Judge: Elaine Lu, Case: 22STCP03668, Date: 2023-04-27 Tentative Ruling

Case Number: 22STCP03668    Hearing Date: April 27, 2023    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background

            On October 7, 2022, Petitioner Quality Loan Service Corp. (“Petitioner”) filed the instant petition to Civil Code § 2924j(c) to deposit surplus funds from a deed of trust sale of the real property located at 1353 W. 90^th St. Los Angeles, CA 90044.

            On November 3, 2022, Petitioner filed the instant motion to deposit surplus funds.  No opposition has been filed.

Legal Standard

            If there is a surplus after payment of a secured obligation, a trustee who does not file an interpleader must serve by mail a prescribed notice of such surplus on all persons entitled to notices of default under Civil Code §§ 2924b(b) & (c).  If a conflict exists that the trustee cannot resolve with due diligence, the trustee may, on additional notice, file with the court a declaration of the unresolved claims and deposit into court the amount remaining in dispute.  (Civ. Code, §§ 2924j(b),(c).)  A summary procedure is provided for the court's resolution of the claims, which must be heard within 90 days of the deposit.  (Civ. Code, §§ 2924j(c),(d).)

Discussion

            “If, after due diligence, the trustee is unable to determine the priority of the written claims received by the trustee to the trustee's sale surplus of multiple persons or if the trustee determines there is a conflict between potential claimants, the trustee may file a declaration of the unresolved claims and deposit with the clerk of the superior court of the county in which the sale occurred, that portion of the sales proceeds that cannot be distributed, less any fees charged by the clerk pursuant to this subdivision. The declaration shall specify the date of the trustee's sale, a description of the property, the names and addresses of all persons sent notice pursuant to subdivision (a), a statement that the trustee exercised due diligence pursuant to subdivision (b), that the trustee provided written notice as required by subdivisions (a) and (d) and the amount of the sales proceeds deposited by the trustee with the court. Further, the trustee shall submit a copy of the trustee's sales guarantee and any information relevant to the identity, location, and priority of the potential claimants with the court and shall file proof of service of the notice required by subdivision (d) on all persons described in subdivision (a).”  (Civ. Code, § 2924j(c).)

            Petitioner asserts that it sent required notice of the surplus to all potential claimants to the Property at their respective addresses of record.  (Boyd Decl. ¶¶ 3-6, Exhs. A-C.)  Specifically, that on July 7, 2022, Petitioner sent Notice of Surplus Funds from Trustee's Sale to all potential claimants with recorded interest in the property at their addresses of record as required by Civil Code § 2924j(a).  (Boyd Decl. ¶ 3, Exh. A.)  Petitioner did not receive any claim from the priority lien in favor of Los Angeles County DCSS recorded 3/21/2012 as instrument number 20120435039.  Petitioner mailed a Second Notice of Surplus Funds to all persons entitled to Notice on August 9, 2022.  (Boyd Decl. ¶ 4, Exh. B.)  “Because Petitioner did not receive a claim from Los Angeles County DCSS, Petitioner is unable to determine how surplus funds should be distributed.”  (Boyd Decl. ¶ 5.)  Accordingly, Petitionre filed the instant petition.  On October 6, 2022, Petitioner mailed Notice of Petition to Deposit Surplus Funds to all persons entitled to notice as required under Civil Code § 2924j(d).  (Boyd Decl. ¶ 6, Exh. C.) 

            Petitioner has complied with the procedural requirements for the surplus claim procedure, and no party has filed any opposition to the motion.  As such, the Court has discretion to grant the relief requested.

            Accordingly, the motion to deposit surplus funds is granted.

Conclusion and ORDER

            Petitioner Quality Loan Service Corp.’s Motion to Deposit Surplus Funds Pursuant To Civil Code Section 2924j And To Discharge Quality is GRANTED.

            The surplus funds of $87,759.58 shall be deposited with the clerk of the court forthwith. 

            The Court sets a hearing on July 19, 2023 at 8;30 am to consider all competing claims to the surplus funds, in accordance with Civil Code section 2924j subd. (d). 

            Petitioner shall give notice of the instant order to all potential claimants to the property and file proof of service of such within 10 days.

DATED: April 27, 2023                                                         ___________________________

                                                                                    Elaine Lu

                                                                                    Judge of the Superior Court