Judge Lee W. Tsao, Case Number: 24NWCP00057, Date: 2024-10-15 Tentative Ruling

Judge: Lee W. Tsao, Case: 24NWCP00057, Date: 2024-10-15 Tentative Ruling

Case Number: 24NWCP00057 Hearing Date: October 15, 2024 Dept: C

Quality Loan Service Corp. vs All Claimants to Surplus Funds

Case No.: 24NWCP00057

Hearing Date: October 15, 2024 @ 9:30 a.m.

Tentative Ruling

The Clerk of the Court is ordered to distribute Surplus Funds from Trustee’s Sale as follows: 1) to Samuel Sanchez in the amount of $265,301.03, and 2) to the United States of America, Internal Revenue Service, in the amount of $49,922.00.

Clerk to give notice.

Background

On September 7, 2023, the real property located at 2512 Deerford Street. Lakewood, CA 90712 sold at a trustee sale for $610,000.00, leaving a surplus in the amount of $318,642.89. On February 9, 2024, Quality Loan Service Corp. (“Trustee”) filed a Petition and Declaration Regarding Unresolved Claims and Deposit of Undistributed Surplus Proceeds of Trustee’s Sale. Trustee claimed fees and expenses in the amount of $3419.86. (Petition, ¶¶15-16.) On April 24, 2024, the Court approved the Petition and ordered discharge of Trustee upon depositing the sum of $315,223.03 with the Clerk of the Court. (4/24/24 Order.) The Clerk subsequently gave notice of hearing scheduled for October 15, 2024. (7/10/24 Minute Order.)

Claims to Surplus Funds were filed by The United States of America, on behalf of the Internal Revenue Service, on June 12, 2024, and by Samuel Sanchez, the former owner of the subject property, on July 17, 2024.

Legal Standard

Civil Code § 2924j provides in part:

“(d)¿Before the trustee deposits the funds with the clerk of the court pursuant to subdivision (c), the trustee shall send written notice by first-class mail, postage prepaid, to all persons described in subdivision (a) 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, providing the address of the court in which the funds were deposited, and a telephone number for obtaining further information.

Within 90 days after deposit with the clerk, the court shall consider all claims filed at least 15 days before the date on which the hearing is scheduled by the court, 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 therein. Where the amount of the deposit is twenty-five thousand dollars ($25,000) or less, a proceeding pursuant to this section is a limited civil case. The court shall distribute the deposited funds to any and all claimants entitled thereto.”

Discussion

The United States, on behalf of the Internal Revenue Service, claims a portion of the surplus funds based upon a federal tax debt owed by Samuel Sanchez. As of October 15, 2024, the total balance due is approximately $49,922.00 for tax years 2012 and 2013. Interest continues to accrue as allowed by law. (6-12-24 Claim of United States of America on Behalf of the internal Revenue Service to Surplus Funds, Ex. A.) The Court finds that the claim is timely under Civil Code § 8460(a.) and the Internal Revenue Service is entitled to surplus funds in the requested amount of $49,922.00.

Samuel Sanchez filed a claim for surplus funds as the owner of the subject property prior to the foreclosure. (Sanchez Decl., ¶¶ 3, 6.) As there are no other claimants, Sanchez is entitled to the remaining surplus funds in the amount of $265,301.03.

Within 5 days of the issuance of the Court’s order, each claimant shall file a proposed order stating the name and address of the claimant and the amount to be distributed per the Court’s order. The Clerk shall distribute the remaining surplus funds within 30 days of the issuance of the Court’s order.