Court Opinion

ID: 9751764
Source: CourtListenerOpinion
Date Created: 2023-08-28 16:58:47.100468+00
Date Added: 2024-06-11T07:26:57.167162
License: Public Domain

MOSK, J., Concurring.
I concur.
In Residential Capital v. Cal-Western Reconveyance Corp. (2003) 108 Cal.App.4th 807 [134 Cal.Rptr.2d 162] (Residential Capital), the trustee in a nonjudicial foreclosure action accepted the bidder’s bid at auction but refused to issue the trusee’s deed because, unbenownst to the trustee, the trustor and beneficiary had agreed to postpone the sale. (Id. at p. 811.) The trustee refunded the purchase price plus interest (at an unspecified rate), (id. at p. 813.) The bidder sued for, among other things, breach of contract, arguing that the acceptance of its bid created a purchase-sale contract that, although voidable because of the defect in the foreclosure proceedings, was not void, and that the bidder was therefore entitled to contract damages measured by the difference between the bid and the fair market value of the property. (Id. at pp. 813-817.) The Court of Appeal rejected the bidder’s argument, reasoning that nonjudicial foreclosure proceedings are “comprehensively regulated by the detailed statutory scheme set forth in section 2924 et seq., which is not based on common law contract principles.” (Id. at p. 821.) It would be inconsistent with the policies underlying that statutory scheme to conclude that “although a postponement of the sale occurred and the trustor was not bound by the sale, a separate conflicting contractual sale obligation nevertheless came into existence on its behalf against the trustee and beneficiary.” (Id. at p. 822.)
Accordingly, the court in Residential Capital held that the bidder’s rights were not governed by common law contract principles, but were determined by “principles of interpretation of the statutory scheme setting forth the rules of trust deed nonjudicial foreclosure sales.” (Residential Capital, supra, 108 Cal.App.4th at pp. 820-821; see also California Golf, L.L.C. v. Cooper (2008) 163 Cal.App.4th 1053, 1070-1071 [78 Cal.Rptr.3d 153] (California Golf) [availability of particular remedy determined by consideration of “the policies advanced by the statutory scheme, and whether those policies would be frustrated by the allowance of the additional remedy”]; I. E. Associates v. *585Safeco Title Ins. Co. (1985) 39 Cal.3d 281, 285 [216 Cal.Rptr. 438, 702 P.2d 596]; Moeller v. Lien (1994) 25 Cal.App.4th 822, 834 [30 Cal.Rptr.2d 777].) The remedy for a bidder when a foreclosure sale is procedurally defective is restitution of the purchase price plus interest. (Residential Capital, supra, 108 Cal.App.4th at p. 823.) Thus, “[t]he trustor is protected from unauthorized foreclosure and loss of its property and the sanctity and finality of foreclosure sales is maintained without significant prejudice to the high bidder.” (Id. at p. 824.)
In the instant case, although there was an express purchase-sale agreement between the bidder and the trustee, under the rationale of Residential Capital, supra, 108 Cal.App.4th 807, that agreement did not give rise to a contract governed by common law contract principles. The bidder’s right to restitution from the trustee is thus not based on their agreement, but is relief provided by the statutory scheme regulating nonjudicial foreclosures. The claim is therefore not a contract cause of action under Civil Code section 3289.
The decision in California Golf, supra, 163 Cal.App.4th 1053, is not inconsistent with this conclusion. In California Golf, the court noted that “California courts have repeatedly allowed parties to pursue additional remedies for misconduct arising out of a nonjudicial foreclosure sale when not inconsistent with the policies behind the statutes.” (Id. at p. 1070.) In this case, however, there is no dispute that restitution is the appropriate remedy. Rather, the bidder seeks to rely upon an alternative cause of action. But notwithstanding the label the bidder has put on its claim, its cause of action is not a “cause of action in contract.”
There is authority that an action to recover quasi-contractual relief — such as an action to recover in quantum meruit for the reasonable value of goods or services — is a “cause of action in contract” under Civil Code section 3287, subdivision (b). (George v. Double-D Foods, Inc. (1984) 155 Cal.App.3d 36, 46-47 [201 Cal.Rptr. 870]; see Zalk v. General Exploration Co. (1980) 105 Cal.App.3d 786, 794-795 [164 Cal.Rptr. 647] [dictum]; Wegner et al., Cal. Practice Guide: Civil Trials and Evidence (The Rutter Group 2008) f 17:188, p. 17-145.) Presumably, the same reasoning should apply to Civil Code section 3289. “ ‘Quasi-contract’ is simply another way of describing the basis for the equitable remedy of restitution when an unjust enrichment has occurred.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 388, fn. 6 [20 Cal.Rptr.3d 115].) In this case, however, the bidder cannot invoke principles of quasi-contract because there was an express agreement between the bidder and trustee. When there is an express agreement, there is no need to imply a *586contract — i.e., quasi-contract. (Id. at p. 388.) In any event, as noted above, the bidder’s right to restitution is relief provided by the statutory scheme regulating nonjudicial foreclosures, and not from any express or implied contract.