UTA Argues Amicus Brief before Court of Appeal in Banc of America Leasing & Capital, LLC, v. 3 Arch Trustee Services, Inc.

3 Arch and UTA argued on appeal, in an amicus brief, that, for the purpose of distributing excess proceeds from a trustee’s sale: (1) Civil Code § 2924j creates a nonjudicial alternative system to filing an interpleader action in court; and, (2) as long as a trustee follows the provisions of Civil Code § 2924j, it need only distribute the excess proceeds of sale to those persons who have submitted written claims pursuant to Civil Code § 2924j.  As such, the trustee has no duty to search the public record for other persons (i.e., which would include judgment lienholders) who might have been entitled to surplus proceeds had the trustee filed an interpleader action.

The significance of the case, and one of the reasons it was of interest to UTA, is that if a trustee cannot rely on the procedures set forth in Civil Code § 2924j to distribute surplus proceeds without incurring liability, trustees will stop using § 2924j and will revert to primarily using  interpleader actions filed in court. 

Read full article by Phillip Adelson