167 E. Williams v. Blessings CA6

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Events leading to the underlying action On or about March 25, 2010, LLC acquired certain real property located at 167 E. William Street (the Property) in San Jose, California, via a trustee’s sale, subject to a first and second deed of trust. The second deed of trust was created in 2003 when Dennis S. Spielbauer (brother to Thomas J. Spielbauer) borrowed $350,000 from Curtis L. Mitchell and executed a promissory note (the Mitchell note), secured by a deed of trust on the Property. By December 2009, Dennis had paid down the Mitchell note leaving a balance due of $4,389.16.2 Approximately two weeks before LLC acquired the third deed of trust, however, the Mitchell note and second deed of trust were assigned to Devine Blessings, a corporation owned and controlled by Thomas.3 In April 2010, LLC entered into an agreement to sell the Property to a third party and escrow was opened with Old Republic Title Company (Old Republic). LLC sent a payoff demand to Devine Blessings seeking the amount due on the Mitchell note, which (at that time) it believed was $4,389.16. In response, Devine Blessings sent Old Republic a written payoff demand in…