California's Sciarratta Decison: Banks aren't Bounty Hunters

Tonight Southern California Attorney Stephen F. Lopez discusses the recent Sciarratta decision.  Lopez is a 1986 graduate of California Western School of Law and practices law in San Diego, California. In May the California Court of Appeals for the 4th Appellate District issued an opinion that allows a homeowner to sue for wrongful foreclosure when the foreclosure is instituted by a non-party and where the assignment is defective. The case is called Sciarratta v. U.S. Bank National Association, etc., No. D069439. Scirratta reversed the trial court’s sustaining of the Defendants’ demurrer without leave to amend the Complaint.  The Court found that “the void assignment is the proximate cause of actual injury and that is all that is required to be alleged to satisfy the element of prejudice or harm in a wrongful foreclosure cause of action.” Citing the recent Yvanova decision from the California Supreme Court, the Sciarratta court stated: “Banks are neither private attorneys general nor bounty hunters, armed with a roving commission to seek out defaulting homeowners and take away their homes in satisfaction of some other bank’s deed of trust.” The appellate court made it very clear that banks cannot re-write a homeowner’s case and then take the position that no claim is stated. The court stated that there are strong public policy reasons for this approach, as otherwise, anyone could foreclose on a homeowner because someone has the right to foreclose, and since lenders can avoid the court system entirely through the nonjudicial process, there would be no court oversight whatsoever. Stephen F. Lopez Esq. 600 B Street, Suite 2230 San Diego CA 92101 Tel:  (858) 682-9666 Fax: (619) 243-7215 Email:  [email protected]