Matthew Matson v. S.B.S. Trust Deed Network
Facts: An investor bid on a deed of trust at a nonjudicial foreclosure sale without first fully reviewing a title report with the property’s profile or thoroughly investigating the terms of the sale. Believing the deed of trust was in first position on the property, the investor placed the highest bid. After acquiring the property, the investor discovered the trust deed lien they purchased was in second position and had a much lower fair market value than the amount they bid.
Claim: The investor sought a rescission of the sale, claiming their unilateral mistake resulted in an unconscionable windfall for foreclosing lender since it sold the deed in great excess of its fair market value.
Counterclaim: The foreclosing lender claimed the sale cannot be rescinded since the lender and trustee properly conducted the sale without irregularity.
Holding: A California appeals court held the investor was not entitled to rescind the sale since they did not do their due diligence before intentionally placing their winning bid, and no misconduct occurred on the foreclosing lender’s part. [Matthew Matson v. S.B.S. Trust Deed Network (March 05, 2020)_CA6th_]
