Judge: Mark H. Epstein, Case: 22SMCV02460, Date: 2022-12-28 Tentative Ruling

Case Number: 22SMCV02460    Hearing Date: December 28, 2022    Dept: R

This is an odd case.  Plaintiff Siregar is claiming that there was an improper foreclosure sale of her home (at which time defendant bought it).  She also claims that Ostayan obtained the deed unlawfully by filing or submitting to the trustee a false declaration.  Ostayan has brought an unlawful detainer action to evict Siregar from the home.  The court believes that the UD action must await quieting of the title.  Ostayan asserts, though, that if Siregar wants to unwind the transaction, she will have to return about $403,000 that she has obtained (representing the surplus of the sale price less the debt and expenses).  And as a legal matter, that seems right.  Siregar cannot both unwind the transaction and keep the surplus funds she received; she would have to give that back to Ostayan.  The court suggested at the last hearing that Siregar deposit the surplus into court, which seemed reasonable as long as she was also living in the property.  The court asked the parties to meet and confer on this subject after the last hearing.  Ostayan says that he has tried to engage Siregar in such a conversation but she will not engage.

The court needs to know what the parties’ positions are.  Ostayan has a point that if Siregar wants to unwind the transaction, the consideration Ostayan paid will need to be returned, or at least if the theory is rescission.  While Siregar may not be able to return the full purchase price (since some of it was used to pay the debt and the expenses), she can at least pay the surplus.  On the other hand, if Siregar loses, then she can keep the surplus, but she will have to leave the property.  The court sees no likely way she can both keep the surplus and keep the property.

The court is also aware, however, of Siregar’s claims concerning Ostayan (as yet unproven).

The question is whether, as Ostayan argues, the stay of the UD action ought to be contingent upon depositing the surplus into court.  The court will discuss that with the parties.