Judge: Elaine W. Mandel, Case: 24SMCV00766, Date: 2024-05-07 Tentative Ruling

Case Number: 24SMCV00766    Hearing Date: May 7, 2024    Dept: P

Case Brief

Ress Financial Corporation v. Dix, et al., Case No. 24SMCV00766

Hearing date May 7, 2024

Defendants Aposta, Inc. and Intellectual Capital Management & Servicer Inc.’s Motion for Order Distributing Surplus Funds

Plaintiff Ress Financial Corporation filed an interpleader against defendants Dix, Smith, Aposta, Inc. and Intellectual Capital Management & Servicer regarding surplus funds following trustee’s sale. Plaintiff was appointed trustee under a deed of trust (DOT) dated June 28, 2018, executed by defendant Dix encumbering property in Calabasas. Plaintiff sold the property on October 31, 2023; moving defendants assert an interest in the funds.

Civil Code section 2924k(a) states “[t]he 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…”

California Constitution, Art. I, sec. 28(b)(13)(A) states “[i]t is the unequivocal intention of the People of the State of California that all persons who suffer losses as a result of criminal activity shall have the right to seek and secure restitution from the persons convicted of the crimes causing the losses they suffer.” “All monetary payments, monies, and property collected from any person who has been ordered to make restitution shall be first applied to pay the amounts ordered as restitution to the victim.” Cal. Const., Art. I, § 28(b)(13)(C).

On March 18, 2019 Aposta and Intellectual Capital Management acquired and purchased an Abstract of Judgment secured and recorded on the property as junior lien for $28,626.24. They renewed the judgment on January 25, 2022 for $59,689.

Defendant Smith obtained default judgment against defendant Dix on April 8, 2020 and recorded the Abstract of Judgment on May 6, 2020. Defendant Dix was disbarred and ordered to pay restitution of $128,254.11 to Smith on March 29, 2021.

Per the Constitution, monies collected from any person ordered to make restitution must be first applied to victim restitution, prior to payment of other obligations. Smith has priority over Aposta/Intellectual Capital Management. The first $128,254 is payable to Smith. This exceeds the amount that was interpled, so the entirety of the funds is payable to Smith.