Deed of Trust Language Was Expansive Enough to Cover Prevailing Trustee.
For any litigators practicing in the real estate area, we are aware of the extremely broad nature of deed of trust language, which is very pro-beneficiary (the lender usually) or pro-trustee (a title company imbued with authority to nonjudicially foreclose under certain conditions). The deed of trust language is also expansive as far as fee recovery in favor of both beneficiaries and trustees, as the next case shows with regard to trustees.
In Signature Log Homes, LLC v. Fidelity Nat’l Title Co., Case No. E056683 (4th Dist., Div. 2 Aug. 21, 2014) (unpublished), plaintiff—after a prior successful appeal resulting in a remand—eventually lost a wrongful foreclosure action against a trustee title company, eventually being on the wrong side of a summary judgment against plaintiff based on trustee immunity. The lower court then awarded trustee $1.256 million in attorney’s fees as against plaintiff based on a fee clause in the deed of trust by which trustee obtained its nonjudicial foreclosure powers.
Plaintiff’s main argument was that a trustor’s tort action for wrongful foreclosure based on trustee negligence did not fall within the ambit of the deed of trust fees clause. However, the appellate court disagreed, because the fee clause did apply to challenges to the “rights and powers” of the trustee—sufficiently broad in scope. As to the challenge to the amount of the award as being excessive, plaintiff only made an argument to that effect, not providing any evidence, fee expert, or specific objections to show otherwise.
Ouch!