Brown v. Superior Court of Fresno Cnty.

228 Cal. Rptr. 3d 687, 19 Cal. App. 5th 1208
CourtCalifornia Court of Appeal, 5th District
DecidedJanuary 30, 2018
DocketF073964
StatusPublished
Cited by6 cases

This text of 228 Cal. Rptr. 3d 687 (Brown v. Superior Court of Fresno Cnty.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Superior Court of Fresno Cnty., 228 Cal. Rptr. 3d 687, 19 Cal. App. 5th 1208 (Cal. Ct. App. 2018).

Opinion

PEÑA, J.

*689*1210Plaintiff Larry Brown obtained assignments from 1,117 borrowers transferring (1) a 100 percent interest in causes of action relating to their home loans and (2) a 5 percent ownership interest in the real estate securing the home loans. Brown then pursued those causes of action by filing a lawsuit against various entities involved in originating, servicing, or enforcing those loans. Some of the defendants filed a motion to compel joinder of the borrowers, contending the borrowers were both necessary and indispensable *1211parties to the litigation under California's compulsory joinder statute, Code of Civil Procedure section 389.1 The trial court ordered the joinder of the borrowers and Brown filed a petition for writ of mandate to challenge that order.

First, as to the interpretation and application of section 389 to the facts presented, we conclude, in the unpublished portion of the opinion, that joinder of the borrowers was warranted under subdivision (a)(2)(i) of section 389. The borrowers have an interest in the protection from personal liability provided by California's antideficiency statutes. The complaint seeks to have the deeds of trust securing the loans declared void or unenforceable, which would render the loans unsecured. If the loans became unsecured, the borrowers might lose the protections of the antideficiency statutes. The borrowers' absence from this litigation may impair or impede their ability to protect their interest in the benefits provided by the antideficiency statutes-that is, immunity from personal liability for the loan balance or any deficiency judgment. Therefore, we conclude the conditions for joinder under *690subdivision (a)(2)(i) of section 389 are present in this case.

Brown argues that, even if joinder is required under section 389, he may sue without joining the borrowers because of the exception contained in section 369, subdivision (a)(3). Under that provision, "a person with whom ... a contract is made for the benefit of another" is authorized to "sue without joining as parties the persons for whose benefit the action is prosecuted." (Ibid .) Brown contends the assignments qualify as contracts made for the benefit of the borrowers, and he is a person prosecuting the action for the benefit of the borrowers. In the published portion of the opinion, we disagree with this interpretation and application of section 369. In our view, section 369 applies when a fiduciary relationship exists between the plaintiff and the persons for whose benefit the action is prosecuted. Here, Brown has no fiduciary relationship with the borrowers. From a textual perspective, we interpret the reference to a contract made for the benefit of another to mean for the sole benefit of another, not for the mutual benefit of the plaintiff and another person. Here, the assignments were for the mutual benefit of Brown and the borrowers and, therefore, we conclude section 369, subdivision (a)(3) does not apply and does not authorize Brown to proceed without joining the borrowers.

We therefore deny the petition for writ of mandate and lift the stay.

*1212FACTS

In July 2012, Life Savers Concepts Association, Inc. (Life Savers), was incorporated as a North Carolina corporation and then registered with the California Secretary of State to do intrastate business in California. Reverend Nigel Johnson is the president of Life Savers. His ministry is nondenominational, uses the name Lifehouse International Ministries, and is based in Stockton, California. Prior to joining Life Savers, Johnson had been a real estate agent, and many of his clients were facing foreclosure. In pursuit of this mission, Life Savers entered into membership agreements with homeowners and former homeowners. From Life Savers' perspective, its members banded together so they could better seek relief from improper actions relating to their home loans and the real property securing the loans.

The members transferred their claims (or the claims of their living trust) against the entities that made, held or serviced their home loans, to Life Savers by executing documents labeled "Agreement for Assignment and Transfer of Rights of Legal Claim." The 25 examples of these agreements attached to Brown's pleading were executed from February 14, 2013, through April 16, 2015.

When the members executed the agreements for assignment and transfer of rights of legal claim, most also executed grant deeds that transferred to Life Savers a 5 percent ownership interest in the real property securing their loans. The grant deeds relevant to this lawsuit total approximately 1,000 pages, so Brown attached 25 examples of the grant deeds to his pleading. The example grant deeds state they granted Life Savers "a 5% ownership interest in the following described real property ...." It appears the purpose of the transfers of an interest in the real property was to assure Life Savers qualified as a "real party in interest" with standing to pursue the assigned causes of action. (§ 367 [California's general standing requirement].)

On March 29, 2013, Life Savers and Brown entered into an assignment agreement. One counterpart of this agreement was signed on behalf of Life Savers by Frank Benjamin, as executive vice president. A second counterpart was signed on *691behalf of Life Savers by Johnson, as president, and Dawn Burt, as vice president. The basic purpose of the agreement was to transfer to Brown all rights that had been assigned to Life Savers by the homeowners and former homeowners. On August 13, 2014, and December 10, 2015, Life Savers executed a second and a third assignment that transferred to Brown all the rights to pursue claims that had been assigned to Life Savers.

Contemporaneous with the second assignment of claims to Brown, Life Savers executed a document that assigned "all of its interest in the Grant *1213Deeds assigned it by all LifeSavers members" to Brown. Similarly, when Life Savers executed the third assignment to Brown, it also executed an assignment agreement that quitclaimed to Brown all of Life Savers' right, title and interest in the real property conveyed to Life Savers by the grant deeds from its members. Based on these assignments, Brown claims to hold a 5 percent ownership interest in each of the properties that secured the home loans of the members.2

The wording of the agreements for assignment and transfer of rights of legal claim to Life Savers and the subsequent assignments from Life Savers to Brown has created disputes about meaning, scope, and effectiveness of the transfers. (See 7 Cal.Jur.3d (2011) Assignments, §§ 42-44, pp. 68-72 [construction and legal effect of assignments].) Those disputes are not addressed in this opinion. Instead, we assume the wording of the assignment documents effectively transferred (to the extent allowed by California law) all of the rights and ownership interests that Brown contends he holds.

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Cite This Page — Counsel Stack

Bluebook (online)
228 Cal. Rptr. 3d 687, 19 Cal. App. 5th 1208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-superior-court-of-fresno-cnty-calctapp5d-2018.