N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT

In re : GOLD STR

IKE HEIGHTS ASSOC IATION,

De btor,

______________________________ INDIAN VILLAGE ESTATES, LLC ,

Pla i ntiff-Appe lla

nt,
v. C OM M UNITY ASSESSM ENT REC OVER

Y SER VIC E S; GAR

Y FARR A R , C ha pte r 7 Truste e , De fe nda n ts-Appe lle e s. No. 19-16152 DC No. 2:18 c v -0973-JAM
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Ea ste rn Distric t of C a lifornia J ohn A. M e nde z , Distric t Judge , Pre siding A rgue d a nd Subm itte d

August 12, 2020 San Fran c isc o , C a lifornia 

# FIL ED
SEP 22 2020 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.B e fore : TASHIM Aand C HR ISTEN, C irc u i t Judge s, a nd B ATAILLON, ** Distric t Judge
. India n Villa ge Esta

te s (IVE) a

ppe a ls from

the judgm e nt e nte re d in fa v or of C om m unity Asse ssm e n t R e c o v e ry

Se rvic e s (C AR S) and Ga ry Farrar, the C ha

pte r 7 truste e for the ba

nkruptc y e sta te of Gold StrikeHe ights Hom e owne rs Assoc iat ion (Truste e ). IVE’ s sta te c ourt a c tion a ga inst C AR S a nd the hom e owne rs’ a ssoc i ation wa s re m ove d to ba nkruptc y c ourt a fte r the hom e owne rs’
a ssoc iation file d for C ha

pte r 7 ba nkruptc y . The distric t c ourt a ffirm e d the ba nkruptc y c ourt’ s judgm e nt in fa

vor of a ppe lle e s on a ll of IVE’ s c la im s. W e have jurisdic tion unde r 28 U.S.C
. §§ 158(d) a nd 1291. W e a ffirm
. B ACK G RO UND This c a se pre se nts a

n unusua l situa

tion in whic h a

pa rty a lle g ing wrongful fore c losure is a ffilia

te d with thee ntity

tha t a lle ge dly

ha d no a uthority to fore c lose
. IVE, the pa

rty a l le ging wrongful fore c losure , is a n e ntity c ontrolle d by

M ark W e ine r. In 2004 a

n d 2005, IVE purc ha se d thirty -one of the forty -nine lots in the Gold StrikeHe ights Subdivision from the de ve l ope r, W e stwind De ve lopm e nt Inc
. As a c ondition of his purc

ha se , W e ine r re quire d W e stwind to a ppoint him

and Don Le e to the boa

rd of the hom e owne rs’ a ssoc iation gove rning thesubdivision, the

* * The Honora

ble Jose ph F. B ata illon, Unite d Stat e s Distric t Judge for the D istric t of Ne b ra ska , sitting by de signa tion. 2Gold StrikeHe ights Assoc iation (Gold Strike 1). Howe ve r, a fte r le a

rning tha t Gold Strike1 wa s a

suspe nde d c orporation for fa ilure to file a Stat e m e nt of Inform at ion with the

Se c re ta ry of State and fa ilure to pa y taxe s to theFranc hise Ta x B oa rd, W e ine r and Le e form e d a ne w hom e o wne rs’ a ssoc iation in 2007. The y
a dde d one word to Gold Strike 1’ s na m e and c a lle d the ne w hom e owne rs’
a ssoc iation the Gold StrikeHe i ghts Hom e owne rs Assoc iation (Gold Strike 2). W e ine r am e nde d

Gold Strike1’ s De c la

ra tion of R e stric tions (C C & R ’ s) to m ake Gold Strike2 the “ full suc c e ssor in intere s t” to Gold Strike 1 a nd to tra nsfe r “ full
c ontrol” of the subdivision to Gold Strike 2. W e ine r kne w tha

t, be c a u se Gold Strike 1’ s a

nd Gold Strike2’ s na

m e s we re so simila

r, the nam e s we re ofte n
c onfuse d a

nd we re use d inte rc ha

nge a bly on boa rd m e e ting minute s a

nd a ge nda s, inc l uding a ge nda s pre p are d by Le e . In 2010, W e ine r and Le e we re ouste d from the boa rd of Gold Strike2, le a ding to litiga

tion be twe e n Gold Strike2 a nd IVE, W e ine r, and Le e . Pursua nt to
a 2011 se ttle m e nt a g re e m e nt, IVE a g re e d to a llow only loc a l re side nts to se rve a s boa rd m e m be rs in e xc ha

nge for pa

y ing re duc e d a ssoc i ation due s a nd a sse ssm e nts to Gold Strike 2. 1 In 2012, IVE unila te ra lly de c ide d to stop pa

y i ng a ssoc i ation

1 W e ine r “ wa s a

de ve lope r who live d outsidethe are a .”

3due s a

n d a sse ssm e nts, purporte dly due to Gold Strike 2’ s fina nc ia l
m ism ana ge m e n t. M ike C oope r, the pre s ide nt of Gold Strike 2’ s boa rd of dire c tors, c o nta c te d C AR S to c o lle c t the de linque nt due s a nd a sse ssm e nts from

IVE on Gold Strike

2’ s be ha lf. In July

2012, Gold Strike

2 e n te re d into a

c ontra c t with C AR S for the latte r to c o lle c t the de l inque nt due s a nd a sse ssm e nts a

nd to a c t a s truste e for nonjudic ia l fore c losure proc e e dings on the prope rty owne d by IVE. Pursua nt to C a lifornia

sta tute s gove rning nonjudic i a l fore c losure s, 2 C AR S
se nt IVE notic e s of inte nt to filea notic e of de linque n t a sse ssm e nt on IVE’ s prope rty , a

nd in M arc h 2013, C AR S file d a nd se rve d thirty -one notic e s of de linque nt a sse ssm e nt re ga rding IVE’ s prope rty . The notic e s sta te d tha t C AR S
re pre se nte d “ Gold StrikeHe ights Assoc iation,” and tha t notic e wa s give n pursua n t to the C C & R ’ s of “ Gold StrikeHe ights Assoc iation.” W e ine r wrote a

le tte r to C AR S on IVE’ s be ha lf, sta ting tha t the Gold Strike He ights Assoc iation (Gold Strike 1) no longe r gove rne d the Gold StrikeHe ights

2 “ C a lifornia ’ s nonjudic ia l fore c losure sc he m e is se t forth in C i vil C ode §§ 2924–2924k, whic

h ‘ p rovide a

c om pre h e nsive fram e w ork for the re gula tion of a nonjudic ia l fore c losure sa le pursua nt to a powe r of sa l e c onta i ne d in a de e d of trust.’ ” Gome

s v . C ountryw ideHomeLoans, Inc

. , 121 C a l. R ptr. 3d 819, 823 (C t. App. 2011) (quoting Moe lle r v . Lie n , 30 C a l. R ptr. 2d 777, 782 (C t. App. 1994)).

4subdivision a nd tha t the Gold Strike He ights Hom e owne rs Assoc i ation (Gold Strike 2) ha d ta

ke n ove r m ana ge m e nt of the subdivision. He c ha lle nge d C AR S’
a uthority to c olle c t m o ne y on be ha l f of Gold Strike1 tha t wa s “ a lle ge dly

owe d to
anothe r c orporate e ntity ,” Gold Strike2. Although not a c knowle dge d

in this le tte r, W e ine r kne w tha

t it wa s not Gold Strike

1 tha t initia te d the fore c losure be c a

use he
re m a ine d on the boa

rd of Gold Strike 1. W e i ne r a lso kne w that IVE owe d the de linque nt due s a

n d a sse ssm e nts to Gold Strike 2, a nd he ne ve r c ha lle nge d

the
c om puta tion of theam ounts pa st due . Nor did W e ine r c ha lle nge any a s pe c t of the fore c losure proc e s s othe r tha n the nam e of the hom e owne rs’ a ssoc iat ion. The C AR S re pre se ntative forwarde d W e ine r’ s le tte r to C oope r, who sa id that the a ssoc iation’ s attorne y a dvise d him

tha t the Gold StrikeHe ights Assoc iat ion a

nd Gold StrikeHe ights Hom e owne rs Assoc iat ion “ we re the sa m e
e ntity .” C AR S re lie d on this a ssura nc e to c o ntinue with thefore c losure proc e ss. In Oc tobe r 2013, C AR S file d fore c losure notic e s a n d se rve d c opie s on IVE. The notic e s of de fa

ult indic ate d tha

t the lie n wa s e x e c ute d by

Gold Strike1. The notic e s of truste e ’ s sa le sim i la rly indic at e d tha

t Gold Strike1 wa s the c la im ant, a nd the c e rtific ate s of fore c losure sa le indic ate d tha t Gold Strike 1 wa s the
a ssoc iation/judgme nt c re ditor, W e ine r an d Le e wrote four m ore le tte rs to C AR S,

5a sking for thele ga l ba sis for C A R S’ a uthority to c o l le c t m one y

on be ha lf of Gold Strike 1 tha

t “ a lle ge dly ” wa s owe d to Gold Strike 2. The fore c losure sa le wa s c onduc te d on Se pte m be r 30, 2014. Gold Strike 2 bought a ll thirty -one lots. In Ja nua ry 2015, C AR S re c orde d the Truste e ’ s De e ds Upon Sa le , indic at ing tha t the prope rty

wa s c o nve y e d to Gold Strike 2. IVE’ s sta t e c ourt a c t ion a ga inst C AR S, Gold Strike1, a nd Gold Strike2 wa s
re m ove d to ba

nkruptc y c ourt. The ba

nkruptc y c ourt c onduc te d a tria l and m a de de ta ile d fa c tua l and c re dibility findings, a nd c onc l usions of la

w. The ba

nkruptc y
c ourt found in fa

vor of C AR S and the Truste e and e nte re d judgm e nt in the ir favor. The c ourt e nte re d

judgm e nt quie ting title

to the thirty -one lots in fa v or of Gold Strike 2 a nd its suc c e s sor ba

nkruptc y e sta te . IVE a ppe a l e d to thedistric t c ourt, whic h a ffirm e d

the ba nkruptc y c ourt in full a fte r a

thorough re v ie w of the fa c tua l findings a nd le ga l de te rm inations. IVE time ly a ppe a le d
. DISCUSSIO N “ [W ] e re vie w a

ba nkruptc y c ourt’ s de c ision inde

pe nde ntly and without de fe re nc e to the distric t c ourt’ s de c ision.” K irk land v

. Rund (In re

EPD Inv . C

o.) , 821 F.3d 1146, 1149–50 (9th C ir. 2016). Theba nkruptc y c ourt’ s findings of fa c t
are re vie w e d for c le ar e rror and its c o nc lusions of la w a re re vie we d

de novo. Id. at 1150.
6IVE’ s wrongful fore c losure c la im wa s ba se d sole ly

on the fa c t

tha t the fore c losure notic e s liste d Gold Strike1, rathe r tha n Gold Strike2, a s the be ne fic ia ry . The ba

nkruptc y c ourt a ptly c ha ra c t e riz e d the e rror a s a

“ nam e
m iside ntific ation” ra t

he r tha n, a s IVE c onte nds, a

m atte r of the wrong e ntity fore c losing. The

c a se s on whic h IVE re lie s pre se nt ve ry diffe re n t c irc um sta

nc e s from those pre se nte d he re . 3 Unde r C a lifornia

la w, “ ‘ [a ] nonjudic ia l fore c losure sa le is pre sum e d to ha ve be e n c o nduc te d

re gula rly and fa irly ; one atta c king thesa le m ust ove rc om e this
c om m on la w pre sum ption “ by ple a ding a

nd proving a

n im prope r proc e dure and the
re sulting pre

judic e .” ’ ‘ Pre

judic e is not pre sum e d

from “ m e re irre g ula

ritie s ” in the proc e s s.’ ” K

alnok i v
. First Am. Tr. Serv i c ing Sols., LLC , 214 C a l. R

ptr. 3d 292, 311 (C t. App. 2017) (quoting, first, K napp v . Dohe rty , 20 C a l. R ptr. 3d 1, 8 n.4 (C t .

3 IVE re lie s on Yv anov a v . N e w C e ntury Mortgage

C orporation , 365 P.3d 845 (C a l. 2016), for the proposition tha t “ [a ] fore c losure initia

te d by one with no a uthority to do so is wrongful for purpose s of [a wrongful fore c losure ] a c tion.” Id. at 851. Howe ve r, this be gs the que stion of whe the r the fore c losing e ntity he re ha d a uthority to do so. M ore ove r, Yv anov a e m pha siz e d tha

t its holding wa s na rrow: “ W e hold only

tha t a borrowe r who ha s suffe re d a nonjudic ia l fore c losure doe s not la c k sta

nding to sue

for wrongful fore c losure ba s e d on a n a lle ge dly

void a ssignm e nt m e re ly

be c a u s e he or she wa s in de fa

ult on theloa

n a nd wa s not a

pa rty to the c ha lle nge d a ssignm e nt.” Id. at 848. The c ourt spe c ific a l ly sta te d tha t, “ [i] n de c iding thelim ite d

que s tion on re vie w, we are c onc e rne d only with pre judic e in the s e nse of an injury

suffic ie n tly

c onc re t e and pe rsona l to providesta nding, not with pre judic e a s a

possible e l e m e nt of the wrongful fore c losure tort.” Id. at 857. Yv anov a is not re le v ant he re . 7App. 2004), then He rre ra v . Fe d. N at’l Mortg. Ass’n , 141 C a l.R ptr.3d 326, 336 (C t. App. 2012)). IVE c onte nds it ha s e s ta

blishe d pre

judic e by the fa c t tha

t its prope rtie s we re fore c lose d upon, c iting K alnok iand Sc i arratta v . U.S. Bank N .A. , 202 C a l. R

ptr. 3d 219 (C t. App. 2016), but those c a se s do not support IVE. Sc iarratta he l d tha t a n
a lle ge dly wrongful fore c losure wa s a suffic ie nt a lle g ation of pre judic e to survive de m urre r whe re it wa s a lso a lle ge d tha t the fore c losing e n tity ’ s be ne fic ia ry inte re st in the de e d of trust wa s void. 4 Id. at 229–30. Unde r Sc iarratta , IVE’ s c onte ntion tha t it suffe re d a

wrongful fore c losure
m ay be a suffic ie nt a lle gation to survive a de m urre r (e quiva l e nt to a

R u le 12(b)(6)
m otion to dism

iss). Howe ve r, IVE not only m u st ple a d, but m

ust prov e , tha

t it wa s pre j udic e d. K

a lnok i , 214 C a l. R

ptr. 3d a t 311. M e re ly

be i ng fore c lose d upon is not suffic ie nt, e spe c ia lly

give n the c irc um sta

nc e s pre se nte d he re . Sc iarratta e xpla ine d

tha t “ ‘ [m ] e re te c hnic a l viola

tions of thefore c losure proc e ss will not give

rise to a tort c la im ; the fore c losure m ust ha ve be e n e ntire ly

4 The c om

pla int in Sc iarratta a lle ge d the a ssignm e nt of the inte re st in the d e e d of trust wa s void, not me re ly voida ble , be c a u se whe n the le nde r purporte d to a s sign the prom issory

note to B a

nk of Am e ric a , the le nde r “ ha d nothing to a ssign, ha ving pre viously

. . . a s signe d the prom issory note s a n d de e d of trust” to a diffe re nt ba

nk. Sc iarratta , 202 C a l. R ptr. 3d a t 228. Thec o m

pla int the re fore a lle ge d tha

t B ank of Am e ric a , the fore c losing e ntity , ha d no va lid inte re st in the de e d of trust a

n d thus no right to fore c lose
. 8una

uthoriz e d on the fa c ts of the c a se .’ ” Sc iarratta , 202 C a l. R ptr. 3d a t 226 (quoting Mile

s v . De u tsc heBank

N at’l Tr. C o . , 186 C a l. R

ptr. 3d 625, 636 (C t. App. 2015)); se e also K

napp , 20 C a l . R

ptr. 3d a t 16 (pre sum

ption tha t fore c losure
wa s c onduc te d re gula

rly and fa irly

m ust pre va il whe n

re c ord la c ks substa

ntia l
e vide nc e of pre

judic ia l proc e dura l irre gula rity ); Re s ide ntial C

apital v . C

a l-W e ste rn Re c onv e y anc e C orp. , 134 C a l. R

ptr. 2d 162, 173 (C t. App. 2003) (there m ust be “ a substa ntia l de fe c t in thesta

tutory proc e dure tha

t is pre j udic ia l to the inte re sts of the trustor a nd c la im ants” ). Nor doe s K

a lnok ihe lp IVE. The re , the le nde r and be ne fic ia ry of the de e d of trust, W e lls Fa

rgo Hom e M o rtga ge , Inc
. , c e a se d to e xist whe n it m e rge d with W e lls Fa rgo B ank, N.A., whic h

suc c e e de d to theprior e ntity ’ s inte re s ts. W e lls Fargo e xe c ute d

a s ubstitution of truste e , whic h the pla intiffs c ha lle nge d on the ground tha

t “ the om ission of the

word ‘ Inc .’ a fte r the words ‘ W e lls Fa rgo Hom e M ortga ge ’ from

the signa ture bloc k” inva lida

te d the substitution, re

nde ring the subse q ue nt fore c losure proc e e dings inval id. K alnok i , 214 C a l. R

ptr. 3d a t 302. The c ourt disa gre e d, sta

ting tha t the om ission wa s “ obviously a m e re ina dve rte nc e or ty pogra phic a l e rror that wa s not m ate ria l a nd did not a ffe c t the va lidity of the Substitution.” Id.

9The pla intiffs in K alnok i c ha lle nge d the va lidity

of the fore c losure proc e e dings on nume rous grounds, but the c ourt found it “ diffic ult to c onc e ive ” how the y we re pre judic e d
. Id. at 311. The c ourt re a s one d tha t the borrowe rs “ do not dispute

tha t the y d e fa

ulte d on the ir loa

n . The y have ple a d e d no fa c ts indic ating that the fore c losure sa le , whic h ha s a lre a dy oc c urre d, would ha v e be e n ave rte d but for the a lle ge d de fic ie nc ie s in the fore c losure proc e ss nor tha t the origina l le nde r would ha ve re fra ine d from

fore c losure unde r the c i rc um sta nc e s pre se nte d.” Id. at 312. Sim ila

rly he re , IVE ha s ne ve r dispute d tha t it owe d Gold Strike 2 the de linque nt a sse ssm e nts. Nor is there any e vide nc e the fore c losure would ha ve be e n av e rte d but for thea lle ge d de fic ie nc y in the fore c losure proc e ss, whic h
c onsiste d sole ly of the om ission of the word “ hom e owne rs” in the nam e of the be ne fic ia ry . As in K

alnok i , the a lle g e d de fic ie n c y

involve d the om ission of one word, a nd the re is no que stion tha t the suc c e ssor e ntity , Gold Strike2, ha d the
a uthority to fore c lose
. It is undispute d tha

t W e ine r not only

kne w tha t IVE owe d the m one y to Gold Strike2, but a lso tha t it wa s not Gold Strike

1 tha t wa s fore c losing be c a

use W e ine r him se lf wa s on the boa rd of Gold Strike1. It a lso is undispute d tha t W e ine r, having a

m e nde d the C C & R ’ s him se lf, kne w tha t Gold Strike2 wa s the
10“ full suc c e s sor in inte re st” to Gold Strike 1. Thus, the

ba nkruptc y c o urt’ s findings that IVE kne w from

the outse t tha

t Gold Strike2 wa s the be ne fic ia ry an d the fore c losing e n t ity , a s we ll a s the findings tha t IVE kne w it owe d de l inque nt
a sse ssm e nts to thebe ne fic i ary and c hose not to pa

y the m have am ple support in the
re c o rd. C a lifornia ’ s e xte n sive nonjudic ia l fore c losure sy ste m prote c ts the borrowe r, or trustor, by

inform ing it “ of the de fa

ult a nd the nature of the de fa

u lt so tha t the trustor ha s a

n opportunity

to re insta te the se c ure d obliga

tion.” 5 M ille r & Sta

rr, C a lifornia R e a l Esta

te § 13:225 (4th e d . June 2020 upda te ); s e e also K

n app , 20 C a l. R ptr. 3d a t 8 (“ T he sta

t ute s provide the trustor with opportunitie s to pre ve nt fore c losure by

c uring the de fa

ult.” ). IVE c le arly kne w of the de fa ult a nd the nature of the de fa

ult a nd ha d the opportunity

to c ure the de fa

ult. R athe r tha

n ta king
a dva nta ge of the sta

tutory provisions to a

void thefore c losure , IVE c h a lle nge d the proc e s s on the ba sis of wha t it c le arly kne w wa s a

one -word m ista

ke . It is

“ diffic ult to c onc e i ve ” how IVE wa s pre judic e d by the om ission of the word

“ hom e owne rs” in the nam e of the be n e fic ia ry . K alnok i , 214 C a l. R

ptr. 3d a t 311. C a lifornia la w re quire s pre

judic ia l proc e dura l irre gula rity in orde r to inva lida t e a fore c l osure sa le . The re is no e vide n c e tha t IVE wa s pre

judic e d by

the
nam e in the notic e s. Se e K napp , 20 C a l. R

ptr. 3d a t 14 (“ t he slight proc e dura l
11irre gula

rity in the se rvic e o f the Sa l e Notic e ” did not pre judic e the borrowe rs whe re the y

ha d notic e of the sa le date and the re wa s no e vide nc e of injury); se e also Le h ne r v . Unite d State s , 685 F.2d 1187, 1190–91 (9th C ir. 1982) (re je c ting borrowe r’ s a

rgum e n t tha

t the fore c losure wa s inva lid be c a use the notic e wa s
m a ile d to thewrong a ddre ss, re a soning tha t “ the re c ord re v e a l s c le arly tha t she kne w the fore c losure sa le wa s im m ine n t” an d “ re fus[ing] to e le vate form ove r substa nc e ” ); Ac e v e

s v . U.S. Bank

, N .A. , 120 C a l. R

ptr. 3d 507, 519 (C t. App. 2011) (finding no pre

judic e whe re notic e of de fa u l t m iside ntifie d the be ne fic i ary be c a use the n otic e a c c urate l y

ide ntifie d the truste e whom the borrowe r c ould c onta c t for inform at ion a

bout thefore c l osure ). B e c a use the e rror in the nam e did not c a use
any pre judic e to IVE, it, a c c ordingly , did not re nde r the fore c losure proc e e dings inva lid. The judgm e nt is AFFIRM E D.

12