BERNARD AUSTIN v. PEPPER DALE CONDOMINIUM OWNERS’ ASSOCIATION, et. al.

TENTATIVE RULINGS FOR April 15, 2026 Department S29 - Judge Nicole Quintana Winter

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BERNARD AUSTIN v. PEPPER DALE CONDOMINIUM OWNERS’ ASSOCIATION, et. al.

Motion: 1. Demurrer to First Amended Complaint 2. Demurrer to First Amended Complaint

Moving Parties: 1. Defendant Capital Assessment Service Company 2. Defendants Latif Ahmad and Samina Ahmad, individually and as Trustees of the Trust Trust formed on January 18, 2024

Responding Party: 1. Plaintiff Bernard Austin 2. Plaintiff Bernard Austin ________________________________________________________________________

On August 13, 2026, Plaintiff Bernard Austin filed his original complaint against Defendants Pepper Dale Condominium Owners’ Association (HOA), Capital Assessment Service Company (Capital), and Latif and Samina Ahmad (Trustees), each as Trustees of the Trust Trust formed January 18, 2024 (Trust). The original complaint alleged causes of action for (1) violation of Civil Code section 2924m against HOA and Capital; (2) violation of Business and Professions Code section 17200 against HOA and Capital; (3) fraud against HOA and Capital; (4) quiet title against all; (5) specific performance against all; and (6) unjust enrichment against the Trust.

The original complaint alleged Plaintiff was the highest bidder under the post-sale bidding process outlined in Civil Code section 2924m in connection with the foreclosure sale of a condominium in Upland. The property was sold on account of unpaid HOA assessments. However, despite Austin’s high bid, the property was instead conveyed to the Trustees.

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The Trustees demurred to the fourth, fifth, and sixth causes of action. On December 11, 2025, the Court sustained the demurrer to the fourth and sixth causes of action with leave to amend, and sustained as to the fifth cause of action without leave to amend. The Court’s written ruling found there is no private right of action for a violation of Civil Code section 2924m. The pertinent portion of the ruling provides: Civil Code section 2924m

Section 2924m was added to the statutory scheme governing nonjudicial foreclosure sales effective January 1, 2021 and provides that, as is the case here, “a prospective owner occupant, as defined...is not the last and highest bidder at the trustee’s sale, the statute grants other entities, as defined in the statute, “certain rights and priorities to make bids on the property after the initial trustee sale and potentially to purchase it as the last and highest bidder, subject to certain requirements and timelines.” (Bird Rock Home Mortgage, LLC v. Breaking Ground, LP (2025) 114 Cal.App.5th 492, 500- 501.

Section 2924m was enacted during the COVID-19 pandemic, which “resulted in widespread job loss and financial distress” that “raised the prospect that many California homeowners [would] soon default on their mortgage payments (if they have not done so already) and a wave of home foreclosures could follow.” (Sen. Com. On Judiciary, Analysis of Sen. Bill No. 1079 (2019-2020 Reg. Sess.) as amended Aug. 24, 2020.) “[D]raw[ing] upon lessons learned from what happened in California’s last foreclosure crisis,” the Legislature enacted “provisions intended to mitigate against blight, vacancy, and the transfer of residential property ownership from owner-occupants to landlord investors in the event that California experience[d] [another] wave of foreclosures.” (Bird Rock Home Mortgage, LLC v. Breaking Ground, LP (2025) 114 Cal.App.5th 492, 500- 501.)

“The way section 2924m works is to delay the finality of a trustee’s nonjudicial foreclosure sale to allow specified entities to submit bids equal to or greater than the highest bid made at the sale. A trustee’s sale generally is deemed final when the auctioneer accepts the last and highest bid. (§ 2924h, subd. (c); Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33, 40, 259 Cal.Rptr.3d 526.) If the sale is “under a power of sale contained in a deed of trust or mortgage on real property containing one to four residential units,” however, the sale will be deemed final at the end of the auction only if the last and highest bidder is “ a prospective owner- occupant” (§2924m, subd. (c)(1)), i.e. a natural person who intends to occupy the property as a primary residence and meets other requirements (id., subd. (a)(1)).

If the last and highest bid at the trustee’s sale is not made by a prospective owner-occupant, certain entities may submit bids matching or exceeding the last and highest bid at the sale. In that event, the trustee’s sale is not deemed final until the earliest of the following: (1) 5 days after

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the sale, if no “eligible tenant buyer” or “eligible bidder,” as defined in the statute, submits a bid or notice of intent to bid within 15 days of the sale (id., subd. (c)(2)); (2) the date when a representative of all eligible tenant buyers submits a bid equal to the last and highest bid at the sale, provided the bid is submitted within 15 days of the sale or a notice of intent to bid is submitted within that time and the bid is submitted within 45 days of the sale (id., subd. (c)(3)); or (3) 45 days after the sale, during which period an eligible bidder may submit a bid that exceeds the last and highest bid at the sale (id., subd. (c)(4)).” (Bird Rock Home Mortgage, LLC v. Breaking Ground, LP (2025) 114 Cal.App.5th 492, 500-501.) Notably, section 2924m applies to foreclosures based upon unpaid HOA assessments. (Ibid.)

However, section 2924 does not contain a standing provision beyond subdivision (j), which merely authorizes the attorney general, a county counsel, a city attorney, or a district attorney to bring an action to enforce the statute. It is also true that recently proposed legislation would include an express private right of action for the last and highest bidder and the high bidder. Available remedies would include quiet title, injunctive relief to prevent the issuance of a deed, monetary damages, and attorney’s fees and costs. The legislative history material also notes that the proposal was intended to address an “enforcement gap” because the attorney general rarely investigates or prosecutes claims. (RJN Ex. 6.)

Whether a person may bring a private right of action for the violation of a statute turns on whether the Legislature manifested an intent to create such a private right through the language in the statute or its legislative history. (Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 492, 596-97 [“Lu”].) The statutory language here is clear that the intent was to impose the obligation to enforce violations of section 2924m upon government attorneys. The attempt to amend the statute only serves to show that the Legislature also believes it never conferred a private right of action upon individuals.

(12/11/26 Ruling, pp. 3-4.)

On January 2, 2026, Plaintiff filed the operative first amended complaint (FAC) alleging causes of action for (1) violation of Civil Code section 2924m against HOA and Capital; (2) violation of Business and Professions Code section 17200 against HOA and Capital; (3) fraud against HOA and Capital; (4) quiet title against all; (5) unjust enrichment against Trust; (6) cancellation of instruments against all; and (7) declaratory relief against all.

DEFENDANT CAPITAL ASSESSMENT SERVICE COMPANY’S DEMURRER TO FAC

On February 3, 2026, the Trustee Defendants demurred to the FAC. However, on March 11, 2026, the Court took the demurrer off calendar pursuant to San Bernardino County Superior Court Local Rule 560, indicating a failure to properly meet and confer in compliance with statute.

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On March 20, 2026, Defendant Capital filed this demurrer challenging the first cause of action for violation of Civil Code section 2924m and the second cause of action under Business and Professions Code section 17200. As for the first cause of action, the Court previously found there is no private right of action under Civil Code section 2924m. Plaintiff does not seek to argue this further and states that he “respects” the Court’s prior ruling on this issue, but included this claim again in the FAC in order to preserve the issue for potential appellate review.

Although not raised in the papers, the pending bill referenced in the Court’s December 11, 2025 order (AB 1158) died on January 31, 2026, and was not enacted into law. Therefore, the Court’s prior analysis controls and the first cause of action is improperly pled. The Court sustains the demurrer to the first cause of action without leave to amend. Defendant also argued in the demurrer that the second cause of action under Business and Professions Code section 17200 also failed because it was premised on a violation of Civil Code section 2924m.

However, in opposition Plaintiff cites authority providing a 17200 action may be based on a statute that does not provide for a private right of action. In reply, Defendant accepts this authority and withdraws this portion of the demurrer. Therefore, the demurrer to the second cause of action is moot.

TRUST’S DEMURRER TO FAC

On February 3, 2026, Trust filed a demurrer to the FAC as to the fourth through seventh causes of action on the basis that Austin lacks standing and for failing to state a cause of action. Austin opposes and Trust replies.

Discussion

Meet and Confer. The Court finds that the parties have failed to meet and confer as required under Code of Civil Procedure section 430.41, subdivision (a). However, in order to expediate the case, the Court will address the merits of the motion. Any failure by the parties to abide by the Rules of Court or the Codes, will result in the Court issuing sanctions to the party. Statement of the Law. A demurrer challenges defects that appear on the face of the pleading, which includes incorporated exhibits, or matters that are judicially noticeable, but nothing else. (Blank v.

Kirwan (1985) 39 Cal.3d 311, 318 (Blank); Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) When evaluating a demurrer, the Court reasonably interprets the pleading by reading it as a whole and all of its parts in their context. (Blank, supra, 39 Cal.3d at p. 318.) The material facts that are properly pled are assumed true for purposes of a demurrer, but contentions, deductions, or conclusions of fact or law are not assumed true. (Ibid.) Whether a plaintiff can prove the allegations or the difficulty in proving the allegations is of no concern. (Concerned Citizens of Costa Mesa, Inc. v. 32nd Dist.

Agricultural Assn. (1986) 42 Cal.3d 929, 936.) The complaint is to be liberally construed. (Code Civ. Proc., § 452.) A demurrer predicated on insufficient facts to constitute a cause of action (Code Civ. Proc., § 430.10, subd. (e)) should be granted only when the facts alleged on the face of the complaint fail to state any valid claim entitled to the plaintiff. (New Livable California v. Association of Bay Area Governments (2020) 59 Cal.App.5th 709, 714.) If the complaint fails to state a cause of action, the court must grant the plaintiff leave to amend if there is a reasonable possibility that the defect can be cured by amendment. (Blank,

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supra, 39 Cal.3d at p. 318.) On the other hand, “if it appears from the complaint ... there is no reasonable possibility that an amendment could cure the complaint’s defect,” sustaining without leave to amend is permissible. (Heckendorn v. City of San Marino (1986) 42 Cal.3d 481, 486.) Analysis. Trust demurs to the fourth through seventh causes of action alleged against them in the FAC. As to all causes of action, Trust again maintains Austin lacks standing to sue because, they claim, Civil Code section 2924m does not create a private right of action.

Trust further contends that Austin cannot maintain these causes of against as they are bona fide purchasers. The Fourth Cause of Action for Quiet Title The elements of the claim The elements of quiet title are (1) a description of the property; (2) plaintiff’s title or interest and the basis; (3) defendant’s assertion of an adverse claim or antagonistic property interest; (4) the date as of which the determination is sought; and (5) a prayer for determination of title. (Code Civ. Proc., § 761.020.)

In this case, the FAC contains a description of the property (FAC ¶ 11), a claim to ownership based upon Austin being the highest bidder after the foreclosure sale (¶¶ 18, 49), an adverse claim, namely, Trust’s claim premised upon their bid at the foreclosure sale (¶ 20), and a claim that Austin’s title is superior, based upon section 2924m, coupled with a prayer for title (¶ 49 and prayer at ¶ 5). Trust argues that Austin lacks standing to bring this cause of action and fails to state a cause of action where Trust are bona fide purchasers who bid in good faith and there are insufficient allegations they had actual or constructive notice of another’s rights.

This Court already decided the issue as to standing—albeit the quiet title cause of action is heavily predicated on Civil Code section 2924m, it is not expressly a cause of action for enforcement under Civil Code section 2924m (for example, the way the first cause of action is stated) and instead is an action for quiet title. Austin has standing to bring an action for quiet title. The remaining causes of action seek remedies related to his claim for quiet title and are not per se statutory. Civil Code section 2924m Standing Section 2924m was added to the statutory scheme governing nonjudicial foreclosure sales effective January 1, 2021 and provides that, as is the case here, “a prospective owner occupant, as defined ... is not the last and highest bidder at the trustee’s sale, the statute grants other entities, as defined in the statute, “certain rights and priorities to make bids on the property after the initial trustee sale and potentially to purchase it as the last and highest bidder, subject to certain requirements and timelines.” (Bird Rock Home Mortgage, LLC v.

Breaking Ground, LP (2025) 114 Cal.App.5th 492, 500–501.) Section 2924m was enacted during the COVID-19 pandemic, which “resulted in widespread job loss and financial distress” that “raised the prospect that many California homeowners [would] soon default on their mortgage payments (if they have not done so already) and a wave of home foreclosures could follow.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1079 (2019-2020 Reg. Sess.) as amended Aug. 24, 2020.) “[D]raw[ing] upon lessons learned from what happened in California’s last foreclosure crisis,” the Legislature enacted “provisions intended to mitigate against blight, vacancy, and the transfer of residential property ownership from owner-occupants to landlord investors in the event that California experience[d] [another] wave of foreclosures.” (Ibid.)

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“The way section 2924m works is to delay the finality of a trustee’s nonjudicial foreclosure sale to allow specified entities to submit bids equal to or greater than the highest bid made at the sale. A trustee’s sale generally is deemed final when the auctioneer accepts the last and highest bid. (§ 2924h, subd. (c); Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33, 40, 259 Cal.Rptr.3d 526.) If the sale is “under a power of sale contained in a deed of trust or mortgage on real property containing one to four residential units,” however, the sale will be deemed final at the end of the auction only if the last and highest bidder is “a prospective owneroccupant” (§ 2924m, subd. (c)(1)), i.e., a natural person who intends to occupy the property as a primary residence and meets other requirements (id., subd. (a)(1)).

If the last and highest bid at the trustee’s sale is not made by a prospective owner-occupant, certain entities may submit bids matching or exceeding the last and highest bid at the sale. In that event, the trustee’s sale is not deemed final until the earliest of the following: (1) 15 days after the sale, if no “eligible tenant buyer” or “eligible bidder,” as defined in the statute, submits a bid or notice of intent to bid within 15 days of the sale (id., subd. (c)(2)); (2) the date when a representative of all eligible tenant buyers submits a bid equal to the last and highest bid at the sale, provided the bid is submitted within 15 days of the sale or a notice of intent to bid is submitted within that time and the bid is submitted within 45 days of the sale (id., subd. (c)(3)); or (3) 45 days after the sale, during which period an eligible bidder may submit a bid that exceeds the last and highest bid at the sale (id., subd. (c)(4)).”

Notably, section 2924m applies to foreclosures based upon unpaid HOA assessments. (Ibid.) However, section 2924m does not contain a standing provision beyond subdivision (j), which merely authorizes the attorney general, a county counsel, a city attorney, or a district attorney to bring an action to enforce the statute. Whether a person may bring a private right of action for the violation of a statute turns on whether the Legislature manifested an intent to create such a private right through the language in the statute or its legislative history. (Lu v.

Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 492, 596-97.) The statutory language here is clear that the intent was to impose the obligation to enforce violations of section 2924m upon government attorneys. The fourth cause of action is not one expressly under section 2924m Even if there is no private cause of action under section 2924m, it is notable that the claims asserted are not for violation of section 2924m per se, but to quiet title and other remedies. Merely because a statute does not confer a private right of action “does not necessarily foreclose the availability of other remedies” including common law claims even if the Legislature is free to create “additional civil or administrative remedies, including, of course, creation of a private cause of action for violation of [statutes].” (Id. at pp. 603–604.)

A quiet title action is akin to a declaratory relief claim. (Entin v. Superior Court (2012) 208 Cal.App.4th 770, 784 [declaratory relief claims are “akin” to “[a]n action to quiet title ... in that plaintiffs seeks a judgment declaring ... rights in relation to a piece of property”].) The elements of a claim for declaratory relief are “(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” (Lee v.

Silveira (2016) 6 Cal.App.5th 527, 546.) Code of Civil Procedure section 1060 provides that “[a]ny person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court

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for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.” (Code Civ. Proc., § 1060.) The equitable versus legal title assertions and Trust’s bona fide purchaser claim Trust argues that the FAC does not correct issues previously noted by the Court; for example, it was previously noted that the Complaint lacked allegations of bad faith on the part of Trust or that Trust had notice of Austin’s rights with respect to the Property, and, as such were bona fide purchasers.

A bona fide purchaser is one “who acquires his interest in real property without notice of another’s asserted rights in the property” and therefore “takes the property free of such unknown rights.” (Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 1251.) “‘The elements of bona fide purchase are payment of value, in good faith, and without actual or constructive notice of another’s rights.” (Ibid.) “The first element does not require that the buyer’s consideration be the fair market value of the property (or anything approaching it). [Citation.]

Instead, the buyer need only part with something of value in exchange for the property.” (Ibid.) The FAC includes new allegations to overcome the previous deficiencies. Austin alleges he notified the Trustee who should have notified Trust of his Notice of Intent to Bid. (FAC ¶ 17.) It is also now alleged that the Trustees of Trust are not ordinary homebuyers, but sophisticated real estate speculators who formed the Trust on the date of the foreclosure sale. (¶ 23.) It is also alleged that Trust frequently attends foreclosure sales and are knowledgeable regarding the procedures, risk, and statutory requirements of nonjudicial foreclosures in California.

As experienced market participants, they are charged with knowledge that a trustee’s sale involving residential property is not final until the Section 2924m process concludes. (¶ 24.) The purchase price paid, $18,527.60 was grossly inadequate where the fair market value of the Property is approximately $436,000. (¶ 25.) This gross disparity under California law is alleged to put an experienced purchaser on “inquiry notice”. The FAC cites Estate of Yates (1994) 25 Cal.App.4th 511 and 6 Angels, Inc. v.

Stuart-Wright Mortgage, Inc. (2001) 85 Cal.App.4th 1279 in support. (¶ 26.) Austin alleges that had Trust performed a reasonable inquiry, they would have discovered his Notice of Intent to Bid and because they failed to investigate a grossly inadequate price, they are not bona fide purchasers (i.e. they did not pay in good faith). (¶ 27.) These allegations mix alleged facts and legal assertions, the latter of which the Court does not assume to be true. Thus, whether the cause of action is now adequately pleaded depends on the holdings in Estate of Yates (1994) 25 Cal.App.4th 511 (Estate of Yates) and 6 Angels, Inc. v.

Stuart-Wright Mortgage, Inc. (2001) 85 Cal.App.4th 1279 (6 Angels, Inc.) and whether they support allegations that Trust are not bona fide purchasers. Defendant argues Estate of Yates has been severely discredited and Austin misreads 6 Angels, Inc. 6 Angels, Inc. involved a winning bid of $10,001 in which relief was sought from the foreclosure sale because there was a clerical error and the bids were to open at $100,00. (6 Angels, Inc., supra, at p. 1284.) There, the Court held “However, California courts have long held that mere inadequacy of price, absent some procedural irregularity that contributed to the inadequacy of price or otherwise injured the trustor, is insufficient to set aside a nonjudicial foreclosure sale.” (Ibid.)

Turning to Estate of Yates, the court notes that: “Where as here, the trustee’s deed recites that all requirements of law have been complied with, “... failure to comply with the notice

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requirements is a ground to cancel the sale only as against a party who is not a bona fide purchaser.” Moreover, “[w]hile mere inadequacy of price, standing alone, will not justify setting aside a trustee’s sale, gross inadequacy of price coupled with even slight unfairness or irregularity is a sufficient basis for setting the sale aside.”” (Estate of Yates, supra, at p. 523, citations omitted.) Here, the FAC alleges Trust were put on notice of potential irregularities in light of the inadequacy of price. (See FAC ¶ 26.)

Thus, Austin is alleging the inadequacy of price is the irregularity, yet both cases cited by Austin demonstrate a procedural irregularity aside from the price is required. Yet, reading the FAC in a light most favorable to Austin, aside from price, Austin also includes allegations regarding that procedure was not followed pursuant to Civil Code section 2924, subdivision (e) because, he alleges, Capital did not comply by posting on the internet notice within 48 hours the date of the sale, the amount of the last and highest bid and an address where the trustee can receive documents.

And, Austin pleads that Trust was a sophisticated buyer who would have been aware of these irregularities. (See FAC ¶¶ 23, 27, 35, 37, 50.) Austin also alleges, in an attempt to show actual or constructive notice that Capital should have notified Trust. (See FAC ¶ 17.) Austin cites In re Spikes (Bankr. E.D. Cal. 2024) 662 B.R. 704, a bankruptcy court case, for the proposition that strict compliance with the notice requirements is a condition precedent for a sale to be deemed final, in other words that this procedural irregularity prevented the sale from being deemed final, and thus, Trust are not bona fide purchasers.

In response, Trust distinguishes In re Spikes because it did not involve a recorded deed in light of the bankruptcy stay, but here, it is alleged the deed was recorded. (See FAC ¶ 21.) But Austin has alleged the deed is void. (See FAC ¶ 85.) In reply, Trust again raises an argument that the recordation of the deed prior to the filing of the Complaint forecloses on the deed being void. Trust cites no caselaw for this proposition, and to further confuse the issue Trust refers to its previous request for judicial notice, which was not refiled with this demurrer nor included in the Notice or Caption.

In light of this, coupled with a liberal reading of the FAC, Austin has alleged that not only was there is an inadequacy of price where Trust was sophisticated buyer, but also that there were procedural irregularities such that Trust’s deed is void. It is also alleged that Trust was not a bona fide purchaser and/or that the deed is void. This overcomes the previous pleading deficiencies. Many of the issues Trust raises are ultimately factual issues based on evidentiary presumptions that are not suited for resolution on demurer.

Therefore, the Court overrules the demurrer as to the fourth cause of action.

The Fifth through Seventh Causes of Action for Unjust Enrichment, Cancellation of Instruments, and Declaratory Relief "Generally, one who is unjustly enriched at the expense of another is required to make restitution. [Citation.] The elements of a cause of action for unjust enrichment are simply stated as “receipt of a benefit and unjust retention of the benefit at the expense of another.” (Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238.) “The term ‘benefit’ ‘denotes any form of advantage.’” (Ghirardo v. Antonioli (1996) 14 Cal.4th 39, 51, 57 Cal.Rptr.2d 687, 924 P.2d 996.) “[T]he benefit that is the basis of a restitution claim may take any form, direct or indirect. It may consist of services as well as property. A saved

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expenditure or a discharged obligation is no less beneficial to the recipient than a direct transfer.” (Rest.3d Restitution and Unjust Enrichment, supra, § 1, com. d, p. 7.) Here, the receipt of the real property could be seen as a benefit considering its fair market value as compared to what Trust paid. Meanwhile, Trust argues a claim for unjust enrichment cannot be maintained against them because they are bona fide purchasers and “a bona fide purchaser is generally not required to make restitution.” (See Professional Tax Appeal v.

Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238.) However, as stated above, Austin has overcome the deficiencies in pleading and made sufficient allegations that Trust are not bona fide purchasers for either lacking good faith or having notice of his rights. Trust’s only remaining argument as to Cancellation of Instruments and Declaratory Relief likewise rests on their claim that the allegations are lacking as to their status as bona fide purchasers; however, as demonstrated above, the allegations are now sufficient.

Thus, these causes of action are stated and can be maintained. Therefore, the Court overrules the demurrer as to the fifth, sixth, and seventh causes of action.

RULING

The Court rules as follows:

1. Sustains s Defendant Capital’s demurrer to the first cause of action without leave to amend; and 2. Deems the demurrer to the second cause of action moot as withdrawn by the moving party; 3. Overrules Trust’s demurrer in its entirety; 4. Orders Counsel for Defendant Capital Assessment Service Company to provide formal notice of the Court’s ruling to all parties.

Dated: April 28, 2026

____________________________ Judge Nicole Quintana Winter

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