Judge: Anne Richardson, Case: 22STCP03969, Date: 2023-08-22 Tentative Ruling

Case Number: 22STCP03969    Hearing Date: August 22, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

On November 2, 2022, Petitioner California TD Specialists (Petitioner) filed a Petition and Declaration Regarding Unresolved Claims and Deposit of Undistributed Surplus Proceeds of Trustee’s Sale (Petition).

The Petition involves the division of proceeds from the April 6, 2022 sale, by Petitioner as trustee, of the real property commonly known as 1310 North Detroit Street, Los Angeles, California 90046 (Property), pursuant to a deed of trust, executed on February 26, 2020, by Claimants Diana Elviera Idham (Claimant Idham) and Claimant Tayebeh T. Parvizi (Claimant Parvizi) as tenants in common entitled to an undivided 50% interest in the Property, in favor of creditor/beneficiary PS Funding, Inc. (The Court discusses below, in greater detail, ownership of the Property as of the date of sale on April 6, 2022.) The total sale price of the Property was $605,000, with $543,392.64 paid to PS Funding, Inc., and with $61,607.36 remaining to be distributed after the sale (Surplus Funds).

After sale, Petitioner received two claims for the surplus funds, one from Claimant Idham, and the other from Claimant Parvizi.

After due diligence, however, Petitioner California TD Specialists was unable to determine the priority of the written claims of the Claimants, for which reason the instant Petition was filed. As described in the Petition, “[f]ormer owners Diana Idham and Tayebeh Parvizi have a dispute between themselves as to the rightful recipient of the surplus funds,” where, “[a]fter a meeting between those claimants and their attorneys, they concluded that they would not be able to resolve the dispute and requested that the funds be submitted to the court for resolution.”

On November 8, 2022, Petitioner filed a Proposed Order Authorizing Petitioner to Deposit Surplus Proceeds of Trustee’s Sale with Clerk Pursuant to Civil Code Section 2924j(c) (Deposit Order), with the Deposit Order depositing $57,272.36 with the Clerk (Deposit Funds) and discharging Petitioner from further responsibility thereover. (The Deposit Funds are the difference of Petitioner retaining its fees and expenses of $3,900, as well as the $435 filing fee for this Petition, from the Surplus Funds.)

On November 9, 2022, the Court entered the Deposit Order.

On November 17, 2022, the Court issued a Notice of Hearing on Petition, setting the hearing for February 2, 2023.

On January 20, 2023, the Court continued the hearing to June 21, 2023.

On January 26, 2023, Petitioner California TD Specialists gave notice of the continuance on the hearing.

On January 27, 2023, Claimant Parvizi filed a Motion for Disbursement of Surplus Funds (Parvizi Motion). The Parvizi Motion was accompanied by a notice of hearing set noticing a June 21, 2023 hearing, a certificate of service showing service on Consumer Defense Law Group, Claimant Idham, and Claimant Parvizi, and a notice of appearance for Claimant Parvizi’s counsel, Law Offices of Timothy D. Ducar, PLC.

(The Court briefly notes that a review of the notice of appearance shows that the Law Offices of Timothy D. Ducar, PLC is an Arizona-based law firm. However, a search of State Bar of California records shows that Timothy D. Ducar is a licensed attorney in California, with active registration, and bar number 164910.)

On February 2, 2023, the Clerk issued a reassignment notice, informing the parties and counsel that Department 40, previously assigned to Judge David Sotelo (Ret.), was reassigned to Judge Anne Richardson.

On February 16, 2023, Petitioner California TD Specialists gave notice of the case reassignment.

On June 20, 2023, Claimant Idham filed a Claim for Surplus (Idham Motion), which noticed an August 22, 2023 hearing.

On June 21, 2023, the Court held an Order to Show Cause hearing (OSC) relating to the hearing date for the Petition, with the Court noting an August 22, 2023 hearing date and taking the OSC off calendar.

The Petition, Parvizi Motion, Idham Motion are now before the Court.

Motions for Disbursement of Surplus Funds

Legal Standard

Civil Code section 2920 et seq. provides the obligations arising from mortgage transactions. (See Civ. Code, § 2920, et seq.) Such obligations include the procedures and findings that must follow surplus funds from a trustee’s sale of real property. (See Civ. Code, §§ 2924j, 2924k.)

In relevant part, Civil Code section 2924k provides:

“(a) The trustee, or the clerk of the court upon order to the clerk pursuant to subdivision (d) of Section 2924j, shall distribute the proceeds, or a portion of the proceeds, as the case may be, of the trustee’s sale conducted pursuant to Section 2924h in the following order of priority:

(1) To the costs and expenses of exercising the power of sale and of sale, including the payment of the trustee’s fees and attorney’s fees permitted pursuant to subdivision (b) of Section 2924d and subdivision (b) of this section.

(2) To the payment of the obligations secured by the deed of trust or mortgage which is the subject of the trustee’s sale.

(3) To satisfy the outstanding balance of obligations secured by any junior liens or encumbrances in the order of their priority.

(4) To the trustor or the trustor’s successor in interest. In the event the property is sold or transferred to another, to the vested owner of record at the time of the trustee’s sale.

(b) A trustee may charge costs and expenses incurred for such items as mailing and a reasonable fee for services rendered in connection with the distribution of the proceeds from a trustee’s sale, including, but not limited to, the investigation of priority and validity of claims and the disbursement of funds. If the fee charged for services rendered pursuant to this subdivision does not exceed one hundred dollars ($100), or one hundred twenty-five dollars ($125) where there are obligations specified in paragraph (3) of subdivision (a), the fee is conclusively presumed to be reasonable.”

Order Granting Disbursement of Surplus

Here, the Petition seeks a court order directing the Clerk to disburse the Deposit Funds.

The Deposit Funds were authorized to be deposited with the Clerk on November 9, 2022.

Per the Petition, the persons with a recorded interest in the Property as of the date immediately prior to the trustee sale of the Property were Wyer Law, Consumer Defense Law Group, Claimant Idham, and Claimant Parvizi. (Petition, § 8; Petition, Attach. 8.) It is unclear whether Wyer Law represented one of the Claimants, but the address therefor shows an Arizona address, suggesting that Wyer Law represented Claimant Parvizi before Timothy D. Ducar assumed representation of Parvizi. (See Petition, Attach. 8.) Consumer Defense Law Group appears as counsel for Claimant Idham. (Comapre Idham Mot., p. 1, with Idham Mot., Proof of Service [counsel on caption page is CDLG, Attn: Tony Cara, with Proof of Service showing Tony Care is the Attn: recipient for Consumer Defense Law Group].)

A Trustee’s Sale Guarantee (Sale Guarantee) executed by Commonwealth Land Title Insurance Company and attached to the Petition shows that as of June 21, 2021, title in the Property was vested in Claimant Idham and Claimant Parvizi as tenants in common owning undivided 50% interests in the Property. (Petition, Attach. 5, Schedule A, § 3.a.) The Sale Guarantee also listed only one encumbrance on the Property as of June 21, 2021, being a $552,000 deed of trust interest in the Property, with PS Funding, Inc. as the beneficiary. (Petition, Attach. 5, Schedule B, § E.4.)

Claimant Parvizi contends that she is entitled to 50% of the “remaining surplus funds” based on Parvizi becoming a recorded owner of the Property by way of Grant Deed conveying the Property from Claimant Idham to Claimant Idham and Claimant Parvizi as tenants in common. (Parvizi Mot., Parvizi Decl., ¶ 4.) Claimant Parvizi also alleges that Claimant Idham attempted to remove Parvizi from ownership of the Property through the use of a quitclaim deed and that Parvizi communicated with the law firm then representing Claimant Idham—Sternberg Law Firm—to inform them that the quitclaim deed was procured from Parvizi “under false representation and undue influence.” (Parvizi Mot., Parvizi Decl., ¶ 4.) The Parvizi Motion does not detail the circumstances under which Parvizi came to own 50% of the Property, nor the circumstances surrounding her execution of a quitclaim deed divesting her interest in the Property (including the date thereof). Neither does the Parvizi motion attach documentary evidence supporting her claim other than her declaration.

In contrast, Claimant Idham provides ample background on the circumstances surrounding the trustee sale and the Petition before the Court. Claimant Idham contends that Claimant Parvizi took advantage of Idham when, in February 2020, Parvizi, as a loan officer, assisted Idham in securing a $60,000 loan from PS Funding, Inc., pursuant to a deed of trust in favor of PS Funding, under circumstances where Idham needed the money to help pay for her brother’s cancer treatment. (Idham Mot., Idham Decl., ¶ 8, Ex. 1 [Deed of Trust in favor of PS Funding, Inc.].) Idham further contends that “[u]nder false pretenses, [Parvizi] told [Idham] [that] [Parvizi] had to put her name on the loan document as co-borrower to get [Idham] this loan because [Parvizi] said [Idham’s] credit score was not good enough (… 630 at the time),” with Idham “just follow[ing] what [Parvizi] told [Idham] to do because [Idham] didn’t know anything about the process,” Idham “sign[ing] the loan document where[] [Parvizi] pointed” and Idham representing that “[she] did not know [Parvizi] was [to be added] on the title of [Idham’s] property.” (Idham Mot., Idham Decl., ¶¶ 9-10.) Claimant Idham contends that she did not know that Claimant Parvizi was on the Property’s title until January 2021, at which point Idham asked Parvizi to sign a quitclaim deed in favor of Idham, which Parvizi refused, instead harassing Idham. (Idham Mot., Idham Decl., ¶¶ 11-12.) Claimant Idham contends that she then hired a bankruptcy lawyer who was able to get Claimant Parvizi to sign a quitclaim deed on December 15, 2021. (Idham Mot., Idham Decl., ¶ 13, Ex. 4 [quitclaim deed, recorded on September 14, 2022].) Based on these representations and evidence, Claimant Idham contends that she is entitled to the full Surplus Funds, payable to her counsel. (Idham Mot., Idham Decl., ¶ 16.)

Based on the record before it, the Court finds as follows.

Only two claimants are before the Court: Claimant Idham; and Claimant Parvizi.

As of February 23, 2020, Claimant Idham and Claimant Parvizi were the owners of the Subject Property. (Idham Mot., Idham Decl., Ex. 1, § H [Claimants as tenants in common owning individual 50% interests in the Property, signing deed of trust in favor of PS Funds, Inc.] & Acknowledgment [date of execution by Claimants].)

Although they were named in the Petition, Yver Law and Consumer Defendant Law Group do not appear to have owned any interest in the Property prior to the trustee sale, as shown by implication through their absence on the deeds attached to the Idham Motion. Yver Law and Consumer Defendant Law Group instead appear to have only represented Claimant Parvizi and Claimant Idham respectively. They are not before the Court as claimants for the Surplus Funds or Deposit Funds.

By the time of the trustee sale of the Property on April 6, 2022, Claimant Idham was the only lawful owner of the Subject Property in light of the quitclaim deed executed on December 15, 2021 by Claimant Parvizi, which conveyed whatever interest Parvizi had in the Property to Idham—and despite the fact that the quitclaim deed was not recorded until September 14, 2022. (Idham Mot., Idham Decl., Ex. 4.)

Claimant Parvizi does not dispute signing the December 15, 2021 quitclaim deed, instead contending that the quitclaim deed was secured “under false representation and undue influence.” (Parvizi Mot., Parvizi Decl., ¶ 4.)

However, Claimant Parvizi does not present any evidence aside from her own declaration in support of her contention that the December 15, 2021 quitclaim deed executed by her is fraudulent or a result of undue influence. As it stands, the declaration of Claimant Parvizi is insufficient for the purposes of showing fraud and undue influence because the declaration fails to provide sufficient details for the Court to make a determination that the December 15, 2021 quitclaim deed was indeed secured from her through fraud and/or undue influence. (See Parvizi Mot., Parvizi Decl., ¶ 4.)

The record fails to show encumbrances or liens on the Property that command diverting a portion of the Surplus Funds from the sale of the Property to the encumbrance or lien holder.

The proper distribution of the Surplus Funds is thus as follows:

(1) $3,900 in fees in favor of Petitioner California TD Specialists, as well as $435 in costs in favor of Petitioner California TD Specialists as compensation for filing this Petition (see Civ. Code, § 2924k, subd. (a)(1); see Petition, §§ 16.e., 16.g. [fees and costs]); and

(2) $57,272.36 in favor of Claimant Idham (see Civ. Code, § 2924, subd. (a)(4)).

The fees and costs due to Petitioner California TD Specialists were retained by Petitioner, as shown by the fact that Petitioner only deposited with the Clerk the difference between the Surplus Funds and Petitioner’s fees and costs. (See Petition, § 16 [Surplus Funds of $61,607.36, minus fees and expenses and filing fee, leaving Deposit Funds of $57,272.36]; see also 11/9/22 Order Authorizing Trustee Deposit [Petitioner deposits $57,272.36 with the Clerk].)

Claimant Idham is thus entitled to the Deposit Funds of $57,272.36.

Accordingly, Claimant Idham’s Motion is GRANTED, in Part.

Claimant Parvizi’s Motion, in turn, is DENIED. 

Conclusion

Petitioner California TD Specialists Petition and Declaration Regarding Unresolved Claims and Deposit of Undistributed Surplus Proceeds of Trustee’s Sale is RESOLVED.

Claimant Tayebeh Parvizi’s Motion for Disbursement of Surplus Funds is DENIED.

Claimant Diana Elviera Idham’s Claim for Surplus Funds is GRANTED.