Spencer

Alanna Spencer filed a chapter 13 bankruptcy and, one year into her bankruptcy, the lender on her home mortgage requested relief from the automatic stay. While this motion was pending in the bankruptcy court, Spencer signed a contract to sell her home for less than the appraised value to Ryan Marshall, a licensed real estate broker. She also signed a leaseback and one-year option to repurchase the home at a price higher than the current sale price. At the end of the year, Spencer could not afford to purchase the home; Marshall filed an unlawful detainer action against Spencer to have her evicted from the home. Spencer sued Marshall for violating Civil Code section 1695 et seq., the Home Equity Sales Contracts Act (HESCA or the Act).

After a court trial, the judge ruled that Marshall was an equity purchaser and Spencer was an equity seller and therefore the transaction came under the protections of HESCA. The court determined that Marshall had violated HESCA and awarded Spencer monetary and exemplary damages. Marshall appeals, arguing that he is not an equity purchaser and is exempted from the requirements of the Act under section 1695.1, subdivision (a)(4) and (5). We…