Court of Appeal:
Judgment Creditor That Made Written Credit Bid of More Than $200,000 Has No Cause of Action, Opinion Says, in Light of Code of Civil Procedure Section Rendering Execurion Sale ‘Absolute’; No Equitable Powers Exist
By a MetNews Staff Writer
The Third District Court of Appeal has held where a judgment was obtained, to be satisfied through the sale of the judgment debtors’ real property at an auction, and the creditor instructed the sheriff to set an opening bid at $205,800, agreeing in writing that the indebtedness would be decreased by that sum, there was no remedy where the sheriff failed to announce the credit bid and sold the property for a penny to the sole bidder who showed up.
Justice Louis Mauro authored the unreported opinion, filed Wednesday. It affirms an order by Sacramento Superior Court Judge David Brown denying the motion by Selene Finance, LP to set aside the sale to First Group Investments, LLC (“FGI”).
Mauro relied on Code of Civil Procedure §701.680 which provides that, with one exception, an execution sale “is absolute and shall not be set aside for any reason.” The exception inures only to the benefit of the judgment debtor, however, providing a remedy where there were “irregularities in the proceedings” and the judgment debtor purchased the property.
Finality of Sales
The jurist wrote:
“Section 701.680 encourages the finality of execution sales….It precludes the motion by Selene Finance to set aside the Sheriff’s sale and deed…..
“Selene Finance nevertheless urges that it is entitled to relief under a court’s broad equitable powers. But the Legislature has limited the circumstances under which an execution sale may be set aside….The court’s inherent equitable power may not be exercised in a manner inconsistent with a statute….Except where legislative action impinges on the exercise of fundamental judicial powers and violates the separation of powers, a statute may specify the relief available and limit the equitable relief a court may grant.”
“Moreover, even if the balance of equities favored Selene Finance in relation to the Sheriff (a matter we need not and do not decide), there is no evidence the balance of equities favored Selene Finance in relation to FGI. Selene Finance claims FGI seized on the Sheriff’s error to purchase the property for a penny, but there is no indication FGI or Gill knew the Sheriff had made an error. Selene Finance fails to show that FGI did anything to deny Selene Finance a regular course of judicial proceedings.”
Noting that a representative of Selene could have attended the sale and bid orally, Mauro said the appellant has failed to show that an application of §701.680, under the circumstances, denies it due process.
Selene obtained a judgment for $227,339.02. That principal amount is now reduced to $227,339.01.
The case is Selene Finance v. First Group Investments, C092537.
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