Filed 3/30/16 Quality Loan Service Corp. v. Hutton CA2/8
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                 DIVISION EIGHT


QUALITY LOAN SERVICE CORP., as                                       B259324
Trustee, etc.,
                                                                     (Los Angeles County
         Plaintiff,                                                  Super. Ct. No. KS017525)

         v.

TERESA GAMBOA HUTTON,

         Defendant and Appellant,

JAMES GAMBOA,

          Defendant and Respondent.




         APPEAL from the judgment of the Superior Court of Los Angeles County. Dan
Thomas Oki, Judge. Affirmed.


         Teresa Gamboa Hutton, in pro. per., for Defendant and Appellant.


         No appearance for Defendant and Respondent.


                                                   *********
       Plaintiff Quality Loan Service Corporation (Quality), as trustee under a deed of
trust securing real property located on James Place in Pomona, conducted a nonjudicial
foreclosure sale of the property following a default. After the loan and foreclosure costs
were paid, there was a surplus of over $100,000 from the sale. Quality gave notice of the
surplus funds to the record owners of the property, Pedro Gamboa, Teresa Gamboa, and
James Gamboa, but did not receive a claim to the funds. Instead, appellant Teresa
Gamboa Hutton, who had no recorded interest in the property, contacted Quality
objecting to the distribution of any surplus funds on various grounds. Unsure of how to
dispose of the funds, Quality filed a petition with the superior court under Civil Code
section 2924j to deposit the funds with the court’s clerk, and to have the court resolve any
claims to the funds.
       Appellant appeared in the action, requesting numerous continuances to prove her
claim to the surplus proceeds. Appellant’s brother, James Gamboa, also made a claim to
the surplus proceeds. The evidence before the trial court established that Pedro and
Teresa Gamboa, husband and wife, and their son, James Gamboa, were the record owners
of the property at the time of the foreclosure, and that Pedro and Teresa Gamboa had
passed away before the foreclosure sale was conducted. The court granted James
Gamboa’s claim on the basis that he was the only surviving record owner of the property.
The court denied appellant’s motions for reconsideration and to set aside the judgment.
       In this appeal, appellant, who is the daughter of Pedro and Teresa Gamboa,
contends that the claim of her brother, James Gamboa, to the surplus funds was untimely;
that there were irregularities in the foreclosure process; that any transfer of the property
to James Gamboa was not supported by consideration or was otherwise invalid; that the
trial court failed to grant her a continuance to carry on her investigation in support of her
claim; and that the trial court failed to consider her evidence challenging Quality’s
authority to foreclose on the property (which was discovered after the trial court entered
judgment). Finding no reversible error, we affirm the judgment below.



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                                       BACKGROUND
       On October 23, 2013, Quality filed this lawsuit seeking to deposit with the court
the undistributed funds of $101,406.80 following its trustee’s sale of the James Place
property. The petition alleged that title to the property was held by Pedro Gamboa,
Teresa Gamboa, and James Gamboa as joint tenants, who were the trustors identified on
the deed of trust on which Quality foreclosed. The petition further alleged that Quality
had received no claims to the undistributed funds, but that there was a “conflict between
potential claimants to the surplus proceeds.” The petition further alleged that Pedro,
Teresa, and James Gamboa, “as prior owners of the subject property just prior to the
foreclosure sale on 07/12/2013, are entitled to any remaining surplus funds.”
       Quality did not receive a claim from Pedro, Teresa, or James Gamboa, and
therefore hired a private investigator to identify possible addresses for them. Notice of
the surplus funds was sent to each of them at the addresses identified by the private
investigator, but no claims were received. Appellant, however, contacted Quality
claiming an interest in the property and objecting to the distribution of surplus funds. She
was unable to provide any documents evidencing a recorded interest in the property.
Therefore, Quality was unable to determine how the funds should be distributed.
       Notice of its petition and intent to deposit surplus funds with the court was given
to Pedro, Teresa, and James Gamboa, and to appellant on October 22, 2013. The notice
advised the potential claimants that “[p]ursuant to Civil Code § 2924j(d) if you claim an
interest to the funds to be deposited you must file a claim with the court within thirty (30)
days from the date of this notice . . . .”
       On November 1, 2013, the court granted Quality’s petition, discharged Quality
from further responsibility, acknowledged receipt of the funds from Quality, and set a
hearing regarding distribution of the funds for January 15, 2014. Notice of the hearing
was given to each of the previous owners at the addresses identified by Quality, and to
appellant.
       On January 10, 2014, appellant filed a “request for accommodations with
disabilities” requesting that the hearing to decide any claims to the surplus funds be

                                              3
continued. That same day, the trial court granted the request and continued the hearing to
February 14, 2014. The court also ordered that “[a]ny claims to the funds must be filed
with the court within 15 days of this notice of continuance.” The notice was mailed to
appellant on January 10, 2014, but not to any of the record owners.
       On January 27, 2014, appellant submitted a claim to the court, with supporting
documents. She included copies of the death certificates for her parents, Teresa and
Pedro Gamboa, reflecting that they passed away in 2005 and 2008, respectively. Also
included was a 1979 grant deed for the James Place property, evidencing her purchase of
the property in 1979. Appellant also submitted a declaration averring that she and her
husband purchased the James Place property in 1979, and that she allowed her parents to
live there rent free.
       On February 14, 2014, the court continued the hearing to March 28, 2014, and
requested additional evidence from appellant to support her claim. Specifically, the court
requested copies of “the deed and any subsequent transfers.” Notice of the continuance
was sent to both appellant and to James Gamboa. On March 28, the hearing was
continued again, at appellant’s request, to April 24, 2014. James Gamboa was given
notice of the continuance.
       On April 22, 2014, appellant filed copies of the requested documents with the
court, including a 2001 grant deed by which appellant and her husband deeded the
property to appellant’s parents, and to her siblings Margaret and Donald Gamboa, as joint
tenants. Also included was a 2002 grant deed, by which Pedro, Teresa, Margaret, and
Donald Gamboa deeded the property to Pedro, Teresa, and James Gamboa as joint
tenants.
       Appellant also filed a memorandum of points and authorities in support of her
claim, arguing that she and her husband transferred their interest in the James Place home
to her parents in 2001 after experiencing financial hardship from protracted litigation
with appellant’s former attorney. The goal was to allow appellant “to pull out some
equity to live on during the duration of the [lawsuit] and then [for her parents to] give the
house back” to appellant. Appellant also made arguments sounding in wrongful

                                              4
foreclosure, claiming that “Pedro and Teresa Gamboa were victims of financial elder
abuse by their trustees . . . rending [sic] any such instruments void on their face.”
       On April 24, 2014, James Gamboa made his first appearance in this lawsuit. The
court continued the hearing to May 22, 2014, and ordered that “James Gamboa is to
submit a claim for surplus funds, by [May 22]. If no claim is submitted, the surplus funds
will escheat to the State of California.”
       On May 16, 2014, appellant filed another accommodation request, captioned
“Urgent Request for Continuance Due to Serious ADA Impairments,” and on May 19,
2014, the court granted the request and continued the hearing to July 23, 2014.
       James Gamboa filed his claim on May 21, 2014.
       On July 18, 2014, appellant filed an opposition and objections to James Gamboa’s
claim. Appellant contended that Mr. Gamboa failed to make a timely appearance in the
action, reasoning that he had received notice of Quality’s intent to deposit the funds with
the court in October 2013. Appellant also repeated many of the arguments made in her
memorandum of points and authorities in support of her claim. She also interposed
numerous objections to Mr. Gamboa’s evidence in support of his claim.
       On July 22, 2014, appellant requested a 60-day extension of the hearing. The
request stated that she needed more time to prepare a supplemental brief because of her
“dire health issues.” She did not explain what additional evidence she hoped to present
or discuss in her supplemental brief.
       The hearing was held on July 23, 2014, and the court took the claims and
appellant’s request for a continuance under submission. When it issued its ruling, the
court denied appellant’s request for a continuance, finding “when asked at the hearing
what additional relevant facts she might be able to offer if afforded more time, [she]
could only state that her investigation of the facts was still ongoing.” The court
concluded that the evidence before it clearly demonstrated that appellant once held title to
the property, but that the property was subsequently transferred to Pedro, Teresa, and
James Gamboa as joint tenants, that Pedro and Teresa Gamboa had died before the
trustee’s sale of the property, and that the only remaining joint tenant at the time of the

                                              5
sale was James Gamboa. The court concluded that James Gamboa’s claim was timely,
because the court had granted him leave to file a claim by May 22, 2014. Accordingly,
the court awarded the surplus proceeds to James Gamboa, finding that “[i]f the court had
not allowed James Gamboa to submit a tardy claim, the funds would have escheated to
the State of California rather than being awarded to [appellant].”
       On July 31, 2014, appellant made a motion for reconsideration under Code of
Civil Procedure section 1008. The declaration in support of the motion stated that
appellant had contacted various entities involved with the loan on the James Place
property, and that none of them had heard of Quality. Appellant posited that her research
revealed a “broken chain of title” creating a “question of fact for the jury.”
       On August 7, 2014, appellant made a motion to set aside and vacate the judgment
pursuant to Code of Civil Procedure section 663. The motion argued the court ignored
appellant’s arguments in opposition to James Gamboa’s claim. She urged that her
subsequent research demonstrated that Quality was a stranger to the loan and had no
standing to bring its petition.
       The court considered appellant’s motions on September 2, 2014. The court found
reconsideration was improper because the judgment had already been entered, and that
the motion must be construed as one for a new trial. However, appellant failed to
demonstrate that the “new evidence” could not have been discovered with reasonable
diligence, or that the new evidence was material. As to the motion to vacate, the court
concluded that appellant failed to demonstrate an erroneous legal basis for the court’s
decision, reasoning that resolution of the issue of Quality’s authority to foreclose on the
loan would not support appellant’s entitlement to the surplus funds.
       Appellant filed her notice of appeal on October 1, 2014.
                                       DISCUSSION
1.     Timeliness of James Gamboa’s Claim
       “Civil Code sections 2924 through 2924k provide a comprehensive framework for
the regulation of nonjudicial foreclosure sale pursuant to a power of sale contained in a
deed of trust.” (Moeller v. Lien (1994) 25 Cal.App.4th 822, 830 (Moeller).) Following a

                                              6
nonjudicial foreclosure, section 2924j provides that when proceeds remain after the
beneficiary’s debt is satisfied and all of the trustee’s expenses have been paid, the trustee
is required to send written notice to those persons with recorded interests in the property
entitled to notice prior to the foreclosure sale. (§§ 2924j, subd. (a) & 2924b, subds. (b) &
(c).) The notice must inform each such person that: there has been a trustee’s sale; he or
she may have a claim to all or a portion of the remaining proceeds; he or she may contact
the trustee to pursue any possible claim; and before the trustee can act on any such claim,
he or she must provide the trustee with certain written information and proof regarding
the claim’s validity. (§ 2924j, subd. (a).)
       “If, after due diligence, the trustee is unable to determine the priority of the written
claims received by the trustee to the trustee’s sale surplus of multiple persons or if the
trustee determines there is a conflict between potential claimants, the trustee may file a
declaration of the unresolved claims and deposit with the clerk of the superior court of
the county in which the sale occurred, that portion of the sales proceeds that cannot be
distributed, less any fees charged by the clerk pursuant to this subdivision.” (Civ. Code,
§ 2924j, subd. (c).) Before the funds are deposited with the clerk, the trustee shall send
notice to all potential claimants informing them “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 . . . .” (Id., subd. (d).)
       Once the surplus funds have been deposited with the clerk, “the trustee shall be
discharged of further responsibility for the disbursement of sale proceeds.” (Civ. Code,
§ 2924j, subd. (c).) “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.” (Id.,
subd. (d).)
       Nothing in Civil Code section 2924j “shall preclude any person from pursuing
other remedies or claims as to surplus proceeds.” (Id., subd. (b).)



                                               7
       Appellant argues that Civil Code section 2924j creates a mandatory deadline,
requiring that claims must be filed with the court within 30 days of the trustee’s notice of
intent to deposit funds with the court.1 (Id., subd. (d).) Appellant has not supported or
developed her argument with reasoned citation to authority. She has merely cited to
section 2924j, and has not otherwise provided any analysis supporting her claim. We
find the argument has no merit.
       James Gamboa did not file a claim within 30 days of Quality’s notice of its intent
to deposit funds with the court. While Civil Code section 2924j, subdivision (d) requires
the trustee to inform potential claimants that their claims must be filed with the court
within 30 days of the trustee’s notice, the trial court has discretion to consider claims
filed outside of this 30-day period. The statute provides that the court shall set a hearing
to resolve the claims within 90 days of the deposit of the funds, and that the court shall
consider claims filed within 15 days of this hearing. (Ibid.) This timeline contemplates
that the court may consider claims filed more than 30 days after the trustee’s notice.
       James Gamboa also did not file a claim within 15 days of the date first set for the
hearing to resolve claims. However, while Civil Code section 2924j requires that the
court consider claims filed by the statutory deadline, it does not limit the court’s
discretion to consider claims filed outside this timeframe. (Id., subd. (d); see also
Rutherford v. Owens-Illinois, Inc. (1994) 16 Cal.4th 953, 967 [a trial court generally has
the inherent authority to manage its calendar and control proceedings before it]; see also
Freeman v. Sullivant (2011) 192 Cal.App.4th 523, 527 [trial courts generally have broad
discretion in deciding whether to grant continuances].)




1      We note that appellant also received notice of the deposit of funds with the court
from Quality, and did not file her claim with the court within 30 days of this notice. It
seems she claims to be excused from this requirement because she “had an ADA
accommodation extension in time.” However, she did not request her “extension” until
well after the 30-day period had lapsed.


                                              8
       The court continued the hearing a number of times at appellant’s request.2 As a
consequence, Mr. Gamboa was able to make a late appearance and request leave of the
court to file a claim. Appellant has not demonstrated that the court abused its discretion.
(Denham v. Superior Court (1970) 2 Cal.3d 557, 564; State Farm Fire & Casualty Co. v.
Pietak (2001) 90 Cal.App.4th 600, 610; Estate of Fain (1999) 75 Cal.App.4th 973, 992.)
2.     Other Claims of Error
       Appellant makes a multitude of other claims of error on appeal, mostly sounding
in wrongful foreclosure. A proceeding under Civil Code section 2924j is not the proper
vehicle to adjudicate claims of error relating to the foreclosure process or defects in title.
(See Cal-Western Reconveyance Corp. v. Reed (2007) 152 Cal.App.4th 1308, 1317-
1318.) Instead, section 2924j specifically contemplates that “[n]othing in this section
shall preclude any person from pursuing other remedies or claims as to surplus proceeds.”
(§ 2924j, subd. (b).) Appellant could have asserted these claims in a suit for wrongful
foreclosure.3
       None of appellant’s other claims of error are cognizable on appeal because she
cannot demonstrate prejudice, since she was not entitled to a judgment in her favor. A
judgment is reversible only if any error or irregularity in the underlying proceeding was
prejudicial. (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475. )




2
        Appellant has not argued that the 90-day timeframe for conducting the hearing is
mandatory (most likely because such an argument would concede that the trial court
lacked discretion to continue the hearing, as the court did a number of times at appellant’s
request). (See Civ. Code, § 2924j, subd. (d).) And, in any event, we find the timeframe
set forth in the statute is not mandatory; the statute is completely silent about the
consequences of the court’s failure to consider claims within the period. (See, e.g.,
Osman v. Superior Court (2005) 134 Cal.App.4th 32, 37; Rutherford v. Owens-Illinois,
Inc., supra, 16 Cal.4th at p. 967.) We can see no legislative intent to usurp the trial
court’s inherent authority to manage it calendar in the language of the statute.

3      We express no opinion whether appellant may have any other claims.


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       In a Civil Code section 2924j proceeding, it is error for the trial court to distribute
funds to a claimant with no recorded or secured interest in the subject property. (See
Cal-Western Reconveyance Corp. v. Reed, supra, 152 Cal.App.4th at pp. 1317-1318
[section 2924k, subdivision (a)(3) “authorizes distribution of proceeds only ‘to satisfy
secured obligations: first, the obligation secured by the trust deed or mortgage that is the
subject of the sale, and then the obligations secured by any junior liens or
encumbrances. . . .’ ”].) Here, appellant had no recorded or secured interest in the
property. The trial court was without jurisdiction to consider appellant’s wrongful
foreclosure claims in this section 2924j proceeding, and appellant cannot show prejudice
by the court denying a further continuance or disability accommodation because she was
not entitled to a distribution of any surplus proceeds.
                                      DISPOSITION
       The judgment is affirmed.


                                                   GRIMES, J.


       WE CONCUR:


                     BIGELOW, P. J.




                     RUBIN, J.




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