Home > Construction Law, Real Estate Law > Ragland v. U.S. Bank case could assist a Foreclosed Homeowner

Ragland v. U.S. Bank case could assist a Foreclosed Homeowner

In Ragland v. U.S. Bank Nat’l Ass’n (Case No. G045580), the Fourth District Court of Appeals ruled in a homeowner’s suit against various banking entities, both reversing and affirming the trial court’s grant of summary judgment which had been fully in favor of the bank defendants.  This allows the plaintiff homeowner’s case to continue at the trial level.  The Court of Appeals reversed, as plaintiff had produced evidence creating triable issues of fact as to whether the loan company induced her to miss a loan payment, thereby wrongfully placing her loan in foreclosure, and whether she suffered damages as a result; but affirmed as to summary adjudication of the causes of action for breach of oral contract, negligent infliction of emotional distress, and the claim for rescission, because plaintiff was no longer pursuing those claims.

An interesting aspect of the case, was the Court of Appeals deciding that Civil Code 2924g(d) does create a private right of action and is not preempted by federal law, citing the  reasoning of Mabry v. Superior Court (2010) 185 Cal.App.4th 208 (Mabry) approvingly.  The court in Mabrysupra, 185 Cal.App.4th at page 214, concluded Civil Code section 2923.5 may be enforced by private right of action and this court agreed. Section 2923.5 requires a lender to contact the borrower in person or by telephone before a notice of default may be filed to “‘assess'” the borrower’s financial situation and “‘explore'” options to prevent foreclosure. (Mabrysupra, at pp. 213-214.) Section 2923.5, does not  expressly create a private right of action, but implicitly created one because there was no administrative mechanism to enforce the statute.  Further, a private remedy furthered the purpose of the statute and was necessary for it to be effective.  Since there is no administrative mechanism to enforce section 2924g(d), a private remedy is necessary to make it effective.

The court also allowed a claim for intentional infliction of emotional distress to go forward at the trial level, to allow plaintiff the opportunity to prove that the bank’s conduct was so outrageous and caused severe emotional distress by selling her home in a foreclosure sale.  The decision does not mean the cause of action is absolutely valid, but just gives the plaintiff the opportunity to prove her case on this point at trial.

All Rights Reserved © 2012 by Michael L. Mau, Esq. & The Mau Law Firm

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