Epps v. Lindsey

• Court: California Court of Appeal
• Decided: April 11, 2017
• Docket: JAD17-02
• Status: Published

Opinion

Filed 3/27/17

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO APPELLATE DIVISION

JOSHUA and CHRISTINA EPPS Case No: ACIAS 1600004 Plaintiffs and Respondents, (Trial Court: UDFS 1509971)

v. PER CURIAM OPINION BRUCE LINDSEY, Defendant and Appellant.

Appeal from a grant of summary judgment, San Bernardino County Superior Court, Fontana District, Lynn Poncin, Judge. Affirmed.

Anderson & LeBlanc, A.P.L.C.; Jeff LeBlanc for defendant and appellant.

Law Offices of Liddle & Liddle, APC; George Lee Liddle, Jr., Raymond Zakari, and Larsen E. Ensberg for plaintiffs and respondents.

THE COURT:

FACTUAL AND PROCEDURAL BACKGROUND

Appellant Bruce Lindsey (Lindsey) appeals from a grant of summary

judgment in favor of respondents Joshua and Christina Epps (the Epps).

Lindsey and the Epps are, respectively, the defendant and plaintiffs in the

underlying unlawful detainer action which arose from the Epps‟ post-

foreclosure acquisition of the at-issue property.

1 The undisputed facts from below indicate Bank of America

purchased the property during an April 2015 foreclosure sale. The property

was security, under a deed of trust, for the repayment of a loan that was

obtained by Lindsey‟s then-girlfriend, Linda Barbee (Barbee).1 Following

the foreclosure, Joshua Epps‟ parents purchased the property, on behalf of

the Epps, at an online auction in August 2015. The property was then

transferred the following month to the Epps, who lacked the liquidity to

place an online bid themselves.2 The Epps plan on using the property as

their primary residence and, to that end, they have even listed their current

residence for sale.3

Despite being served with a 90 day notice to quit, Lindsey refused to

vacate the premises and the underlying suit was commenced.4 The Epps

then moved for summary judgment. In opposing the motion, Lindsey

outlined what he admitted was a “convoluted” factual history between him

and Barbee. Namely, the couple agreed to acquire the property together,

but Barbee refused to place Lindsey on title. Then, at the end of their

tumultuous relationship and in the face of foreclosure proceedings, Barbee

quit claimed her interest to Lindsey for $5,000 and moved out. However,

Lindsey contends the transfer was ineffective since Barbee never truly

intended to transfer title and because she somehow continued to exercise

1 Clerk‟s Transcript (CT) 14-15, 95-97, 103, 2 CT 18-22, 100-102, 156 3 CT 156 4 CT 100 and 121

2 control over the property. Barbee then apparently used her “leverage” to

“extort” money from Lindsey in the form of ten year lease to the property

for $2,300 a month. 5

Based on the written agreement, Lindsey opposed the motion for

summary judgment and argued he was entitled to stay at the property for

the duration of the lease.6 Despite expressing concerns regarding

Lindsey‟s credibility and his shifting positions regarding ownership, the trial

court determined that Lindsey‟s version of the facts was not dispositive

since the Epps were successors in interest under Code of Civil Procedure

section 1161b.7 As such, even assuming that Lindsey had a valid lease

with Barbee, the trial court concluded that the Epps had no obligation to

honor the lease and Lindsey failed to vacate the premises after expiration

of the 90 days.8 Lindsey now appeals the limited issue of whether the trial

court correctly applied the undisputed facts to section 1161b.9

DISCUSSION

The Standard of Review

We review the propriety of a grant of summary judgment de novo.

(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860.) In effect, we

assume the role of a trial court and apply the same rules and standards

5 CT 214-217 6 Reporter‟s Transcript (RT) 33-34 7 RT 41 and 43-44 8 RT 43-44 9 All further statutory references are to the Code of Civil Procedure unless otherwise noted.

3 that govern a trial court‟s determination of a motion for summary judgment.

(Riverside County Comm. Facilities Dist. No. 87-1 v. Bainbridge 17 (1999)

77 Cal.App.4th 644, 652.) Although we would normally engage in the same

three-step analysis required of the trial court, the argument raised by

Lindsey through his appeal is simple: whether the trial court erred in

applying Code of Civil Procedure section 1161b to undisputed facts. We

similarly review de novo the trial court‟s application of a statute to

undisputed facts. (See Be v. Western Truck Exchange (1997) 55

Cal.App.4th 1139, 1143.)

Code of Civil Procedure section 1161b and Its Application

Code of Civil Procedure section 1161b, subdivision (b)(1), provides

that “tenants or subtenants holding possession of a rental housing unit

under a fixed-term residential lease entered into before transfer of title at

the foreclosure sale shall have the right to possession until the end of the

lease term, and all rights and obligations under the lease shall survive

foreclosure, except that the tenancy may be terminated upon 90 days‟

written notice to quit” if, as relevant here, “[t]he purchaser or successor in

interest will occupy the housing unit as a primary residence.”

In this case, even if we assume that Lindsey had a written lease

agreement which preceded the foreclosure, the Epps had no obligation to

honor the lease if they provided a 90 day notice to quit and if they were

“the purchaser or successor in interest” who intended to “occupy the

4 housing unit as a primary residence.” It is undisputed that the Epps

provided the 90 day notice and that they intended to occupy the property

as their primary residence. In fact, Lindsey even acknowledges that the

Epps fit the ordinary or “general” definition of “successor in interest” since

their title can be traced back to the foreclosure through the chain of title. 10

However, Lindsey disputes whether the Epps constitute “successors in

interest” as the term is used in Code of Civil Procedure section 1161b.

“Our fundamental task in construing a statute is to ascertain the

intent of the lawmakers so as to effectuate the purpose of the statute.

[Citation.] We begin by examining the statutory language, giving the words

their usual and ordinary meaning.” (Park Medical Pharmacy v. San Diego

Orthopedic Associates Medical Group, Inc. (2002) 99 Cal.App.4th 247,

250-251.) “If the language of a statute is clear, we must follow its plain

meaning. [Citation.] If, however, the language is susceptible to more than

one reasonable interpretation, then we look to „extrinsic aids, including the

ostensible objects to be achieved, the evils to be remedied, the legislative

history, public policy, contemporaneous administrative construction, and

the statutory scheme of which the statute is a part.‟” (Ibid.)

Here, the term “successor in interest” is not defined by section

1161b. Black‟s Law Dictionary (10th ed. 2014) defines the term as

“[s]omeone who follows another in ownership or control of property. A

10 Opening Brief at p. 12

5 successor in interest retains the same rights as the original owner, with no

change in substance.” The Epps followed Bank of America in ownership,

but they did not do so immediately. Section 1161b is potentially susceptible

to differing interpretations since “successor in interest” is not qualified by

terms like “immediate,” “ultimate,” or “eventual.” On the other hand, section

1161b uses the definite article “the” before “purchase or successor in

interest.” The word “the” is used as a “function word” to indicate “that a

following noun or noun equivalent is definite or has been previously

specified by context or by circumstances” or the word indicates “that a

following noun or noun equivalent is a unique or particular member of its

class.” (Merriam Webster‟s Collegiate Dictionary (11th ed. 2003).)

The successor in interest then-owning the property, intending to

reside there, and who provides the notice to quit is the successor in

interest who would have the most significance in relation to the statute or

who would be the most unique amongst all others within the chain of

succession. To hold that the statute is only referencing the successor in

interest that immediately succeeded the purchaser would be nonsensical

since one who simply appears within the chain of succession, but who

does not currently hold the ownership rights, could not terminate the lease.

Also, if the legislature intended to limit the exception outlined in

1161b to only the purchaser‟s “immediate successor” it could have done

so. For instance, the code section which immediately follows section

6 1161b obligates the “immediate successor in interest” to provide the type

of advisory notice outlined by the statute. (Code Civ. Proc., § 1161c.)

Although the term, as used in section 1161c, is actually a reference to the

purchaser, the use of the phrase “immediate” still demonstrates that if the

legislature wanted to specifically limit the exception under section 1161b to

one specific successor within the chain of title, it could have done so. The

absence of such limiting language suggests that the term “successor in

interest” is not limited to purchaser‟s immediate successor in interest, but

to “the” ultimate or most significant successor in interest who then-owns

the property intending to reside there and who provides the notice to quit.

The term “new owner” is also used within the legislative scheme. For

instance, Lindsey argues that “[t]he notice language required by Civil Code

section 2924.8 provides important guidance on how the legislature

intended section 1161b to apply.” Civil Code section 2924.8 obligates the

“trustee or authorized agent” to post and mail a notice which advises the

residents of the property that “[i]f you have a fixed-term lease, the new

owner must honor the lease unless the new owner will occupy the property

as a primary residence or in other limited circumstances.” (See similar

language in Code Civ. Proc. § 1161c.) Thus, Lindsey argues that the

phrase “successor in interest” does not include just any “owner” within the

chain of title because such a conclusion would mean there is no distinction

between the legislature‟s differing usages of the two terms.

7 However, the legislative history undermines Lindsey‟s position and

only serves to support the trial court‟s ruling. Assembly Bill 2610

simultaneously amended both Civil Code section 2924.8 and Code of Civil

Procedure section 1161b. The author of the bill indicated the increasing

number of foreclosures had resulted in tenants facing the “specter of

sudden dislocation of themselves, their families and their belongings.

Renters are usually the last to know of foreclosure, and many renters,

including families with children, are ending up homeless due to foreclosure

evictions.” (2011 California Assembly Bill No. 2610, California 2011-2012

Regular Session.) The author further indicated “tenants are often confused

or misled about their legal protections, and how long they have to move

when served with a notice to vacate after a foreclosure sale. AB 2610

would help alleviate the debilitating, sudden upheaval of Californians who

reside in foreclosed properties by eliminating the inconsistency, confusion

and abuse of existing laws intended to protect them.” (Ibid.)

Notably, the author also specifically stated that the bill would “require

purchasers of foreclosed homes to give tenants at least 90 days before

commencing eviction proceedings; allow tenants in foreclosed homes

under a residential lease to stay until the end of the lease term, except in

cases where the new owner plans to use the property as their primary

residence….” (2011 California Assembly Bill No. 2610, California 2011-

2012 Regular Session [emphasis added].) When Civil Code sections

8 2924.8 and Code of Civil Procedure section 1161b are read in connection

with the legislative history, it is apparent the terms “successor in interest”

and “new owner” can be used interchangeably, with the latter term being

more easily understood by a lay person and being reserved for the

language of the tenant notices because tenants had been historically

susceptible to confusion.

We see no problem with allowing a successor in interest that is two

steps removed from the foreclosure sale from exercising the same rights

afforded under section 1161b to the “purchaser” or the purchaser‟s

immediate successor.11 This is especially true where the immediate

successor acquired the property on behalf of the ultimate successor. There

is nothing within the language of section 1161b which indicates the Epps

did not succeed to every ownership right that Bank of America acquired

during the foreclosure. “[T]he general rule is that foreclosure of a senior

encumbrance terminates subordinate liens, including leases.” (Nativi v.

Deutsche Bank National Trust Company (2014) 223 Cal.App.4th 261,

272.) Although section 1161b turns the general rule into the exception

when certain conditions are met, the statute does not preclude the Epps

11 This would of course assume that the tenant had been residing at the property all along without the acceptance of rent by the purchaser or its successor in interest. We also see no problem with the fact that the Epps acquired their interest several months after the foreclosure since the facts do not indicate Lindsey tendered any rent that was accepted, meaning the Epps never lost their right to evict Lindsey under section 1161b.

9 from exercising their predecessors‟ right to terminate the tenancy under

the conditions imposed by section 1161b.

Finally, although the statute was enacted in-part to address the

concern that unsuspecting tenants were being evicted despite paying their

rent, the statute‟s exception suggests that the legislature intended to give

the post-foreclosure owner, who doubles as a would-be resident,

preference over a non-defaulting tenant whose interest would have

otherwise been extinguished by the foreclosure. This is especially true

given that the purpose of the statute is furthered based on the fact that the

Epps were required to provide the 90 day notice. Therefore, the trial court

correctly applied the undisputed facts to the law.

DISPOSITION

For all these reasons, the grant of summary judgment is affirmed.

__________________________________ ARTHUR HARRISON Acting Presiding Judge of the Appellate Division

__________________________________ ANNEMARIE PACE Judge of the Appellate Division

__________________________________ CARLOS CABRERA Judge of the Appellate Division