Every week: one real lawsuit filed over a California foreclosure, taken apart.
The File
Case: Hartsook 14001, LLC v. Selene Finance LP, U.S. Bank Trust National Association as Owner Trustee for RCF 2 Acquisition Trust, MTC Financial Inc. dba Trustee Corps, David Brown and Julian Raymond
Court: Los Angeles County Superior Court, Van Nuys
Filed: August 4, 2026. Verified complaint. The plaintiff is represented by counsel.
Property: Single-family, Sherman Oaks. APN 2269-008-018
Loan: A conventional first. $1,665,000, recorded May 2022, matures June 1, 2052.
Plaintiff: A limited liability company that bought the property in 2023 and took title subject to that loan. It is not the borrower.
Claims: Five. Declaratory relief, accounting, injunction, unfair business practices, and estoppel.
Relief sought: Declarations, an accounting, injunctions, restitution, attorney’s fees and interest. No damages of any kind.
Exhibits attached to the complaint: None.
Hearings held to date: None. The first is a case management conference set for December 2, 2026.
The Timeline
5/17/2022. A $1,665,000 deed of trust records against the property. Two individuals are the borrowers. The loan matures June 1, 2052.
3/1/2023. The Notice of Default recorded two years later states that the borrowers did not make the payment due on this date, and made no payment after it.
8/29/2023. The grant deed records. The two borrowers transfer the property to the buyer. The buyer pays $10,444.00 in documentary transfer taxes.
6/26/2025. The Notice of Default records. The amount required to bring the loan current is $449,667.74.
9/24/2025. The Notice of Trustee’s Sale records. It sets the sale for October 28, 2025. It states the total unpaid balance and estimated costs as $2,129,356.67.
8/4/2026. The buyer files the complaint.
8/7/2026. The buyer files a notice of lis pendens with the court.
8/10/2026. The buyer files a second notice of lis pendens.
8/11/2026, 10:17 a.m. The foreclosure trustee holds the sale. The property sells back to the beneficiary for $1,800,000.
12/2/2026. The case management conference, Department A, Van Nuys. Nothing is scheduled before it.
The Money
$1,665,000. Original principal on the first loan, per the recorded deed of trust.
$10,444.00. Documentary transfer taxes paid when the grant deed recorded in August 2023.
$449,667.74. The amount required to bring the loan current as of June 25, 2025, per the Notice of Default.
$2,129,356.67. Total unpaid balance and estimated costs, per the Notice of Trustee’s Sale recorded September 24, 2025.
$2,125,000.00. The value of the property, as alleged in the complaint.
$1,657,029.68. The secured claim amount, as alleged in the complaint.
$1,800,000. What the property sold for at the trustee’s sale on August 11, 2026, back to the beneficiary.
Claim 1: Declaratory relief
The buyer asks the court to declare that it holds the borrower’s rights. The recorded deed of trust says a new owner gets those rights only by written assumption with lender approval.
What this claim is
A declaratory relief claim asks a judge to state what the parties’ rights are when there is a real dispute about them. It does not order anyone to do anything.
What the buyer says
That it owns the property. That the servicer and the beneficiary must recognize it as the party entitled to payoff, reinstatement, cure, assumption and account information. That they cannot rely on the two sellers to defeat those rights. That the court must determine the amount of the secured claim.
What the record shows
The buyer is not the borrower. The recorded deed of trust names two individuals as the borrowers, and they are the same two people who later sold the property.
That deed of trust is a standard uniform instrument. Section 13 says a person who takes title gets the borrower’s rights only if that person assumes the loan in writing and the lender approves. Section 18 lets the lender demand payment in full if the property transfers without the lender’s prior written consent, and it specifically covers a transfer where the new owner is not a natural person. The buyer is a limited liability company.
The complaint does not allege a written assumption. It does not allege lender approval. It does not allege written consent to the transfer. It says the transaction “contemplated” that the buyer would pursue an assumption.
The complaint also never says when the loan went into default. The recorded Notice of Default does. It states that the borrowers did not make the payment due March 1, 2023, and made no payment after it. The grant deed recorded on August 29, 2023, almost six months later.
Claim 2: Accounting
The buyer says it could not find out what was owed. The recorded documents in this file each describe a way to ask.
What this claim is
An accounting asks a court to make the other side produce a full record of what is owed. A court orders one when one side holds all the records and the other side cannot compute the number on its own.
What the buyer says
That the amount of the debt is uncertain and disputed. That it cannot determine the payoff, the reinstatement amount, the arrears or the cure amount without a complete accounting. It then lists eighteen categories it wants broken out, from principal and interest down to inspection fees and suspense-account credits.
What the record shows
Two recorded documents in this file already describe how to get the amount due.
The Notice of Default states, in plain type: “Upon your written request, the Beneficiary or Mortgagee will give you a written itemization of the entire amount you must pay.” That same notice prints the contact for anyone who wants the amount required to stop the foreclosure, with a street address, a telephone number and the trustee’s file number.
The deed of trust covers it as well. Section 25 is titled Statement of Obligation Fee, and it refers to furnishing that statement under the California Civil Code.
The complaint does not allege that anyone ever made a written request.
Claim 3: Injunctive relief
Asking for an injunction inside a complaint does not stop a trustee’s sale. Only a court order does. Nobody asked for one, and the property sold seven days after the buyer filed.
What this claim is
An injunction is a court order telling someone to stop doing something. A request for one written into a complaint is not an order. A judge grants it, and only after a party applies and the court hears the application.
What the buyer says
It asks the court to bar the defendants from adding avoidable charges, from refusing to give it payoff, reinstatement, loan history and account information, from communicating with the two sellers in a way that impairs its ownership, and from taking any action inconsistent with its rights as owner.
What the record shows
The buyer filed the complaint on August 4, 2026. The foreclosure trustee held the sale on August 11, 2026 at 10:17 a.m. The property sold back to the beneficiary for $1,800,000.
The court’s case summary shows no hearing of any kind in this case. It shows no application for a temporary restraining order and no order shortening time. The first calendared date is a case management conference on December 2, 2026, almost four months after the sale.
What the buyer did file were two notices of lis pendens, on August 7 and August 10. A lis pendens records notice that a lawsuit affecting title is pending. It does not stop a trustee’s sale.
Claim 4: Unfair business practices (§ 17200)
An unfair business practices claim has to borrow a violation from some other law. This complaint cites no other law.
What this claim is
California lets a person sue a business for an unlawful, unfair or fraudulent business practice. The plaintiff has to point to something the business actually did wrong. The remedy is restitution and an injunction. Damages are not available under it.
What the buyer says
Seven practices, all versions of one complaint: that the servicer refused to recognize or deal with it as the title owner, refused to give it account and payoff information, kept foreclosing while it tried to resolve the loan, dealt with the two sellers instead, and let interest and fees accrue in the meantime. The complaint states expressly that it does not seek damages under this count.
What the record shows
The unlawful part of a § 17200 claim comes from another statute. This complaint cites Business and Professions Code § 17200 itself, and two Code of Civil Procedure sections about injunctions. That is all. It cites no Civil Code section, and no provision of California’s foreclosure law.
The declaration attached to the recorded Notice of Default names the borrowers. It lists the two individuals, identifies the servicer, and states that the servicer contacted the borrower and that thirty days or more passed after that contact. The buyer is not named on it, because the buyer is not the borrower.
Claim 5: Equitable estoppel and promissory estoppel
The promise the buyer relied on is never identified. The complaint points to an insurance request.
What this claim is
Estoppel stops a party from denying something it led the other side to rely on. Promissory estoppel enforces a promise when the other side reasonably relied on it and got hurt. Both require a promise or a representation that can be identified.
What the buyer says
That the servicer asked it to obtain or keep insurance on the property and to name the servicer on that insurance. That it complied. That the request acknowledged its ownership. That it relied by spending money on repairs, insurance and maintenance, and that it was harmed when the servicer later refused to deal with it as owner.
What the record shows
The complaint never identifies a promise. It gives no date, no person who spoke, no letter, no email, and no phrase that was said. The only conduct it points to is a request to insure the collateral.
The loan itself requires insurance on the collateral, no matter who holds title. Under the same recorded deed of trust, a new owner gets the borrower’s rights only by written assumption with lender approval. A request to keep the property insured is not a promise to let a non-borrower assume or cure the loan.
🔒 Paid below: the takeaway and three lessons for lenders.
