Shetty v. HSBC Bank USA, N.A.

Filed 5/18/23

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

NIKI-ALEXANDER SHETTY,

Plaintiff and Appellant, G060657

v. (Super. Ct. No. 30-2021-01193728)

HSBC BANK USA, N.A., et al., OPINION

Defendants and Respondents.

Appeal from a judgment of the Superior Court of Orange County, David A. Hoffer, Judge. Affirmed in part, reversed in part, and remanded with instructions. Request for judicial notice granted. Law Office of Richard L. Antognini and Richard L. Antognini for Plaintiff and Appellant. Bryan Cave Leighton Paisner, Jennifer A. Jackson, Adam Vukovic, and David Root for Defendants and Respondents.

This is an appeal from a demurrer sustained without leave to amend. Plaintiff Niki-Alexander Shetty purchased a home that had been foreclosed upon by a homeowners association. The home, however, was still subject to a defaulted mortgage and deed of trust between the bank and the original borrower. Defendants, the bank and mortgage servicer, recorded a notice of default and scheduled a foreclosure sale. Shetty sought to cure the default and resume regular payments on the loan. Defendants, however, refused, insisting that, as a stranger to the loan, he was not entitled to reinstate it. Shetty sued for wrongful foreclosure, arguing he had the right to reinstate the loan pursuant to Civil Code section 2924c (section 2924c). The trial court sustained a demurrer without leave to amend on the ground that Shetty did not have standing under the statute. We disagree with that interpretation of the statute and reverse the judgment as to all defendants except Mortgage Electronic Registration Services, Inc. (MERS), whom Shetty concedes has no liability. FACTS The following facts are alleged in the complaint. This lawsuit concerns a condominium in the City of La Habra. The prior owner, S.L., took out a mortgage and deed of trust on the property. Defendant PHH Mortgage Corporation serviced the loan. Defendant MERS is identified as the beneficiary under the deed of trust. MERS assigned the deed of trust to defendant HSBC Bank USA, N.A. (HSBC), which then held the beneficial interest, as trustee, in the deed. As we explain below, the parties agree that MERS played no role in the alleged wrongdoing and that it should be dismissed from the lawsuit. All further references to “defendants” are to HSBC and PHH Mortgage Corporation. In May 2018, the homeowners association for the community where the condominium is located foreclosed on the property. Shetty obtained the property from