A California court has ruled against Deustche Bank AG when the latter challenged a lower court ruling that exposed the bank's trustees to wrongful-eviction claims, Bloomberg reported. The California Supreme Court yesterday had stood with an earlier ruling that will have the Frankfurt-based bank step in a landlord's shoes for a rental unit on a property that it has acquired through foreclosure and face the lawsuits filed by the tenants following their evictions and had their possessions trashed as a result. The news agency noted that the state Supreme Court had not provided its reason why it denied Deustche Bank's petition to review the ruling.

In a phone interview, attorney Richard Rothschild for one of the tenants, said about the state Supreme Court decision, "It's good news and not surprising. (The ruling upheld yesterday) says essentially that banks and other players in the mortgage industry have to play by the same rules as other property owners."

Renter Rosario Nativi is among the many tenants who had lost their possessions and home after the homeowner they have been paying rent to had defaulted on the homes' mortgages. The tenants had claimed that they had no knowledge about the default and the subsequent acquisition of the contested properties by the bank. Nativi is seeking damages for the loss of the home and property as a result of the foreclosure, and Rothschild said that their lawsuit will proceed in the San Jose, California state court.

According to an argument by Deustche and bankers' groups in California and Nevada, the lower court ruling could jeopardize the recovery of the nation as lenders and investors will now have to weight the risks of acquiring properties that has housed unwanted tenants, or are subject to leases, or are at risk of claims by renter-tenants who had been evicted by paid middlemen.

Although Deustche spokesman Ari Cohen declined to comment about the state Supreme Court ruling, he had said in an earlier email, "Deutsche Bank has no financial stake in this case. Loan servicers, and not Deutsche Bank as trustee, are responsible for foreclosure activity, including actions relating to tenants of foreclosed properties, and the maintenance and resale of foreclosed properties."