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April 16, 2012

Jane Brown v. Wells Fargo Bank, NA (2012) 204 Cal.App.4th 1352

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The Second District orders its court clerk to send a copy of its opinion to the California State Bar for consideration of discipline of an attorney for abusing the appellate process by filing an appeal solely to delay the inevitable.

Jane Brown was in default on a home mortgage.  After Wachovia Mortgage, a division of Wells Fargo Bank NA, recorded notice of a trustee sale it eventually set for August 9, 2010, she filed suit seeking declaratory/injunctive relief to prevent the sale of her home.  After granting a temporary restraining order to stop the August 9th sale, the trial court granted a preliminary injunction on September 7, 2010 preventing the sale on condition that Brown deposit $1,700 a month in a client trust account in lieu of a bond.

On June 2, 2011, Wells Fargo filed an ex parte application to dissolve the preliminary injunction because appellant had not made a single payment and a foreclosure sale was scheduled for June 10th.  Brown’s counsel, Jason Estavillo, appeared at the June 3rd hearing and argued that the proposed order should not issue ex parte.  The trial court agreed, and set a June 8th hearing date and told Mr. Estavillo to find out what his client had done or hadn’t done.  On June 7th, Brown filed opposition papers, but failed to explain why the money had not been deposited.  On June 8th, the trial court dissolved the preliminary injunction and allowed the June 10th foreclosure sale to go forward as scheduled.

On June 8th, Brown filed a notice of appeal.  That notice worked as a stay of the trial court’s order and stopped the trustee sale.  She argued that Wells Fargo had failed to make a good cause showing for ex parte relief and that her due process rights were violated.  She prayed for reversal of the trial court’s order allowing the sale of her home.

The Court of Appeal affirmed the decision, holding that because the trial court had not granted Wells Fargo’s requested relief ex parte, but instead set the matter for hearing five days later, the premise to the sole contention on appeal was false.  Moreover, at the noticed hearing, Brown expressly waived any claim that the hearing was not noticed or irregular.  Even if she had not made such a waiver, the trial court had good cause to fast track the hearing.

The Court concluded that with the misguided help of counsel, Brown had delayed the trustee’s sale of her home for over two years.  Her use of the appellate process solely for continued delay was an abuse of the appellate process.  While the Court of Appeal granted Brown the benefit of the doubt, it did not extend that benefit to her counsel.  Thus, despite the fact that Wells Fargo had not sought sanctions, the Court ordered its clerk to send a copy of its opinion to the California State Bar for consideration of discipline.

Comment: The case makes clear that the California Court of Appeal, in its own words, will not suffer lightly the abuse of the appellate process.  Even if the opposing party does not seek sanctions, a lawyer that files an appeal the Court deems frivolous may be reported by the Court to the State Bar of California for consideration of discipline.


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