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February 07, 1997
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Case No: 95-10486 - AP 96-91030-George Harder v David Peters, Carlos Sosa, Desert Br
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New York
Other Court
County of New York
Branch: United Stated Bankruptcy Court - Northern District of New York
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George W. Harder
Represented by: E. Lisa Tang
v.
Desert Breezes HOA
David M. Peters
Carolos Sosa et al
Represented by: Thomas Latin of Hinman, Straub, Pigors & Manning
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Summary
Desert Breezes Homeowners Association collection lawyer David M. Peters (Peters & Freedman) foreclosed on George Harder's winter home in Palm Springs, California and sold it to another lawyer, Carlos Sosa. Harder, a New York lawyer, declared bankruptcy to protect his home.)
Judge Kaplan concluded that George and Michael Harder would prevail for the following reasons:
As against Michael Harder, the non-judicial foreclosure proceedint is fatally flawed in three separate ways:
1. Failure to send statutory notice of method of foreclosure. This alone would be fatal to a non-judicial foreclosure. (Perhaps not to a judicial foreclosure.) The association sent only a notice of how and when to pay the annual assessemnt. This defect was further compounded when the Association first began a judicial foreclosure against the Harders, but later dropped that (at the point of a money judgement against George only), and started over with a non-judicial proceeding. Without the clear prior announcement required by the statute, even a lawyer-owner could be lulled into believing that a judicial foreclosure proceeding that ended only in a money judgement would be followed by another judicial proceeding if divestiture of title was really the object. In any event, non-judicial divestiture of title because of non-payment of a few hundred dollars in association assessment fees is too drastic to approve without compliance with the statutes that afford adequate prior notice of that process to homeowners each time they are assessed, as explained later.
2. Failure to attempt service on Michael Harder at the Manhatten address ....
3. Naming the Association's attorney (David Peters) to be the foreclosure Trustee. In a non-judicial foreclosure proceeding in Califonira, the creditor is to "authorize" a foreclosure Trustee. Here the named Trustee was one of the Association's own lawyers, representing it in collecting the very debt at issue.
As to George Harder:
...And Section 1365 of the California Civil code itself---the duty to forewarn---was enacted as part of the same bill that enacted Section 1367 --the authority of associations to use a non-judicial foreclosure.
Neither the notice statute, Section 1365(d), nor the mailing list statute, Section 8320, was observed by the Association, and that infects the process as to George Harder.
Finally, the court hold that naming oneof its own lawyers as foreclosure Trustee infected the Association's non-judicial proceeding as against George Harder, for the same reasons it infected it as against Michael Harder.
Conclusion:
The proceeding failed as against George and Michael Harder etc...
See attached pdf file for complete discussion
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Causes of Action: By virtue of a "special" order of reference under 28 U.S.C. Section 157(a) , the court was asked to decide whether the non-judicial forecloure sale by HOA was properly conducted under California Civil Code Section 1367 and 2924.
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Citation: George W. & Michael Harder vs Desert Breezes, David M. Peters et al |
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Judge: The Honorable Michael K. Kaplan
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Submitted Files
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Filename
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Description
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File Type
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File Size
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Click to download
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PetersDesertBreeze.pdf
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George W. Harder et al vs Desert Breezes, David M. Peters (Peters & Freedman), Carlos Sosa et al
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PDF document, version 1.4
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361KB
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Download
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George Harder, a New York lawyer filed for bankruptcy and retrieved his home when he discovered that David Peters had sold his home without his knowledge to a Carlos Sosa, a Los Angeles lawyer.
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