Placer acted as the deed of trust trustee in holding a foreclosure sale under Aflalo’s deed of trust. The sale resulted in a $937,000 surplus. Following the sale, Aflalo filed a wrongful foreclosure suit against Placer and Pro Value, the buyer at the foreclosure sale. Placer filed a cross-complaint in interpleader, claiming it did not know to whom to pay the surplus sale proceeds and might be subjected to multiple liabilities given the wrongful foreclosure claim. Held, the trial court correctly dismissed the interpleader cross-complaint. Under CC 2924k, absent a lien claim, surplus sale proceeds are owed to the trustor—here, Aflalo. The fact that he had filed suit to set aside the sale did not change that fact. Pro Value had no claim to the surplus sale proceeds. If Aflalo succeeded in setting the sale aside, he would have to refund the surplus sale proceeds to Pro Value, but that fact did not give Pro Value any claim against Placer for the surplus funds. Since Placer was not subject to conflicting claims the surplus sale proceeds, it could not state a viable interpleader claim.
California Court of Appeal, Second District, Division 6 (Tangeman, J.); May 30, 2018; 2018 Cal. App. LEXIS 501