Filed 9/30/14 Banis v. Magnate Fund CA1/3
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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or ordered published for purposes of rule 8.1115.


                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                DIVISION THREE


THOMAS BANIS et al.,
         Plaintiffs and Appellants,
                                                                     A137414
v.
MAGNATE FUND #2 LLC et al.,                                          (Contra Costa County
                                                                     Super. Ct. No. 1000601)
         Defendants and Respondents.

         Marie Dalkas-Banis and Thomas Banis sued Magnate Fund #2, LLC (Magnate)
and Standard Trust Deed Services Co. (Standard) on a number of theories arising out of
Magnate’s foreclosure and credit bid purchase of property the Banises owned in Orinda.1
After 13 of 14 causes of action were dismissed on demurrer, Magnate moved for
summary judgment on the remaining cause of action alleging a failure to distribute
trustee sale proceeds in accordance with Civil Code section 2924k.2 The trial court found
Magnate’s evidence established that its credit bid was below the outstanding balance of
its loan secured by the Orinda property and that plaintiffs failed to present competent
opposing evidence to raise a triable issue of fact on that issue. Accordingly, the court
granted summary judgment. We agree, and affirm the judgment.


         1
         For convenience we will generally refer to Dalkas-Banis and Banis jointly as
plaintiffs. Although the two plaintiffs’ participation in the various transactions that
resulted in the present state of affairs differed, those differences are immaterial to the
limited issues raised by this appeal.
         2
             Unless otherwise noted, references to statutes are to the Civil Code.

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                                      BACKGROUND
       Between 2004 and 2011, plaintiffs obtained multiple loans and loan modifications
secured by the Orinda property. As of March 2011, the Orinda property was encumbered
by two deeds of trust. The senior loan (the World Savings loan) was approximately
$1,428,000. Magnate’s loan of approximately $875,000 was in second position.
Magnate foreclosed in 2011 and acquired the property at a trustee’s sale on March 25,
2011, subject to the existing World Savings loan, with a bid of $505,088.93.
       Plaintiffs sued Magnate, Standard, and various other defendants. After all but one
of their causes of action were dismissed with prejudice on demurrer, Magnate and
Standard moved for summary judgment on plaintiffs’ remaining cause of action for
failure to distribute proceeds of the trustee’s sale pursuant to Civil Code section 2924k.
The trial court granted summary judgment for the defendants. It explained: “Section
2924k sets the priority for distributing the ‘proceeds’ of a foreclosure sale. In the case at
bar, there were no proceeds to distribute, because there was no cash bid exceeding
defendant Magnate Fund’s credit bid. . . . [¶] Defendants’ opening evidence adequately
establishes that defendant Magnate Funds made a credit bid in an amount that was less
than the outstanding balance secured by the Orinda deed of trust,” and plaintiffs failed to
dispute that fact with competent evidence sufficient to raise a triable issue. The court
further found plaintiffs had failed to articulate any legal theory of liability under which
Standard, the foreclosure trustee, could be held vicariously liable for following
Magnate’s instructions in conducting the sale.
       This appeal timely followed.
                                          DISCUSSION
                      I. Legal Standards On Summary Judgment
       “ ‘To secure summary judgment, a moving defendant may prove an affirmative
defense, disprove at least one essential element of the plaintiff’s cause of action
[citations] or show that an element of the cause of action cannot be established
[citations]. [Citation.] The defendant “must show that under no possible hypothesis
within the reasonable purview of the allegations of the complaint is there a material


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question of fact which requires examination by trial.” [Citation.] [¶] The moving
defendant bears the burden of proving the absence of any triable issue of material fact,
even though the burden of proof as to a particular issue may be on the plaintiff at trial.
[Citation.] . . . Once the moving party has met its burden, the opposing party bears the
burden of presenting evidence that there is any triable issue of fact as to any essential
element of a cause of action.’ ” (Ochoa v. Pacific Gas & Electric Co. (1998) 61
Cal.App.4th 1480, 1485 (Ochoa), brackets and ellipses in original.)
       “In reviewing the propriety of a summary judgment, the appellate court must
resolve all doubts in favor of the party opposing the judgment. [Citation.] The reviewing
court conducts a de novo examination to see whether there are any genuine issues of
material fact or whether the moving party is entitled to summary judgment as a matter of
law.” (M.B. v. City of San Diego (1991) 233 Cal.App.3d 699, 703–704.) “We accept as
true the facts alleged in the evidence of the party opposing summary judgment and the
reasonable inferences that can be drawn from them. [Citation.] However, to defeat the
motion for summary judgment, the plaintiff must show ‘ “specific facts,” ’ and cannot
rely upon the allegations of the pleadings.” (Horn v. Cushman & Wakefield Western, Inc.
(1999) 72 Cal.App.4th 798, 805.) “While ‘[s]ummary judgment is a drastic procedure,
should be used with caution [citation] and should be granted only if there is no issue of
triable fact’ [citation], it is also true ‘[j]ustice requires that a defendant be as much
entitled to be rid of an unmeritorious lawsuit as a plaintiff is entitled to maintain a good
one.’ ” (M.B. v. City of San Diego, supra, at p. 704.)
                                             II. Analysis
       Section 2924k prescribes the priority a foreclosure trustee must follow to
distribute the proceeds of a trustee’s sale. Proceeds are first applied to the costs and
expenses of exercising the power of sale and of sale, including the payment of the
trustee’s and attorney’s fees, and then to the obligation secured by the foreclosed deed of
trust. Any remaining proceeds are applied to satisfy obligations secured by junior liens in
the order of their priority. Only after these obligations are satisfied may remaining
proceeds, if any, be distributed to the trustor. (§ 2924k, subd. (a)(1)–(4).)


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       Section 2924h, subdivision (b) permits the beneficiary of the foreclosing deed of
trust to make a credit bid at the sale up to “the total amount due the beneficiary including
the trustee’s fees and expenses.” “The only distinction between the [foreclosing] lender
and any other bidder is that the lender is not required to pay cash, but is entitled to make a
credit bid up to the amount of the outstanding indebtedness. [Citation.] The purpose of
this entitlement is to avoid the inefficiency of requiring the lender to tender cash which
would only be immediately returned to it. [Citation.] . . . . If the full credit bid is
successful, i.e., results in the acquisition of the property, the lender pays the full
outstanding balance of the debt and costs of foreclosure to itself and takes title to the
security property, releasing the borrower from further obligations under the defaulted
note.” (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1238, text in initial
brackets added.)
       Magnate supported summary judgment with evidence that showed it purchased the
property with a credit bid. John Simonse, one of the individuals who approve and
manage loans for Magnate, attested that “Magnate purchased the Orinda property by
making a credit bid for $505,088.93. . . . Our credit bid was less than the full amount of
our loan in hopes that someone would overbid. No one did.” Simonse further attested
that “[f]ollowing the trustee’s sale, the Orinda property reverted to Magnate, subject to
the approximately $1,428,000 World loan which Magnate assumed. There were no
proceeds from the trustee’s sale of the Orinda property. . . . [¶] [B]ecause there were no
proceeds, there was no money to be applied.” (Italics added.) Magnate’s evidence thus
shifted the burden to plaintiffs to produce competent evidence showing the existence of a
triable issue of fact as to whether there were proceeds from the trustee’s sale that should
have been distributed to them under section 2924k. (Ochoa, supra, 61 Cal.App.4th at p.
1485.) In a second and more detailed declaration, Simonse clarified that the principal
balance remaining on the loan when Magnate foreclosed was $636,832.54, and that
$536,292.06 remained due and owing after credit for the foreclosure sales of the Orinda
property and another property (the Yakima property) on which it held a deed of trust as
additional security for the loan.


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       Plaintiffs disagree that Simonse’s declarations were sufficient to shift the balance
of production. They say their complaint alleged that their indebtedness on the Magnate
loan had been satisfied when Magnate foreclosed on the Yakima property and another of
their properties, this one in Hollywood, on which Magnate also held a trust deed.3 But
bare allegations are insufficient to defeat summary judgment. Once the moving
defendant meets its burden of showing that no triable issue of material fact exists, the
plaintiff must produce competent evidence sufficient to make a prima facie showing of
the existence of a triable issue of material fact, and “may not rely upon the mere
allegations or denials of its pleadings to show that a triable issue of material fact
exists. . . .” (Code. Civ. Proc., §437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co.
(2001) 25 Cal.4th 826, 850–851; Bushling v. Fremont Medical Center (2004) 117
Cal.App.4th 493, 506.)
       Here, the court sustained Magnate’s objections to essentially all of plaintiffs’
evidence purportedly supporting their position that the Hollywood and Yakima
foreclosures had satisfied their obligation on the loan. (See Guz v. Bechtel National Inc.
(2000) 24 Cal.4th 317, 334 [reviewing court considers all evidence except that to which
objections have been sustained].) Plaintiffs have not challenged those rulings on appeal,
so they are final. All that remained of plaintiffs’ evidence, to the extent potentially
relevant to the amount they owed at foreclosure, were their attestations that they “made
payments of $123,711.31” on the Magnate loan. But there is no evidence that these
payments had reduced plaintiffs’ principal loan balance, let alone that they reduced it
below the amount of Magnate’s credit bid. Summary judgment was properly granted.
       Plaintiff’s contention that when the court ruled on summary judgment it was under
the assumption that it had already dispensed with their claim to credits for Magnate’s
foreclosure on the Yakima and Hollywood properties does not alter our conclusion.
Whether or not plaintiffs are correct, we review the court’s ruling de novo and are not

       3
       In its reply brief in support of summary judgment, Magnate pointed out that the
loan documents plaintiffs cited in support of this claim show that the Hollywood property
secured a different loan obligation than the loan against the Orinda property.

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bound by its stated reasons or rationales. (Hersant v. Department of Social Services
(1997) 57 Cal.App.4th 997, 1001.) Our independent review fails to demonstrate any
error possibly due to rejection of plaintiffs’ claim to loan credits.
                                          DISPOSITION
Respondents’ motion to dismiss the appeal is denied and the judgment is affirmed.
Respondents are to recover their costs on appeal. Their request for judicial notice of this
court’s opinion in Chokatos v. Magnate Fund #1 LLC et al. (Sept. 12, 2013, A137174,
A137187 [nonpub. opn]) is denied, as the opinion is irrelevant to any issue properly
before us. (See Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063.)
Their pro forma request for $24,837 in postjudgment fees and/or sanctions for pursuing a
frivolous appeal is denied without prejudice to any right respondents may have to seek
postjudgment fees in the trial court.




                                                   _________________________
                                                   Siggins, J.


We concur:


_________________________
Pollak, Acting P.J.


_________________________
Jenkins, J.




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