Thursday, March 05, 2020

Mattson v. SBS Trust Deed Network (Cal. Ct. App. - March 5, 2020)

On first read I felt like the plaintiff here should have been sanctioned for bringing the lawsuit.  But as I read through the opinion, that changed to just feeling bad for the guy.  Still thought he should lose the suit (which he did).  But still.  Felt bad for him and didn't want him to be sanctioned.

He's a guy who buys up trust deeds at foreclosure sales.  He sees this one deed on a software platform called "Property Radar" says it's for $414,500 on a property worth more than than, and there's a "1" in the text field that says what position the loan is in -- signifying that it was a first trust deed (the most secured).  So he decides to bid on it, ultimately paying $502,000 for it, via cashier's check.

But the guy overlooks the fact that there's other information in that same document that indicates that the deed is actually a junior lien, plus there's a lot of other information in his possession to basically the same effect.  But he's excited and his initial impression (i.e., that it's a first deed) seems (to him) to be confirmed in a particular telephone call, which is why he made the bid he did.

But he quickly learns that what he just bought is actually a second (junior) lien, worth a ton less than what he paid.  So he tries to back out of the sale, including claiming that the cashier's check that he used was stolen, etc.  None of that works.  So he sues, asserting unilateral mistake etc.

The Court of Appeal, like the trial court, essentially says;  "Your bad, not the defendant's."  You knew it was an irrevocable sale.  You didn't carefully read the stuff in your possession or conduct additional investigation.  Bad deal, for sure.  But you're stuck with it.

And that's right.  Sorry about that.  It's a lot of money to blow, for sure.  But it is what it is.  Be more careful next time.  There's a reason these foreclosure sales are irrevocable.

So no sanctions.  But no relief either.