## Facts

- Robert Moore held a beneficial interest (with the Atwills) in a deed of trust encumbering Santa Clara County real property; Valley Title Company was the trustee.
- The property passed through intermediate owners and became subject to multiple encumbrances, including a senior construction loan deed of trust and junior deeds of trust.
- Maynard Munger, Jr. initially loaned money secured by a junior deed of trust, then advanced additional funds and received a grant deed from Reichert, coupled with an option allowing Reichert to repurchase for $25,000.
- After default on the Atwill–Moore obligation, Moore caused a notice of default and trustee’s sale to be recorded and published.
- Before the sale, Munger timely tendered to the trustee the amount needed to cure the default under the Atwill–Moore deed of trust.
- The trustee wanted to accept the tender but refused it at Moore’s insistence, and the trustee’s sale proceeded.
- Moore and the Atwills purchased the property at the trustee’s sale and Moore later exchanged the property in a transaction reflecting substantial value.
- Munger sued for tort damages for wrongful trustee’s sale; after a bench trial, the court awarded $30,000 plus interest, and Moore appealed.

## Issues

1. Whether a successor in interest to trust property has the right to cure a default by timely tender to the trustee and thereby prevent foreclosure under a deed of trust.
2. Whether a beneficiary may be liable in tort for damages when a trustee, acting at the beneficiary’s insistence, wrongfully refuses a proper tender and conducts a trustee’s sale.
3. Whether the grant deed to Munger was an absolute conveyance or merely a mortgage/security device, affecting Munger’s status and damages.
4. Whether the trial court applied a correct measure of damages for a wrongful trustee’s sale and whether substantial evidence supported the $30,000 award.

## Decision

- The court affirmed the judgment for Munger.
- Munger, as successor in interest and record title holder, was entitled to cure the default on the obligation being foreclosed by a timely tender of the cure amount.
- The trustee’s refusal of Munger’s proper tender, made at Moore’s insistence, rendered the ensuing trustee’s sale wrongful as to Munger.
- Moore could be held liable in tort for damages resulting from the wrongful sale carried out through the trustee.
- Moore failed to rebut the presumption that an absolute deed is what it purports to be; the evidence did not clearly and convincingly show the grant deed was intended only as security.
- The trial court’s damages methodology and valuation findings were supported by substantial evidence.

## Legal Principles

- A successor in interest to the trust property may exercise the statutory right to cure a default on the foreclosed obligation by timely tender of the amount then due to reinstate.
- A trustee’s wrongful refusal of a proper, timely tender to cure can make a subsequent foreclosure sale wrongful.
- A deed absolute on its face is presumed to be an absolute conveyance; the party asserting it is a mortgage bears the burden to prove that intent by clear and convincing evidence.
- A beneficiary may be liable in tort for an illegal, fraudulent, or willfully oppressive sale under a power of sale when the trustee’s wrongful act is attributable to the beneficiary’s direction or insistence.
- Damages for wrongful trustee’s sale may be measured by the value of the property interest lost, commonly framed as the owner’s equity (fair market value less encumbrances) at the time of the sale, if supported by substantial evidence.

## Conclusion

The court upheld tort liability and a damages award against the deed-of-trust beneficiary where a successor owner timely tendered the cure amount, the trustee refused the tender at the beneficiary’s insistence, and a foreclosure sale proceeded despite the right to reinstate; the plaintiff’s ownership status and the amount of damages were sustained on the evidence.


Munger v. Moore, 11 Cal. App. 3d 1 (Cal. Ct. App. 1970)