Sweatt v. Foreclosure Co.

Opinion

BRAUER, J.

This case involves Civil Code section 2924c as it read in 1982 and 1983.

1

That section is a part of the statutory scheme providing for nonjudicial foreclosure of deeds of trust and mortgages. Specifically this appeal seeks an interpretation of the clause fixing the amount of the trustee’s fee payable by a debtor in order to cure his default, and an answer to the question whether the statutory fees payable in nonjudicial foreclosures still apply when the parties to the deed of trust invoke judicial assistance because of a dispute between them. What follows is also relevant to the current wording of the section.

On November 25, 1981, appellant The Foreclosure Co. as trustee recorded a notice of default reciting arrearages of $2,800.98 due under the secured

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promissory note executed by respondents Sweatt. By letter of January 15, 1982, The Foreclosure Co. itemized its claim including a trustee’s fee of $262.78. On February 24, 1982, the Sweatts commenced an action in the trial court to enjoin the foreclosure proceedings, contending inter alia that certain installment payments had been made but not credited and others credited against principal rather than interest. The Sweatts also challenged the computation of the trustee’s fee. A temporary restraining order issued. Subsequently, at a pendente lite injunction hearing, a balance was struck, the note was brought current, and the Sweatts were reinstated, At that hearing, the trial judge awarded The Foreclosure Co. $150 in trustee’s fees rather than the $262.78 requested; and he reconfirmed his ruling upon motion for reconsideration. The appeal is from that ruling, which was a part of the pendente lite injunction order. All other issues were consensually resolved, and the Sweatts dismissed the action subsequent to the filing of the notice of appeal.

As enacted in 1981, effective January 1, 1982,

2

the pertinent portion of section 2924c of the Civil Code read as follows: “. . . the trustor . . . at any time within three months of the recording of the notice of default under such deed of trust or mortgage, if the power of sale is therein to be exercised, or, otherwise at any time prior to entry of the decree of foreclosure, may pay to the beneficiary or the mortgagee or their successors in interest, respectively, the entire amount then due under the terms of such deed of trust or mortgage and the obligation secured thereby (including costs and expenses actually incurred in enforcing the terms of such obligation, deed of trust or mortgage, and trustee’s or attorney’s fees not exceeding one hundred fifty dollars ($150) in case of a mortgage .or a deed of trust or one half of 1 percent of the entire unpaid principal sum secured, whichever is greater) other than such portion of principal as would not then be due had no default occurred, and thereby cure the default theretofore existing . . . .” The Foreclosure Co.’s position is simply that the unpaid principal sum due on the note was $52,556.54 at the time foreclosure was initiated; therefore it was entitled to a trustee’s fee of