IN RE: 1563 28th Avenue, San Francisco, CA 94122

Background

This interpleader action concerns $273,331.73 left after Peak Foreclosure Services, Inc. sold the property at a foreclosure sale and paid the foreclosing creditor, trustee’s fees and expenses, and court costs. An interpleader action allows a stakeholder holding disputed money to deposit it with the court while competing claimants litigate their rights to it.

The claimants were Ali Poorsina, who claimed all of the surplus proceeds; Jeffrey B. Neustadt, who claimed $87,642.88; Jose Javier Gutierrez, who claimed $84,742.19; the United States, which claimed $34,187.63 for outstanding taxes; the California Department of Tax and Fee Administration, which claimed $11,434.64 plus additional interest; and Poorsina’s former attorney, John E. Cowan, who claimed 40 percent of any remaining proceeds under an asserted fee agreement. The court had previously granted the United States summary judgment on its claim and ordered payment after the funds were deposited.

Peak Foreclosure’s Motion

Peak Foreclosure asked to deposit the surplus proceeds with the court, be discharged from liability concerning those funds, and receive $9,371.33 in costs and attorney’s fees. The court granted the request to deposit the money because multiple parties asserted competing claims. It also granted the request to discharge Peak Foreclosure from liability concerning the surplus proceeds after deposit.

The court deferred ruling on costs and attorney’s fees. It gave Peak Foreclosure one week to submit a declaration explaining the basis for the claimed expenses and why the requested amount was reasonable. The order did not award or deny those fees.

Poorsina’s Motions and Objections

Poorsina moved for summary judgment, asking that all surplus proceeds be paid to him and requesting $37,808.40 in attorney’s fees. Summary judgment is a ruling without a trial when the evidence shows that no important factual dispute requires a trial. The court denied Poorsina’s motion because he had not shown that no material factual dispute existed concerning his entitlement to all the proceeds or to attorney’s fees.

Poorsina also objected to the claims of Neustadt, Gutierrez, the California Department of Tax and Fee Administration, and Cowan and asked the court to remove or deny them. The court denied those motions and objections. It explained that Poorsina had not established that the other claimants lacked valid claims, and the court did not otherwise decide the ultimate validity or priority of those claims.

Ruling and Effect

The court granted Peak Foreclosure’s motion to deposit $273,331.73 with the court and discharge Peak Foreclosure from liability concerning the surplus proceeds. It deferred the motion for costs and attorney’s fees and extended by one week the time for Peak Foreclosure to provide supporting information. It denied Poorsina’s motions and objections opposing the other parties’ claims.

The order addressed the first stage of the interpleader case—placing the disputed funds with the court and releasing the stakeholder from responsibility for them. It stated that the claimants’ respective rights and the distribution of the funds would be determined in the second stage. Judge Laurel Beeler therefore did not resolve the final allocation of the surplus proceeds in this order.