This case was last updated from Los Angeles County Superior Courts on 06/08/2019 at 02:36:45 (UTC).

QUALITY LOAN SERVICE CORP. VS. ALL CLAIMANTS STO SURPLUS FUN

Case Summary

On 06/16/2016 QUALITY LOAN SERVICE CORP filed an Other lawsuit against ALL CLAIMANTS STO SURPLUS FUN. This case was filed in Los Angeles County Superior Courts, Burbank Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.

Case Details Parties Dockets

 

Case Details

  • Case Number:

    ****9998

  • Filing Date:

    06/16/2016

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Other

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Burbank Courthouse

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiff

QUALITY LOAN SERVICE CORPORATION

Defendants

ALL CLAIMANTS TO SURPLUS FUNDS

FUNDS ALL CLAIMANTS TO SURPLUS

Not Classified By Court

TEST PARTY FOR TRUST CONVERSION

Attorney/Law Firm Details

Plaintiff Attorney

MCCARTHY & HOLTHUS LLP

Court Documents

Court documents are not available for this case.

 

Docket Entries

  • 07/06/2016
  • Notice; Filed by Quality Loan Service Corporation (Plaintiff)

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  • 07/06/2016
  • Notice (OF ENTRY OF ORDER TO DEPOSIT SURPLUS FUNDS PURSUANT TO CAL. CIV. CODE SECTION 2924j(c) & (d) ); Filed by Attorney for Petitioner

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  • 06/21/2016
  • Order (TO DEPOSIT SURPUS FUNDS PURSUANT TO CAL. CIV. CODE $2924J(C) & (D) ); Filed by Attorney for Plaintiff

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  • 06/21/2016
  • Order

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  • 06/16/2016
  • Complaint Filed

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  • 06/16/2016
  • Complaint; Filed by Quality Loan Service Corporation (Plaintiff)

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  • 06/16/2016
  • Notice; Filed by Quality Loan Service Corporation (Plaintiff)

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  • 06/16/2016
  • Notice (OF PETITION OF TRUSTEE, QUALITY LOAN SERVICE CORP., TO DEPOSIT SURPLUS FUNDS PURSUANT TO CIVIL CODE 2924j(c)&(d) ); Filed by Attorney for Petitioner

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Tentative Rulings

Case Number: ES019998    Hearing Date: February 21, 2020    Dept: NCD

TENTATIVE RULING

Calendar: 18

Date: 2/21/20

Case No: ES 019998

Case Name: Quality Loan Service Corp. v. All Claimants to Surplus Funds

MOTION FOR ORDER TO DISBURSE CLAIMED SURPLUS FUNDS

[Civil Code §2924j, 2924k]

Moving Party: Respondent and Claimant American Lung-Jui Yeh Medical

Foundation, LLC

Responding Party: No Opposition

RELIEF REQUESTED:

Order to for the Clerk and/or the appropriate county department to disburse all surplus funds and accrued interest held in trust by the court on this matter.

SUMMARY OF FACTS:

Petitioner Quality Loan Service Corp. is the foreclosing trustee of real property located on Balboa Drive in Arcadia. The property was evidently sold at a duly noticed non-judicial foreclosure sale, conducted on January 7, 2016. Petitioner sent Notice of Surplus Funds to all potential claimants, and also mailed notice of petition to deposit surplus funds to all persons entitled to notice on February 11, 2016. Petitioner had identified two liens: (1) a deed of trust in favor of JPMorgan Chase Bank, upon which petitioner received a claim and all necessary supportive documents, and accordingly disbursed surplus funds to it in the amount of $269,735.91; and (2) a lien in favor of State of California Franchise Tax Board, for which petitioner received a waiver of claim. [Petition, Attach. 11b, Exs. B, C]. Petitioner determined that respondent American Lung-Jui Yeh Medical Foundation, LLC, as prior owner of the subject property just prior to the foreclosure sale on January 7, 2016, is entitled to any remaining surplus funds after the above-mentioned liens were satisfied. Petitioner did not receive a claim from the prior owner of the subject property, and mailed a second notice, but still did not receive a response from the prior owner.

At the time the petition was filed, petitioner noted that respondent American Lung-Jui Yeh Medical Foundation, LLC was listed with the California Secretary of State as a suspended company. [See Ex. E]. Because petitioner did not receive a claim from the prior owner, and because the prior owner was a suspended company, petitioner indicated that it was unable to determine how the surplus funds should be distributed and requested to deposit them with the court, and to be discharged from this matter.

Petitioner’s Motion to Deposit Surplus Funds was heard by the court on June 21, 2016. The court reviewed the petition and declaration and approved the petition in its entirety. It was ordered that the clerk was to receive the sum of $39,074.76, and the petitioner was discharged. The deposit was received on July 5, 2018.

ANALYSIS:

Respondent American Lung-Jui Yeh Medical Foundation, LLC has now brought this motion for an order disbursing the remaining surplus funds to it, providing proof that it is no longer suspended, but an active California Domestic LLC. [See Ex. D].

Civil Code section 2924j provides that “Upon deposit of that portion of the sale proceeds that cannot be distributed by due diligence, the trustee shall be discharged of further responsibility for the disbursement of sale proceeds.”

The section specifies the court’s obligations;

“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 trustees’ declaration at the addresses specified therein. The court shall distribute the deposited funds to any and all claimants entitled thereto.”

The file does not show that any notice was in fact given as required, and no formal claim filed by the moving respondent. The court could continue this matter to permit the clerk to serve notice on all interested parties set forth in the petition at Exhibit 8 but elects not to do so because all claimants have been identified and are on notice.

However, it appears from the petition that the only other identified claimants have been notified of the availability of the funds and have either been paid or waived any interest in the funds, and all that remains left in this matter is to properly transfer the funds to the prior owner.

Civil Code section 2924k specifies the order of priority for distribution of the proceeds. Before proceeds are distributed to the trustor or the vested owner of record at the time of the trustee’s sale, payment must be made on obligations secured by the deed of trust or mortgage, and then to satisfy the outstanding balance of obligations secured by any junior liens or encumbrances in the order of their priority:

“(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.”

The funds here should be distributed to the owner of record at the time of the trustee’s sale. The motion is not as clear as it could be with respect to establishing that respondent was the trustor or vested owner of record at the time of the sale. The showing is made by the attorney for respondent, who would have no personal knowledge of such matters, stating that respondent was granted the title to the real property, and attaching a quitclaim deed. [Carlyle Decl. 4, Ex. B]. There is reference to the deed of trust by reference to the petition, and the document itself is not submitted, and neither the quitclaim deed nor the deed of trust are authenticated. The court could require a declaration from the LLC itself attesting to matters such as its ownership of record, and its active status. However, there is a title company Trustee’s Sale Guarantee submitted with the petition, showing that as of June 20, 2013, fee title to the property was vested in American Lung-Jui Yeh Medical Foundation, LLC. [Petition, Attach. 5, Schedule A]. The court believes this showing is sufficient to establish ownership or status as trustor as of the sale date in January of 2016, despite possible non-compliance with some technical notice requirements.

RULING:

Motion for Order to Disburse Claimed Surplus Funds is GRANTED.

The court finds that the petition is in order and that the surplus funds, in the amount of $39,074.76, have been deposited in conformance with Civil Code section 2924j, and the petitioner has been discharged of further responsibility for the disbursement of sale proceeds. CCP § 2924j(c).

The court further finds that all potential claimants identified in the petition have had their claims satisfied or have waived their interest in the funds, other than moving Respondent American Lung-Jui Yeh Medical Foundation, LLC.

The remaining funds, $39,074.76, are ordered to be paid to the trustor or the vested owner of record at the time of the trustee’s sale. CCP § 2924k(4). The Trustee’s Sale Guarantee submitted with the petition and dated June 20, 2013 indicates these parties to be American Lung-Jui Yeh Medical Foundation, LLC. [Petition, Attachment 5, Schedule A].