Banis v. Magnate Fund CA1/3

Filed 9/30/14 Banis v. Magnate Fund CA1/3 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

THOMAS BANIS et al., Plaintiffs and Appellants, A137414 v. MAGNATE FUND #2 LLC et al., (Contra Costa County Super. Ct. No. 1000601) Defendants and Respondents.

Marie Dalkas-Banis and Thomas Banis sued Magnate Fund #2, LLC (Magnate) and Standard Trust Deed Services Co. (Standard) on a number of theories arising out of Magnate’s foreclosure and credit bid purchase of property the Banises owned in Orinda.1 After 13 of 14 causes of action were dismissed on demurrer, Magnate moved for summary judgment on the remaining cause of action alleging a failure to distribute trustee sale proceeds in accordance with Civil Code section 2924k.2 The trial court found Magnate’s evidence established that its credit bid was below the outstanding balance of its loan secured by the Orinda property and that plaintiffs failed to present competent opposing evidence to raise a triable issue of fact on that issue. Accordingly, the court granted summary judgment. We agree, and affirm the judgment.

1 For convenience we will generally refer to Dalkas-Banis and Banis jointly as plaintiffs. Although the two plaintiffs’ participation in the various transactions that resulted in the present state of affairs differed, those differences are immaterial to the limited issues raised by this appeal. 2 Unless otherwise noted, references to statutes are to the Civil Code.

1

BACKGROUND Between 2004 and 2011, plaintiffs obtained multiple loans and loan modifications secured by the Orinda property. As of March 2011, the Orinda property was encumbered by two deeds of trust. The senior loan (the World Savings loan) was approximately $1,428,000. Magnate’s loan of approximately $875,000 was in second position. Magnate foreclosed in 2011 and acquired the property at a trustee’s sale on March 25, 2011, subject to the existing World Savings loan, with a bid of $505,088.93. Plaintiffs sued Magnate, Standard, and various other defendants. After all but one of their causes of action were dismissed with prejudice on demurrer, Magnate and Standard moved for summary judgment on plaintiffs’ remaining cause of action for failure to distribute proceeds of the trustee’s sale pursuant to Civil Code section 2924k. The trial court granted summary judgment for the defendants. It explained: “Section 2924k sets the priority for distributing the ‘proceeds’ of a foreclosure sale. In the case at bar, there were no proceeds to distribute, because there was no cash bid exceeding defendant Magnate Fund’s credit bid. . . . [¶] Defendants’ opening evidence adequately establishes that defendant Magnate Funds made a credit bid in an amount that was less than the outstanding balance secured by the Orinda deed of trust,” and plaintiffs failed to dispute that fact with competent evidence sufficient to raise a triable issue. The court further found plaintiffs had failed to articulate any legal theory of liability under which Standard, the foreclosure trustee, could be held vicariously liable for following Magnate’s instructions in conducting the sale. This appeal timely followed. DISCUSSION I. Legal Standards On Summary Judgment “ ‘To secure summary judgment, a moving defendant may prove an affirmative defense, disprove at least one essential element of the plaintiff’s cause of action [citations] or show that an element of the cause of action cannot be established [citations]. [Citation.] The defendant “must show that under no possible hypothesis within the reasonable purview of the allegations of the complaint is there a material