Leach v. Home Sav. & Loan Assn

Leach v. Home Sav. & Loan Assn. (1986) 185 Cal.App.3d 1295 involved an action to enjoin a foreclosure and remove clouds on title to property. It also involved a related probate dispute surrounding one of the testamentary trust beneficiaries, who, as trustee of the trust, encumbered the affected property with the multiple deeds of trust to the detriment of his sister, Leach, the other trust beneficiary. Leach was not a party to any of the notes or deeds of trust. The parties to the dispute included the beneficiaries and trustees of the deeds of trust and the two adverse beneficiaries of the testamentary trust. (Id., at pp. 1298-1300.) The trust-deed beneficiaries prevailed on summary judgment against Leach and then sought attorney fees under the deeds of trust as prevailing parties under Civil Code section 1717. The trial court denied the fees on the basis that Leach was not signatory to the deeds of trust but ruled that the trust deed beneficiaries could seek these fees as part of the secured obligation from the testamentary trustee or the trust itself in a separate proceeding. (Leach, supra, at p. 1301.) The appellate court, limiting Saucedo to its distinct procedural circumstances of an action to prevent foreclosure for nonpayment of a loan, affirmed, observing that there were no practical liabilities or impacts in Leach that were present and compelling in Saucedo. (Leach, supra, at p. 1306.) Although Leach, who did not hold legal title to the property, had sought to enjoin a foreclosure under a deed of trust, she had done so not because she acknowledged the validity of the deed of trust and wished to refinance in order to satisfy it but instead because she perceived the encumbrance as void. (Ibid.)