Federal Home Loan Mortgage Corporation v. Keo

Background

Freddie Mac brought an unlawful-detainer action against Chanht Reatrey Keo concerning 18 Falmouth Cove in San Rafael, California. Keo obtained a $417,000 home loan secured by a deed of trust on the property in 2008. After Keo fell behind on the loan, the trustee began a nonjudicial foreclosure process. At a September 26, 2018 trustee’s sale, Nationstar Mortgage LLC submitted the highest credit bid and directed the trustee to issue a trustee’s deed upon sale to Freddie Mac. That deed was recorded on October 9, 2018.

Freddie Mac served Keo with a three-day written notice to leave on October 26, 2018. Keo did not leave, and Freddie Mac filed this unlawful-detainer case in state court. Keo later removed it to federal court. Freddie Mac moved for summary judgment, arguing that the foreclosure complied with California law, its title was perfected, the required notice was served, and Keo remained in possession.

Keo’s arguments

Keo argued that the complaint was not properly verified and that this deprived the court of subject-matter jurisdiction. She also claimed that relevant documents were forged and that the foreclosure sale did not comply with California Civil Code section 2924. The court noted that Keo continued to submit some filings without attorney assistance even though an attorney had been approved to represent her; the court therefore read those filings liberally. The court denied counsel Jonathan Matthews’s later request to withdraw.

Judicial notice

The court granted Freddie Mac’s request for judicial notice as to the recorded county documents, a newspaper notice, and an order from the related case. It denied judicial notice of exhibit 7, a posting certificate, because the document was not shown to be a recorded public record or otherwise beyond reasonable dispute. Keo’s requests for judicial notice were denied as moot because most concerned materials for which judicial notice was unnecessary or inappropriate.

Analysis

Summary judgment is proper when there is no genuine dispute about a material fact and the moving party is entitled to judgment under the law. Under California’s unlawful-detainer statute, after a trustee’s sale, the plaintiff must show that the property was sold in accordance with the foreclosure statute, the plaintiff’s title was duly perfected, the required notice to leave was served, and the defendant remains in possession.

The court found that Freddie Mac’s evidence established compliance with the foreclosure requirements. The recorded trustee’s deed contained recitals supporting compliance, and the evidence in the declaration submitted by Freddie Mac further supported that conclusion. Keo did not submit a declaration or documentary evidence creating a genuine factual dispute about compliance with the foreclosure-sale requirements. The court rejected her arguments about alleged failures before the sale, including the loan servicer’s alleged failure to discuss foreclosure alternatives, because such noncompliance did not affect title after the foreclosure sale. It also found that Keo’s older “Securitization Audit” did not create a factual dispute about the 2018 sale and that her forgery allegations were conclusory and unsupported.

Freddie Mac also submitted evidence, including time-stamped photographs and a process server’s declaration, showing that the notice to leave was attached to Keo’s front door on October 26, 2018. Keo did not challenge that evidence, so the court treated the notice element as conceded. She likewise did not dispute that she continued to live at the property, so the possession element was also treated as conceded.

Disposition

The court granted Freddie Mac’s motion for summary judgment. It ruled that Freddie Mac was entitled to possession of the property and owned it outright, and that Keo and other occupants had no legal right to reside there. The court enjoined the occupants from interfering with Freddie Mac’s use, inspection, sale, or possession of the property and ordered them to remove themselves and their belongings by July 6, 2020. The U.S. Marshal was authorized and ordered to remove any occupant who failed to leave.

The order did not resolve Freddie Mac’s request for monetary damages. Because Freddie Mac’s summary-judgment motion did not address damages, the court ordered Freddie Mac to file a short motion explaining whether it still sought damages and how they should be calculated, after which Keo could respond.