Implicit Party Theory Prevailed.
In Morf v. MTDS, Inc., Case No. A140010 (1st Dist., Div. 5 Nov. 4, 2014) (unpublished), a trustee under a deed of trust (DOT) won a nonjudicial foreclosure challenge by a borrower, winning $9,825 in attorney’s fees based on a DOT fees clause under Civil Code section 1717. Borrower argued that the clause only focused on the lender, not the trustee, but the appellate court affirmed because the trustee is an implicit party under the DOT clauses—including the DOT fee clause. (Huckell v. Matranga, 99 Cal.App.3d 471, 481 (1979).)
BLOG COMMENT—in order to avoid this result, a borrower should give consideration to notifying a foreclosure trustee that it will be naming the trustee only to avoid non-joinder challenges and obtain a stipulation that neither side will seek fees/costs upon trustee filing a declaration of nonmonetary status under Civil Code section 2924l.