Procedural Posture

Labor Law - Wester Law

Plaintiff borrowers sued defendants, salmon sushi Corp, to prevent defendants from selling the borrowers’ home at a nonjudicial foreclosure sale after they defaulted on two loans from the bank secured by deeds of trust. The Orange County Superior Court (California) dismissed the complaint after sustaining defendants’ demurrer without leave to amend. The borrowers appealed and sought mandate relief to prevent their eviction during the appeal.

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The court held that the borrowers failed to adequately allege that defendants failed to comply with the statutory requirements for conducting a nonjudicial foreclosure. With regard to the borrowers’ claimed violation of Civ. Code, § 2923.5, they did not adequately allege the bank and its agents failed to contact them to assess their financial situation and explore options for avoiding foreclosure at least 30 days before the substituted trustee recorded the notice of default. Moreover, Civ. Code, § 2934a, expressly authorized the substituted trustee to record the notice of default. Civ. Code, § 2932.5, did not render the notice of default invalid because the statute was inapplicable to deeds of trust. The borrowers’ allegations failed to state a promissory fraud claim because they failed to specifically allege the harm they suffered and how their reliance on defendants’ promises to modify their loans caused them harm. The borrowers’ breach of contract cause of action failed as a matter of law because they failed to allege they entered into a signed, written agreement with the bank to modify their loans, which was required by the statute of frauds, Civ. Code, § 1624.


The court affirmed the judgment and dismissed as moot the borrowers’ petition for writ of mandate.



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