Deutsche Bank Nat. Trust v. PyleAnnotate this Case
In 2004 Denise Saluto recorded a grant deed to real property. In early 2007 Saluto defaulted on the loan encumbering the Property. Plaintiff Deutsche Bank National Trust Company acquired the Property at a trustee's sale. Before the purchase was complete, Saluto recorded a number of documents purporting to convey an interest in the Property. In August 2007 Deutsche Bank recorded its trustee's deed upon sale. Saluto again recorded a number of documents. Deutsche Bank sought to gain possession of the Property through an unlawful detainer action, but Saluto filed for bankruptcy protection. Saluto sued Deutsche Bank (and other parties) to cancel, set aside and vacate the trustee's deed and cancel the DOT; Saluto did not allege a quiet title claim. Saluto also recorded more documents purporting to convey an interest in the Property, then sold the Property to defendants Cora Broadhurst and her husband, Alan Pyle. Deutsche Bank successfully moved the trial court to set aside the default judgment. A grant deed was ultimately recorded, and title in the Property was conveyed to Broadhurst and Pyle. Deutsche Bank filed suit against defendants for quiet title, cancellation of instruments, declaratory and injunctive relief, slander of title, and forcible entry and detainer. Defendants filed a cross-complaint seeking to quiet title to the Property in their favor. Deutsche Bank argued that defendants' claim for quiet title and affirmative defense of bona fide purchaser or encumbrancer failed as a matter of law. The trial court denied defendants' motion and granted Deutsche Bank's, concluding that defendants did not qualify as bona fide purchasers as a matter of law based on the void default judgment in the chain of title. The Court of Appeal found a void judgment does not pass title free of the lien purportedly cancelled by the void judgment; rather, "a void judgment in the chain of title has the effect of nullifying a subsequent transfer, including a transfer to a purported bona fide purchaser." The Court of Appeal concluded the void default judgment did not quiet title to the property.