Sciarratta v. U.S. Bank National Association

Appellate Court Allowed a Plaintiff to Pursue a Claim Against a Lender By Alleging That the Lender Had No Interest in the Debt or Property


In Sciarratta v. U.S. Bank National Association, a California Appellate Court allowed a plaintiff to pursue a claim against a lender for wrongful foreclosure by alleging that the home was wrongfully foreclosed upon by an entity with no interest in either the debt or the property.  In June 2005, plaintiff obtained a $620,000 loan secured by her property in Riverside, California.  She executed a promissory note secured by a deed of trust identifying the lender as Washington Mutual Bank.  Washington Mutual went into receivership and JPMorgan Chase acquired its assets, including plaintiff’s loan.  Chase subsequently assigned the deed of trust and promissory note to Deutsche Bank National Trust Company.  Chase recorded an assignment of deed of trust assigning the deed of trust and promissory note to Bank of America.  On the same date, Trustee, California Reconveyance Company (“CRC”) recorded a Trustee’s Deed Upon Sale on behalf of Bank of America as a foreclosing beneficiary under the deed of trust.  Bank of America acquired the property at a foreclosure sale.  Plaintiff sued Chase, Deutsche, CRC and others for wrongful foreclosure arguing that Bank of America had no right to foreclose, because the assignment was void and it had no interest in the debt or the property.  The trial court sustained the defendants’ demurrers without leave to amend and dismissed the complaint.  The Court of Appeals reversed holding that the alleged foreclosure by an entity with no interest in the property sufficed to establish the requisite prejudice.  The Appellate Court relied upon Yvanova v. New Century Mortgage Corp. (2016) 62. Cal.4th 919, wherein the California Supreme Court held that where a homeowner alleges a nonjudicial foreclosure sale was wrongful because of a void assignment, the homeowner has standing to sue for wrongful foreclosure.


Shannon B. Jones, Partner