UTA Files Amicus Brief In Case Involving Mistake in Beneficiaries Bid

Martin T. McGuinn, Esq.

UTA has filed an amicus brief with the California Supreme Court in the case of Biancalana v. T.D. Service Company.  The Biancalana case involves the critical issue of: when a third party purchaser is the successful bidder at a trustee’s sale, can the sale be set aside based upon a mistake in the beneficiary’s bid?  A California Supreme Court decision on this issue is likely to be significant to trustees and their agents.  It is critical that the Supreme Court hear the industry’s side of this issue.  The law firm of Kirby & McGuinn has been retained to file an amicus on UTA’s behalf in the Biancalana case.

UTA took the position that the trustee was entitled to rescind a sale prior to issuing a deed regardless of whether the mistake was made by the beneficiary in communicating the bid to the trustee or the trustee failing to give the bid given it by the beneficiary.  “We feel this strategy will work to at least move the court to our position which is that trustee errors should result in an ability to rescind the sale where the deed has not been issued to the purchaser,” said Martin T. McGuinn,Esq. UTA’s Legal Resources Chair, who wrote and filed the brief on UTA’s behalf.

UTA argued that in keeping with numerous other appellate court decisions … [the Trustee] should have been permitted to cancel and re-hold the sale using the correct credit bid submitted by the beneficiary rather than the bid actually used due to mistake of the trustee.  In the past, this issue has been decided by the courts of appeal based upon whether the error was extrinsic (caused by someone other than the trustee or its crier) or intrinsic (caused by the trustee or its agent).  Without any analysis, the court of appeal’s decision in the Biancalana case suggested that the trustee is the agent of the beneficiary when entering bids at a trustee’s sale, making it almost impossible to set aside a trustee’s sale resulting from a mistaken bid.  UTA believes that the court of appeal’s decision was wrongly decided and hopes that the Supreme Court will rectify this error and clarify the law.

Read UTA’s Amicus Brief