Judge: Layne H. Melzer, Case: "Inre:32018ViaCanela,SanJuanCapistrano,California92675", Date: 2022-08-25 Tentative Ruling

Petitioner California Td Specialists
Unresolved Claims (The Deed of Trust)

Before the court is the Petition to deposit undistributed surplus proceeds for unresolved claims after the foreclosure of the Deed of Trust (DOT) recorded on 3/22/19 for the real property commonly described as 32018 Via Canela, San Juan Capistrano, California 92675 by foreclosure Trustee California TD Specialists.

A Trustee’s Sale took place on January 22, 2021. The total sale price of the Property was $185,000. There is a surplus in the amount of $67,002.28, after the Sale was finalized and the DOT paid off. 

If, after due diligence, the trustee is unable to determine the priority of the written claims received or if the trustee determines that there is a conflict between potential claimants, he or she may file a declaration of the unresolved claims and deposit the undistributed proceeds, less any fees charged by the clerk, with the clerk of the superior court of the county where the sale occurred. (C.C. 2924j(c); see CTC Real Estate Services v. Lepe (2006) 140 C.A.4th 856, 861.)

Here, the Trustee has identified three potential claimants, the California Franchise Tax Board (FTB) in the amount exceeding the surplus finds for a tax lien recorded on 9/3/20; the original lender, Mr. Henry A. Thomas in the amount of $16,941.50, for defense of a post-foreclosure lawsuit; and the owner of the property Denise Metzger.

Trustee declares in the Attachment 11a to the Petition that it is unable to determine the priority of the claims.

Under subsection (c), the trustee may file a declaration of the unresolved claims and deposit the surplus funds with the clerk. Before filing the declaration, the trustee shall send written notice to all persons with a recorded interest in the property, “informing them that the trustee intends to deposit the funds with the clerk of the court and that a claim for the funds must be filed with the court within 30 days from the date of the notice.” Civ. Code, § 2924j(d).

Here, this was accomplished. On May 13, 2022, the Trustee sent a Notice of Intent to Deposit Surplus Funds by mail to all interested parties including the three claimants.  See Attachment 13 to the Petition.

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. Civ. Code, § 2924j(c).

Here, this is accomplished.

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).

Here, this is accomplished.

Once that portion of the sale proceeds that cannot be distributed by due diligence is deposited with the court, the Trustee will be discharged of further responsibility for disbursement of the sale proceeds. (C.C. 2924j(c).)

Here, the court sees no indication that the $67,002.28 in excess funds have been deposited.

Once it is deposited, within 90 days after deposit with the clerk, the court must consider claims filed at least 15 days before the scheduled hearing date, and the Clerk must “serve written notice of the hearing by first-class mail on all claimants identified in the trustee's declaration at the addresses specified.” The court will then hear the matter and distribute the deposited funds to the claimants entitled thereto. (C.C. 2924j(d).)

Claims should be filed with the Court and served at least 15 days before the upcoming hearing. (See id.)

Any persons who have previously filed their claims in the action need not re-file the claims including Mr. Thomas, the California Franchise Tax Board, and Ms. Metzger.

The court notes that Trustee seeks fees and expenses in the amount of $3,925 in Paragraph 15 of the Petition relating to this Petition pursuant to Civil Code §2924k(a)(1) and (b), but those amounts have not been detailed with specificity.

The Trustee is ordered to deposit the $67,002.28 in excess funds.  The hearing to consider claims for distribution of excess funds shall be on 11/3/22 at 2PM.  Claims for any portion of such funds shall be filed and served no later than 15 days prior to this scheduled hearing.  The Clerk shall “serve written notice of the hearing by first-class mail on all claimants identified in the trustee's declaration at the addresses specified.”

Clerk to give notice