Strike 2002") that 

initiated this foreclosure. 

Second, the Defendant-Trustee claims that Gold Strike 2007 purchased all the lots at a public 

auction on September 30, 2014. However, the recorded notices entitled "Certificate of Foreclosure 

Sale Subject to Redemption" state that non-debtor Gold Strike 2002 was the purchaser of the 31 lots. 

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1 Third, although the Defendant-Trustee claims that the purchase of the 31 lots is reflected in 

2 each of the 31 "Trustee's Deeds" in favor of Gold Strike 2007 (recorded in Calaveras County on 

3 January 12, 2015), the purchaser at the public auction was non-debtorGold Strike 2002. These 

4 deeds were prepared so as to act as a transfer of the real property from Gold Strike 2002 to Gold 

5 Strike 2007 in violation of California Revenue and Taxation Code § 23302, which prohibits a 

6 suspended corporation from transferring any interest in real property while under suspension. 

7 Plaintiff asserts that an entity other than Gold Strike 2007 purchased the lots at issue. The 

8 Plaintiff states that after the foreclosure sale conducted in September 2014 had concluded, Gold 

9 Strike 2002 recorded 31 separate notices with Calaveras County recorder that stated that Gold Strike 

10 2002 had purchased all 31 lots at the sale conducted on September 30, 2014. The declarations of 

11 Don Lee and Mark Weiner corroborate that it was in fact Gold Strike 2002 who made a full-credit 

12 bid on each of the 31 lots and that there were no other bidders for any of the 31 lots. Dckt. 45 and 46. 

13 Plaintiff asserts that non-debtor Gold Strike 2002 never transferred any rights, assets, or 

14 I liabilities to Gold Strike 2007. Within the declarations of Don Lee and Mark Weiner are first-hand 

15 factual statements that establish that Gold Strike 2002 never entered into any transfer of its assets, 

16 liabilities, or rights to Gold Strike 2007. 

17 Plaintiff asserts that California Revenue and Taxation Code § 23301 states that a suspended 

18 corporation may not initiate a non-judicial foreclosure while under suspension. Furthermore, Plaintiff 

19 contends that California Revenue and Taxation Code § 23302 states that a suspended corporation 

20 may not transfer any interests it may have in real property while suspended. 

21 Lastly, the Plaintiff argues that although Plaintiff Indian Village failed to file its initial 

22 discovery disclosures, it is also true that Defendant-Trustee filed his initial disclosures on March 24, 

23 2016, and withdrew them the following day on March 25, 2016. See Dckt. 28, 29 and 30. 

24 The Plaintiff more generally argues that the Defendant-Trustee had constructive notice that 

25 Gold Strike 2002 foreclosed on the 31 lots and yet the trustees deeds were to Gold Strike 2007 and 

26 all of the documents of foreclosure were recorded in Calaveras County. The Plaintiff seems to view 

27 this discrepancy as proof that no notice was given at all. 

28 In support of all of these contentions, the Plaintiff filed the declarations of Mark Weiner and 

n. 

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Don Lee. Dckt. 45 and 46. 

DEFENDANT-TRUSTEE'S RESPONSE 

The Defendant-Trustee reiterated many of the same arguments and points that were made in 

the initial Motion for Summary Judgment. The following are additional arguments: 

Any claims Indian Village may have had against Gold Strike 2007, prior to bankruptcy, 

to rescind the foreclosure are now moot because Mr. Farrar has the protection of a bonafide 

purchaser. In the absence of a lis pendens, his interest as Trustee in the subject property is 

free and clear of Indian Village's claims. 

As bona JIde purchaser, Mr. Farrar is entitled to the conclusive presumption under 

California Civil Code section 2924(c) that there was no defect in the notices of default and 

the sale that issued in the foreclosure process. Nothing in Indian Village's opposition shows 

that there are disputed material facts. 

The identity of the initiating and purchasing party at the foreclosure sale and any 

information, other than what is stated in the Trustee's Deeds Upon Sale, are immaterial in 

this case because the property has been later conveyed to a bona fide purchaser (the Trustee) 

without notice of the dispute. 

Constructive notice of a lawsuit affecting title or possession of real property is given by 

filing a Notice of pendency of Action pursuant to California Code of Civil Procedure 

sections 405-405.24. The failure to file a lis pendens means that no constructive notice of 

the lawsuit is given and, in a quiet title action, any judgment is non-binding against persons 

with a recorded interest. Cal. Code Civ. Proc. Section 764.045(a). Even if the Chapter 7 

Trustee should have "researched" the status of the entity he was purchasing from, in this case 

that entity would have been Debtor Gold Strike 2007, not Gold Strike 2002. 

Mr. Farrar as the bonajIde purchaser of the subject property has an independent right to 

rely on the recitals in the trustee's deeds of sale that the foreclosure was valid. Cal Civ. Code 

Section 2924(c). This presumption, coupled with Indian Village's failure to provide 

constructive notice via a lis pendens means that the Trustee's interest in the subject property 

is free of the claims by Indian Village. 

Mr. Farrar complied with Rule 26, Indian Village has not and Indian Village alone should 

be bared from introducing evidence. 

DEFENDANT-TRUSTEE'S OBJECTION TO PLAINTIFF'S EVIDENCE 

IN RESPONSE TO MOTION FOR SUMMARY JUDGMENT 

Defendant-Trustee objects to the declarations of Don Lee and Mark Weiner in their entirety 

on the ground that they are irrelevant. Fed. R. Evid. 401(b). In order to be relevant, a fact must be 

"of consequence in determining the action." The contents of the declarations of Mr. Lee and 

Mr. Weiner all refer to the alleged dispute regarding the relationship between Gold Strike 2007 and 

Gold Strike 2002. These facts fail to establish that the Chapter 7 Trustee had constructive notice of 

the dispute in light of Indian Village's failure to file and record a Notice of Pendency of Action and 

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ii because they are not apparent on the face of the Trustee's Deeds upon sale which contain recitals that 

rd establish a conclusive presumption that there are no defects in the foreclosure documents. 

3 Defendant-Trustee objects to the documents contained in Indian Village's Request for 

4 Judicial Notice on the grounds that they are irrelevant. Fed. R. Evid. 401(b). Under California Civil 

5 Code section 2924(c) the Chapter 7 Trustee, as a bonajIde purchaser, is entitled to rely on the 

6 Trustee's Deeds as conclusive evidence against the defects alleged in the other foreclosure 

7 documents. The Certificate of Status of Gold Strike 2002 and Gold Strike 2007 filed as Exhibit A 

8 of Indian Village's original complaint is irrelevant to the recorded foreclosure document. 

9 SUMMARY JUDGMENT STANDARD 

10 In an adversary proceeding, summary judgment is proper when "the movant shows that there 

11 is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of 

12 law." Fed. R. Civ. P. 56(a), incorporated by Fed. R. Bankr. P. 7056. The key inquiry in a motion 

13 for summary judgment is whether a genuine issue of material fact remains for trial. Fed. R. Civ. P. 

14 56(c), incorporated by Fed. R. Bankr. P. 7056; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 

15 248-50 (1986); 11 James Wm. Moore et al., Moore's Federal Practice § 56.11[1][b] (3d ed. 2000) 

16 ("Moore"). 

17 "[A dispute] is 'genuine' only if there is a sufficient evidentiary basis on which a reasonable 

18 fact finder could find for the nonmoving party, and a dispute [over a fact] is 'material' only if it 

19 could affect the outcome of the suit under the governing law." Barboza v. New Form, Inc. (In re 

20 Barboza), 545 F.3d 702, 707 (9th Cir. 2008) (citingAnderson v. Liberly, Lobby, Inc., 477 U.S. 242, 

21 248 (1986)). 

22 The party moving for summary judgment bears the burden of showing the absence of a 

23 genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). To support the 

24 assertion that a fact cannot be genuinely disputed, the moving party must "cit[e] to particular parts 

25 of materials in the record, including depositions, documents, electronically stored information, 

26 affidavits or declarations, stipulations. . . , admissions, interrogatory answers, or other materials." 

27 Fed. R. Civ. P. 56(c)(1)(A), incorporated by Fed. R. Bankr. P. 7056. 

28 In response to a properly submitted motion for summary judgment, the burden shifts to the 

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1 nonmoving party to set forth specific facts showing that there is a genuine dispute for trial. Barboza, 

2 545 F.3d at 707 (citing Henderson v. City ofSimi Valley, 305 F.3d 1052, 1055-56 (9th Cir. 2002)). 

3 The nonmoving party cannot rely on allegations or denials in the pleadings but must produce specific 

4 evidence, through affidavits or admissible discovery materials, to show that a dispute exists. Id. 

5 (citingBhan v. NME Hosps., Inc., 929 F.2d 1404, 1409(9th Cir. 1991)). The nonmoving party "must 

6 do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita 

7 Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). 

8 In ruling on a summary judgment motion, the court must view all of the evidence in the light 

9 most favorable to the nonmoving party. Barboza, 545 F.3d at 707 (citing Cnty. of Tuolumne v. 

10 Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001)). The court "generally cannot grant 

11 summary judgment based on its assessment of the credibility of the evidence presented." Agosto v. 

12 INS, 436 U.S. 748, 756 (1978). "[A]t the summary judgment stage[,] the judge's function is not 

13 himself to weigh the evidence and determine the truth of the matter[,] but to determine whether there 

14 is a genuine issue for trial." Anderson, 477 U.S. at 249. 

15 DISCUSSION 

16 This adversary proceeding is merely another step in along, drawn out, and ongoing legal and 

17 personal battle between Mark Weiner, the homeowners association for that development purported 

18 to be controlled by local residents, and Don Lee. Gold Strike 2007 filed for bankruptcy on 

19 August 20, 2015, and this case was removed to this Bankruptcy Court in November of 2015. 

20 Defendant-Trustee, as the Trustee for Gold Strike 2007's estate has inherited the responsibility to 

21 assert and defend the rights and interests of the bankruptcy estate. 

22 First Cause of Action: Declaratory Relief 

23 The First Cause of Action is titled as Declaratory Relief - seeking a determination from the 

24 I court: 

25 A. Whether Gold Strike 2002 and Gold Strike 2007 are separate entities, or Gold Strike 

2007 is the successor entity to Gold Strike 2002; 

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B. Whether Gold Strike 2002 could conduct a non-judicial foreclosure sale on the 

27 31 lots when it was a suspended corporation; 

28 C. Whether Gold Strike 2007 conducted the non-judicial foreclosure sale; and 

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D. Whether Gold Strike 2002 could transfer title to the 31 lots, when its corporate 

powers were suspended to Gold Strike 2007. 

While the Plaintiff is enamored with wanting to address these issues for purposes of 

obtaining a declaration from the court, they do not state grounds upon which declaratory relief may 

be sought. 

Declaratory relief is an equitable remedy distinctive in that it allows adjudication of rights 

and obligations on disputes regardless of whether claims for damages or injunction have arisen. See 

Declaratory Relief Act, 28 U.S.C. § 2201 . 1 "In effect, it brings to the present a litigable controversy, 

which otherwise might only be tried in the future." Societe de Conditionnement v. Hunter Eng. Co., 

Inc., 655 F.2d 938, 943 (9th Cir. 1981). The party seeking declaratory relief must show (1) an actual 

controversy and (2) a matter within federal court subject matter jurisdiction. Calderon v. Ashmus, 

523 U.S. 740, 745 (1998). There is an implicit requirement that the actual controversy relate to a 

claim upon which relief can be granted. Earnest v. Lowentritt, 690 F.2d 1198, 1203 (5th Cir. 1982). 

The court may only grant declaratory relief where there is an actual controversy within its 

jurisdiction. Am. States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9thCir. 1994). The controversy must 

be definite and concrete. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41 (1937). However, 

it is a controversy in which the litigation may not yet require the award of damages. Id. 

1 28U.S.C.2201. Creation of remedy 

In a case of actual controversy within its jurisdiction, except with respect to 

Federal taxes other than actions brought under section 7428 of the Internal 

Revenue Code of 1986, a proceeding under section 505 or 1146 of title 11, or in 

any civil action involving an antidumping or countervailing duty proceeding 

regarding a class or kind of merchandise of a free trade area country (as defined in 

section 51 6A(f)(1 0) of the Tariff Act of 1930), as determined by the administering 

authority, any court of the United States, upon the filing of an appropriate 

pleading, may declare the rights and other legal relations of any interested party 

seeking such declaration, whether or not further relief is or could be sought. Any 

such declaration shall have the force and effect of a final judgment or decree and 

shall be reviewable as such. 

For limitations on actions brought with respect to drug patents see section 505 

or 512 of the Federal Food, Drug, and Cosmetic Act, or section 351 of the Public 

Health Service Act. 

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1 Here, the shots have been fired and battlefield set. It is the actual rights and interests in the 

2 31 lots which must be adjudicated, not what might be the rights of the parties in the future, if in the 

3 future Gold Strike 2002 were to conduct a sale or was to record deeds. These issues, and the 

4 determination thereof, are elements of a quite title action or other claim, not an independent claim 

5 for declaratory relief. 

6 Second Cause of Action: to Set Aside Trustee's Sale 

7 In the Second Cause of Action, Indian Village asserts that Gold Strike 2002, Gold Strike 

8 2007, and Community Assessment Recovery Services did not have the right and power to conduct 

9 a sale of the 31 lots. This was because: (1) Gold Strike 2002 had it corporate powers suspended; and 

10 (2) No assessment for fees, upon which the alleged foreclosure was based, had been set by Gold 

11 Strike 2002 or Gold Strike 2007. 

12 Indian Village alleges that it acquired title to the 31 lots in 2004. Thus, this Second Cause 

13 of Action, titled to "set aside" the sale is actually one to quite title, asserting that the foreclosure 

14 deeds are of no force and effect. This is contrasted with admitting that a sale occurred, but that the 

15 sale may be "unwound." 

16 Third Cause of Action: To Cancel Trustee's Deed 

17 The Third Cause of Action seeks to "cancel" the Trustee's Deeds for the 31 lots. However, 

18 it is alleged that the deeds are void and did not work to transfer any interest in the 31 lots. Rather 

19 than "cancelling" the Trustee's Deeds, this appears to be a restated version of the Second Cause of 

20 Action, which is to determine that the Trustee's Deeds are void and quite title as between the estate 

21 and Indian Village. (Seeking to "cancel" a deed connotes an admission that the deed validly 

22 transferred an interest, but must be rescinded.) 

23 Fourth Cause of Action: Wrongful Foreclosure 

24 In this Fourth Cause of Action, the general allegation is made that Gold Strike 2007 engaged 

25 in a "fraudulent foreclosure" on the 31 lots. It is asserted that none of the Defendants had the right 

26 and ability to declare a default and foreclose on the lots. It is asserted that there are some damages 

27 which flow from the foreclosure. 

III 

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1 Fifth Cause of Action: Quiet Title 

2 In the Fifth Cause of Action, Indian Village requests that the court quite title to the 31 lots 

3 as between the Plaintiff and the Defendants. It is alleged that none of the Defendants did, or could 

4 have, acquired any interest in the 31 lots by virtue of the non-judicial foreclosure sales. 

5 I Sixth Cause of Action: Slander of Title 

6 In the Sixth Cause of Action, Indian Village asserts that the deeds recorded for the 31 lots 

7 has clouded Indian Village's title, and that such recorded non-judicial foreclosure deeds are 

8 actionable for damages arising therefrom. 

9 Basis for Summary Judgment 

10 The Defendant-Trustee's basis for summaryjudgment is quite simple - the bankruptcy trustee 

11 is clothed in the purity of the statutory bonajIde purchaser for value of real property status provided 

12 in 11 U.S.C. § 544(a)(3). Though the state court action was filed, no lispendens was recorded by 

13 Plaintiff as of the commencement of this bankruptcy case. The Defendant-Trustee further argues that 

14 pursuant to California Civil Code § 1214, a bonafide purchaser for value takes title to real property 

15 free and clear of all unrecorded interests. It is further contended that the presumptions in California 

16 Civil Code § 2924(c) place the non-judicial foreclosure deeds beyond question. 

17 Indian Village's opposition to the Motion is devoid of any discussion of the bonajIde 

18 purchaser for value status of the bankruptcy trustee, the rights of a bonajIde purchaser for value set 

19 forth in California Civil Code § 1214, or the statutory presumptions provided in California Civil 

20 Code § 2924(c). Indian Village ignores these arguments and the recorded deeds, but attacks the 

21 non-real property record foreclosure process and the corporate status of Gold Strike 2002. 

22 11 U.S.C. § 544. 11 U.S.C. § 544(a)(3) provides that: 

23 The trustee shall have, as of the commencement of the case, and without regard to 

any knowledge of the trustee or of any creditor, the rights and powers of, or may 

24 avoid any transfer of property of the debtor or any obligation incurred by the debtor 

that is voidable by... 

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• . a bona fide purchaser of real property, other than fixtures, from the debtor, against 

26 whom applicable law permits such transfer to be perfected, that obtains the status of 

a bona fide purchaser and has perfected such transfer at the time of the 

27 commencement of the case, whether or not such a purchaser exists. 

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1 The court next turns to California Civil Code 1214, which is one of the key foundations of 

2 the Motion of the Defendant-Trustee, states: 

3 § 1214. Unrecorded conveyance void as to subsequent purchaser or mortgagee 

4 Every conveyance of real property or an estate for years therein, other than a lease for 

a term not exceeding one year, is void as against any subsequent purchaser or 

5 mortgagee of the same property, or any part thereof, in good faith and for a valuable 

consideration, whose conveyance is first duly recorded, and as against any judgment 

6 affecting the title, unless the conveyance shall have been duly recorded prior to the 

record of notice of action. 

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8 There does not appear to be any dispute that the transfer of interest to Indian Village was 

9 recorded, leaving the court at a bit of a loss as to why or how this section is applicable to the dispute. 

10 The Defendant-Trustee cannot assert that Indian Village is asserting an interest based on an 

11 unrecorded deed. In the Motion, the Defendant-Trustee too broadly states the effect of California 

12 Civil Code § 1214, paraphrasing it as, "California law provides that a bona fide purchaser without 

13 notice of the dispute takes title free and clear of the competing interest. Cal. Civil Code § 1214...." 

14 It is unrecorded competing interests, not any and all competing interests. 

15 The Defendant-Trustee next builds his BFP argument on California Civil Code § 2924(c), 

16 asserting that the trustee's deeds from the non-judicial foreclosure sale are irrefutable proof that the 

17 foreclosure sale properly occurred for the purposes of a bonajide purchaser for value asserting its 

18 interest in property. California Civil Code §2924(c) [emphasis added] provides: 

19 (c) A recital in the deed executed pursuant to the power of sale of compliance with 

all requirements of law regarding the mailing of copies of notices or the 

20 publication of a copy of the notice of default or the personal delivery of the copy 

of the notice of default or the posting of copies of the notice of sale or the 

21 publication a copy shall constitute prima facie evidence of compliance with these 

requirements and conclusive evidence thereof in favor of bona fide purchases 

22 and encumbrancers for value and without notice. 

23 The core of the dispute in this Adversary Proceeding is the contention that Gold Strike 2007 

24 had the right and power to conduct a non-judicial foreclosure sale, and that Community Assessment 

25 Recovery Services could properly exercise that power. The issue is not whether notices were mailed, 

26 publications made, personal delivery completed, notices posted, or notices published - the statutory 

27 presumptions. The Defendant-Trustee overstates this statutory provision, asserting, "However, Mr. 

28 Farrar, as the bonafide purchaser of the subject property has an independent right to rely on the 

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1 recitals in the trustee's deeds of sale that the foreclosure was valid." In substance, the Defendant2 Trustee argues that a forged, fraudulent trustee's deed is made valid merely because the thief is able 

3 to sell the property to an innocent, bonajide purchaser for value, defeasing the actual owner of right, 

4 title and interest. 

5 Who purported to conduct the sale is the issue. The Defendant-Trustee asserts that it was 

6 Gold Strike 2007, and cites the court to the amendment to the Declaration of Restrictions for Gold 

7 Strike 2007, which states, 

8 WHEREAS, on May 15, 2007 a new corporation was formed to succeed In 

Interest the suspended corporation formed by WESTWIND DEVELOPMENT, 

9 INC., and 

10 WHEREAS, the new corporation formed in May of 2007 identified as the GOLD 

STRIKE HEIGHTS HOMEOWNERS ASSOCIATION is the full successor in 

11 Interest to the old corporation Identified as the GOLD STRIKE HEIGHTS 

ASSOCIATION formed in March of 2002 by WEST WIND DEVELOPMENT, INC" 

12 and 

13 NOW, THEREFORE, said "DECLARANT" hereby certifies and declares the 

following amendments to the heretofore recorded restrictions: 

14 

Article 1, Section 1.3, page 2, the following changes are to be made: 

15 

"GOLD STRIKE HEIGHTS ASSOCIATION, a California nonprofit benefit 

16 corporation" shall be changed to read: "GOLD STRIKE HEIGHTS HOMEOWNERS 

ASSOCIATION, a California nonprofit benefit corporation". 

17 

This amendment shall become a part and portion of said heretofore recorded 

18 "Declaration of Restrictions" (CC&Rs) recorded in the County of Calaveras on 

March 13, 2002." 

19 

20 Exhibit C, Dckt. 35. 

21 Countering this document is the testimony under penalty of perjury of Mark Weiner 

22 (Dckt. 45) and Don Lee (Dckt. 46) which state that the two of them formed Gold Strike 2007. That 

23 each have remained members of the Gold Strike 2002 and that no rights were transferred to Gold 

24 Strike 2007. Neither testifies to how and what they mean by saying no rights were transferred, when 

25 the Amendment to Declaration of Restrictions was filed which state that Gold Strike 2007 is the "full 

26 successor in interest" to Gold Strike 2002 or that the name "Gold Strike Heights Homeowners 

27 Association" replaces "Gold Strike Heights Association in the Restrictions." 

28 While the testimony under penalty of perjury by Mr. Weiner and Mr. Lee may appear suspect, 

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such requires a credibility determination by the court. There is some evidence presented by these 

two witnesses. The court reserves, and must determine, the credibility of this testimony at trial. 

Denial of Motion for Summary Judgment 

The court denies the Motion for Summary Judgment. Pursuant to Federal Rule of Civil 

Procedure 5 6(g), the court shall enter an order on the motion determining all of the undisputed facts 

set forth above as finally determined for all purposes of this Adversary Proceeding. 

This Memorandum Opinion and Decision constitutes the court's findings of fact and 

conclusions of law in ruling on this Motion for Summary Judgment. 

Dated: August Fl, 2016 

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Instructions to Clerk of Court 

Service List - Not Part of Order/Judgment 

The Clerk of Court is instructed to send the Order/Judgment or other court generated 

document transmitted herewith to the parties below. The Clerk of Court will send the document 

via the BNC or, if checked ____, via the U.S. mail. 

Debtor(s) Attorney for the Debtor(s) (if any) 

Bankruptcy Trustee (if appointed in the Office of the U.S. Trustee 

case) Robert T. Matsui United States Courthouse 

5011 Street, Room 7-500 

Sacramento, CA 95814 

James L. Brunello Ricardo Z. Aranda 

P.O. Box 4155 Neumiller & Beardslee 

El Dorado Hills, CA 95762 P.O. Box 20 

Stockton, CA 95201-2030 

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