Filed 11/19/19 Nationstar Mortgage, LLC v. Vaughan CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

THIRD APPELLATE DISTRICT

(Siskiyou)

—-

NATIONSTAR MORTGAGE, LLC,

Plaintiff and Respondent,

v.

SANDRA LEE VAUGHAN,

Defendant and Appellant.

C086692

(Super. Ct. No. SCSCCVCV1601033)

Nationstar Mortgage LLC (Nationstar) filed this action against Sandra Lee Vaughan seeking, among other things, to update the legal description in a deed of trust Vaughan signed to secure a loan on real property. The trial court granted Nationstar’s motion for summary judgment, concluding there was no triable issue regarding mutual mistake between Vaughan and the original lender as to the legal description of the property.

Vaughan now contends (1) there are disputed facts regarding mutual mistake, (2) material facts support her defense that the complaint is time-barred, and (3) the trial court erred in sustaining Nationstar’s objections to her declaration and exhibits.

We will reverse the judgment. Nationstar did not make an initial prima facie showing of the nonexistence of any triable issue of material fact regarding mutual mistake. Because Nationstar failed to meet its initial burden, the burden never shifted to Vaughan, and summary judgment should not have been granted. As a result, we need not consider Vaughan’s other contentions.

BACKGROUND

Vaughan obtained title to the subject property by grant deed from a private party in 1996. That same year the City of Dunsmuir (the City) transferred additional land to Vaughan.

Approximately nine years later, in 2005, the City recorded a lot line adjustment affecting the legal description of the subject property. In connection with the 2005 lot line adjustment, the City executed a grant deed to Vaughan containing a full and current legal description of the subject property. The 2005 grant deed transferred additional property to Vaughan on which Vaughan installed a porch, patio, and wooden fencing. The City later executed another grant deed to Vaughan (with a full and current legal description of the subject property) because the prior grant deed misspelled Vaughan’s name.

The City recorded another lot line adjustment in 2006 and included a full and current legal description of the entire subject property, but the 2006 lot line adjustment did not transfer additional land to Vaughan.

In 2008, Vaughan obtained a loan for $175,000 from Bank of America, which was secured by a deed of trust on the subject property. The deed of trust included a legal description of the property as it existed in 1996, before the 2005 lot line adjustment, and it expressly excluded part of the current description of the property, using the language “[e]xcepting therefrom those portions . . . .”

Bank of America assigned the loan and deed of trust to Federal Home Loan Mortgage Corporation in 2012, and Federal Home Loan Mortgage Corporation assigned the loan and deed of trust to Nationstar in 2016.

Nationstar filed an action against Vaughan for declaratory relief and to reform the deed of trust to reflect the full and current legal description for the subject property, not just the legal description of the property as it existed in 1996. Nationstar alleged the legal description failed to reflect the true boundaries of the subject property after the 2005 and 2006 lot line adjustments, which resulted in a correct legal description as described in the 2005 vesting grant deed. Nationstar said the legal description in the deed of trust should have been the same as the legal description provided in the 2005 vesting grant deed, and it alleged the incorrect legal description was included in the deed of trust “through the mutual mistake of the parties” and that but for the mutual mistake, the deed of trust would have included the full and correct legal description of the subject property. Nationstar did not argue in its summary judgment motion that a deed of trust must encumber an entire property.

Vaughan filed an answer to the complaint, generally denying the allegation that there was a mutual mistake resulting in an incorrect description of the property subject to the deed of trust. She also alleged several affirmative defenses, including laches and the statute of limitations. In response to Nationstar’s special interrogatories, Vaughan denied there was a mistake in drafting the legal description.

Nationstar filed a motion for summary judgment, asserting no triable issue as to a mutual mistake of fact. Vaughan opposed the motion, but the trial court sustained Nationstar’s objections to her evidence and granted Nationstar’s motion. The trial court concluded: “It is not disputed that the deed of trust securing the loan from the Bank of America contained an erroneous legal description, in that it did not set forth the then current and legal description of the subject property that existed as of April 14, 2008 [the date of the loan].” To support this statement, the trial court found: “It is an undisputed material fact that [Vaughan] intended to give a deed of trust on her subject real property and [Bank of America] also intended to have a secured deed of trust on [Vaughan’s] subject property. . . . The description of the subject property that was contained in the deed of trust failed to contain the then existing legal description of the subject property. There are no material disputed facts that this was anything but a mutual mistake of the parties.”

STANDARD OF REVIEW

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he [or she] is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).) This burden “remains with the party moving for summary judgment.” (Kahn v. East Side Union High School Dist. (2003) 31 Cal.4th 990, 1003 (Kahn).) The moving party also “bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he [or she] carries [the] burden of production, . . . the opposing party is then subjected to a burden of production . . . to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar, at p. 850.)

On appeal from a judgment entered after the granting of a summary judgment motion, “[w]e review the record and the determination of the trial court de novo.” (Kahn, supra, 31 Cal.4th at p. 1003.)

DISCUSSION

Vaughan contends there are disputed material facts regarding mutual mistake. We conclude Nationstar did not meet its initial burden on summary judgment, and hence the burden never shifted to Vaughan to present contrary evidence.

Nationstar’s effort to reform the deed of trust is based on Civil Code section 3399. That statute provides: “When, through fraud or a mutual mistake of the parties, . . . a written contract does not truly express the intention of the parties, it may be revised on the application of a party aggrieved, so as to express that intention, so far as it can be done without prejudice to rights acquired by third persons, in good faith and for value.”

In order to shift the burden to Vaughan and require her to present evidence in opposition to the motion for summary judgment, Nationstar had to initially show the nonexistence of any triable issue of material fact on the subject of mutual mistake. (Aguilar, supra, 25 Cal.4th at p. 850.) It did not do so.

As we have noted, the deed of trust expressly excludes a portion of Vaughan’s property. The wording of that document is not ambiguous and does not suggest a mistaken omission, it suggests an intentional and overt exclusion.

Nationstar nevertheless asserted an undisputed mutual mistake. In support of that assertion it relied on Vaughan’s responses to requests for admissions and Nationstar’s statement of undisputed material facts. Nationstar also relied on a prior appraisal report. However, those items of evidence do not assist Nationstar in meeting its initial burden on summary judgment.

Nationstar points to Vaughan’s response to Nationstar’s requests for admissions, in which Nationstar asked Vaughan to admit it was her intent that the deed of trust encumber the entirety of the subject property, including the land deeded to her by the City via a grant deed executed on January 29, 1996. Although the request referenced the entirety of the subject property, it did not specifically mention the land added by the 2005 lot line adjustment. Vaughan responded: “[Vaughan] admits the deed of trust recorded on April 22, 2008, was to include the [City] grant deed previously executed on January 29, 1996. [Vaughan] denies intention was for deed of trust recorded on April 22, 2008 to encumber entirety of subject property.” The record is clear that Vaughan continued to deny there was an intention to encumber the entire property when the deed of trust was prepared. Nationstar also referenced Vaughan’s response to Nationstar’s statement of undisputed material facts, but again, Vaughan’s response indicated a clear denial and a triable issue of material fact.

As for the appraisal report, Nationstar presented the declaration of Barkley Sutton, an assistant vice president of Rushmore Loan Management Services, LLC (Rushmore), the current servicer of Vaughan’s loan on behalf of Nationstar. In his declaration, Sutton did not say he had personal knowledge of the conversations between Vaughan and Bank of America at the time the deed of trust legal description was prepared. Rather, his declaration indicated he was relying on business records. Based on those business records, Sutton declared that the legal description did not comply with the intentions of the parties. He appeared to base that assertion on an appraisal report prepared in connection with Bank of America’s loan to Vaughan. Because the appraisal report referenced the porch, patio and fencing added following the lot line adjustments, Sutton said the report indicated it was the intent of the parties that the deed of trust encumber the entire property at the time. But the appraisal report said nothing about the intent of the parties concerning the legal description to be included in the deed of trust, it merely showed that Bank of America obtained an appraisal of the entire property before making the loan to Vaughan. While the inclusion of the porch, patio and fencing could create an inference that Bank of America and Vaughan intended to have the deed of trust encumber the entire subject property, the fact that the deed of trust expressly excluded a portion of the subject property creates a contrary inference. Because there are opposing inferences, there is a disputed question of fact. (See Ralph Andrews Productions, Inc. v. Paramount Pictures Corp. (1990) 222 Cal.App.3d 676, 682 [opposing inferences raise question for trier of fact].)

Nationstar also points to Vaughan’s lack of contrary evidence, but as we have explained, the burden on summary judgment never shifted to her because Nationstar failed to carry its initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact. Having so failed, Nationstar was not entitled to summary judgment, and we need not consider the remainder of Vaughan’s contentions.

DISPOSITION

The judgment is reversed. Vaughan is awarded her costs on appeal. (Cal. Rules of Court, rule 8.278(a).)

/S/

MAURO, Acting P. J.

We concur:

/S/

MURRAY, J.

/S/

KRAUSE, J.