Judge: Latrice A. G. Byrdsong, Case: 24STCP00565, Date: 2024-05-09 Tentative Ruling
Case Number: 24STCP00565 Hearing Date: May 9, 2024 Dept: 25
Hearing Date: Thursday, May 9, 2024
Case Name: QUALITY LOAN SERVICE CORP. v. ALL CLAIMANTS TO SURPLUS FUNDS
Case No.: 24STCP00565
Motion: Motion to Deposit Surplus Funds and Discharge Petitioner
Moving Party: Petitioner Quality Loan Service Corp.
Responding Party: None
Notice: OK
Tentative Ruling: Petitioner Quality Loan Service Corp.’s Motion to Deposit Surplus Funds and to Discharge Petitioner is CONTINUED to JUNE 27, 2024 AT 10:00 A.M. in Department 25 of the Spring Street Courthouse.
BACKGROUND
On February 22, 2024, Petitioner Quality Loan Service Corp. (“Petitioner”) commenced this petition regarding unresolved claims and deposit of undistributed surplus proceeds of trustee’s sale.
On March 1, 2024, Petitioner filed the instant motion to deposit surplus funds and to discharge Petitioner. The motion is unopposed.
MOVING PARTY POSITION
Petitioner Quality Loan Service Corp. will move, and hereby does move this Court to deposit surplus funds pursuant to Cal. Civ. Code §2924j(c) & (d) and to discharge Petitioner from further responsibility for disbursement of the funds.
OPPOSITION
None filed.
REPLY
None filed.
ANALYSIS
I. 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).)
II. 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. (Podmenik Decl. ¶¶3-6, Exhs. A-C.) Specifically, on November 22, 2023, Petitioner sent Notice of Surplus Funds From Trustee's Sale to all potential claimants at their addresses of record as required by Civil Code § 2924j(a). (Podmenik Decl. ¶3, Exh. A.) As Petitioner did not receive any claim from the priority lien in favor of Secretary of Housing and Urban Development recorded on 1/19/2007 as Instrument Number 20070108221, Petitioner mailed a Second Notice of Surplus Funds to all persons entitled to Notice on January 4, 2024. (Podmenik Decl. ¶4, Exh. B.) “Because Petitioner did not receive a claim from Secretary of Housing and Urban Development, Petitioner is unable to determine how surplus funds should be distributed.” (Podmenik Decl. ¶5.) Accordingly, the instant petition was filed. On February 22, 2024, Petitioner mailed Notice of Petition to Deposit Surplus Funds to all persons entitled to notice as required under Civil Code § 2924j(d). (Podmenik Decl. ¶6, Exh. C.)
However, the Court observes that the declaration of Petitioner’s counsel does not include (1) the date of sale, (2) a description of the property, (3) names and addresses of all persons sent notice, (4) an affirmative statement of due diligence, or (5) the amount of surplus to be deposited, as required under Civil Code § 2924j(c). There is also no copy of the trustee’s sales guarantee or statement regarding other relevant information regarding the priority of the potential claimants as required under Civil Code § 2924j(c). Lastly, Petitioner requests $3,137.32 in costs and attorney’s fees, but the Petitioner’s counsel’s declaration does not provide an explanation nor support for the amount sought.
Accordingly, the Court cannot approve the petition.
III. Conclusion
For the foregoing reasons, Petitioner Quality Loan Service Corp.’s Motion to Deposit Surplus Funds and to Discharge Petitioner is CONTINUED to JUNE 27, 2024 at 10:00 a.m. in Department 25 of the Spring Street Courthouse.
Petitioner must serve and electronically file supplemental papers addressing the deficiencies noted in this Court’s order 16 days prior to the next scheduled hearing. Failure to do so may result in the Petition being denied or placed off calendar.
Moving party is ordered to give notice.