Signature Log Homes v. Draper

Filed 4/16/10 Signature Log Homes v. Draper CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of San Bernardino County. Christopher J. Warner, Judge. Reversed.

Gordon & Rees, William M. Rathbone and Timothy K. Branson for Plaintiffs and Appellants.

Somers & Somers, Richard B. Somers; Hall & Bailey, Therese Bailey-Nelson, John L. Bailey; Luce, Forward, Hamilton & Scripps, Charles A. Bird and Steven S. Wall for Defendants and Respondents.

In this case we hold that a trustor on a note secured by a deed of trust on real property who tenders a sum of money to the beneficiary to cure a default on the note without first obtaining a beneficiary statement or some other confirmation from the beneficiary or trustee of the amount required to cure the default is not entitled to set aside a foreclosure sale to a bona fide purchaser when it is later shown that the trustors tender was sufficient to cure the default and therefore was wrongly rejected by the beneficiary. The trustors remedy is an action for damages against the beneficiary and the trustee, if appropriate. Because in this case substantial evidence does not support the trial courts finding that the trustors tender was insufficient to cure the default we will reverse the judgment entered against plaintiffs and appellants, Signature Log Homes and Richard Maraziti, and remand the matter to the trial court.

STATEMENT OF FACTS

The pertinent facts are undisputed. In April 2000, Signature Log Homes (Signature) through its sole shareholder Richard Maraziti (Maraziti) (sometimes also referred to collectively as plaintiffs) purchased real property on Big Bear Boulevard in Big Bear, California, (hereafter the Big Bear property) from defendants and respondents Jack Draper and James Joyce (hereafter Draper and Joyce) for $305,000. As part of the purchase price, Signature assumed the existing note secured by a deed of trust that Draper and Joyce had given to defendant and respondent Mary Stone (hereafter Stone) when they purchased the property from her. Signature also gave Draper and Joyce a note for $136,000 secured by a deed of trust on the property (hereafter Draper note). Under the terms of the Draper note Signature was to make monthly payments of $850 beginning in May 2000 with the balance due and payable in 10 years.^[1] Maraziti sent Signatures first payment on the note in May 2000, and when that check was returned by the bank for insufficient funds, he issued a new check for $1,700 as payment for May and June 2000. Over the next three years, Maraziti sometimes made payments of $850 for a single month, and sometimes made payments of $1,700 for two months. Maraziti also sometimes noted in the checks memo line the month or months to which the payment or payments applied. Other times, Draper or Joyce made notations on the memo line regarding the month to which the payment applied, and still other times the checks were not annotated. Maraziti also made payments on the Draper note with checks drawn on several different bank accounts. In March 2003, Maraziti sent Draper and Joyce check No. 2673, dated March 15, 2003, with the notation May 2003 on the memo line. Draper or Joyce wrote 4-2003 next to Marazitis notation before negotiating the check by depositing it into an account at Union Bank.

When they did not receive any payment from Signature in April or May, Draper and Joyce contacted defendant and respondent Fidelity National Title Company (Fidelity) in late May 2003 to initiate foreclosure under the power of sale contained in the trust deed securing Signatures note on the Big Bear property.^[2] After Fidelity was substituted as trustee, it prepared a notice of default, dated June 10, 2003, which stated, in pertinent part, that Signatures default consisted of its failure to pay [i]nstallment of interest only in the amount of $850.00 which became due May 15, 2003 and all subsequent installments of interest only; plus advances made to protect the security hereof in the amout [sic] of $8,356.66 for taxes, together with interest from the date of expenditure at the rate permitted by law; plus all foreclosure costs, expenses and fees. The notice of default also stated that in order to bring the account into good standing and avoid sale of the property, payment of all past due sums plus permitted costs and expenses must be paid within the time permitted by law, which is normally five business days prior to the date set for the [foreclosure sale], and no sale date may be set for three months from the date the notice of default is recorded. The notice of default specified $11,363.31 as the amount required as of June 6, 2003, to bring the account into good standing and also stated that the amount will increase until the account is current. Finally, the notice of default advised that the payment amount, or arrangements to make payments, to stop the foreclosure could be obtained from Beverly J. Brown, identified in the notice as a foreclosure officer. The notice included Ms. Browns address at Fidelity and her telephone number.

Although he received the notice of default in June, Maraziti did nothing until September 4, 2003, when he delivered a $15,000 cashiers check to Fidelity with a cover note that stated, in its entirety, Please find enclosed check for $15,000 to apply to the foreclosure action; for taxes; and, for the month of September payment. [] Please send me an accounting of costs.^[3] Draper and Joyce rejected the tender after meeting with Sierra Samra, a Fidelity foreclosure officer, who calculated that Signatures payment was insufficient. According to Samras calculations, the tender was $65.07 short if it covered payments due on the note from May through August, plus other specified costs and fees incurred in connection with the foreclosure, and it was short $125.07 if the tender were construed to include payments due from May through September. After consulting with Draper and Joyce, Fidelity sent Maraziti a letter dated September 10, 2003, under Samras signature, advising him in pertinent part that $15,000 does not appear to be sufficient funds to reinstate the [] foreclosure and pursuant to the beneficiarys instructions, we are returning said your [sic] funds. Samra directed Maraziti to contact Beverly Brown in our Palm Desert office . . . or myself, and we will be glad to give you current amounts and figures, during the reinstatement time period.

Maraziti testified at trial that he did not collect his mail between September 12 and October 10, 2003. Therefore, he did not know until October 10, 2003, that his check had been rejected, that Fidelity had noticed the foreclosure sale for October 8, 2003, and that the Big Bear property had been sold at that sale for $411,000. In a letter dated October 14, 2003, but sent by facsimile on October 16, 2003, Marazitis attorney notified Fidelity, Draper, and Joyce of various errors in the foreclosure process, including the fact that Signature had made a sufficient tender, and demanded that Fidelity not record the trustees deed. Fidelity did not comply with that demand. It recorded the trustees deed on October 21, 2003, and ultimately sent Signature $228,736.31, the excess proceeds from the foreclosure sale.

After Fidelity recorded the trustees deed, plaintiffs filed various lawsuits two of which the trial court consolidated and are the subject of the instant appeal. Signature filed its first lawsuit, which the parties refer to as the San Bernardino action, on October 30, 2003, against defendants and respondents Draper, Joyce, Fidelity National Title, Stone, and Modern Homes seeking to set aside the foreclosure sale, cancel the trustees deed, and quiet title based on alleged wrongful foreclosure. The complaint also included causes of action seeking damages, among other things, for breach of contract, breach of the implied covenant of good faith and fair dealing, and negligence. In March 2004, Signature amended the complaint to name defendants and respondents 41691 Big Bear Blvd. Trust U.D.T 10/8/03, Banca Financial, and Pan American Investments, whom Signature alleged were entities that had bid on the property at the foreclosure sale (along with Modern Homes referred to in the trial court and hereafter as the bidding defendants).^[4] A year later, on October 8, 2004, plaintiffs filed another lawsuit, which the parties refer to as the Big Bear action, against defendants and respondents Thomas Nick Lanza, Timothy J. Brigham, Erin D. Brigham, Thomas Nickie Lanza, and Candy Lanza (hereafter referred to collectively as the Lanza group) who purchased the real property for $750,000 in December 2003 from the bidding defendants. The Big Bear action includes six purported causes of action, including wrongful eviction, conversion, declaratory relief, and negligence. In February 2005, the trial court consolidated the San Bernardino and Big Bear actions.

After various pretrial proceedings, including numerous discovery motions and several motions to amend the complaints in both actions, the trial court granted Stones motion for trial preference and Fidelitys motion to bifurcate the equitable issues from plaintiffs damage claims. A court trial on the equitable issues began on January 8, 2007, and continued for 18 days. The parties submitted written closing arguments on March 2, 2007. In a statement of decision dated July 13, 2007, the trial court found in favor of all defendants and against plaintiffs on every major issue. The trial court further found that its resolution of the equitable issues rendered plaintiffs damage claims moot. In accordance with those findings, the trial court entered judgment in favor of all defendants and also granted their respective motions to recover attorneys fees from plaintiffs, awarding Fidelity $882,740 of the $1,103,000 it had requested, and awarding $165,381 to Draper, Joyce, and Stone.

In this appeal plaintiffs purport to challenge nearly every aspect of the trial court proceedings, including the trial courts rulings on various pretrial motions, the adequacy and accuracy of its statement of decision, and the attorneys fees awards. Because it is potentially dispositive, we first address plaintiffs challenges to the trial courts findings regarding the validity of the foreclosure sale.

DISCUSSION

1.

VALIDITY OF FORECLOSURE SALE

Plaintiffs raise numerous challenges, as they did in the trial court, to the validity of the foreclosure sale beginning with their claim that Signature was not in default on the note and in any event its payment of $15,000 was sufficient to cure the defaults identified in the notice of default and thereby reinstate the loan. The trial court found that plaintiffs did not meet their burden to prove that Signature was not in default on the May 2003 payment or that its tender of $15,000 was sufficient to cure the defaults. Specifically, the trial court found that plaintiffs did not meet their burden to prove that Marazitis check No. 2673 in the amount of $850 was for the May 2003 payment due on the Draper and Joyce note, and therefore plaintiffs did not prove that Signature was not in default on the note. We first address the validity of the finding.

A. Standard of Review

The parties disagree on the standard by which we review the trial courts findings. Plaintiffs contend, citing Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881, 888, that we review the validity of the foreclosure sale under a de novo standard because the issue involves mixed questions of fact and law. On the other hand, in their respondents brief defendants^[5]cite Crummer v. Whitehead (1964) 230 Cal.App.2d 264, to support their claim that we review the trial courts refusal to set aside the foreclosure sale for abuse of discretion. In Crummer v. Whitehead, the trustor challenged the legality of the foreclosure sale on the ground that the property was sold for a grossly inadequate price. The trial court rejected the claim and on appeal the court affirmed. Noting first that inadequate price without evidence of some other irregularity in the foreclosure process does not compel setting aside the foreclosure sale, the Court of Appeal held, The trial court heard all of the evidence and made extensive findings concerning the foreclosure proceedings, and concluded that the trustees sale was legally held under the power of sale contained in the deed of trust. These findings are fully supported by the evidence. It is the rule that whether the particular facts of a given case justify setting aside a trustees sale rests very largely in the discretion of the trial court. [Citations.] (Id. at p. 268.)

The issues in this case are not limited to a claim of inadequate price and instead include claims of various alleged irregularities in the foreclosure process. More importantly, the pertinent evidence in this case is undisputed. Therefore, our task is to resolve questions of law, i.e., whether the undisputed facts establish that the foreclosure sale violated any pertinent statutory provision, a standard of review that involves our independent or de novo analysis. (Environmental Charter High School v. Centinela Valley Union High School Dist. (2004) 122 Cal.App.4th 139, 145-146 [when an appellate court is asked to resolve questions of law on undisputed facts, then the standard of review requires an independent analysis].)

B. Analysis

A nonjudicial foreclosure sale is accompanied by a common law presumption that it was conducted regularly and fairly. [Citations.] This presumption may only be rebutted by substantial evidence of prejudicial procedural irregularity. [Citation.] (Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 1258 (Melendrez).) It is the burden of the party challenging the trustees sale to prove such irregularity and thereby overcome the presumption of the sales regularity. [Citation.] (Ibid.)

Nonjudicial foreclosure sales are governed by Civil Code sections 2924 through 2924k^[6]which provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust. (Moeller v. Lien (1994) 25 Cal.App.4th 822, 830 (Moeller).) The statutory scheme can be briefly summarized as follows. Upon default by the trustor, the beneficiary may declare a default and proceed with a nonjudicial foreclosure sale. [Citations.] The foreclosure process is commenced by the recording of a notice of default and election to sell by the trustee. [Citations.] After the notice of default is recorded, the trustee must wait three calendar months before proceeding with the sale. [Citations.] After the 3-month period has elapsed, a notice of sale must be published, posted and mailed 20 days before the sale and recorded 14 days before the sale. [Citations.] (Ibid., citing 2924, 2924f, and 4 Miller & Starr, Cal. Real Estate (2d ed. 1989) 9:131 & 9:145, pp. 415, 416, 471.) The conduct of the sale, including any postponements, is governed by Civil Code section 2924g. [Citation.] The property must be sold at public auction to the highest bidder. [Citations.] (Moeller, at p. 830.) During the foreclosure process, the debtor/trustor is given several opportunities to cure the default and avoid the loss of the property. First, the trustor is entitled to a period of reinstatement to make the back payments and reinstate the terms of the loan. [Citation.] This period of reinstatement continues until five business days prior to the date of the sale, including any postponement. (Civ. Code, 2924c, subds. (a)(1), (e).) In addition to the right of reinstatement, the trustor also possesses an equity of redemption, which permits the trustor to pay all sums due [on the note] prior to the sale of the property at foreclosure and thus avoid the sale. (Civ. Code, [] 2903, 2905.) (Ibid.)

(1.) Sufficiency of Evidence to Show Signature in Default

Plaintiffs^[7]first contend the undisputed evidence shows Signature was not in default on its note to Draper and Joyce because among other things the evidence showed that Signature made all 37 payments due on the note at the time Draper and Joyce declared the default. In their joint respondents brief, defendants do not address this assertion, an omission we construe as a concession on the merits. Moreover, we agree with plaintiffs that according to the undisputed evidence, Signature was not in default on its obligation to make monthly payments on the note. However, the evidence is also undisputed that Signature was in default on its contractual obligation to pay property taxes, as we now explain.

According to the undisputed evidence Signature made 37 payments of $850, which were all the payments due on the note at the time Draper and Joyce declared the note in default and initiated the foreclosure process. That evidence shows that Signature was not in default on its obligation under the promissory note to make monthly payments. As previously noted, defendants do not dispute either the evidence or its effect. Instead, they argue as Draper and Joyce did in the trial court, that Signature was one month behind in its payments. As a result when Maraziti sent Signatures check No. 2673 in March 2003, which he noted on the checks memo line was the May payment, Draper and Joyce credited that check to the April payment. Plaintiffs contend the undisputed evidence shows Draper and Joyce failed to credit Signature with a payment of $950 made in November of 2000, and that error is the source of their incorrect belief that Signature was delinquent on the payment due in May 2003.

Because the evidence is undisputed that Signature made 37 payments of $850 on the loan and therefore was not in default on any payment, we arguably need not address defendants claim regarding the May 2003 payment. We nevertheless do so in order to address errors in the trial courts statement of decision, and also to show that Signatures tender of $15,000 was sufficient to cure its default. To support their claim, defendants cite the trial courts finding that Marazitis testimony was not credible, and that as a result of his haphazard bookkeeping, Maraziti could not prove that check No. 2673 was in fact the payment due in May 2003.^[8]

In its statement of decision, the trial court rejected plaintiffs argument that Signature had made 37 payments on the note which were all the payments due as of May 2003. According to the trial court, plaintiffs failed to produce supporting bank records to prove all the checks were cashed. However, Draper and Joyce did not dispute any payment other than the one due in May 2003. Moreover, Draper and Joyce did not claim they had received but had not cashed checks from plaintiffs. In short, there was no dispute regarding whether Draper and Joyce cashed plaintiffs checks. The only dispute in the trial court was whether Signature had made all the payments due on the note as of May 2003.

With respect to the May 2003 payment, the trial court acknowledged in its statement of decision that there is controversy surrounding whether the payment for May of 2003 was made. Defendants [meaning Draper and Joyce] deny receiving a payment in May of 2003 for that month. The court finds that Mr. Maraziti, acting on behalf of Signature, tendered check number 2673 . . . [but] did not produce any bank statement or record to establish that the check was cashed. If it is within a partys power to produce stronger available evidence and the party does not do so, the evidence produced may be viewed with distrust (Evid. Code[,]  412). Signature had the power to produce bank records, but Signature did not do so. Again, Draper and Joyce did not dispute that they received and cashed check No. 2673. The only issue was whether that check represented payment for May 2003. Therefore, the trial courts finding is irrelevant.

The trial courts purported finding regarding check No. 2673 is also incorrect for two reasons. First, and as previously noted, Draper and Joyce did not dispute that they had received and cashed check No. 2673.^[9] The only issue at trial was whether that check covered Signatures payment for May 2003, as Maraziti noted on the checks memo line, or whether it represented payment for April, as Draper and Joyce claimed and also wrote on the check. Because it is undisputed that Draper and Joyce received and cashed check No. 2673, the trial courts contrary finding is not supported by the evidence.

But even if the issue were disputed, the trial courts finding is also incorrect on the law, specifically the evidentiary value of a cancelled check. Plaintiffs presented a photocopy of the cancelled check, endorsed by defendant Joyce, to prove that Draper and Joyce received and cashed check No. 2673. Contrary to the trial courts view, noted above, that plaintiffs were required to present bank statements or other unspecified bank records to prove the check had been cashed, the cancelled check is a bank record and is sufficient proof that Draper and Joyce negotiated that instrument. A paid bank check, payable to the order of the creditor and indorsed by him, is admissible as evidence of payment. (Brown v. Gow (1933) 128 Cal.App. 671, 675.) Plaintiffs produced exactly that, a cancelled bank check, endorsed by Joyce; no other evidence was required.

The trial court also found that even if it were to assume that Draper and Joyce cashed check No. 2673, controversy regarding the number, timing and application [of] payments actually made and negotiated remains. The trial court further found that Maraziti caused [t]he controversy regarding the application of payments . . . by misstating the payment months on checks as far back as January 9, 2001, and continuing thereafter at least intermittently. The record does not support the trial courts alternate finding that there was a controversy regarding the timing and application of other payments, or that Maraziti caused the problem by among other things, misstating on the checks memo line the month to which the payment related. In fact, the evidence suggests that some of the notations the trial court cited were actually made by Draper or Joyce, and not Maraziti. The fact is irrelevant, as are the purported facts cited by the trial court that Maraziti also wrote checks out of numerical order and on different bank accounts and thus caused confusion over what payments Signature had made on the note. Defendants do not cite any legal authority to support the trial courts apparent finding that the purported errors absolved Draper and Joyce of their responsibility to keep track of Signatures monthly payments on the note. The only question in the trial court and thus on appeal is whether the evidence shows that Signature made all the payments due on the note as of May 2003, which is the time Draper and Joyce declared the note in default.

The evidence pertinent to this issue consists of records maintained by Draper and Joyce, which include copies of checks from Maraziti and a mortgage payment record book in which Draper and Joyce made entries through December 2002. That evidence reveals that Draper and Joyce committed two errors, either or both of which caused them to lose track of Signatures monthly payments. The first error occurred in October 2000, when Maraziti sent Draper and Joyce check No. 1123 in the amount of $1,650 as Signatures purported payment for October and November. That check includes a notation that the extra $50 is a late fee. Despite the notation, check No. 1123 does not include an extra $50 and in fact is short by that amount; the check should have been for $1,750 not $1,650 if Maraziti intended the check to cover two months plus a $50 late fee (2 x $850 + $50 = $1,750). In November, Maraziti sent Draper and Joyce a check, the number of which is not legible, for $950 as payment for December. That $950 check corrected the $100 deficit in the October check and also included the $850 payment for December. Draper and Joyce did not record the $950 check in the mortgage payment record book they used to keep track of Signatures payments.^[10]

A second error occurred in February 2001, when a $1,700 check Maraziti had written to cover Signatures loan payments for March and April was incorrectly annotated, 2-15, 3-15, and presumably Draper and Joyce credited the payments to those months. The evidence shows that Maraziti made the February 2001 payment with a check for $1,700 written in January as payment for that month and for February. Therefore, Draper and Joyce should have credited the February check for $1,700 to March and April. As a result of the noted error, each month thereafter Draper and Joyce were off by one month in their record of Signatures payments so when they received check No. 2673 in March 2003, they incorrectly believed Signature was one month behind in payments. Because of the error, Draper and Joyce believed that check No. 2673, which is dated March 15, 2003, represented payment for April rather than May, as Maraziti had noted on the checks memo line. According to the undisputed evidence, before negotiating check No. 2673, Draper and Joyce wrote 4-2003 next to Marazitis May notation on the memo line.

Apart from the noted bookkeeping errors, Draper and Joyce did not dispute in the trial court and therefore defendants cannot dispute on appeal that Signature made the payments evidenced by the checks admitted into evidence at trial as Exhibit No. 277. Those checks represent 37 payments of $850, or $31,450, which is the total amount Signature was required to pay in order to be current through May 2003 on its payments on the Draper note. In short, according to the undisputed evidence, Signature was not in default on any of the monthly payments due on its promissory note to Draper and Joyce. However, the evidence also is undisputed that Signature had not paid property taxes due for 2003 and therefore was in default on that obligation, as stated in the notice of default.^[11] Accordingly, we must conclude the evidence supports the trial courts finding that Signature was in default on the Draper note as a result of its failure to pay property taxes.

Because the undisputed evidence supports a finding that Signature was in default on its obligation to pay property taxes, the next issue we must resolve is whether the evidence supports the trial courts finding that Signatures check for $15,000 was insufficient to cure its default and reinstate the loan from Draper and Joyce. As we now explain, we conclude the trial courts finding is not supported by the evidence, and in fact the undisputed evidence shows Signatures $15,000 payment was sufficient to cure its default.

(2.) Sufficiency of Evidence to Show Signature Cured the Default

The controlling law is set out in section 2924c, subdivision (a)(1), which specifies the means for curing a default on a promissory note secured by a deed of trust that contains a power of sale. That section states in pertinent part that, The trustor may cure the default by timely payment of the the entire amount then due plus costs and expenses incurred in enforcing the obligation except that, with respect to principal owed, the trustor need not pay the portion of principal as would not then be due had no default occurred . . . . The consequence of such a cure is that all [foreclosure] proceedings theretofore had or instituted shall be dismissed or discontinued and the obligation and deed of trust . . . shall be reinstated . . . . [Citations.] (Anderson v. Heart Federal Sav. & Loan Assn. (1989) 208 Cal.App.3d 202, 212, quoting 2924c, subd. (a)(1).)

Rather than send its cashiers check for $15,000 without knowing the exact amount necessary to cure the default, as it did in this case, Signature could have requested a beneficiary statement as specified in the notice of default it received from Fidelity. If it had done so, Fidelity would have been obligated to provide Signature with a statement setting out the sum necessary to cure its default. Signature, in turn, could have relied on the beneficiary statement and tendered the specified sum. ( 2943, subd. (d)(1); see 4 Miller and Starr, Cal. Real Estate, supra, 10:189, pp. 582-583.) In the note that accompanied the $15,000 check, Maraziti did ask for an accounting of costs. Neither Fidelity nor Draper and Joyce responded to that request and instead argued in the trial court, as defendants argue in this appeal, that the quoted phrase does not constitute a request for a beneficiary statement and in fact is not a phrase used in the foreclosure business. Although we do not share their view, we will not address the issue because we conclude Signatures $15,000 payment was sufficient to cure the default, and therefore the point is irrelevant.

As one of its designations of error Signature points out that the trial court did not make a finding on the amount Signature was required to pay in order to cure the default and reinstate the loan.^[12] Instead the trial court found, To the extent Mr. Maraziti claimed the amount of tender was in excess of the amount necessary to cure the default, that contention is without any evidentiary support in the record as to how such a conclusion was reached at the time of the tender. The trial court also found that Marazitis actions first in failing to contact Draper and Joyce or Fidelity before making the tender, and next in failing to pick up his mail after making the tender were unreasonable. The trial courts findings are legally incorrect because Signature does not have any legal obligation to contact the beneficiaries or the trustee (although not doing so is foolish, as this case illustrates) and factually irrelevant because they do not resolve the issue of whether Signatures payment of $15,000 was sufficient to cure the default.

Although quoted above, it bears repeating here that under section 2924c to cure the default and reinstate the loan, the amount paid or tendered by the trustor must be sufficient at the time payment is tendered, with respect to (A) all amounts of principal, interest, taxes, assessments, insurance premiums, or advances actually known by the beneficiary to be, and that are, in default and shown in the notice of default, under the terms of the deed of trust or mortgage and the obligation secured thereby, (B) all amounts in default on recurring obligations not shown in the notice of default, and (C) all reasonable costs and expenses, subject to subdivision (c), which are actually incurred in enforcing the terms of the obligation, deed of trust, or mortgage, and trustees or attorneys fees, subject to subdivision (d).

According to the only evidence presented at trial on the issue, namely the calculations made by Sierra Samra, a Fidelity foreclosure officer, Signatures payment at worst was $125.07 short if the amount necessary to cure the default, including costs and expenses, was calculated to include the five monthly payments due for May through September, and at best was only short by $65.07, if calculated to include four monthly payments due from May to August. Our conclusion that Signature was not in default on the May 2003 payment means that on September 4, 2003, when Signature sent its check for $15,000 to Fidelity, at worst it owed payments for June through September, or four months, and therefore its tender was short by only $65.07, and at best the amount tendered was sufficient to cure the default if calculated to include payments due for the months of June through August.

Plaintiffs contend as they did in the trial court that the September payment was not due when Signature sent its check to Fidelity and therefore $15,000 was sufficient to cure the default and reinstate the loan. According to the terms of the note secured by the deed of trust, Signature was to make installments of $850 beginning on May 15, 2000, and continuing until the 15th day of April, 2010. According to their payment records, Draper and Joyce recorded the due date of each payment as the 15th of each month. That evidence, which is undisputed, supports plaintiffs claim that the September payment was not due until September 15, 2003. However, the evidence presented at trial also includes Marazitis letter that accompanied the $15,000 cashiers check. That letter states, as previously noted, Please find enclosed check for $15,000 to apply to the foreclosure action; for taxes; and, for the month of September payment. [] Please send me an accounting of costs. (Emphasis added.) The trial court interpreted the emphasized language to mean that [t]he check for $15,000 was conditioned on payment of the September 2003 payment. The tender was therefore effectively $14,150.

The trial court is correct that to be effective a tender must be unconditional. (See 1486 & 1494, which state, respectively, An offer of partial performance is of no effect, and An offer of performance must be free from any conditions which the creditor is not bound, on his part, to perform.) Whether Marazitis letter creates a condition depends on interpretation of that writing. The interpretation of a written instrument, even though it involves what might properly be called questions of fact [citation], is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. [Citations.] (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865, citing Civ. Code, 1635-1661 & Code Civ. Proc., 1856-1866.) The trial courts interpretation of Marazitis letter leads to the absurd result that Signatures payment of $15,000 is not sufficient to cure the default and reinstate the loan because the payment is conditioned on the requirement that it include a monthly payment on a loan that is in default.

Maraziti could not have intended to include the September payment unless the sum tendered, i.e., $15,000 was first sufficient to cure the default and reinstate the loan. Unless the default is cured and the loan is reinstated, Signature has no reason to make the September payment. Both the cited legal principles and common sense dictate that Signatures payment of $15,000 be applied first to cure its default and reinstate the loan, and then to the September payment, if any money remained. As previously noted, Sierra Samra, the foreclosure officer, made two calculations, one that included the September payment, and one that did not, presumably because she recognized that the September payment was pointless unless the default were first cured and the loan reinstated. Both of Samras calculations included the May payment that Draper and Joyce incorrectly stated was in default. As a result, when Signatures $15,000 cashiers check is applied to cure the payments actually due, i.e., June through August, it was insufficient to cure the default and reinstate the loan.

The evidence, discussed above, is undisputed and demonstrates that Signature was not in default on the May 2003 payment. Therefore, Signatures $15,000 payment was sufficient to reinstate the loan because it included the monthly payments due in June, July, and August, the tax delinquency, and all other costs Fidelity claimed were properly attributed to the foreclosure. In short, the trial courts finding that Signatures payment was insufficient to cure its default and that Fidelity and Draper and Joyce properly rejected that payment is not supported by the undisputed evidence presented at trial.^[13]

(3.) Effect on Foreclosure Sale of Rejecting Signatures Tender

As set out in section 2924c, subdivision (a)(1), quoted above, the effect of Signature tendering an amount sufficient to cure the default is that the note and deed of trust to Draper and Joyce were reinstated according to their terms. As a result, the foreclosure proceedings should have ended. ( 2924c, subd. (a)(1); Anderson v. Heart Federal Sav. & Loan Assn., supra, 208 Cal.App.3d at pp. 202, 211-212; see also 4 Miller & Starr, Cal. Real Estate, supra, 10:186, p. 577.) That did not happen in this case. Therefore, the question we must resolve is what effect, if any, did that error have on the validity of the subsequent foreclosure sale.

We have not found a case that involves the same irregularity, or error, that occurred in this case. According to Miller and Starr, If the trustee wrongfully rejects a proper tender of reinstatement and the property is sold at a foreclosure sale to a bona fide purchaser, the trustor cannot set the sale aside against the purchaser. However, the trustee is liable for damages measured by the fair market value of the property less the amounts due secured by liens on the property. (4 Miller and Starr, Cal. Real Estate, supra, 10:186, pp. 577-578, fn. omitted, citing Munger v. Moore (1970) 11 Cal.App.3d 1, 9 (Munger).) The statement in Miller and Starr in our view is too broad and in any event is not supported by the cited case.

The statement is too broad because under section 2924c, subdivision (a)(1), quoted above, payment of the amount either agreed upon by the trustor and beneficiary or specified by the trustee or beneficiary in a beneficiary statement has the effect of curing the default and reinstating the loan. (Bank of America v. La Jolla Group II (2005) 129 Cal.App.4th 706 [trustor and beneficiary entered into agreement pursuant to which trustor would cure default but trustee mistakenly conducted foreclosure sale at which third party purchased property] (Bank of America).) A foreclosure sale conducted after a trustee rejects such a tender would be void, not voidable. (See Bisno v. Sax (1959) 175 Cal.App.2d 714, 724 [Speaking generally, the acceptance of payment of a delinquent installment of principal or interest cures that particular default and precludes a foreclosure sale based upon such preexisting delinquency. The same is true of a tender which has been made and rejected.].) Signature did not tender an agreed-upon sum of money, nor did it request either a beneficiary statement or other specification of the sum due, and then tender the specified sum. Therefore the point is irrelevant in this case and we will not further address the issue.

The Miller and Starr statement is also not supported by authority because Munger, the only authority cited to support the quoted principle, does not involve an action to set aside a foreclosure sale. The case involves an action by the trustor to recover damages after the beneficiary refused $4,000, a sum sufficient to cure the alleged default, and then purchased the property at the subsequent foreclosure sale for slightly less than $58,000. Two years later the beneficiary sold the property for $475,000. The trial court awarded damages to the trustor, an award that was affirmed on appeal. (Munger, supra, 11 Cal.App.3d at pp. 5-6.) Munger also does not involve a bona fide purchaser at the foreclosure sale. The only issue even arguably close to the principle quoted in Miller and Starr arose in connection with the trial court determining the proper measure of damages and concerned whether the defendant, who had an interest in the property superior to that of the plaintiff, had standing to attack Mungers interest by showing his deed was in fact a mortgage which in turn would support the defendants claim that damages should be measured according to the measure of damages that applies to the wrongful loss of security. In that context, the court noted that only parties to the transaction and those claiming under them could claim that the deed was in fact a mortgage. But even they could not raise that claim against an innocent purchaser or encumbrancer since such purchaser or encumbrancer was entitled, on the theory of estoppel, to claim that he was the real owner. (Id. at pp. 8-9.) In short, Munger is not authority for the cited proposition in Miller and Starr.

Moeller says that the trustor cannot set aside a sale to a bona fide purchaser for value at the trustees sale even where the trustee wrongfully rejected a proper tender of reinstatement by the trustor. (Moeller, supra, 25 Cal.App.4th at pp. 831-832; see also Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 441-442, quoting Moeller.) The Moeller court based its conclusion on the provision in section 2924 that states, in pertinent part, that, A recital in the deed executed pursuant to the power of sale of compliance with all requirements of law regarding the mailing of copies of notices or the publication of a copy of the notice of default or the personal delivery of the copy of the notice of default or the posting of copies of the notice of sale or the publication of a copy thereof shall constitute prima facie evidence of compliance with these requirements and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value and without notice. (Former  2924, now  2924, subd. (c), emphasis added.)

Arguably the emphasized language pertains only to the mailing and service of notices, and to no other procedural defect, as our colleagues in the Fifth District explained in Bank of America, supra,129 Cal.App.4th 706: Section 2924 pertains to the adequacy of notices related to a foreclosure and therefore the presumption specified in that section pertains only to those notices and not to other procedural aspects of a nonjudicial foreclosure. (Bank of America, at pp. 713-714.) The court in Bank of America specifically rejected the above quoted language from Moeller regarding application of the statutory presumption to a trustee who rejects a proper tender, not only because the language is obiter dictum but also because Moeller cites no authority for this proposition, and it is impossible to see how it is supported by a statute that describes in such great detail the notice requirements to which it specifically pertains. (Bank of America, at p. 714.)^[14] In Moeller itself, the court rejected a trustors effort to set aside a foreclosure sale partly on the basis of the section 2924 presumptions, but the courts primary holding was that the beneficiary properlyrefused a tender of the amount due and therefore there were no grounds for attacking the validity of the sale . . . . [Citation.] (Ibid., quoting Moeller, supra, 25 Cal.App.4th at p. 833.) According to the California Supreme Court Moeller stands for the unremarkable proposition that, Where there is no irregularity in a nonjudicial foreclosure sale and the purchaser is a bona fide purchaser for value, a great disparity between the sales price and the value of the property is not a sufficient ground for setting aside the sale. [Citations.] (Alliance Mortgage v. Rothwell (1995) 10 Cal.4th 1226, 1237, quoting Moeller, supra, 25 Cal.App.4th at p. 832.) In other words, disparity in price alone will not support setting aside an otherwise lawfully conducted foreclosure sale. Moeller therefore is equally inapplicable here because this case involves an irregularity in the nonjudicial foreclosure process, namely the beneficiaries rejection of a tender in an amount sufficient to cure the trustors default and reinstate the loan.

In an apparent contradiction with the previously quoted statement, Miller and Starr also say, When the sale is merely voidable, it is conclusive in favor of a bona fide purchaser in order to protect the sanctity of titles to real property and, therefore, the trustor cannot have the sale set aside based on irregularities in the foreclosure sale process, except in the case of fraud. [] On the other hand, where the sale is void the trustor can avoid the sale even where title is held by a bona fide purchaser. (4 Miller & Starr, Cal. Real Estate, supra, 10:211, pp. 682-683, fns. omitted.)

Under this formulation of the issue, the question is whether the error in refusing Signatures tender rendered the subsequent foreclosure sale void or merely voidable. If rejection of Signatures tender is an irregularity in the foreclosure process that renders the subsequent foreclosure sale void, then the trustees deed transferring the property to the bidding defendants has no force or effect and their sale to the Lanza Group is equally invalid. On the other hand, if the irregularity renders the foreclosure sale voidable, then a court of equity has authority to intervene and set the sale aside unless the purchaser is a bona fide purchaser for value. The general rule in the United States on voidness or voidability of sale is set out in [then] 55 American Jurisprudence Second: [D]efects and irregularities in a sale under a power [of sale] render it merely voidable and not void. . . . However, substantially defective sales have been held void where the defect lay in a particular as to which the statutory provision was regarded as mandatory. . . . [Citation.] (Little v. CFS Service Corp. (1987) 188 Cal.App.3d 1354, 1358 (Little).)

Apart from defects in notice, the effects of which are expressly addressed in the foreclosure statute, the cases that hold that the sale is void focus first on whether the irregularity involves a mandatory statutory duty and next on the stage of the foreclosure process at which the irregularity is discovered. For example in Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, the beneficiary recorded a substitution of trustee but then the prior trustee conducted the foreclosure sale. Division One of this court held the foreclosure sale was void because section 2934a, subdivision (a)(4) [b]y its terms . . . provides that after such a substitution has been recorded, the new trustee shall succeed to all the powers, duties, authority, and title granted and delegated to the trustee named in the deed of trust. [Citation.] (Dimock v. Emerald Properties, supra,at p. 871.) Because recitals in the trustees deed did not and could not overcome the prior trustees lack of authority to act, the deed was void. (Id. at p. 878.) Similarly, in Little, supra, 188 Cal.App.3d 1354, the trustee discovered a few days after the foreclosure sale that a judgment creditor and a junior lienor, both of whom had recorded requests for notice under section 2924b, subdivision (b)(2), and the trustor had not been given notice of the sale. The trustee immediately notified the purchasers and returned the purchasers money with interest. In a subsequent lawsuit by the purchasers against the trustee, the trial court found the sale was void and that the purchasers could not recover damages for breach of contract. The Court of Appeal affirmed, holding in part that until proper notice was given, the trustee is not required to prepare, execute, and deliver a deed containing the conclusive presumption language which would have incorrectly stated that notice had been properly given. (Little, at p. 1361; accord, Residential Capital v. Cal-Western Reconveyance Corp. (2003) 108 Cal.App.4th 807 [trustee rescinded sale after accepting high bid but before recording deed when trustee discovered agreement between trustor and beneficiary to postpone sale].)^[15]

In this case Signature not only tendered an amount sufficient to cure its default before the foreclosure sale took place, but before Fidelity recorded the trustees deed Maraziti also notified Fidelity that the sale was invalid because Signatures tender had been sufficient. These factual similarities to the above noted cases suggest that the foreclosure sale in this case should be void.^[16] Nevertheless, the fact that distinguishes this case from the cited cases is that before making the tender of $15,000, Signature, or Maraziti acting on its behalf, did not request a beneficiary statement or otherwise inquire about the sum necessary to cure the default.^[17] Therefore, the issue in this case, correctly framed, is whether a foreclosure sale is void or merely voidable when a trustor tenders an amount of money the trustor believes is sufficient to cure a default, and the beneficiary or trustee rejects the tender based on the beneficiarys belief that the tender is insufficient, but in later litigation, filed after the foreclosure sale and delivery of the trustees deed, the sum tendered is shown to have been sufficient to cure the default.

We conclude for reasons we now explain that such a foreclosure sale is voidable but not void and therefore cannot be set aside against a bona fide purchaser. We base our conclusion on the acknowledged purposes of the comprehensive statutory framework regulating nonjudicial foreclosures which, as set out in Moeller, are threefold: (1) to provide the creditor/beneficiary with a quick, inexpensive and efficient remedy against a defaulting debtor/trustor; (2) to protect the debtor/trustor from wrongful loss of the property; and (3) to ensure that a properly conducted sale is final between the parties and conclusive as to a bona fide purchaser. [Citation.] (Moeller, supra, 25 Cal.App.4th at p. 830.)

That statutory framework, as previously noted, includes a means for the trustor to obtain a statement from the beneficiary itemizing the amount that the trustor must pay to cure the default and reinstate the loan. ( 2924c, subd. (b)(1).) Tender of the amount specified by the beneficiary effectively precludes the beneficiary from later rejecting the tender. Maraziti did not request a beneficiary statement or contact either Fidelity or Draper and Joyce to determine the sum required to cure Signatures default. Instead, Maraziti sent a cashiers check for $15,000, an amount he either knew or merely hoped was sufficient to cure the default. By failing to follow the statutory procedure designed to avoid the precise problem that occurred in this case, Signature and Maraziti must be viewed as having effectively assumed the risk that the trustee and/or beneficiaries would find that the amount tendered was insufficient to cure the default and therefore reject the tender. Consequently, the defect in the foreclosure process at issue in this case is not the result of an irregularity in the mandatory statutory process. Instead, the error is one caused by the trustors failure to follow a statutory procedure that is not mandatory but that is designed to prevent the precise problem that ultimately occurreda disagreement between the trustor and the beneficiary over the amount required to cure the trustors default and reinstate the loan. Because we conclude the error in this case is not the result of the trustees or beneficiaries failure to comply with a mandatory statutory duty, we must further conclude that the foreclosure sale in this case is voidable, but not void.

Because we conclude the foreclosure sale in this case is only voidable, not void, we next must address plaintiffs claim that the bidding defendants and the Lanza Group are not bona fide purchasers. The trial court found otherwise, a finding we must affirm if supported by substantial evidence. (Central Valley General Hosp. v. Smith (2008) 162 Cal.App.4th 501, 513 [an appellate court independently reviews questions of law and applies the substantial evidence standard to findings of fact].)

2.

STATUS OF THE BIDDING DEFENDANTS AND THE LANZA GROUP AS BONA FIDE PURCHASERS

A bona fide purchaser (BFP) at a foreclosure sale is one who (1) purchased the property for value, and (2) had no knowledge or notice of the asserted rights of another. (Melendrez, supra, 127 Cal.App.4th at p. 1253, fn. and emphasis omitted.) Because a BFP by definition acquires [its] interest in real property without notice of anothers asserted rights in the property [it] takes the property free of such unknown rights. [Citations.] (Id. at p. 1251.) The question of whether a buyer is a BFP is a question of fact. [Citations.] Accordingly, we will reverse a trial courts determination on this question only if it is not supported by substantial evidence. [Citations.] Moreover, this factual determination is based upon the circumstances that existed at the time of the buyers acquisition; information learned after the acquisition does not affect the buyers BFP status. [Citation.] (Id. at p. 1254.)

A. Bidding Defendants

The trial court found that the bidding defendants were BFPs because plaintiffs did not present any evidence to show that the bidding defendants had any knowledge of alleged defects or irregularities in the foreclosure process leading to and through the trustees sale, procedural or otherwise. [] The court finds that the Bidding Defendants had no actual, constructive, inquiry or imputed knowledge or notice of any allegedly improper rejection of a tender in response to the notice of default . . . . We agree with the trial courts articulation of the issue.

Plaintiffs do not directly challenge the trial courts finding. Instead they assert that Modern Homes violated section 2924h, subdivision (g) by agreeing not to bid and thereby chilled the bidding at the foreclosure sale, and in any event the conclusive presumption in section 2924, subdivision (c) only applies to Modern Homes, as the high bidder, because the rights of the high bidder are not transferable. We construe these assertions as challenges to the bidding defendants status as purchasers at the foreclosure sale, bona fide or otherwise.

Section 2924h, subdivision (g) makes it unlawful for any person, acting alone or in concert with others, (1) to offer to accept or accept from another, any consideration of any type not to bid, or (2) to fix or restrain bidding in any manner, at a sale of property conducted pursuant to a power of sale in a deed of trust or mortgage. In addition to the findings noted above, the trial court also found there was no evidence of conspiracy, collusion, deception [or] underhanded dealing on the part of the bidding defendants, and no evidence of chilled bidding. Plaintiffs claim the evidence shows that Modern Homes agreed not to bid on the Property, and instead pooled their money with others, as purportedly revealed in the testimony of Jose Aquino, the president of Banca Financial (one of the successful bidding defendants), set out in pages 1538 to 1616 of the reporters transcript. According to plaintiffs, by agreeing to pool resources, Modern Homes accepted consideration not to bid on the property. In addition, pooling of funds evidences chilling the bid.

We will not resolve these claims because plaintiffs have not complied with their obligation under rule 8.883 of the California Rules of Court to support their reference to a matter in the record by a citation to the volume and page number of the record where the matter appears. (Cal. Rules of Court, rule 8.883(a)(1)(B).)^[18] By citing all 78 pages of Mr. Aquinos testimony as support for their claim that Modern Homes agreed not to bid at the trustees sale on the Big Bear property, plaintiffs have in effect failed to cite any evidence at all, and instead have left to us the task of finding the pertinent portions, if any, of Mr. Aquinos testimony. That we will not do. (Margott v. Gem Properties, Inc. (1973) 34 Cal.App.3d 849, 853.)^[19]

Because plaintiffs have not cited any evidence to support their claims that Modern Homes agreed not to bid or that it pooled resources with other bidders, we must conclude that the trial courts findings are supported by the evidence set out in its statement of decision. In particular, the trial court found that the trustees sale took place on October 8, 2003; Jose Aquino, a principal of Banca Financial, learned of the sale on the morning of October 8; Aquino conta