Disputes over the validity of recorded loan documents and foreclosure authority remain a frequent source of litigation in California real estate cases, particularly when borrowers allege defects in a deed of trust or irregularities following bankruptcy proceedings. A recent California decision illustrates how courts manage complex foreclosure disputes at the summary judgment stage while enforcing strict procedural rules. If you are considering filing for bankruptcy, it is in your best interest to talk to a California bankruptcy attorney as soon as possible.
Facts and Procedural History
Allegedly, the plaintiff acquired an interest in residential real property located in Los Angeles County and later became subject to a deed of trust recorded in 2006 in favor of the original lender. The plaintiff asserted that the deed of trust was void because it named a non-existent entity as beneficiary and was unsupported by a valid promissory note. Based on these asserted defects, the plaintiff contended that the lien was fraudulent from its inception.
It is alleged that the deed of trust was subsequently assigned through a series of transactions and ultimately came under the control of the defendant trustee, which serviced the loan through a loan servicing entity. After years of inactivity, the defendant recorded a notice of default in 2021 and initiated nonjudicial foreclosure proceedings. The plaintiff maintained that these actions occurred without lawful authority and in violation of protections arising from a previously confirmed bankruptcy plan.
Reportedly, the plaintiff filed a civil action asserting claims for fraud, cancellation of written instruments, wrongful foreclosure, and unfair business practices. The plaintiff alleged that the defendants never filed a proof of claim in the bankruptcy case and therefore lacked standing to pursue a trustee sale after plan confirmation. The defendants answered the complaint and later filed a cross complaint asserting contractual and quasi contractual claims related to the loan obligation and seeking declaratory relief regarding their enforcement rights.
It is reported that the defendants moved for summary judgment or summary adjudication in mid 2025, arguing that the plaintiff could not establish essential elements of her claims and that the foreclosure process complied with California law. The plaintiff opposed the motion, and the defendants filed a reply. The court considered the papers without oral argument and issued a detailed ruling addressing both the substantive standards for summary judgment and the procedural sufficiency of the parties’ filings.
Foreclosure in the Context of Bankruptcy
The court began by restating the fundamental purpose of summary judgment under California law, which is to determine whether any triable issues of material fact require resolution at trial. The moving party bears the initial burden to show that a cause of action lacks merit, either because an element cannot be established or because a complete defense applies. Only if that burden is met does the obligation shift to the opposing party to demonstrate the existence of a triable factual dispute.
Applying these principles, the court emphasized that compliance with procedural rules governing summary judgment motions is not optional. The separate statement of undisputed material facts plays a central role in identifying the precise factual issues presented. The court found that both sides submitted procedurally defective separate statements that failed to conform to the California Rules of Court. The defendants improperly incorporated facts by reference rather than clearly identifying which facts supported which issues. At the same time, the plaintiff failed to use the required two column format and did not adequately cite evidence by exhibit, page, and line number.
The court also scrutinized the plaintiff’s evidentiary objections, finding that they were not filed separately, were not properly numbered, and did not quote or identify the challenged material as required. Citing established authority, the court noted that trial judges are not obligated to search through disorganized filings to locate evidence or reconstruct arguments on a party’s behalf. Technical compliance serves due process interests by ensuring that courts and opposing parties can efficiently evaluate whether factual disputes actually exist.
Rather than granting or denying the motion outright, the court exercised its discretion to continue the summary judgment hearing. It ordered both parties to revise their separate statements and, where applicable, evidentiary objections within specified deadlines. The court limited the revisions to clarification and proper formatting, expressly prohibiting the introduction of new facts, arguments, or evidence. This approach reflected the court’s view that immediate disposition would be too harsh where procedural defects could be cured without prejudicing either side.
Consult with a Skilled California Bankruptcy Attorney
If you have overwhelming debt and want to learn more about bankruptcy and how it could help you regain financial stability, it is in your best interest to talk to an attorney. The experienced California bankruptcy attorneys of the Law Office of Matthew Roy represent clients throughout the state in complex bankruptcy proceedings, and if we represent you, we can help you navigate the process with clarity and confidence. To schedule a confidential consultation, contact the firm at (916) 361-6028 or reach out through the online form.