Prudential Home Mortg. Co. v. Superior Court of Orange Cty.

Baum, Hedlund, Aristei, Guilford & Downey, Paul J. Hedlund, Karen A. Barth, Pine & Pine, and Norman Pine, Los Angeles, for Real Parties in Interest.

Certified for Partial Publication. [*]

WALLIN, Associate Justice.

Petitioners Prudential Home Mortgage, Centerbank Mortgage Company and Guild Mortgage Company are all real estate lenders, and each is a defendant in one of three potential class actions by former borrowers. The borrowers claim petitioners violated Civil Code section 2941, which regulates the process for recording a reconveyance of a deed of trust after a borrower pays off a secured loan. For these alleged violations, the borrowers seek to recover the $300 statutory forfeiture for each loan, all of which were repaid more than one year but less than three years before these actions were filed.

Petitioners challenged the pleadings below by demurrers and motions to strike, claiming the recovery of the statutory forfeiture is barred by the one-year statute of limitations. (Code Civ. Proc, § 340, subd. (1).) At a joint hearing on all three cases, the trial court disagreed. Relying on MacManus v. A.E. Realty Partners (1983) 146 Cal.App.3d 275 , 194 Cal.Rptr. 567 , it ruled…

Petitioners Prudential Home Mortgage Company, Inc., Centerbank Mortgage Company and Guild Mortgage Company are all real estate lenders, and each is a defendant in one of three potential class actions by former borrowers. The borrowers claim petitioners violated Civil Code section 2941, which regulates the process for recording a reconveyance of a deed of trust after a borrower pays off a secured loan. For these alleged violations, the borrowers seek to recover the $300 statutory forfeiture for each loan, all of which were repaid more than one year but less than three years before these actions were filed.

Petitioners challenged the pleadings below by demurrers and motions to strike, claiming the recovery of the statutory forfeiture is barred by the one-year statute of limitations. (Code Civ. Proc., § 340, subd. (1).) At a joint hearing on all three cases, the trial court disagreed. Relying on MacManus v. A. E. Realty Partners (1983) 146 Cal.App.3d 275 [ 194 Cal.Rptr. 567 ], it ruled that Civil Code section 2941 is remedial, rather than penal, and therefore the three-year statute of limitations applies. (Code Civ. Proc., § 338, subd. (a).) Petitioners seek extraordinary…

I concur in the majority opinion, except as to part III. These writ proceedings concern lawsuits against lenders who loaned the real parties money secured by deeds of trust on their real property. Real parties seek recovery of a statutory penalty under Civil Code section 2941 based on the lenders’ alleged failure to record deeds *1251 of reconveyance after the underlying debts were satisfied. In part II of the majority opinion, my colleagues hold that the one-year statute of limitations contained in Code of Civil Procedure section 340, subdivision (1) (all further statutory references are to the Code of Civil Procedure unless otherwise specified) applies to these actions. I agree with this conclusion. But in part III, the majority holds that under the rule of discovery, real parties may amend their complaints to allege facts which would support a delay in the accrual of their causes of action. I disagree with this conclusion. In my opinion real parties’ actions are barred by the statute of limitations.

We start with the proposition that statutes of limitation are the prerogative of the Legislature. (Valley Circle Estates v. VTN Consolidated, Inc. (1983) 33 Cal.3d 604, 615 [ 189…