tender rule in California

2025Given this, the exception to the tender requirement where “no tender will be required . . . because the trustee’s deed is void on its face” (Lona, supra, 202 Cal.App.4th at p. 113 ) would not apply.1 1 Plaintiffs also assert that the deed of trust was voided by DiSanto.

2023Tender Requirement A borrower may not challenge a foreclosure sale unless the borrower “tendered the amount of the secured indebtedness or was excused from tendering.” (Lona, supra, 202 Cal.App.4th at p. 104 .) There are four recognized exceptions to the tender requirement: (1) the underlying debt is unenforceable; (2) the borrower has a setoff sufficient to cover the debt; (3) it would be inequitable to impose a tender requirement on the party challenging the sale; or (4) the trustee’s deed is void.

2026(Sciarratta v. U.S. Bank National Assn., supra, 247 Cal.App.4th at p. 568 .) The void transaction exception does not apply here, and we agree with REF that the Heredias have not argued that any other exceptions to the tender rule apply. 14 be subserved through its intervention.’ ” ’ ” (Id. at p. 118.) “[O]ne who is relying upon equity in overcoming a voidable sale must show that he is able to perform his obligations under the contract so that equity will not have been employed for an idle purpose.” (Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878 .) Karlsen affirmed the trial court

2023Third, plaintiff contends that the tender rule does not apply in this case because the trustee’s deed upon sale was void on its face, citing Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868 (where substitution of trustee was recorded, later sale by prior trustee was void).

2026(Sciarratta v. U.S. Bank National Assn., supra, 247 Cal.App.4th at p. 568 .) The void transaction exception does not apply here, and we agree with REF that the Heredias have not argued that any other exceptions to the tender rule apply. 14 be subserved through its intervention.’ ” ’ ” (Id. at p. 118.) “[O]ne who is relying upon equity in overcoming a voidable sale must show that he is able to perform his obligations under the contract so that equity will not have been employed for an idle purpose.” (Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878 .) Karlsen affirmed the trial court

2025(Turner v. Seterus, Inc. (2018) 27 Cal.App.5th 516, 525 .) “A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust.” (Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 117 , italics added.) “Where tendering is required and not excused, a plaintiff seeking to set aside an irregular sale must allege tender of the full amount of the loan to maintain any cause of action that either is based on the wrongful foreclosure allegations or seeks redress from that foreclosure.” (Turner v. Seterus, Inc., supra,

2020It is undisputed that plaintiff was in default and through bankruptcy and attempted 11th hour negotiations tried but failed to avoid foreclosure.” “To obtain the equitable set-aside of a trustee’s sale or maintain a wrongful foreclosure claim, a plaintiff must allege that (1) the defendants caused an illegal, fraudulent, or willfully oppressive sale of the property pursuant to a power of sale in a mortgage or deed of trust; (2) the plaintiff suffered prejudice or harm; and (3) the plaintiff tendered the amount of the secured indebtedness or was excused from tendering. [Citation.] Recognized ex

2018Thus, she "sufficiently alleged an exception to the tender rule that the foreclosure sale was void because Defendants lacked a contractual basis to exercise the power of sale as [her] original loan had been modified under the [agreement] and [she] fully performed under the [agreement] until Defendants breached the agreement by refusing payment." ( Id. at p. 1063, 162 Cal.Rptr.3d 382 .) Although the homeowner also alleged improper notice of the trustee's sale, which would otherwise be subject to the tender requirement, the allegation did "not invalidate the remainder of th[e] properly pled caus

2014(Pfeifer, supra, 211 Cal.App.4th at p. 1280 .) Finally, we observed that “[a] number of courts have explicitly held that the tender rule applies only in cases seeking to set aside a completed sale, rather than an action seeking to prevent a sale in the first place.” (Pfeifer, supra, 211 Cal.App.4th at p. 1280 .) We distinguished the cases cited by the lenders because they did not involve a challenge to a void sale or an objection to a foreclosure proceeding prior to a sale.

2014(Pfeifer, supra, 211 Cal.App.4th at p. 1280 .) Finally, we observed that “[a] number of courts have explicitly held that the tender rule applies only in cases seeking to set aside a completed sale, rather than an action seeking to prevent a sale in the first place.” (Pfeifer, supra, 211 Cal.App.4th at p. 1280 .) We distinguished the cases cited by the lenders because they did not involve a challenge to a void sale or an objection to a foreclosure proceeding prior to a sale.

2025(See Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109 [“[plaintiffs] are required to allege tender of the amount of [defendants’] secured indebtedness in order to maintain any cause of action for irregularity in the sale procedure”].) “Case law has recognized four exceptions to the tender requirement in actions to set aside a foreclosure sale: (1) the borrower attacks the validity of the debt (e.g., based on fraud); (2) the borrower has a counterclaim or setoff sufficient to cover the amount due; (3) it would be inequitable as to a party not liable for the debt; or (4) the trus

2020(Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109 ; Onofrio [v. Rice (1997) 55 Cal.App.4th 413 ], at p. 424 [the borrower must pay, or offer to pay, the secured debt, or at least all of the delinquencies and costs due for redemption, before 31 commencing the action].) ‘The rationale behind the rule is that if [the borrower] could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the [borrower].’ [Citation.]” (Lona v. Citibank, N.A., supra, at p. 112.) Because plaintiff failed to allege wrongful forecl

2016“It is settled in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649 (Shimpones).) The tender requirement is “based upon the equitable principle that he who seeks equity must do equity. . . . [A] court of equity will not aid a person in avoiding the payment of his or her debts.” (Mix v. Sodd (1981) 126 Cal.App.3d 386, 390 .) “The cloud upon his title persists until the debt is repaid.” (Aguilar v. Bocci (1974) 39 Cal.App.3d 475, 477 .) Exceptions to the tender rule that apply where a plainti

2016“It is settled in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649 (Shimpones).) The tender requirement is “based upon the equitable principle that he who seeks equity must do equity. . . . [A] court of equity will not aid a person in avoiding the payment of his or her debts.” (Mix v. Sodd (1981) 126 Cal.App.3d 386, 390 .) “The cloud upon his title persists until the debt is repaid.” (Aguilar v. Bocci (1974) 39 Cal.App.3d 475, 477 .) Exceptions to the tender rule that apply where a plainti

2016(Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 117 .) Before asking a court to exercise its equitable powers to stop or set aside foreclosure proceedings, the defaulting borrower must first “do equity.” (FPCI RE-HAB 01 v. E & G Investments, Ltd. (1989) 207 Cal.App.3d 1018, 1021 [tender rule is based on equitable maxim that a court of equity will not order a useless act performed if plaintiffs could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the plaintiffs].) The tender rule is strictly enforc

2014(Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109 ; McElroy v. Chase Manhattan Mortgage Corp. (2005) 134 Cal.App.4th 388, 394 .) " 'The rationale behind the rule is that if [the borrower] could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the [borrower].' " (Shuster v. BAC Home Loans Servicing, LP (2012) 211 Cal.App.4th 505, 512 ; FPCI RE-HAB 01 v. E & G Investments, Ltd. (1989) 207 Cal.App.3d 1018, 1021 [tender rule is based on equitable maxim that a court of equity 5 will not order a useless ac

2018Where tendering is required and not excused, a plaintiff seeking to set aside an irregular sale must allege tender of the full amount of the loan to maintain any cause of action that either is based on the wrongful foreclosure allegations or seeks redress from that foreclosure. ( Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101 , 1109, 51 Cal.Rptr.2d 286 ; Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575 , 579, 205 Cal.Rptr. 15 .) Courts have applied equitable exceptions to the tender rule, such as: "(1) where the borrower's action attacks the validity of the underlying

2018Where tendering is required and not excused, a plaintiff seeking to set aside an irregular sale must allege tender of the full amount of the loan to maintain any cause of action that either is based on the wrongful foreclosure allegations or seeks redress from that foreclosure. ( Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101 , 1109, 51 Cal.Rptr.2d 286 ; Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575 , 579, 205 Cal.Rptr. 15 .) Courts have applied equitable exceptions to the tender rule, such as: "(1) where the borrower's action attacks the validity of the underlying

2020(Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109 ; Onofrio [v. Rice (1997) 55 Cal.App.4th 413 ], at p. 424 [the borrower must pay, or offer to pay, the secured debt, or at least all of the delinquencies and costs due for redemption, before 31 commencing the action].) ‘The rationale behind the rule is that if [the borrower] could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the [borrower].’ [Citation.]” (Lona v. Citibank, N.A., supra, at p. 112.) Because plaintiff failed to allege wrongful forecl

2013McCleverty, supra, 161 Cal. at p. 291 ; Shuster, supra, 211 Cal.App.4th at p. 512 ; Onofrio v. Rice, supra, 55 Cal.App.4th at p. 424 .) Plaintiffs have not pleaded facts showing that application of the tender rule would be inequitable here.

2011Facts extrinsic to the complaint also give rise to a duty to defend when they reveal a possibility that the claim may be covered by the policy. [Citation.]’ [Citation.] . . . ‘[T]he existence of a duty to defend turns not upon the ultimate adjudication of coverage under its policy of insurance, but upon those facts known by the insurer at the inception of a third party lawsuit. [Citation.]’ ” (Montrose, supra, 6 Cal.4th at p. 295 .) We therefore must identify “ ‘the information available to the insurer at the time of the tender of the defense.’ ” (Howard v. American National Fire Ins.

2004Corp., supra, 6 Cal.4th at p. 301 .) 2 At oral argument Walker asserted for the first time that ACE had a duty to defend because it did not immediately deny the tender of defense or seek a court determination of its duties.

2026Co. v. Majorino, supra, 99 Cal.App.4th at p. 977 [declaratory relief action filed by insurer against its insured not a SLAPP because it “arose from the tender of defense and the terms of an insurance policy issued well before the underlying litigation commenced, not from the litigation process itself”].) The trial court reasoned the allegations “illustrate how [Commonwealth] delayed payment, namely, by creating an excuse for not immediately paying [Canyon Vineyard’s] claim and by stringing [Canyon Vineyard] along,” but concluded that the “pursuit of the appeal is not itself the wrongful conduc

2026Co. v. Majorino (2002) 99 Cal.App.4th 974, 977 [“the action for declaratory relief arose from the tender of defense and the terms of an insurance policy issued well before the underlying litigation commenced, not from the litigation process itself”].) 9 Commonwealth requests judicial notice of two trial court documents in the instant proceeding: a post-appeal brief filed by Canyon Vineyard and the court’s corresponding order stating that in its pleading Canyon Vineyard stated its bad faith cause of action was limited to conduct in 2017 and afterwards, which is inconsistent with Canyon Vineyard

2026(See Crawford, supra, 44 Cal.4th at p. 558 [“the duty [to defend] 48. arises immediately upon a proper tender of defense by the indemnitee, and thus before the litigation to be defended has determined whether indemnity is actually owed”].) This duty to defend remains in place “throughout the underlying tort action unless it can conclusively show by undisputed facts that plaintiff’s action is not covered by the agreement.” (Centex Homes, supra, 32 Cal.App.5th at p. 1237 .) C.

2026It includes all claims “which, at the time of tender, allege facts that would give rise to a duty of indemnity.” (Crawford, supra, 44 Cal.4th at p. 558 .) This interpretation reflects the practical reality of when the decision to provide a defense must be made. “[T]he duty to defend arises immediately upon a proper tender of defense by the indemnitee, and thus before the litigation to be defended has determined whether indemnity is actually owed.” (Ibid.) As a result, the duty to defend “cannot depend on the outcome of that litigation.” (Ibid.) Having identified the legal standard that defines

1995CNA Casualty held that: “An insurer’s duty to defend must be analyzed and determined on the basis of any potential liability arising from facts available to the insurer from the complaint or other sources available to it at the time of the tender of defense.” ( 176 Cal.App.3d at p. 605 , italics in original.) As the Court of Appeal below observed, CNA Casualty simply recites the settled rule that the insurer must look to the facts of the complaint and extrinsic evidence, if available, to determine whether there is a potential for coverage under the policy and a corresponding duty to defend.

1995(Montrose Chemical Corp. v. Superior Court (1993) 6 Cal.4th 287, 295 [ 24 Cal.Rptr.2d 467 , 861 P.2d 1153 ].) “ ‘[T]he carrier must defend a suit which potentially seeks damages within the coverage of the policy.’ ” (Id. at p. 295, quoting Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 267-277 [ 54 Cal.Rptr. 104 , 419 P.2d 168 ], italics in original.) In addition, “[a]n insurer’s duty to defend must be analyzed and determined on the basis of any potential liability arising from facts available to the insurer from the complaint or other sources available to it at the time of the tender of d

2015As we have noted, a number of courts have held or suggested that the tender requirement “does not apply to actions seeking to enjoin a foreclosure sale—at least where the lenders had allegedly not complied with a condition precedent to foreclosure.” ( Intengan, supra, 214 Cal.App.4th at pp. 1053-1054, original italics.) Gallardo’s complaint alleges the Notice of Default was improperly recorded in part because 18 Defendants failed to comply with section 2923.5.2 We agree that the tender requirement did not apply in this case and the court erred when it sustained the demurrer to the first cause

2014“While the tender requirement may apply to causes of action to set aside a foreclosure sale, a number of California and federal courts have held or suggested that it does not apply to actions seeking to enjoin a foreclosure sale—at least where the lenders had allegedly not complied with a condition precedent to foreclosure.” ( Intengan, supra, 214 Cal.App.4th at pp. 1053-1054.) We agree that tender is not a bar to plaintiffs’ presale effort to enforce compliance with the law. 4 Civil Code section 2923.5’s directions are plainly stated: “(a)(1) A mortgagee, trustee, beneficiary, or authorized a

2016“It is settled in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649 (Shimpones).) The tender requirement is “based upon the equitable principle that he who seeks equity must do equity. . . . [A] court of equity will not aid a person in avoiding the payment of his or her debts.” (Mix v. Sodd (1981) 126 Cal.App.3d 386, 390 .) “The cloud upon his title persists until the debt is repaid.” (Aguilar v. Bocci (1974) 39 Cal.App.3d 475, 477 .) Exceptions to the tender rule that apply where a plainti

2016“It is settled in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649 (Shimpones).) The tender requirement is “based upon the equitable principle that he who seeks equity must do equity. . . . [A] court of equity will not aid a person in avoiding the payment of his or her debts.” (Mix v. Sodd (1981) 126 Cal.App.3d 386, 390 .) “The cloud upon his title persists until the debt is repaid.” (Aguilar v. Bocci (1974) 39 Cal.App.3d 475, 477 .) Exceptions to the tender rule that apply where a plainti

1994(Ibid.) Applying the foregoing law to the facts before it, the Lambert court held that the insured’s cause of action against Commonwealth accrued on April 26, 1985, when the insurer denied coverage, but was thereafter tolled until completion of the underlying action. 5 Tabachnick maintains that Lambert mandates reversal: Lambert specifically says that “. . . the limitation period for an action under a title insurance policy for failure to defend accrues when the insurer refuses the insured’s tender of defense, . . .” ( 53 Cal.3d at p. 1080 .) Tabachnick sued Ticor for breach of the duty to pro

1992The trial court determined that Pacific Scene’s cause of action against North Star accrued on March 31, 1987, when Pacific Scene received North Star’s letter refusing the tender of the defense. 3 The court relied on the reasoning of cases such as Lambert, supra, 53 Cal.3d 1072, 1077 [ 261 Cal.Rptr. 72 ], Israelsky v. Title Ins.

2025Co. (2010) 187 Cal.App.4th 498, 520 (Howard) [“ ‘If 34 coverage depends on an unresolved dispute over a factual question, the very existence of that dispute would establish a possibility of coverage and thus a duty to defend.’ ”].) The complexity of the underlying facts does not shield the insurer from the risk of erroneously denying the tender of defense.

2025Co. (2010) 187 Cal.App.4th 498, 520 (Howard) [“ ‘If 34 coverage depends on an unresolved dispute over a factual question, the very existence of that dispute would establish a possibility of coverage and thus a duty to defend.’ ”].) The complexity of the underlying facts does not shield the insurer from the risk of erroneously denying the tender of defense.

2021(Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 439 .) Recognized exceptions to the tender rule include when: (1) “the borrower’s action attacks the validity of the underlying debt”; (2) a counterclaim offsets the amount due; (3) “it would be inequitable to impose such a condition on the party challenging the sale”; and (4) the trustee’s deed is void on its face. ( Lona, supra, 202 Cal.App.4th at pp. 112-113.) Relying on the first and third exceptions, plaintiff claims she is exempt from the tender requirements because defendants “are not the noteholder[s] and thus are owed no debt” and applica

2016(Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 439 .) With certain exceptions, the tender rule applies to any cause of action that is based on allegations of wrongful foreclosure, seeks redress from foreclosure, or is implicitly integrated with a foreclosure, whether it seeks equitable relief or monetary relief.

2018(See, e.g., Arnolds Management Corp. v. Eischen, supra, 158 Cal.App.3d 575 [defect in notice of sale]; Karlsen v. American Sav. & Loan Assn., supra, 15 Cal.App.3d 112 [trustee sold property to corporation in which trustee was financially interested].) “ ‘The rationale behind the [tender] rule is that if [the borrower] could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the [borrower].’ ” (Lona v. Citibank, N.A., supra, 202 Cal.App.4th at p. 112 .) “Allowing [borrowers] to recoup the property without full tender w

2016(Ibid.) “Allowing plaintiffs to recoup the property without full tender would give them an inequitable windfall, allowing them to evade their lawful debt.” (Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526 ; see also Gavina v. Smith (1944) 25 Cal.2d 501, 506 [“One who violates his contract cannot have recourse to equity to support that very violation.”].) However, the tender rule is subject to exceptions, and other recent foreclosure cases have excused tender in some contexts.

2026(Sciarratta v. U.S. Bank National Assn., supra, 247 Cal.App.4th at p. 568 .) The void transaction exception does not apply here, and we agree with REF that the Heredias have not argued that any other exceptions to the tender rule apply. 14 be subserved through its intervention.’ ” ’ ” (Id. at p. 118.) “[O]ne who is relying upon equity in overcoming a voidable sale must show that he is able to perform his obligations under the contract so that equity will not have been employed for an idle purpose.” (Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878 .) Karlsen affirmed the trial court

2020It may be true that “a homeowner who has been foreclosed on by one with no right to do so—by those facts alone—sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure.” (Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 555 .) But here, Blake had the right to proceed with the foreclosure; therefore, the 11 DeVoes failed to establish prejudice or an exception to the tender rule and failed to prove their wrongful foreclosure claim.

2022(See Ram v. OneWest Bank, FSB, supra, 234 Cal.App.4th at pp. 10–11; Fonteno v. Wells Fargo Bank, N.A. (2014) 228 Cal.App.4th 1358 , 1372–1374 [calling plaintiffs’ allegation that they were “ready, willing and 49 able” to make partial payments “flawed” and holding instead that full tender was equitably excused].) Morris argues it would be inequitable to require strict compliance with the tender rule.

2016Lastly, Grossman contends “the tender rule does not apply to a sale that is void because it was obtained by fraud.” (Lona, supra, 202 Cal.App.4th at p. 113 , citing Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878 .) Courts have applied this exception where a sale is found to be “void as opposed to merely voidable.” (Dimock, at p. 876; cf. Ram, supra, 234 Cal.App.4th at pp. 18-19 [affirming sustaining of demurrer in wrongful-foreclosure case because alleged notice defects were “deemed voidable, not void”].) Whether a borrower even has standing to challenge an assignment of a note an

2023The tender requirement “arises out of a paradigm where, by definition, there is no way that a foreclosure sale can be avoided absent payment of all the indebtedness.” (Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 225 .) That is not the case when a loan modification application is pending, as the purpose of a modification “is to avoid a foreclosure despite the borrower being incapable of complying with the terms of the original loan.” (Majd, supra, 243 Cal.App.4th at p. 1306 .) “It would be contradictory to require the borrower to tender the amount due on the original loan in such circum

2016Mabry v. Superior Court (2010) 185 Cal.App.4th 208 (Mabry) is instructive.

2015(Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109 [tender requirement applies to "any cause of action for irregularity in the sale procedure"]; McElroy v. Chase Manhattan Mortgage Corp., supra, 134 Cal.App.4th at p. 394 .) In the absence of a sufficient tender by Cardoni, the court did not err by sustaining the demurrer on this cause of action.

2014(Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109 ; McElroy v. Chase Manhattan Mortgage Corp. (2005) 134 Cal.App.4th 388, 394 .) " 'The rationale behind the rule is that if [the borrower] could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the [borrower].' " (Shuster v. BAC Home Loans Servicing, LP (2012) 211 Cal.App.4th 505, 512 ; FPCI RE-HAB 01 v. E & G Investments, Ltd. (1989) 207 Cal.App.3d 1018, 1021 [tender rule is based on equitable maxim that a court of equity 5 will not order a useless ac