YANCEY v. California Bank Consumers Association, Objector and Appellant.

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Court of Appeal, First District, Division 4, California.

Margaret S. YANCEY, Plaintiff and Respondent, v. AMERICAN SAVINGS AND LOAN ASSOCIATION et al., Defendants and Respondents; California Bank Consumers Association, Objector and Appellant.

No. A043851.

Decided: September 28, 1989

Martin A. Cooper, Law Offices of David B. Bloom, Los Angeles, for objector and appellant. Patricia Sturdevant, Sturdevant & Sturdevant, A Professional Corp., San Francisco, Richard G. Carlston, David G. Ramos, Miller, Starr & Regalia, Oakland, for defendants and respondents.

These purported appeals from a pair of orders made in connection with the voluntary settlement of a class action will be dismissed because we conclude that the appellant is not aggrieved by the orders and thus lacks standing.


Our holding requires that the procedural history underlying this appeal be summarized in detail.

In recent years considerable attention has been directed to various practices attending the initiation, financing, and termination of nonjudicial foreclosure proceedings.   These practices provoked numerous actions, many of which the Judicial Council ordered coordinated in the San Francisco Superior Court.   Two of these coordinated actions are relevant for present purposes;  In re:  Foreclosure Fee Cases (Jud. Council Coordination Proceeding No. 1681) and In re:  Trustee Sale Guarantee Cases (Jud. Council Coordination Proceeding No. 1962).

All of the pertinent events occurred in 1986.   In April Margaret S. Yancey was one of the plaintiffs in Neals, et al. v. Bank of America, et al. (San Francisco Super.Ct. Action No. 855505).   The trial court sustained general demurrers with leave to amend.   Rather than amend, Yancey split off on her own with a new complaint.1  In late January of 1987 she filed a “Complaint For Fraud, Unlawful And Unfair Business Practices, Breach Of The Implied Covenant Of Good Faith And Fair Dealing, And For Restitution, Damages, and Declaratory And Injunctive Relief” against American Savings and Loan Association, First Charter Financial Corporation, and Sunkist Service Company.2  The action was alleged to be “brought pursuant to ․ Code of Civil Procedure Section 382 on behalf of a class ․ composed of all California persons and entities whose real property was subjected to foreclosure proceedings by First Charter Financial or by Sunkist Service Company as trustee upon instructions from defendant beneficiary American Savings, a related corporate entity, from April, 1982, through December 31, 1983.” 3  As subsequently amended, the primary target of the complaint was defendants' “practice of always charging the maximum statutory fee” allowed by former Civil section 2914c “regardless of what services were provided, and regardless of the reasonableness of that fee.”   The complaint sought (among other things) damages and recovery of excessive trustee and sale fees and costs which the class paid to defendants as a condition of curing defaults which had resulted in the commencement of nonjudicial foreclosure proceedings.

Settlement negotiations began in March.   In May of that year the parties moved for the trial court's tentative approval of the proposed settlement and the procedures for notifying the class members.   After conducting a hearing on the motion, the trial court filed an order granting it on June 22.   A further hearing for final approval was scheduled for August 15.

The parties had already begun filing papers in connection with their joint request for final approval when on August 5 California Bank Consumers Association (CBCA) filed objections to the proposed settlement and moved that it be allowed “to conduct and complete discovery ․ relating to the proposed settlement.”   In their separate oppositions, the parties argued that not only were CBCA's objections on the merits groundless, but CBCA had no standing to make those objections because “CBCA will neither benefit from nor be burdened by the settlement.”   They attacked CBCA as “a sham organization” which was nothing more than the “personal litigation vehicle” of CBCA General Counsel Donald Ricketts, who was merely “looking to latch on to a case and interpose himself to try to force a new settlement to generate fees.”   They submitted a wealth of materials from the Foreclosure Fee and Trustee Sale Guarantee cases to substantiate their claim that Ricketts “is notorious for abusing the class action format for his own personal gain,” that CBCA had failed to demonstrate that it represented any members of the class, and that the objections were only “a thinly veiled attempt to coerce attorney fees.”

On August 15 the trial court conducted a brief hearing and granted the parties' motion for final approval of the settlement.   After ordering off calendar as moot CBCA's motion for leave to conduct discovery, the court on September 9 entered an order embodying its final approval of the settlement.   CBCA filed a timely notice of appeal from both of these orders.


By maintaining their claim that CBCA lacks standing, plaintiffs and defendant beckon us into the realm of one of the murkiest and yet most sensible limitations on judicial action.   Courts have neither the resources nor the competence to resolve every controversy a complex society may spawn.   The concept of standing is one of the devices courts have developed to ensure that the very limited means at their disposal are not squandered, but instead preserved for those situations where the judicial power is most usefully brought to bear.

Most of these devices have their origins in the “case or controversy” language of Article III of the United States Constitution governing the jurisdiction of federal courts.   The focus of these devices varies.   For example, the avoidance of political questions depends upon the nature of the dispute.   Several other devices, such as ripeness and mootness, emphasize the element of timing.   Concerns with justiciability and advisory opinions deal with the amenability of the issue raised to judicial redress.

The matter of standing overarches several of these limitations, looking to the party and the issue.  “In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues․  [¶]  [S]tanding imports justiciability․”  (Warth v. Seldin (1975) 422 U.S. 490, 498, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343.)   It “requires the party who invokes the court's authority to ‘show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,’ ․ and that the injury ‘fairly can be traced to the challenged action’ and ‘is likely to be redressed by a favorable decision,’․”  (Valley Forge College v. Americans United (1982) 454 U.S. 464, 472, 102 S.Ct. 752, 758, 70 L.Ed.2d 700.)  “The injury alleged must be ․ ‘ “distinct and palpable,” ’ ․ and not ‘abstract’ or ‘conjectural’ or ‘hypothetical,’․”  (Allen v. Wright (1984) 468 U.S. 737, 751, 104 S.Ct. 3315, 3324, 82 L.Ed.2d 556.)   A litigant who would invoke the court's jurisdiction is obliged to demonstrate “such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends․”  (Baker v. Carr (1962) 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663.)   The standing doctrine stiffens courts' inhospitality toward “appeals to their authority which would convert the judicial process into ‘no more than a vehicle for the vindication of the value interests of concerned bystanders.’ ”  (Valley Forge College v. Americans United, supra, 454 U.S. at p. 473, 102 S.Ct. at p. 759.)   Standing is not bestowed by reason of either “ ‘an organizational interest in the problem’ ” or a claim to be acting “ ‘as representatives of the public interest.’ ”  (Sierra Club v. Morton (1972) 405 U.S. 727, 739, 736, 92 S.Ct. 1361, 1368, 1367, 31 L.Ed.2d 636.)

 The standing demanded of individuals is relaxed slightly with respect to entities composed of individuals.  “There is no question that an association may have standing in its own right to seek judicial relief from injury to itself and to vindicate whatever rights and immunities the association itself may enjoy․  [¶] Even in the absence of injury to itself, an association may have standing solely as the representative of its members․  The association must allege that its members, or any one of them, are suffering immediate or threatened injury as a result of the challenged action of the sort that would make out a justiciable case had the members themselves brought suit․  So long as this can be established, and so long as the nature of the claim and of the relief sought does not make the individual participation of each injured party indispensable to proper resolution of the cause, the association may be an appropriate representative of its members, entitled to invoke the court's jurisdiction.”  (Warth v. Seldin, supra, 422 U.S. 490 at p. 511, 95 S.Ct. 2197 at p. 2211.)

California is in general agreement with the federal law of standing, likewise treating it as a jurisdictional requirement.  (See Carsten v. Psychology Examining Com. (1980) 27 Cal.3d 793, 796–797, 166 Cal.Rptr. 844, 614 P.2d 276;  Harman v. City and County of San Francisco (1972) 7 Cal.3d 150, 159, 101 Cal.Rptr. 880, 496 P.2d 1248;  Brotherhood of Teamsters & Auto Truck Drivers v. Unemployment Ins. Appeals Bd. (1987) 190 Cal.App.3d 1515, 1521–1522, 236 Cal.Rptr. 78;  Stocks v. City of Irvine (1981) 114 Cal.App.3d 520, 531, 170 Cal.Rptr. 724;  Zee Toys, Inc. v. County of Los Angeles (1978) 85 Cal.App.3d 763, 780, 149 Cal.Rptr. 750;  cf.  McKeon v. Hastings College (1986) 185 Cal.App.3d 877, 890–892, 230 Cal.Rptr. 176.)   In addition, an appellate variation of the inquiry into standing is to determine whether a person or entity seeking review of an order or judgment is actually “aggrieved” by the order or judgment designated for review.  (See Code Civ.Proc., § 902;  9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, §§ 139–140, pp. 148–150.)

 It is a general principle of class actions that the named plaintiff appearing as the representative of the class must be a member of the class.   As the United States Supreme Court put it:  “To have standing to sue as a class representative it is essential that a plaintiff must be a part of that class, that is, he must possess the same interest and suffer the same injury shared by all members of the class he represents.”  (Schlesinger v. Reservists to Stop the War (1974) 418 U.S. 208, 216, 94 S.Ct. 2925, 2930, 41 L.Ed.2d 706;  accord General Telephone Co. of Southwest v. Falcon (1982) 457 U.S. 147, 156, 102 S.Ct. 2364, 2369, 72 L.Ed.2d 740;  see La Sala v. American Sav. & Loan Assn. (1971) 5 Cal.3d 864, 875, 97 Cal.Rptr. 849, 489 P.2d 1113.)   This principle is relaxed when associations appear to represent their members.  “The presumption that one not a member of the represented class cannot adequately and fairly represent its interests cannot apply with full force to an association seeking to represent its membership;  it imports an artificial distinction between the association and its members.   One presumes that an association is typically the embodiment of a community of interest, the form assumed by some conglomerative principle or goal.”  (Salton City etc. Owners Assn. v. M. Penn Phillips Co. (1977) 75 Cal.App.3d 184, 190, 141 Cal.Rptr. 895.)   The full stringency of the general principle can be reasserted if the trial court determines that the association is not faithfully representing the interests of its membership for whatever reason, one of which may be “a divergence of views among the members.”  (Id. at pp. 190–191, 141 Cal.Rptr. 895.)

 In its papers objecting to final approval of the settlement CBCA identified itself as “an unincorporated association of approximately 2500 California residents, acting individually, on behalf of its members (including, approximately, 27 members who are members of the class certified herein), on behalf of the class certified herein, and in the public interest.”   We disregard the claim that CBCA is acting in “the public interest,” because that generalized consideration will not confer standing.  (See Sierra Club v. Morton, supra, 405 U.S. 727 at p. 739, 92 S.Ct. 1361 at p. 1368.)   It remains to be determined whether CBCA qualified to act on behalf of itself, its members, and the members of the entire class.

 Virtually all of the information concerning CBCA was furnished in one form or another by Donald Ricketts.4  The association was formed by Ricketts in 1983 with funds Ricketts had obtained from a class action against certain foreclosure practices.   In August of 1987 Ricketts testified concerning CBCA's membership roster:  Ricketts “bought ․ foreclosure lists from people who sell such lists, in connection with the Foreclosure Fee Cases and related cases․  [¶] Those people were solicited to join California Bank Consumers Association.   Approximately eighty of them did so and paid four dollars in membership dues to do so.  [¶] Thereafter, the dues were established, and as we obtained lists of people who were involved on either the holds issues or on the Trustee Sale Guarantee issues, we would enroll them as members, send them a letter, tell them we had done so, tell them what it was all about and give them the opportunity to ask to have their names removed from the membership list.   It's the same process as an opt-out process in a class certification.   It has about twenty-five hundred to thirty-five hundred hard members at this time.”

CBCA currently has no membership dues or fees.   It has no funds, nor does it maintain a bank account.   When CBCA did have funds of its own, they were deposited in Ricketts' trust account.   CBCA did not elect officers until the spring of 1987.   Ricketts also described the membership meetings held in 1986 and in 1987.   In 1986, 7,000 notices of the meeting were mailed but only Ricketts and one other person showed up.   Things improved the following year;  3,500 notices resulted in the appearance of Ricketts, his brother, his sister-in-law, and a “Mr. Regan.”   A class action filed by CBCA in federal court was dismissed for lack of standing.   Ricketts, who is CBCA's general counsel, makes most “day-to-day business ․ or legal decisions” and does all of the legislative lobbying on behalf of CBCA.   In a declaration Ricketts stated that CBCA “until recently, was represented by me in all cases.”   When asked “would CBCA exist if you ceased your activities on its behalf?”   Ricketts answered “I don't know.”

Ricketts further stated in his declaration:  “I am one of the custodians of the membership records of CBCA․  I have reviewed those records and determined that non-judicial foreclosures were instituted against 27 CBCA members by the defendants in this action.   I believe there are more, but the records are incomplete to identify them.   The membership is now being canvassed and asked to provide further information.”

This evidence raises troubling questions about the institutional existence of CBCA.   We put to one side the issue of whether CBCA would be competent to have commenced this action on behalf of the class.   We put to another side the accusations of plaintiffs and defendants that CBCA is not a consumer rights watchdog, but merely Mr. Ricketts' poodle and alter ego.5  Our sole concern is whether CBCA has standing to maintain these appeals.

There is absolutely nothing in the record showing that CBCA ever owned property which was the subject of a nonjudicial foreclosure that CBCA was obliged to cure.   Accordingly, CBCA itself cannot qualify as a member of the class entitled to object to the settlement.  (See 2 Newberg on Class Actions (2d ed. 1985) § 11.54, p. 471 [“Any party to the settlement proceeding has standing to object to the proposed settlement” (emphasis added) ];  cf. Parker v. Bowron (1953) 40 Cal.2d 344, 353, 254 P.2d 6 [“Parker cannot give himself standing to sue by purporting to represent a class of which he is not a member”].)

 There is still the matter of CBCA's claim to entitlement to object “on behalf of its members” and “on behalf of the [entire] class [already] certified.”   The members of the class, including any existing members of CBCA, were at that time represented by Ms. Yancey and Homeowners Alliance.   Whether these named plaintiffs would be satisfactory representatives of the class was “an issue within the discretion of the trial court.”  (Scott v. City of Indian Wells (1972) 6 Cal.3d 541, 550, 99 Cal.Rptr. 745, 492 P.2d 1137;  accord La Sala v. American Sav. & Loan Assn., supra, 5 Cal.3d 864 at p. 871, 97 Cal.Rptr. 849, 489 P.2d 1113.)   The trial court also possesses “broad powers to determine whether a proposed settlement in a class action is fair.”   (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 438, 152 Cal.Rptr. 503;  accord Trotsky v. Los Angeles Fed. Sav. & Loan Assn. (1975) 48 Cal.App.3d 134, 150, 121 Cal.Rptr. 637 and authorities cited.)   By the time CBCA made its belated appearance the trial court had already decided that plaintiffs were fit representatives of the class and that the tentatively-approved settlement was fair.   CBCA's objections to final approval of the settlement tacitly challenged both of these rulings.   The evidence recounted above constituted a more than adequate basis for the trial court to repel that attempt upon determining that CBCA was not a better agent for the class than the named representatives already accepted.   Even if it is assumed that CBCA did legitimately purport to represent a number of disgruntled class members, those members were a distinct minority of a class which otherwise expressed no dissatisfaction with the settlement.   The situation thus presented was one where “as a result of a divergence of views among the members, the association ․ no longer is fully representative of the interests of its members, or all of them.”  (Salton City etc. Owners Assn. v. M. Penn Phillips Co., supra, 75 Cal.App.3d 184 at p. 190, 141 Cal.Rptr. 895.)   Members of the class who were also included in CBCA's membership would have standing to object, but CBCA did not.  (See In re Equity Funding Corp. of America Sec. Lit. (9th Cir.1979) 603 F.2d 1353, 1360–1361.)

 CBCA did not intervene in this action.   Had it done so it could have appealed as an aggrieved party (see County of Alameda v. Carleson (1971) 5 Cal.3d 730, 736, 97 Cal.Rptr. 385, 488 P.2d 953) and contested the merits of the settlement, as occurred in State of California v. Levi Strauss & Co. (1986) 41 Cal.3d 460, 224 Cal.Rptr. 605, 715 P.2d 564.   Lacking the status of either class member or intervenor, CBCA is not aggrieved within the meaning of Code of Civil Procedure section 902.  (See Trotsky v. Los Angeles Fed. Sav. & Loan Assn., supra, 48 Cal.App.3d 134 at pp. 139–140, 121 Cal.Rptr. 637;  cf. Sierra Club v. Morton, supra, 405 U.S. 727 at pp. 736–739, 92 S.Ct. 1361 at pp. 1367–1368;  In re Equity Funding Corp. of America Sec. Lit., supra, 603 F.2d 1353 at p. 1361.)   As a consequence, the orders are not appealable by CBCA.   The situation in which CBCA finds itself is even weaker than a defendant who is not allowed to appeal from the order approving a settlement between the plaintiff and another defendant tortfeasor.  (See Chernett v. Jacques (1988) 202 Cal.App.3d 69, 71, 248 Cal.Rptr. 63.)

The purported appeals are dismissed.


1.   It appears that about this time a settlement was reached with Bank of America and other institutions.

2.   Yancey was joined as plaintiff by Homeowners Alliance, which is described in the complaint as “a California nonprofit, public benefit corporation established in 1984 to provide information, education, and advice to California homeowners about their rights and obligations” and which was alleged to be acting “as private attorney general.”   It is not a party to this appeal.We have taken judicial notice of documents establishing that during the interim between the settlement's final approval and the filing of the notice of appeal, the Federal Savings and Loan Insurance Corporation was appointed as receiver for defendant American Savings and Loan Association.   The assets of American Savings and Loan Association were subsequently acquired by New West Federal Savings and Loan Association, which appears as one of the respondents.

3.   It was also alleged in the complaint that the representative form of the action was “appropriate ․ pursuant to Business and Professions Code Sections 17203 and 17204.”

4.   The information is in the form of a declaration and Ricketts' testimony given at a hearing conducted in connection with the Trustee Sale Guarantee Cases.   A copy of the voluminous transcript of the contempt hearing is included in the clerk's transcript.

5.   It should in fairness be noted that personal animosity is not confined to plaintiffs and defendants;  in his declaration Ricketts gave as good as he got.

POCHÉ, Associate Justice.

ANDERSON, P.J., and PERLEY, J., concur.

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