Lucioni v. Bank of America, N.A

In Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, the courtheld that that Civil Code "section 2924.17 does not impose a preforeclosure duty on foreclosing entities to demonstrate that they have a right to foreclose." Rather, according to the Lucioni court, the statute merely "creates a procedural right" (ibid.), directed "at ensuring the foreclosing entity's 'review' of its right to foreclose. (Id. at p. 163.) The Lucioni court explained: "Section 2924.17 . . . does not create a right to litigate, preforeclosure, whether the foreclosing party's conclusion that it had the right to foreclose was correct. If the Legislature wished to authorize as much, it could have authorized injunctive relief for a violation of 2924 subdivision (a)(6), but it did not." (Ibid.) The Lucioni court noted that Civil Code section 2924, subdivision (a)(6) "requires an entity initiating a foreclosure be legally entitled to do so." (Lucioni, supra, 3 Cal.App.5th at p. 155.) The Lucioni court however noted that the Legislature did not authorize injunctive relief for a violation of section 2924, subdivision (a)(6): "The Legislature, however, did not provide for injunctive relief for a violation of section 2924 subdivision (a)(6), the provision that the complaint relies upon in seeking injunctive relief. . . . In our view, under the text of the HBOR, a foreclosure may be enjoined due to a material violation of the statutory provisions that the Legislature has chosen to list, but not due to a violation of unlisted provisions." (Lucioni, at pp. 158-159.) In Lucioni v. Bank of Am., N.A, plaintiffs challenged the validity of the underlying section 2923.55 declaration filed with a notice of default and sought a pre-foreclosure injunction for a violation of Section 2924.17 on that basis. The California Court of Appeals clarified that Section 2924.17 does not "impose a pre-foreclosure duty on foreclosing entities to demonstrate that they have a right to foreclose." Lucioni, 3 Cal.App.5th at 162. The statute "does not create a burden on the foreclosing party to prove anything in court, other than that the declaration required by section 2923.55, subdivision (c) or whatever document is in dispute was filed, and that necessary steps were taken before filing it." Id. at 163. Thus, when the disputed document has been filed with the court (demonstrating that it was in fact recorded), along with "the deed and its assignments that defendants rely upon to substantiate their right to foreclose," that is sufficient to "preclude injunctive relief for a violation of the requirements of sections 2924.17 and 2923.55." Id. That is because the purpose of Section 2924.17 is simply to ensure due diligence on the foreclosing parties' part, not to "create a right to litigate, preforeclosure, whether the foreclosing party's conclusion that it had the right to foreclose was correct." Id.