Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1036

Introduced by Assembly Member Blumenfield

February 22, 2013

An act to amend begin delete Section 20919.2 end delete begin insert Sections 2924.19, 2950, and 3509 end insert of the begin delete Public Contract end delete begin insert Civil end insert Code, relating to begin delete public contracts end delete begin insert mortgages end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 1036, as amended, Blumenfield. begin delete Public contracts: job order contracting. end delete begin insert Mortgages. end insert

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Existing law allows the Los Angeles Unified School District to utilize job order contracting as an alternative to any contracting procedures otherwise authorized or required by law.

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Existing law imposes various preconditions for exercising a power of sale under a mortgage or deed of trust, including, among other things, recording a notice of default and a notice of sale. Existing law authorizes a borrower to seek an injunction and damages for violations of certain of the requirements described above, except as specified. Existing law authorizes the greater of treble actual damages or $50,000 in statutory damages if a violation of certain requirements is found to be intentional or reckless or resulted from willful misconduct, as specified. Existing law authorizes the awarding of attorney’s fees for prevailing borrowers, as specified.

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Existing law provides that a grant of real property that is intended to be voidable on the performance of certain conditions is not voided as to the grantee or other specified persons having actual notice, unless a instrument of defeasance is recorded with the county recorder.

end insert begin insert

Existing law provides that the maxims of jurisprudence set forth in the provisions of the California Civil Code do not qualify that code’s provisions, but are instead intended to aid in their application.

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This bill would make technical, nonsubstantive changes to those provisions.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 2924.19 of the end insert begin insert Civil Code end insert begin insert , as added by
Section 22 of Chapter 86 of the Statutes of 2012, is amended to
read: end insert

2924.19.  

(a) (1) If a trustee’s deed upon sale has not been
recorded, a borrower may bring an action for injunctive relief to
enjoin a material violation of Section 2923.5, 2924.17, or 2924.18.

(2)  begin delete Any end delete begin insert An end insert injunction shall remain in place and any trustee’s
sale shall be enjoined until the court determines that the mortgage
servicer, mortgagee, beneficiary, or authorized agent has corrected
and remedied the violation or violations giving rise to the action
for injunctive relief. An enjoined entity may move to dissolve an
injunction based on a showing that the material violation has been
corrected and remedied.

(b) After a trustee’s deed upon sale has been recorded, a
mortgage servicer, mortgagee, beneficiary, or authorized agent
shall be liable to a borrower for actual economic damages pursuant
to Section 3281, resulting from a material violation of Section
2923.5, 2924.17, or 2924.18 by that mortgage servicer, mortgagee,
beneficiary, or authorized agent where the violation was not
corrected and remedied prior to the recordation of the trustee’s
deed upon sale. If the court finds that the material violation was
intentional or reckless, or resulted from willful misconduct by a
mortgage servicer, mortgagee, beneficiary, or authorized agent,
the court may award the borrower the greater of treble actual
damages or statutory damages of fifty thousand dollars ($50,000).

(c) A mortgage servicer, mortgagee, beneficiary, or authorized
agent shall not be liable for any violation that it has corrected and
remedied prior to the recordation of the trustee’s deed upon sale,
or that has been corrected and remedied by third parties working
on its behalf prior to the recordation of the trustee’s deed upon
sale.

(d) A violation of Section 2923.5, 2924.17, or begin delete 2917.18 end delete begin insert 2924.18 end insert
by a person licensed by the Department of Corporations, the
Department of Financial Institutions, or the Department of Real
Estate shall be deemed to be a violation of that person’s licensing
law.

(e)  begin delete No end delete begin insert A end insert violation of this article shall begin insert not end insert affect the validity of
a sale in favor of a bona fide purchaser and any of its
encumbrancers for value without notice.

(f) A third-party encumbrancer shall not be relieved of liability
resulting from violations of Section 2923.5, 2924.17 or 2924.18,
committed by that third-party encumbrancer, that occurred prior
to the sale of the subject property to the bona fide purchaser.

(g) The rights, remedies, and procedures provided by this section
are in addition to and independent of any other rights, remedies,
or procedures under any other law. Nothing in this section shall
be construed to alter, limit, or negate any other rights, remedies,
or procedures provided by law.

(h) A court may award a prevailing borrower reasonable
attorney’s fees and costs in an action brought pursuant to this
section. A borrower shall be deemed to have prevailed for purposes
of this subdivision if the borrower obtained injunctive relief or
damages pursuant to this section.

(i) This section shall apply only to entities described in
subdivision (b) of Section 2924.18.

(j)  This section shall remain in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2018, deletes or extends that date.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 2924.19 of the end insert begin insert Civil Code end insert begin insert , as added by Section
22 of Chapter 87 of the Statutes of 2012, is amended to read: end insert

2924.19.  

(a) (1) If a trustee’s deed upon sale has not been
recorded, a borrower may bring an action for injunctive relief to
enjoin a material violation of Section 2923.5, 2924.17, or 2924.18.

(2)  begin delete Any end delete begin insert An end insert injunction shall remain in place and any trustee’s
sale shall be enjoined until the court determines that the mortgage
servicer, mortgagee, beneficiary, or authorized agent has corrected
and remedied the violation or violations giving rise to the action
for injunctive relief. An enjoined entity may move to dissolve an
injunction based on a showing that the material violation has been
corrected and remedied.

(b) After a trustee’s deed upon sale has been recorded, a
mortgage servicer, mortgagee, beneficiary, or authorized agent
shall be liable to a borrower for actual economic damages pursuant
to Section 3281, resulting from a material violation of Section
2923.5, 2924.17, or 2924.18 by that mortgage servicer, mortgagee,
beneficiary, or authorized agent where the violation was not
corrected and remedied prior to the recordation of the trustee’s
deed upon sale. If the court finds that the material violation was
intentional or reckless, or resulted from willful misconduct by a
mortgage servicer, mortgagee, beneficiary, or authorized agent,
the court may award the borrower the greater of treble actual
damages or statutory damages of fifty thousand dollars ($50,000).

(c) A mortgage servicer, mortgagee, beneficiary, or authorized
agent shall not be liable for any violation that it has corrected and
remedied prior to the recordation of the trustee’s deed upon sale,
or that has been corrected and remedied by third parties working
on its behalf prior to the recordation of the trustee’s deed upon
sale.

(d) A violation of Section 2923.5, 2924.17, or begin delete 2917.18 end delete begin insert 2924.18 end insert
by a person licensed by the Department of Corporations, the
Department of Financial Institutions, or the Department of Real
Estate shall be deemed to be a violation of that person’s licensing
law.

(e)  begin delete No end delete begin insert A end insert violation of this article shall begin insert not end insert affect the validity of
a sale in favor of a bona fide purchaser and any of its
encumbrancers for value without notice.

(f) A third-party encumbrancer shall not be relieved of liability
resulting from violations of Section 2923.5, 2924.17 or 2924.18,
committed by that third-party encumbrancer, that occurred prior
to the sale of the subject property to the bona fide purchaser.

(g) The rights, remedies, and procedures provided by this section
are in addition to and independent of any other rights, remedies,
or procedures under any other law. Nothing in this section shall
be construed to alter, limit, or negate any other rights, remedies,
or procedures provided by law.

(h) A court may award a prevailing borrower reasonable
attorney’s fees and costs in an action brought pursuant to this
section. A borrower shall be deemed to have prevailed for purposes
of this subdivision if the borrower obtained injunctive relief or
damages pursuant to this section.

(i) This section shall apply only to entities described in
subdivision (b) of Section 2924.18.

(j)  This section shall remain in effect only until January 1, 2018,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2018, deletes or extends that date.

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begin insert SEC. 3. end insert   

end insert

begin insert Section 2950 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

2950.  

When a grant of real property purports to be an absolute
conveyance, but is intended to be begin delete defeasable end delete begin insert defeasible end insert on the
performance of certain conditions, such grant is not defeated or
affected as against any person other than the grantee or his heirs
or devisees, or persons having actual notice, unless an instrument
of defeasance, duly executed and acknowledged, shall have been
recorded in the office of the County Recorder of the county where
the property is situated.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 3509 of the end insert begin insert Civil Code end insert begin insert is amended to read: end insert

3509.  

The maxims of jurisprudence hereinafter set forth are
intended not to qualify any of the foregoing provisions of this
begin delete Code, end delete begin insert code, end insert but to aid in their just application.

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SECTION 1.  

Section 20919.2 of the Public Contract Code is
amended to read:

20919.2.  

Nothing in this article or in this code shall prohibit
the unified school district from utilizing job order contracting as
an alternative to contracting procedures that the unified school
district is otherwise authorized or required by law to use.

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