Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_09-cv-05721/USCOURTS-cand-3_09-cv-05721-5/pdf.json

Parties Involved:
First Guaranty Mortgage Corporation
Defendant
Jahi Ohmahree Spears
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

JAHI OHMAHREE SPEARS,

Plaintiff,

v.

FIRST GUARANTY MORTGAGE

CORPORATION, et al.,

Defendants.

NO. C09-5721 TEH

ORDER GRANTING

DEFENDANT’S MOTION FOR

SUMMARY JUDGMENT AND

DENYING REQUEST FOR

SANCTIONS

This matter comes before the Court on a motion for summary judgment filed by

Defendant First Guaranty Mortgage Corporation, which also requested further monetary

sanctions against Plaintiff’s counsel in its reply brief. After carefully reviewing the parties’

written arguments, and in the absence of any request for oral argument, the Court finds a

hearing to be unnecessary. For the reasons discussed below, the Court now GRANTS the

motion for summary judgment but DENIES the request for an order to show cause as to why

additional sanctions should not be imposed.

BACKGROUND

The Court has previously discussed the factual and procedural background of this case

and will not repeat that history in detail here. See Feb. 25, 2010 Order at 1-5. In brief,

Plaintiff Jahi Ohmahree Spears is the son of Carolyn Bell, who formerly owned the property

located at 151 Fuchsia Court, Hercules, California. In February 2007, Ms. Bell sold the

property to Dissrew Brown, who obtained a mortgage from Defendant First Guaranty to

purchase the property. One week before this mortgage funded, Ms. Brown signed a grant

deed conveying the property to Mr. Spears as a gift. This grant deed was signed on

February 8, 2007, but not filed with the county recorder until September 10, 2007.

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United States District Court

For the Northern District of California

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At some point, Ms. Brown failed to make the payments on her mortgage, and First

Guaranty began foreclosure proceedings. The company recorded a notice of default with the

county on September 14, 2007, and a notice of trustee’s sale on December 24, 2008. Both

notices listed Ms. Brown as trustor of the property and made no mention of Mr. Spears. 

Although First Guaranty has provided evidence that it sent copies of both notices to

Mr. Spears, Mr. Spears contends that he never received either notice. First Guaranty

ultimately obtained title to the property on January 21, 2009, following a trustee’s sale.

The complaint in this case alleges seven state law claims, all of which are premised on

the allegation that First Guaranty failed to properly notify Mr. Spears of the foreclosure and

trustee’s sale. First Guaranty initially filed its motion for summary judgment on

December 11, 2009. After Mr. Spears failed to file an opposition or statement of nonopposition, the Court vacated the summary judgment motion hearing and issued an order to

show cause as to why the case should not be dismissed for failure to prosecute. Mr. Spears

failed to respond to the order to show cause, and the Court therefore dismissed the case with

prejudice on January 21, 2010, and entered judgment the following day.

Mr. Spears and Ms. Bell subsequently appeared before the Court on the previously

scheduled summary judgment motion hearing date and asserted that Mr. Spears’s counsel,

Mr. Thomas Swihart, told them that he no longer represented Mr. Spears. They also stated

that Mr. Swihart informed them that this case was being dismissed, but that they could

appear before the Court to ask for more time to find new counsel. The Court thereafter

vacated the judgment and ordered Mr. Swihart, who always remained counsel of record to

Mr. Spears, to show cause as to why sanctions should not be imposed for his failure to follow

Court orders and rules.

Following a February 22, 2010 hearing, the Court imposed sanctions against

Mr. Swihart and renewed First Guaranty’s motion for summary judgment via written order

on February 25, 2010. The parties filed timely opposition and reply briefs pursuant to that

order, and the motion is once again before the Court.

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LEGAL STANDARD

Summary judgment is appropriate when there is no genuine dispute as to material

facts and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). 

Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is “genuine” if there is

sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. The

court may not weigh the evidence and must view the evidence in the light most favorable to

the nonmoving party. Id. at 255.

A party seeking summary judgment bears the initial burden of informing the court of

the basis for its motion, and of identifying those portions of the pleadings and discovery

responses that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986). Where the moving party will have the burden of proof at

trial, it must affirmatively demonstrate that no reasonable trier of fact could find other than

for the moving party. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 985 (9th Cir. 2007). 

However, on an issue for which its opponent will have the burden of proof at trial, the

moving party can prevail merely by “pointing out to the district court . . . that there is an

absence of evidence to support the nonmoving party’s case.” Celotex, 477 U.S. at 325. If

the moving party meets its initial burden, the opposing party must then “set out specific facts

showing a genuine issue for trial” to defeat the motion. Fed. R. Civ. P. 56(e)(2); Anderson,

477 U.S. at 250.

DISCUSSION

The parties agree that the primary issue in this case is whether First Guaranty

complied with California Civil Code section 2924b(c), which provides that:

The mortgagee, trustee, or other person authorized to record the

notice of default or the notice of sale shall do the following:

(1) Within one month following recordation of the notice of

default, deposit or cause to be deposited in the United States

mail an envelope, sent by registered or certified mail with

postage prepaid, containing a copy of the notice with the

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recording date shown thereon, addressed to each person set

forth in paragraph (2), provided that the estate or interest of

any person entitled to receive notice under this subdivision

is acquired by an instrument sufficient to impart constructive

notice of the estate or interest in the land or portion thereof

that is subject to the deed of trust or mortgage being

foreclosed, and provided the instrument is recorded in the

office of the county recorder so as to impart that

constructive notice prior to the recording date of the notice

of default and provided the instrument as so recorded sets

forth a mailing address that the county recorder shall use, as

instructed within the instrument, for the return of the

instrument after recording, and which address shall be the

address used for the purposes of mailing notices herein.

(2) The persons to whom notice shall be mailed under this

subdivision are:

(A) The successor in interest, as of the recording

date of the notice of default, of the estate or

interest or any portion thereof of the trustor

or mortgagor of the deed of trust or

mortgage being foreclosed.

Cal. Civ. Code § 2924b(c). The parties do not dispute that Mr. Spears satisfies the

description under paragraph (2)(A) and that First Guaranty was therefore required to notify

Mr. Spears in accord with this statute.

First Guaranty has presented evidence that copies of the notice of default and notice of

trustee’s sale were sent to Mr. Spears by certified mail on October 11, 2007. As required by

statute, these notices were sent to Mr. Spears at the address listed on the grant deed

transferring the property from Ms. Brown to Mr. Spears. See Cal. Civ. Code § 2924b(c)(1)

(providing that “the address used for the purposes of mailing notices” shall be the address

provided in the grant deed for use by the county recorder in returning the deed after

recording). The notices were also sent to Mr. Spears at the subject property.

Mr. Spears asserts in a declaration that he never received copies of either notice. In

his opposition to the motion, he also makes note of the fact that First Guaranty failed to

provide copies of any return receipts. However, the statute requires only that notice be sent

by registered or certified United States mail and does not require a return receipt. See

Moores v. Bd. of Supervisors of Mendocino County, 122 Cal. App. 4th 883, 891 (2004)

(explaining that the California Legislature “knows how to impose” a requirement that a

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return receipt be used, and that if the Legislature did not do so, “it is not a judicial function to

rewrite the statute by inserting such a requirement”).

More importantly, the statute does not require that Mr. Spears actually have received

the notices. As one California appellate court has held:

We pointedly emphasize, however, that Civil Code sections

2924-2924h, inclusive, do not require actual receipt by a trustor of a

notice of default or notice of sale. They simply mandate certain

procedural requirements reasonably calculated to inform those who

may be affected by a foreclosure sale and who have requested notice

in the statutory manner that a default has occurred and a foreclosure

sale is imminent.

Lupertino v. Carbahal, 35 Cal. App. 3d 742, 746-47 (1973). Another court has similarly

held that “[t]he trustor need not receive actual notice of the trustee’s sale so long as notice is

provided to the trustor that is in compliance with the statute.” Knapp v. Doherty, 123 Cal.

App. 4th 76, 88-89 (2004). Inexplicably, Mr. Spears failed to address either of these cases in

his opposition.

The Court finds this case materially indistinguishable from Knapp v. Doherty, in

which a California appellate court held that summary judgment was proper under similar

facts. There, as here, the defendant submitted affidavits that the sale notice was mailed to

plaintiffs, and plaintiffs submitted their own testimony that they never received the notice. 

Id. at 87-88 & n.5. The court held that the plaintiffs’ evidence failed to raise a triable issue

of material fact: “Even assuming that Borrowers raised a disputed issue of fact – namely,

whether they actually received the Sale Notice – this issue was not a material one.” Id. at 88. 

At best, the court held, evidence that the plaintiffs did not actually receive the sale notice

“raised an issue of immaterial fact,” and that the court “need not resolve whether Borrowers,

in fact, received the Sale Notice” because “[i]t suffices that the evidence demonstrated that

the trustee mailed the Sale Notice to Borrowers as required under section 2924b, subdivision

(b)(2).” Id. at 89 & n.7.

Section 2924b(b)(2) contains identical language to section 2924b(c)(2), the statute at

issue in this case. Both provisions require that the mortgagee, trustee, or other authorized

person “deposit or cause to be deposited in the United States mail an envelope, sent by

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registered or certified mail with postage prepaid, containing a copy of the [required] notice”

to specified individuals within a specific time frame. Consequently, following Knapp, this

Court now GRANTS First Guaranty’s motion for summary judgment. While Mr. Spears has

submitted a declaration that he never received the notice of default or notice of trustee’s sale,

he has not submitted any evidence that these notices were not actually sent, nor has he

presented any authority that California law requires that the notices actually be received.

Summary judgment is therefore proper.

First Guaranty also requests in its reply papers that this Court issue an order to show

cause as to why additional sanctions should not be imposed against Mr. Swihart. The Court

DENIES this request because it finds that, while Mr. Swihart’s opposition papers certainly do

not demonstrate the highest level of competence, they do not appear to have been filed in bad

faith or for any improper motive.

CONCLUSION

For the reasons discussed above, the Court GRANTS First Guaranty’s motion for

summary judgment in its entirety but DENIES First Guaranty’s request for additional

sanctions against Mr. Swihart. The Clerk shall enter judgment and close the file.

IT IS SO ORDERED.

Dated: 03/22/10 

THELTON E. HENDERSON, JUDGE

UNITED STATES DISTRICT COURT

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