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Anti-Foreclosure Advocate Loses Appeal Due to Mootness After Bank Terminates Foreclosure Proceedings

Tim Kowal     June 24, 2021

As time passes in litigation, counsel should give a care to changes that may render their client's cases moot. This is particularly common when equitable relief is sought, such as injunctions. And it tends to be more common on appeal.

That is what happened in Brown v. U.S. Bank, N.A. (D5 May 4, 2021) no. F079568 (nonpub. opn.) A homeowner fell behind on his payments, and the lender initiated nonjudicial foreclosure on the home. The homeowner (actually now the assignee of the homeowner's claims, Larry Brown, who has been involved in such cases before) sought a temporary restraining order to enjoin the foreclosure. The trial court denied the TRO, and plaintiff Brown appealed.

While the appeal of the injunction denial was pending, the trial court then dismissed the complaint.

Plaintiff then moved to stay the injunction appeal until after the merits appeal was decided. This seems a strange move, given the plaintiff had failed to impose a stay of the foreclosure proceedings, and given the plaintiff, having previous experience in this arena, was aware of the risk his appeal could become moot.

The court refused to stay the injunction appeal. But the appeal became moot anyway, argued the bank, because the homeowner meanwhile had negotiated a loan modification with the bank, and the bank terminated its foreclosure proceedings.

An Appeal Becomes Moot When the Court Can No Longer "Grant Practical, Effective Relief": 

The Fifth District Court of Appeal agreed the appeal was moot and dismissed it. An appeal becomes moot when an actual controversy that once was ripe no longer exists due to a change in circumstances. (Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1573.) The test for mootness is whether the appellate court can “grant practical, effective relief.” (Citizens for the Restoration of L Street v. City of Fresno (2014) 229 Cal.App.4th 340, 362.)

The court cited two cases supporting findings of mootness in other appeals involving injunction orders, one to enjoin the sale of some government buildings but which sale had been voluntarily abandoned when a new governor took office (Epstein v. Superior Court (2011) 193 Cal.App.4th 1405), and another where a discrimination claim against a condo HOA became moot after the plaintiff moved out of the condo complex. MaJor v. Miraverde Homeowners Assn. (1992) 7 Cal.App.4th 618.)

The court found the mootness analysis rather simple here. The appellant sought to enjoin a foreclosure that the bank had abandoned. Nothing left for the court to do. The appeal was moot.

Discretionary Exceptions to Mootness (But Not Applicable Here):

In fairness, there are discretionary exceptions to the mootness rule. (Cucamongans United for Reasonable Expansion v. City of Rancho Cucamonga (2000) 82 Cal.App.4th 473, 479 [three discretionary exceptions] (Cucamonga).) For instance, a moot appeal may be retained “when there may be a recurrence of the controversy between the parties.” (Cucamonga, supra, 82 Cal.App.4th at p. 479.) The appellant here argued the issues could come up again if his complaint were reinstated in the other pending appeal, but this really didn't have anything to do with the fact that the bank had voluntarily terminated foreclosure proceedings upon the loan mod.

Another exception allows an appellate court to retain a moot appeal “when the case presents an issue of broad public interest that is likely to recur.” (Cucamonga, supra, 82 Cal.App.4th at p. 479.) The rationale for exercising the discretionary authority and decide an issue of broad public interest is the efficiency that would result to the public and court system from such a decision. The court here thought that issuing what would amount to an advisory opinion would be neither efficient nor helpful.

In my experience, your mileage will vary greatly in establishing mootness, or an exception to mootness, depending on the circumstances of your case. So do not be misled by this case into thinking mootness is always a straightforward analysis.

Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at [email protected] or (714) 641-1232.

Tim Kowal is an appellate specialist certified by the California State Bar Board of Legal Specialization. Tim helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at CALpodcast.com, and publishes summaries of cases and appellate tips for trial attorneys. Contact Tim at [email protected] or (949) 676-9989.
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