Judge: Theresa M. Traber, Case: 24STCP01422, Date: 2025-05-14 Tentative Ruling
Case Number: 24STCP01422 Hearing Date: May 14, 2025 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: May 14, 2025 TRIAL DATE: NOT
SET
CASE: Quality Loan Service Corp. v. All
Claimants to Surplus Funds After Trustee’s Sale of Real Property Located At
4238 3rd Avenue Los Angeles CA 90008
CASE NO.: 24STCP01422 
RULING
ON DISTRIBUTION OF SURPLUS FUNDS
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
Commenced on May 3, 2024, this case involves a petition to deposit
undistributed surplus proceeds from a trustee’s sale.
The Court now rules on the
distribution of surplus funds.
TENTATIVE RULING:
Civil Code
section 2924j subdivision (d) states:
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 thirty-five thousand dollars
($35,000) 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.
(Civ. Code section 2924j(d) [emphasis added].) Pursuant to
section 2924k subdivision (a):
(a) The 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.
(4) To the trustor
or the trustor's successor in interest. In the event the property is sold or
transferred to another, to the vested owner of record at the time of the
trustee's sale.
(Id. Section 2924k(a).) Each claimant in a dispute
for the proceeds has the burden to prove each fact essential to their claim. (MTC
Financial Inc. v. Cal. Dept. of Tax & Fee Admin. (2019) 41 Cal.App.5th
742, 749.)
Petitioner brought this matter on May
3, 2024, following a trustee’s sale on the property commonly known as 4238 3rd
Avenue, Los Angeles CA 90008. (Petition ¶¶ 2-4.) After satisfaction of the deed
of trust, surplus proceeds remained in the amount of $405,661.40, less taxes,
trustee’s fees and expenses. (Petition ¶¶ 13-16.) Petitioner identified several
heirs to the estate of the previous owner, James Terry Crosland III as trustee
of the James Terry Crosland III Living Trust Agreement but was unable to
identify the successor trustee. (Petition Attach. 11(b).) Petitioner therefore
sought to deposit the balance of the surplus funds, totaling $389,411.60, with the Court. The
Court granted that request on November 21, 2024. (Order To Deposit Surplus
Funds.) Following confirmation of the deposit, the Court set a hearing on
unresolved claims for February 21, 2025 pursuant to Civil Code section 2924j
subdivision (d). (November 21, 2024 Minute Order.) The Court ordered Petitioner
to give notice to all potential claimants before it would be discharged. (Id.)
Notice of that ruling was given on November 22, 2024. (Notice of Entry of Order
Re: Petition to Deposit Surplus Funds.) Proof of service was filed that same
date. (See Id.) The Court continued the Hearing on the Distribution of
Surplus Funds on two occasions, ultimately calendaring the hearing for May 14,
2025. (See March 14, 2025 Minute Order.)
Although no claims were submitted
after the Court scheduled a formal hearing on the distribution of surplus
funds, Claimant Tameka Renee Crosland submitted a claim to the surplus proceeds
as an ex parte application on May 20, 2024, before the funds had been
deposited. That application included a sworn affidavit from the Claimant
stating that she is the daughter of the deceased former owner, James Crosland.
(Declaration of Tameka Crosland ISO Claim ¶ 3.) Claimant states that she knows
of no other persons with a superior claim to the surplus funds. (Id. ¶
6.) As the successor-in-interest to the trustor, Claimant’s sworn statement
demonstrates that she is entitled to surplus proceeds under subdivision (a)(4)
of Civil Code section 2924k. Ms. Crosland supplemented her claim on July 8,
2024, when she submitted a copy of the Letters of Administration from her
father’s probate case, with the attached Living Trust of James Terry Crosland,
III. (See attachment to Notice of
Related Case, filed 7/8/24.) Among other
specific distributions directed by the grantor is a statement that the “HOUSE
shall be distributed to TAMEKA RENEE CROSLAND.”
(Id.) As the
undisputed record establishes notice of this hearing was given to all potential
claimants, and only Ms. Crosland has filed a claim with the Court within the
time prescribed by section 2924j of the Civil Code, there are no senior claims,
disputed or not, which could take precedence over her claim. Further, Ms. Crosland has provided strong
evidence that she is the proper recipient of any funds remaining after the sale
of her father’s house.
Accordingly,
Tameka Renee Crosland’s claim for surplus funds is GRANTED. The balance of the
surplus funds deposited with the Court in this matter, totaling $389,411.60 are
ordered to be disbursed to the claimant pursuant to Civil Code section 2924j
subdivision (d).
Court to give notice.
IT IS SO ORDERED.
Dated: May 14, 2025 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day
before the hearing. All interested parties must be copied on the email. It
should be noted that if you submit on a tentative ruling the court will still
conduct a hearing if any party appears. By submitting on the tentative you
have, in essence, waived your right to be present at the hearing, and you
should be aware that the court may not adopt the tentative, and may issue an
order which modifies the tentative ruling in whole or in part.